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Housing the homeless is big business for the motel owners taking the risk of their property being trashed or small goods stolen along with their reputations when the public discover they might be sleeping next door to relatives and friends of gang members.
But business savvy motel owners are making hay while the sun shines by charging the government a premium. One motel owner claimed all motels do it, noting the going rate of $444 a night for a $170 night motel. The premium is considered “danger money” because it wouldn’t be worth their while otherwise but charging a premium certainly does make it worthwhile.
“One motel made $6 million off the Government last year, charging much more for rooms than it normally would. In the three months to December 2017, the Government spent $6.6 million on motels. By the following year it more than tripled and just keeps growing.
In the same period last year, the Government spend skyrocketed to $82.5 million.”
The shocking aspect to this story is that Carmel Sepuloni, the Minister for Social Welfare, hasn’t a clue the government pays a premium. She thinks she is charged at the same rate as the public.
“If there are issues with regards to whether or not they are charging more to [Ministry of Social Development] clients than they would to be to others, then yes it should be looked into,” she told Newshub [this week].
“I’m going to explore this.”
Newshub
It’s a bit late to explore this when the premium has been in effect several years at least.
Another shocking aspect to this story is that in November 2019 RNZ and Stuff reported moteliers reaping tens of millions of dollars for providing “emergency” housing. Why is a remedy taking so long? Why has the minister not looked more closely at the accommodation bills until now? Why hasn’t the government done anything about their promise of economical housing?
Sepuloni will discover that ignorance about how taxpayer money is spent under her watch is a look that will not wear well.
But congratulations are in order to the moteliers creaming the government. Perhaps we should be employing their skills in government for advice on how to house the homeless more economically? They are obviously more business savvy than either the minister or her government.
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