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Image: Tina Tiller
Image: Tina Tiller

SocietyNovember 30, 2022

New Zealand’s other looming housing crisis

Image: Tina Tiller
Image: Tina Tiller

NZ Super was designed with the assumption that most people will own their home and be mortgage-free by the time they retire. That’s increasingly not the case.

This article was first published in Bernard Hickey’s newsletter The Kākā.

Retirement commissioner Jane Wrightson published her three-yearly retirement policy review yesterday with a warning that the number of retirees renting is likely to double to 600,000 by 2048, and that an increasing number of both renters and those with mortgages are spending more than half their pensions on rent and borrowing costs.

This challenges the entire basis of New Zealand’s universally available and non-means-tested superannuation system, which is based on providing enough income to live well – but only with the assumption that the retiree owns their own home.

The review recommended:

  • the retention of the universally-available and wage-linked nature of NZ Super available from the age of 65;
  • an increase in the asset threshold for Accommodation Supplement access to $43,700 per person from the current $8,100, which is unchanged from 1993, and to look at inflation-adjusting the threshold;
  • finding ways to stimulate an increasing supply of affordable, healthy and accessible housing for pensioners, including smaller properties for downsizing and larger properties for multi-generational living;
  • removing barriers to building on collectively-owned Māori land; and,
  • researching whether to encourage the availability of hard-to-access reverse equity mortgages and home reversion schemes that would allow home owners to draw down on equity while living in their homes.

The review commissioned research that found the Accommodation Supplement (AS) was already being paid to 50,808 pensioners as of March 2022, up 14% from three years earlier, but that the share of the pension-aged population on the AS had increased only marginally to 6% from 5.8% – in part because so many were ruled out by having KiwiSaver accounts and other assets worth more than $8,100.

“The dominant narrative of retirees as people who own their own home outright is certainly not true for all,” said the retirement commissioner. “It has always been significantly more reflective of Pākehā than Māori or Pacific People.”

Overall, 66% of New Zealanders aged over 65 own their home outright, but this is the case for only 47% of Māori kaumātua and just 27% of Pacific matua. Overall, 13% of people over 65 have a mortgage, but that includes 18% of Māori kaumātua and 27% of Pacific matua.

And overall, 20% of over 65s pay rent, but this increases to 35% of Māori kaumātua, and 46% of Pacific matua.

“This is important because there has been an implicit assumption underlying NZ Super that by the time people become eligible, at age 65, they will own their own home outright or be in secure and affordable public housing,” Wrightson wrote. “This is not explicitly stated in legislation, but reflects the dominant narrative of retirement as experienced largely by Pākehā.”

The report also found a growing proportion of pensioners with mortgages that were consuming most of their pensions, although some may also have other incomes.

Of those people still paying off mortgages, 80% were spending the equivalent of more than 40% of NZ Super on housing costs, and more than half were spending the equivalent of more than 80%.

Of those people paying rent, two-thirds of those aged 65-74 were spending 40% or more of NZ Super on housing, as well as over a third of those aged over 75. Some were paying more than 80% of NZ Super on housing costs, including 40% of those aged 65-74 and 16% of those aged over 75.

Those who own their homes outright much lower housing costs. About 80% of outright homeowners spent less than 40% of NZ Super on housing costs and more than half spent less than 20% of NZ Super on housing costs.

Treasury found that mortgage and rent costs had risen faster than outright ownership costs, with rents increasing at a higher rate than mortgage costs.

The Commission also recommended a closer look at the assumptions about living costs for those on their own, as opposed to couples.

The numbers have changed dramatically since NZ Super’s current settings were locked in place in the early 1990s. In 1986, 87% of those in their 60s were homeowners, with mortgages paid off, and for the most part were not in paid work. In 2018, 80% of those in their early 60s were homeowners, but 1 in 5 were still paying off mortgages, 20% paying rent, and many still in paid work.

The balance of home ownership is expected to shift to 60% homeowners and 40% paying rent by 2048 – up to 600,000 people.


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Image: Tina Tiller
Image: Tina Tiller

OPINIONSocietyNovember 29, 2022

This GP is signing out

Image: Tina Tiller
Image: Tina Tiller

I am proud of the work that I do, but I am no longer proud of the system I work in, says this general practitioner.

I am a full time GP in the suburbs of Hutt Valley. I love being a GP, and I have the privilege of looking after several generations of families. Most of the time my patients see me every time they come to the practice and I value continuity of care.

I am Australian; I came to New Zealand nearly 12 years ago while training in another specialty. I transitioned to GP and haven’t looked back. I have a special interest in women’s health including endometriosis and menopause management, and do procedures like endometrial biopsies and fitting long-acting reversible contraceptives in my rooms. I see a lot of mental health patients. I love my elderly patients and the complexity that comes with managing multiple chronic conditions, interacting medications and ensuring good quality of life within the limitations of age and illness.

I have been proud to be part of the New Zealand health sector. When I started in GP I didn’t feel the need to have private health insurance. The health system, while it had its limitations, generally worked well. I would do everything I could to manage the patient in the community and when I needed help I could refer the patient on and they would be seen. I was so proud of the initial government response to Covid, one that prioritised public safety, that I applied for citizenship.

How things have changed. The health system is fundamentally broken and I can’t see how it is going to be fixed. Patients who need to be managed in secondary care aren’t, instead being pushed back into primary care. Patients going to Emergency are not getting the imaging they require on presentation; they are given pain relief and told to see their GP in the morning and get referred for an ultrasound. The patient then needs to pay to see me (and I usually have to double-book them to see them promptly). Unless they are one of the chosen few eligible for community-funded radiology that ultrasound will cost them $280 and will require a four week wait.

Good medical practice prioritises early intervention for children with developmental delays. The Child Development Service, which does the majority of assessments for autism, global developmental delay and other conditions, has a waitlist of over 12 months. Even if a family has the resources to go private, I have no one to refer to.

‘The health system is fundamentally broken and I can’t see how it is going to be fixed.’ (Image: Tina Tiller)

I will manage a patient as far as I can, and then, when I have exhausted all options, I refer on – only to have the referral declined as “below access criteria”. If I get a referral accepted, the patient is waiting four to six months for that first specialist appointment.

Every consult becomes more and more complex as patients get sicker waiting for care. Patients have to wait longer for an appointment so by the time they come there are multiple issues to deal with. Follow-up is hard as patients struggle to pay for repeat appointments. We don’t have the medications that are bog-standard in other parts of the world. We have only recently funded some diabetes medications (empagliflozin and dulaglutide) that are second line treatments elsewhere. The special authority criteria are so strict there are many who can’t access them.

Please don’t mention mental health. Again, I am really confident managing a range of mental health conditions. However good mental health management requires a team. Access to counsellors, and sometimes a psychiatrist. There is no one I can refer to. Funded counselling is very scarce and limited to the most needy. Most people can’t afford to pay $160-170 an hour to see a psychologist and even if they can, I can’t find one with open books. If I have a patient in crisis in my rooms and I need to call the Crisis Team, I wait on hold for 30-40 minutes. The patient has normally left the room by then and my other patients are left waiting.

No new antidepressants have been funded for years. GPs are often accused of jumping straight to medication – but often it is the only affordable option I have to offer patients.

So much of my time is spent battling to get patients the care they need. As soon as a patient comes in I am desperately looking at their demographic: do they have a community services card? What quintile is their address in? If they don’t have a community services card and live in a quintile 3 street I have no chance of getting them counselling or imaging that they don’t have to pay for (and usually can’t).

I used to be able to have some friendly banter with my practice team during the day. Now I sit in my room through breaks, trying to catch up on the neverending mounds of paperwork. ACC requests for information. Ministry of Social Development disability forms. Letters for Kainga Ora for a place without stairs for my patient with severe arthritis. I work most evenings and for two hours on a Sunday. One Friday evening at 5.30 I logged out of the patient management system. By Saturday afternoon when I logged back in I had 105 inbox documents waiting to be checked. Dinner table conversation is taken up with stories of patients I can’t help. Sometimes I can share a win, however those are getting fewer by the week. My 14 year old son says I look tired, and work too much. He says outright he will never be a doctor.

Some days I am filled with rage at the injustice of it all. Some days I am just tired and sad. I am proud of the work that I do, but I am no longer proud of the system I work in.

I have sold my house and put in my notice. I fly back to Australia on Boxing Day. I have a new job lined up – it really wasn’t hard to find one. GPs are just as scarce as they are here. The Australian system is different. It has its pros and cons. All I know is that I can’t stay here.

The New Zealand health system is broken, and it has broken me.

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