“Ministers, political parties all rely on information that’s available at the time they make decisions,” he said. “There’s more information available now than there was back then.”
Housing Minister Chris Bishop announced in May that the Government planned to increase the accommodation supplement, a weekly payment New Zealanders can receive to help with their rent or the cost of owning a home.
This increase would be mostly paid for by hiking the minimum contribution social housing tenants have to make to their rent. This is called the Income-Related Rent Subsidy (IRRS).
On Tuesday, Hipkins confirmed his party would reverse both decisions if elected to power, arguing it was “cruel” for the Government to take money from low-income renters to give to another group of low-income renters.
He said the “accommodation supplement ultimately is a subsidy for private-sector landlords”.
That argument was repeated in a press release from Labour, which said the accommodation supplement was “created to help people with housing costs, but too often increases simply disappear into rising rents while taxpayers pick up the bill”.
“Labour won’t fuel that cycle. We won’t increase state house rents, and we won’t increase payments to private landlords through a bigger accommodation supplement,” Hipkins said in that statement.
Chris Hipkins says the support ends up in the wallets of landlords. Photo / Michael Craig
In 2018, while in office, Labour increased the maximum accommodation supplement and made other policy changes to the support.
The Ministry of Social Development (MSD) later commissioned a report to consider the concern that increases to housing subsidies flow through to landlords, because they might increase the cost of rent in response.
The report from Motu Economic and Public Policy Research, published in 2022, found “increased accommodation support associated with the 2018 AS-area policy changes did not lead to substantial strong landlord capture via an increase in rents charged to AS-recipient tenants”.
It said in the “worst case”, the “average rent increase was at most half of the average increase in support”. However, that was put down to other factors and “we conclude the policy effect on rent increases was negligible”.
MSD, in its own paper on the findings, said the results suggested on average “around 90% of the increase in assistance stayed with Accommodation Supplement recipients as extra after-rent income”.
“Accommodation Supplement increases do not appear to be an important driver of the growth in accommodation costs that is occurring.”
The Social Development Minister at the time was Sepuloni, now the Labour deputy.
She issued a statement via the Beehive website at the time calling the findings “pleasing”.
Echoing MSD, she said long-term trends “show no evidence of rents for Accommodation Supplement recipients increasing faster than overall rents for new tenancies following the Families Package changes”.
Social Development Minister at the time, Carmel Sepuloni, was pleased with the findings of the Motu Economic and Public Policy Research report when it was published in 2022. Photo / Getty Images
In Parliament today, Bishop pointed to the inconsistency between Labour’s previous and current positions on the accommodation supplement.
“I note the Opposition seems to have changed its perspective and is now describing the accommodation supplement as a subsidy for landlords,” he said.
“Apparently, it’s a good thing when Labour puts up the accommodation supplement, but when the National Government, which is actually supporting low- to middle-income working New Zealanders, does it, it’s apparently a terrible thing. I invite Members of the House to reflect on that comparison.”
Asked about Labour’s position, Hipkins told the Herald that subsequent to the 2022 report, work by University of Auckland academics had found “those who are living in accommodation supplement households pay higher rentals than those who are living in non-accommodation supplement households”.
“So there is evidence to suggest that the accommodation supplements [are] actually resulting in increased rents rather than reduced pressure on those tenants,” he said.
The research Labour is referencing looked at how rental and home ownership subsidies affect housing affordability. It is not entirely about whether increases to the accommodation supplements leads to higher rents.
Within it, the academics said they had found renters receiving the support “consistently face higher rent expenditures than those not receiving” it.
The piece said critics argue rental subsidies contribute “to increasing market rents by inflating demand without corresponding increases in supply”.
“However, the evidence on this is mixed,” it said, before then mentioning the Motu report.
In a piece for website The Conversation, the researchers said, “on average, middle-income tenants receiving the accommodation supplement paid NZ$539.40 per week in rent in 2023. Non-recipients paid $502.90. That’s a 7.3% difference”.
“Further research is needed to determine whether this discrepancy is due to rent inflation or differences in housing quality. But the finding aligns with international studies showing that subsidies can unintentionally drive up market rents.
“If landlords are capturing part of the subsidy by increasing rents, then the benefit meant for vulnerable tenants is being diluted.”
Bishop told the Herald there was a “variety of views” on the matter but he had been advised by officials that the accommodation supplement had been “quite carefully and specifically designed” so most of the benefit went to the renters.
Bishop said the paper referred to by Hipkins didn’t “analyse the question of whether [accomodation supplement] increases are passed through to tenants or landlords”.
“The analysis shows that AS rent support provides limited improvement in housing affordability – but we already knew that the AS does not solve the underling housing affordability problem.
“The point of AS is that it boosts incomes for low to moderate income households struggling with housing costs.”
He pointed out that the paper found those receiving the support “show increases in household disposable incomes”.
Jamie Ensor is the NZ Herald’s chief political reporter, based in the press gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.