Our sympathies go out to Tenoch King and her husband, Mark Steadman. The couple emigrated to New Zealand three years ago, Mr Steadman is a relief secondary school teacher from Australia and his American wife is a graduate and is working part time.

They bought an old, uninsulated 1914 villa (wooden)  in Port Chalmers* with a Housing New Zealand supported ‘Welcome Home’ Loan, a type of loan that helps lower-income people buy their first home.

Unfortunately under the terms of their agreement they are not permitted to borrow additional funds for improvements to the house, not even to install much needed home insulation in a house that must be an ice box in the winter.

According to an article printed in the Dom Post the couple can’t take advantage of a home insulation scheme aimed at low income households and they feel they are discriminated against for being poor, something they blamed on NZ’s low wage economy.

If it was not for New Zealand’s low-wage economy, the couple would not need state assistance, Ms King said. Taking out a personal loan instead would incur a higher rate of interest than their home loan.

Preventing assisted borrowers topping up their mortgage essentially excluded them from a scheme designed to help them. This discriminated against the poor and created a blanket rule which did not take into account individual circumstances, she said. Without insulation, people had to pay for extra electricity they could not afford.

When Ms King complained to Housing Minister Phil Heatley, she was advised people on lower incomes needed to be careful about taking on extra debt, which was why top-ups were not allowed…more“

Which is a bit rich when government ministers are spending $22,000 on (tax payer funded) tours of Europe, porn films and chocolates. Furthermore, why are HNZ helping to loan money to poor people in the first place, rather than offer them good quality rental accommodation, free of the financial burden of home maintenance?

And surely it makes good sense to allow them top ups to improve the comfort and value of their investment, e.g. insulation; why must they be forced to sit and freeze?  Not only will a well insulated home help them cut back on heating fuel costs but it’s also good for the environment. But the nanny state knows what’s best for them, so in a cold and uninsulated home they shall remain.

We wonder if the couple ever imagined that moving to New Zealand would leave them in a poverty trap three years down the line. If they had their time again would they have done things differently, would they still have chosen New Zealand?

The Welcome Home scheme allows people to borrow up to $200,000 with no deposit and up to $280,000 with a deposit of just 15% of the amount above $200,000, in some areas this is extended up to $350,000. However, the advance comes not from HNZ but from a range of financial institutions including Kiwibank, NBS and some credit unions.

For two borrowers the maximum yearly income must be below $85,000 before tax.

*Port Chalmers is a suburb of Dunedin, the temperature there at present  is 2°C, with a maximum of 9°C forecast for tomorrow.

See also:

Freezing families told to “toughen up”

THAT’S COLD – Exploding the myth about sub-tropical New Zealand