State Rents: Minister In Hot Water—Mr Watt

Press, Volume CVI, Issue 31125, 30 July 1966, Page 3

State Rents: Minister In Hot Water —Mr Watt

(New Zealand Press Association)

WELLINGTON, July 29.

The Deputy-Leader of the Opposition (Mr Watt) said today that the Minister of Labour (Mr Shand) was in hot water over the departmental house rents issue.

Mr Watt—speaking in Parliament on the State Services Commission estimates—said the Public Servants’ Association and other groups had put up much opposition since the Government announced about 12 months ago its proposal to increase rents on Public Service houses.

Because of that opposition, it appeared the Minister and the Government had “climbed down from the pedestal on which they placed themselves,” and another formula for increasing rents had been devised, said Mr Watt.

There was little or no reason for increasing rents on houses in isolated areas. “The Minister seems to have got himself into a great deal of hot water,” said Mr Watt The Opposition and the public were entitled to know what progress had been made in negotiations.

Mr H. J. Walker (Govt, St. Albans) said he believed wages should be met by direct payment rather than hidden subsidies by way of some rent reduction.

Mr Shand said he did not regard the formula arranged between three of the State services organisations—and with “some reluctance" by the fourth—as “cilmbing down.” “I regard it as giving expression to the basic principles which we thought should be accepted. The prob-

lem was that rentals charged for State houses created a large number of anomalies,” he said. Mr Shand said that about one-sixth of public servants were housed in departmental houses.

Whether a public servant had a State house did not affect his salary, so some people owned their own homes, some lived in private rental houses, and some in State rental houses. This had been an anomaly for many years.

Mr Shand said the principle should be that where an employee rented a house, the rent should be regarded as a rent and not as part of his salary.

An employer should not be in a position to tie a man to a job by reason of a house.

Special Cases

The Government recognised some time ago that there should not be anomalies between individuals in the same service. Where there were special considerations —such as isolated areas—they should be paid for by special allowances not by rental privileges. “Negotiations first started on July 2, 1964, and they did not progress very far or very

fast,” he said. “I am not prepared at this time to say whose fault it was in any way.” Mr Shand said the Government had announced a policy that a basic rent formula would be 5 per cent, and any increases in rents would not be more than 10s in any year. “As a result of this, the State services organisations came to the negotiating table,” he said. “Three of the organisations agreed that it was a fair and reasonable formula.” Disappointed Mr Shand said be was disappointed when the basic formula was reduced from 5 per cent to 4J per cent—but the Government was satisfied with this figure. “In regard to rural and isolated areas I did hope to adopt a system of allowances,” said Mr Shand. “But it was decided to make the rental formula 3 per cent instead of 5 per cent in these special cases. “We have adopted a policy which is basically fair and privileges are balanced by disadvantages of living in rental houses,” said the Minister.

Mr R. J. Tizard (Opp.,

Pakuranga) said the Public Service did not approve the Government proposal, but took part in negotiations to get the best possible deal. Obviously the Minister had “climbed down,” but still had not satisfied the parties involved.

He suggested there were recruitment difficulties because of dissatisfaction within the service.

It would be far better to have a satisfied Public Service, and thus retain trained staff, than to recruit more people who inevitably tended to be inexperienced. At Disadvantage The public servant, even with a house on a reasonable rental, was still at a disadvantage, said Mr Tizard. He could not buy a house while in the Public Service, but tried to save money which was losing value. When the public servant retired, at 60 or 65, what chance had he of getting a long-term mortgage at that age? Mr Tizard said. The Under-Secretary of Industries and Commerce (Mr Adams-Schneider) said there had been an improvement in junior recruitment, and in terms of service, such as the introduction by a National Government of ruling rates surveys. The vote of £340,000 for the Commission (£315,633 expended last year) was passed.