Govt’s 90 cent Cost of Living increase pales compared to Housing Crisis Hikes for Students

24 February 2015
Media Release: New Zealand Union of Students’ Associations

While the Government has announced cost of living increases of 0.51 per cent to benefit levels “to ensure that those people who rely on state assistance aren’t disadvantaged by inflation”, the students’ union is pointing out the fact that Government support is not nearly keeping pace with real increases to the cost of living faced by New Zealand’s 400,000 students.

Social Development Minister Anne Tolley announced yesterday that benefit and superannuation payments to more than a million New Zealanders will increase on April 1, following legislation passed in 2011 that made sure that benefits increase each year in line with inflation.

The claim that “Rates and thresholds for … StudyLink assistance will rise to keep up with increasing living costs” is simply not true, says the New Zealand Union of Students’ Association's National President Rory McCourt.

“The 90 cents a week increase to student allowance and living cost loan rates does nothing for students facing a $10 or $20 a week hike in their rent from last year, which was already unaffordable.”

“Accommodation costs are galloping in front of general inflation. Just last week TradeMe revealed a 9 per cent hike in average New Zealand rents for the year to January. For students, it’s even worse.” says McCourt.

“The housing crisis means the Government’s increase does not do its job of protecting fixed-income New Zealanders against changes in the real cost of living. New Zealand’s students need a top-up.”

The worsening situation highlights how broken the student support system is, he says.

“The accommodation benefit, which the poorest 40% of full-time students who qualify for student allowances receive, has been capped for over a decade. If you’re a student in Auckland, you’re now supposed to pay your average rent of $220 a week with a $40 accommodation grant. It’s ludicrous.” says McCourt. 

Twenty years ago, when the student allowance and loan scheme was introduced, accommodation costs for students in a place like Auckland made up half their weekly income.

“Now the cost of rent alone makes up more than what a student gets in the hand from their allowance. Even worse, for the majority of students who borrow to live there’s a $40 a week gap to pay the rent.”

“It’s time the Government took the student housing crisis seriously before we lock a generation out of tertiary education.” McCourt concludes.

Figures per week:

  • Maximum student allowance: $174.21, rises to $175.10
  • Maximum accommodation benefit (for allowance students only, living away from home): $40 in Auckland, Wellington, Christchurch
  • Maximum student loan living costs: $175.96, rises to $176.86
  • Average student rent in Auckland (bedroom in 3 bedroom flat): $218.16 in 2014, up from 209.90 in 2013 (based on MBIE Housing Data)
  • National average annual rent rise: 9% to January 2015 (TradeMe)

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The New Zealand Union of Students’ Associations exists to advance the political, social and economic interests of tertiary students whatever they study and wherever they live. NZUSA is a membership body of local students' associatons. We believe in opportunity for all.

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