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New Zealand PM ups rent subsidies in move to rein in housing crisis

Xinhua, January 28, 2015 Adjust font size:

New Zealand Prime Minister John Key unveiled changes to the way the government will deliver affordable housing to poorer families in his annual "state of the nation" speech in Auckland Wednesday.

Key said the government would sell off some state-owned homes while engaging private sector and non-profit groups in supplying affordable housing, as well as increasing the amount of government cash available in rent subsidies.

Key's government won a resounding victory in the general election in September last year, but it has been plagued by criticisms that it is doing too little to alleviate the problems of poverty and soaring home prices in the major cities.

Key said in the published speech that the government had managed the economy well and that the number of new jobs was growing and wages were rising.

But he warned that challenges still loomed.

"Europe's debt issues are far from resolved, growth is slowing in China and global prices for many commodities remain weak," said Key.

"These, and other factors, make it all the more important to continue improving our economy, boosting our competitiveness and encouraging new investment, so we build a stronger and more resilient New Zealand."

The government's focus this term would be on four priorities: responsibly managing its finances; building a more productive and competitive economy; delivering better public services; and continuing to support the rebuilding of earthquake-battered Christchurch.

Leader of the main opposition Labour Party Andrew Little, who delivered his own keynote speech Wednesday offering greater support for small businesses and a commission to look at "the future of work," said the government's social housing policies would just worsen an overheated housing market.

"The Prime Minister is sending thousands of state housing tenants out into the private rental market with a taxpayer-funded subsidy in their pockets. This will just push rents up for all renters," Little said in a statement.

"The government will end up shelling out more and more in subsidies to landlords." Endi