Thursday, 2 March 2017
Senator RHIANNON: I will just pick up on some of these issues. I want to start with the Commonwealth Rent Assistance. How does it compare with the NAHA expenditure?
Mr McBride: Commonwealth Rent Assistance is about $4.5 billion, whereas NAHA is about $1.3 billion.
Senator RHIANNON: In terms of prescribing the level of rent that public tenants pay—I am just trying to understand how this could play out—let us say you had a single pensioner in public housing; how would the change play out for them?
Mr McBride: It would depend on what change you would envisage.
Senator RHIANNON: With the CRA, if you put the people in public housing into the current rental market and then provided them assistance. Firstly, that has been considered, hasn't it?
Mr McBride: I think that has been mooted from Henry reviews and other reviews. I am not suggesting that it is part of the current government's consideration or not, but in those models you would move them from where they pay a percentage of their income—and that varies from state to state—as their rent to somewhere where they pay a discount to what the market rent would be. What that discount will be will vary, but they will get Commonwealth rent assistance. So it could well be that they are in exactly the same position financially, it is just that the subsidy is paid through the person rather than to the state.
Senator RHIANNON: So you are saying the pensioner could be not worse off? It would be the same situation?
Mr McBride: It would depend on how discounted those market rents are in whatever form of housing they go to.
Senator RHIANNON: Say that the pensioner was not worse off, what is the cost to the government? Is it more costly? Has that modelling been done?
Mr McBride: It would be largely neutral. For example, if you paid everyone who is currently in public housing CRA, it would cost—and this is very, very rough—about $1.5 billion, which is more or less what we pay for the NAHA at the moment.
Senator RHIANNON: I wanted to move onto NAHA. What we are losing is those services that go directly to homeless people, if there was that change.
Mr McBride: Part of the current NAHA funding when was it constructed through from homelessness funding—I am sure Dr Baxter can help me out here—is about $250 million.
Dr Baxter: $275 million.
Mr McBride: The Commonwealth's contribution to that, if you spent all of the NAHA on rent assistance, you would obviously—
Senator RHIANNON: You would lose out that way. I wanted to just clarify where the government is at with NAHA. Is it correct that NAHA will be scrapped or will it be reformed?
Mr Pratt: I have answered that question already. No decisions have been taken by government in this area. We have been talking with the states and territories about potential enhancements into the future, but it is not impossible. The government may choose to look at the NAHA being done in a very different way, in consultation with the states and territories.
Senator RHIANNON: Is the deadline for that decision the budget or is there some other deadline that you are working to?
Mr Pratt: There is no deadline, as far as I am aware.
Senator RHIANNON: As far as you are aware? Does that mean that you could take it on notice?
Senator Seselja: If I could just add to that, NAHA is an ongoing funding arrangement. There is no deadline, as such. On any decisions that are taken, obviously the budget is always a focus for key decisions like this, but there is no formal deadline like that. If no decision is taken about NAHA, NAHA will go on its current form until a decision to reform it or otherwise is taken.
Senator RHIANNON: In its current form, with maybe reforms coming down the track. Is that a fair summary?
Senator Seselja: Well, I have certainly indicated that I would like to see improvements to it, absolutely. Fundamentally, that will be a decision for government. But from my perspective, if you were sitting down and starting NAHA now, you certainly would not design it in the way that it was designed several years ago.
Senator RHIANNON: On that precise issue, considering the federal government has known for a long time and lamented the problems, why hasn't it acted and take it up with the states to sort this out?
Senator Seselja: We cannot act unilaterally, as far as I can tell. There was some discussion earlier—I think you were out of the room—in terms of the bits of NAHA where there might be some Commonwealth discretion, but there is certainly a question mark over our ability to do certain things with NAHA without either the agreement of parliament or the agreement of the states and territories.
Senator RHIANNON: To be fair, all my question was was: why has it not been taken up earlier? It was not about acting unilaterally; it was actually about, considering that you have been lamenting it for a long time, why it has not been taken up earlier. If you do not want an answer it, fair enough.
Senator Seselja: I can only speak for myself, having come into the portfolio in July. Looking at examining the form of NAHA has been a priority for me since taking that portfolio.
Senator RHIANNON: In terms of possible directions for NAHA, I think it was the Treasurer who was suggesting a government-backed aggregate bond financing model. Is that one of the reforms on the table or has that been crossed off now?
Senator Seselja: Certainly, the bond aggregator is very much on the table. One of the key recommendations coming out of the Affordable Housing Working Group was to progress that. That is obviously being looked at. I might ask one of the officials in terms of NAHA. It is a slightly separate process from any reforms of NAHA, although of course they would be potentially complementary.
Senator RHIANNON: Could I just clarify before I leave the minister: were you saying that NAHA could continue and the housing bond aggregate could be set up parallel to it?
Senator Seselja: That would be my impression, but I might ask Mr McBride—
Senator RHIANNON: That is what I am also trying to clarify: is it 'instead of' or 'as well as'?
Mr McBride: The bond aggregator is being looked at in isolation. At the moment, we are looking at the community housing sector and Treasury have started a process to look at that se
Mr Pratt: I think, as the minister said, clearly if the government was to take a decision to go with the bond aggregator model, that would be helpful in terms of complementing any enhancements to the NAHA. They could proceed in parallel or jointly.
Senator RHIANNON: However it goes, do you recognise—or is it part of the mix of how you are approaching this—that such a bond would require the establishment of a specialist financing intermediary?
Mr McBride: Yes.
Senator RHIANNON: What form would that intermediary take?
Mr McBride: That is the process that the task force we were talking about earlier is currently exploring. In very basic terms, it would go to the community housing providers who were interested in growing their portfolio. It would look at what financing needs they had rather than them going individually to a bank and saying, 'I need a loan,' they would bundle all of them up or aggregate them and then go to the market and sell that as a bond.
Senator RHIANNON: With the intermediary, are you looking at the three choices—which is what I often read about—in that it could be a government entity, a not-for-profit entity or private sector entity? Are they the choices or is that not how you are looking at it?
Mr McBride: Certainly, those will be three of the ones we consider. Whether it goes beyond that is the process that the task force will consider over the next six months.
Senator RHIANNON: When you say beyond, are you talking about other options? If so, what are they?
Mr McBride: They have not been contemplated yet, but I am not closing off the possibility that they will be.
Senator RHIANNON: Right, so there are others.
Mr McBride: Not that I am aware of, but I am open to the idea that someone may come up with a better idea.
Senator RHIANNON: Just moving onto your Affordable Housing Working Group issues paper that came out in January 2016, I just wanted to clarify about the process that is going on with that, as to whether that has closed now or is it still ongoing?
Mr McBride: That was considered by the finance ministers' meeting. From that, they have decided that, of those models examined, the bond aggregator was the preferred one that was more likely to reach the goals that that report examined. So the Affordable Housing Working Group has been reconstituted to support the task force that will examine the bond aggregator.
Senator RHIANNON: That was model 1. You have knocked out all those other models?
Mr McBride: The task force's focus will be on the bond aggregator. Whether we explore those other things separately is open, but the task force and the Affordable Housing Working Group will now specifically look at the bond aggregator.
Senator RHIANNON: When you say 'to open', is that to open who makes a decision?
Mr McBride: Ultimately, it is the Treasurer and the government. But as I said before, the other three are not being actively pursued.
Senator RHIANNON: I suppose when I say 'who makes that decision', it is who brings it back onto the table. It sounds like it has slipped off the table. Who brings it back onto the table?
Mr McBride: At the moment, our focus is on the bond aggregator.
Mr Pratt: I do not think I would characterise other options as having slipped off the table. It is just that they are not the focus at the moment. Government is looking, with the states and territories, at a large array of possible mechanisms and measures to improve our affordable housing in Australia. It is not impossible that some of these ideas could come back even if the priority is on the bond aggregator.
Senator RHIANNON: I really was not trying to misrepresent it. I was literally trying to understand it. Is what you are saying that the housing trusts, the housing cooperatives and the impact investing models, including social impact bonds, are all still active but maybe not as prominent as the bond aggregator is?
Mr Pratt: I think, as Mr McBride mentioned, essentially we are not focusing on those at this time, but it is not impossible that they could come back as a priority down the track.
Mr McBride: Certainly, the work of the Affordable Housing Working Group on the task force is not focusing on those. Social impact bond is something that broadly the Commonwealth is still examining.
Senator RHIANNON: Considering the bond aggregator is obviously more prominent, can you give us a summary of what you thinking is on it, what problems you have identified having gone through this process and where it is going?
Ms Wilson: The task force has really been set up to do that, as I understand it. As evidence was given earlier to Senator Cameron, the government will appointment three independent people to constitute the task force who will work through the issues around designing and implementing a bond aggregator, including the sort of financial market and financial viability issues. We in DSS and the Treasury will support the work of that task force. As I understand it, so will the states and territories who are part of the Affordable Housing Working Group. But it is the task force that will have that sort of day-to-day deliberations and then advise government on the outcome of their exploration.
Senator RHIANNON: Minister, do you regard housing is a human right?
Senator Seselja: I certainly think that if people do not have shelter then it is very difficult to live a dignified life. I think that food and shelter are the basics of human existence, so we want to see everyone have a house, absolutely.
Senator RHIANNON: And do governments have a responsibility to ensure that happens?
Senator Seselja: I think certainly governments at all levels should do all they can to try to make housing as accessible and affordable as possible. When I was in another sphere of government in the ACT assembly, certainly in opposition we always pushed very hard for the local government to be doing more to allow people to buy a home, to rent and, for those who cannot afford to buy or rent, to be supported in other ways, through public housing or the community housing. It is a critically important issue.
Senator RHIANNON: Just on that, you mentioned local government. I am often asked this and not able to answer it adequately: what can local governments do in terms of housing programs in their area? Could you provide how—at your level, the federal government—interacts and can interact with local government in assisting them?
Senator Seselja: I am happy to take that on notice.
Senator RHIANNON: I gathered from some of the earlier discussion that you do not have the data on the shortage of affordable housing. Was that correct or did I misunderstand that?
Senator Seselja: Mr McBride was answering that question. I think it is fair to say that we would be happy to see improvements in that data, but I do not think it is fair to say that there is no data. There are various ways of getting that data. They are imperfect, but there are significant sources of data whether it is at a state level or whether it is in various parts of the private sector or community sector.
Senator RHIANNON: How are you judging appropriate levels of funding and the effectiveness of the agreements if the data is so weak?
Senator Seselja: I did not say that the data was weak; I said it should be improved. There are significant sources of data, and I will perhaps ask Mr McBride to expand on those for you briefly. What I would say is that getting better data is important. As we have discussions with the states and territories, I think it is fair to say that improving the data is a constant theme. But I do not think it is fair to say that there is not any data. If I look at the data in terms of individual agreements—you were not here earlier when I was talking about some of the failings with NAHA in terms of where it has gone and what the statistics show in terms of some of the key objectives under that—then clearly the data is showing that, as a nation, we have gone backwards in many areas despite significant Commonwealth spend. But I am not sure if you are talking about that element of data or you are talking about other aspects of data, but I would not characterise it as being—I forget your word, was it 'insufficient'?
Senator RHIANNON: I said 'weak'. You do not think it is inadequate?
Senator Seselja: I certainly think it could be improved, I think it is fair to say. But there are all sorts of sources of the data, so I might get Mr McBride just to talk about some of those different sources of data.
Mr McBride: And we could tell you—
Senator RHIANNON: Can I just insert my question? I was asking about the data, which, from how are you judging appropriate levels of funding and effectiveness of agreements, seemed to be inadequate, if I am correct in understanding what you have said. I wanted to go from the data to understanding how you are making those judgements.
Mr McBride: The NAHA, as struck, had certain outcomes that collectively the NAHA was meant to deliver, and they were about homeownership for the Indigenous, overcrowding, rental stress and rates of homelessness, and we can measure outcomes against that. We do have a lot of data. We can tell you the size of the sector. We can tell you average rents. We can tell you rent exposure, rental stress and mortgage stress. We can tell you the size of the social housing sector and the affordable housing sector. So we do have enough data, and we have a relationship with the states, to the extent that they have sources of data that they share. We are just saying that we could make that process better, and the more data we have the better informed those discussions will be. But there is certainly a lot of data that gives us insights into what parts of the sector are performing well and what others not so much.
Senator RHIANNON: Minister, according to the Australian Institute of Health and Welfare, about $378 million of federal investment supported services has assisted just under 280,000 people—adults and children—who are homeless or at risk of being homeless. That works out, from my calculations, at $370 per person per night. By comparison, all the MPs who stay overnight in Canberra can get more than $270 a night when we stay here. How do you resolve this gross inequality? This clearly is a major problem for the government and for all of us when homelessness numbers are going up—$370 a night, compared to $270 per night. There is something seriously wrong in how government is working.
Senator Seselja: I am not sure about the particular AHW data that you are talking about. You are talking about an annual Commonwealth spend specifically on homelessness versus how many people have been assisted by that, and you have got a figure on that. Is that it?
Senator RHIANNON: Yes. It is $378 million on federal investment supported services assisting 280,000 people—adults and children—who are at risk of becoming homeless or who are already homeless.
Senator Seselja: If I could just add, the report on government services for 2017 talks about nominal expenditure in 2015-16 on homelessness services delivery by state governments being $744.6 million, so that is in addition, presumably, to that number. When we look at the Commonwealth spending on homelessness and housing, it was, I think, in total about $6.8 billion per annum, and I think the states make up another $4 billion or so in rough terms. We can get you more detail on that if you like. So we are talking about a $10 billion spend between the states and the Commonwealth per annum. You have taken out the part that the Commonwealth spends specifically on homelessness services. I do not have those figures in front of me, but if you were to combine even just what ROGS says the states spend in terms of homelessness plus what you have indicated that is well over a billion dollars there in terms of that spend. Now, what you are saying is: could we be spending more? Well, of course, in a range of worthy areas we certainly could if the money were there—and we always look to spend money appropriately—but I think we need to look at the entirety, particularly when you consider that the states and territories do have primary responsibility and constitutional responsibility for housing and homelessness.
Senator RHIANNON: But, Minister, you would not dispute that the situation is getting worse and that there is inequality. Homelessness is driving greater inequality in our society. You would not dispute that, would you?
Senator Seselja: I do not dispute that in the last decade or more that we have, unfortunately, seen more homeless people in this country. There is no doubt about that—I think the figures, if you look at one of the targets under NAHA was to reduce homelessness and between 2006 and 2013, there was a 17.3 per cent increase in that time. So, no, I do not dispute at all that there are more homeless people in Australia now than there were 10 or15 years ago and I think that that is something that should concern us all.