PARLIAMENT State Rent Cuts Not Supported

Press, Volume CI, Issue 29908, 23 August 1962, Page 14

PARLIAMENT State Rent Cuts Not Supported

(New Zealand Press Association) WELLINGTON, August 22. The Public Petitions Committee of Parliament has not supported a plea by 1,3 Aucklanders that the present Slate house rent policy be discontinued on the grounds that the recent weekly increase was not justified, that rents had no true relation to the cost of houses and that the increase would have an inflationary effect on all other rent and land values. But a Labour minority on the committee did not support this decision and the Opposition debated it in the House of Representatives this afternoon.

Mr N. J. King (Opposition, Waitemata) said he unsuccessfully sought to have the petition referred to the Government with a view to adopting a more equitable formula for fixing State house rents. Reporting that the committee had no recommendation to make, Mr J. H. George (Government, Otago Central) said the petition was signed by V. R. P. Barnham and 12 others. Fifteen hundred other signatures collected were made ineligible by a technicality. Mr George said the petitioners’ rents had been increased by an average of 14s 8d; very much in line with the average of 15s which the Minister of Housing (Mr Rae) had said the increases would come to. Formula of 1905

Mr George said it was true the rent formula went right back to 1905, and that there was no true relationship as far as present day values were concerned. It was found that rents were, in the main, based on accommodation, plus a slight increase for site value.

The petitioners’ claim that the increase was unwarranted was not accepted by the majority of the committee, in the light of the standard of living and cost and wage indices at the present time. “We found that the State Housing Department had tried to see that the whole of the money invested in the State housing scheme would return 3 per cent. We feel the formula is just and warranted,” said. Mr George. If rents were calculated by the cost of houses when they were built there would be a great range of rents, and it was felt this was not in the best interests of the country. State house rents were, to some extent, based on general economic trends and wage levels. They had some part in forming the basis of what people were thought to be able to pay for their homes. Mr King said the Minister had caused confusion by his statements about the basis of

rentals. Some people could not work out whether they or their neighbours were paying a fair rent—they were paying different rents for the same type of accommodation. “There has been a large increase in site loading and that is why there has been such a big increase in State house rentals,” said Mr King. “Some officer determines the rent, the tenant is told, and there is no opportunity to calculate it or determine what it should be.” Mr Rae asked if the Labour Party would reduce rents if it became the Government.

The Minister of Transport (Mr McAlpine): Dead silence. Ask them that again. Mr Rae said it was only fair that there should be a reasonable return. The rent of every other person’s land was based on site loading. “The public have got to decide. It has been a matter of policy. The Government has got to stand up for its policy when it goes to the elections. That is why this petition had to fail,”' said Mr Rae.

Mr W A. Fox (Opposition, Miramar) said rent-fixing was full of pitfalls, but he felt the Government could review the formula and its effect on tenants. “No Maintenance”

Mr P. Blanchfield (Opposition, Westland) said that if another committee was set up to hear evidence many people would say that their rents should not be increased because their State homes had not been maintained.

Mr N. E. Kirk (Opposition, Lyttelton) said there was a great need for a better formula for assessing State rents. “Thousands of pensioners are paying an extra £1 a week. They were not pensioners at the time that the rents were adjusted.” Mr R. L. Bailey (Opposition, Heretaunga) said people were allocated State houses. They could not choose them. The motion was talked out at 5.30 p.m., when the House adjourned for tea.