The Government is denying claims by the Labour Party that it intended to cream off millions of dollars in Canterbury earthquake insurance payouts to Housing New Zealand as Crown dividends.
Papers obtained by Labour under the Official Information Act reveal plans to delay maintenance and redirect Canterbury quake insurance payouts to meet the Government's demands for increased returns from state housing.
Labour's housing spokesperson Phil Twyford says Housing New Zealand has agreed to pay higher dividends to the Government by using some of its $320 million insurance payment and putting off repairs and maintenance.
Mr Twyford says the Government is robbing Housing New Zealand in Canterbury to fund dividends going into the Crown account. He says Housing Minister Nick Smith needs to explain why money that should have gone into the rebuild has gone into Government coffers instead.
But Housing Minister Nick Smith says it's not a case of earmarking any particular income towards the dividend, but it's not true to say it will come from the insurance payout.
He says insurance proceeds are going towards capital expenditure, including 2000 new houses, which will be under construction by the end of 2015.
Dr Smith says Housing New Zealand has always been expected to return a dividend to the Crown, including under the previous Labour-led Government. This comes from normal operating revenue, including rent and rent subsidies from the Government.
Housing New Zealand's latest statement of intent shows $308 million in insurance money earmarked for capital expenditure this financial year.