Government blows the budget on emergency housing

The Government has had a massive blowout in emergency housing grants, spending almost four times its annual budget in just three months.

As part of an overall $345m investment in emergency housing, the Government only budgeted $2m per year for an estimated 1400 emergency housing grants - which pay for urgent motel stays for families in need.

But in the December quarter alone, the Ministry of Social Development spent $7.7m on emergency housing grants.

There were 8860 grants in the final three months of 2016 - which is more than six times the Government’s expectations.


If demand continues at that rate, it will cost the Government $30 million a year.

The grant was introduced in May by then-Social Housing Minister Paula Bennett, who admitted to Newshub she had "no idea" how big the problem was.

"To be honest, we just had no idea, and that's part of it. I mean, they're often hidden from us."

Labour Leader Andrew Little says the Government is out of touch.

"They don't know what's going on. They've mucked it up yet again, and the people who pay for that is the desperate families," he said. "How could they get it so wrong?"

But even though the budget is all but blown, the Government will continue to fund any shortfall.

Prime Minister Bill English admits demand has been higher than predicted and said he’s ready to pump more money in.

“We will if we have to,” he said. “Right from the early on, there's been more demand, strong demand for that, so it’s demand-driven. If they need more funding, they'll have to get it.”

Social Housing Minister Amy Adams says funding will be topped up from Crown funds in the same way benefits are.

"We're not going to run out of money, nor will people miss out," she said. "While demand has been higher, which we've been very upfront about, the grant will be available to anyone who is eligible."

The December quarter was the first to be properly recorded by the Ministry of Social Development.

"The $2 million was what officials predicted might be needed - remembering that this was the first time we'd established the grant, so it was always going to be a forecast," Ms Adams said.

The ministry has also taken steps to cut back on the spend.

In a briefing to the Incoming Minister of Social Development, MSD warns the additional demand is "creating pressures".

"The high level of demand for emergency housing has seen higher than expected numbers of households being supported to stay in motels and other forms of commercial accommodation," it said.

Following an initial blowout in the months up to November the briefing states there was a crackdown on how many grants staff were dishing out.

"The guidance focussed on ensuring that assistance was only granted to people with a genuine emergency need and that clear expectations for clients were set about what they must do as a condition of receiving the assistance."


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