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Estimates: Community Affairs Legislation Committee: Social Services Portfolio

Estimates & Committees
Lee Rhiannon 13 Jun 2018

Friday, 1 June 2018

Affordable housing

Senator RHIANNON: Thank you, Senator Cameron. In the 2017-18 budget I notice that there were 87 mentions of 'affordable housing' or 'housing affordability'. It compares interestingly with the 2018-19 budget, where there were only five mentions of those words—only five times those words were used, two of which were in reference to measures in the previous budget. Does this indicate that the government thinks little more needs to be done in the area of housing? Is it the assessment that the 2017-18 budget delivered for affordable housing? Is that the conclusion that has been reached?

Ms Campbell: I don't think you can reach that conclusion on government priorities from the number of words in the budget paper. Affordable housing remains a very high priority for the government. It did put in place a number of measures in the 2017-18 budget. We continue to work on those measures. I don't think that you can assert that, just because there may not have been as many words in this budget—

Senator RHIANNON: From 87 down to five is a big change. I'm not saying that words are everything, but clearly the issue is not being discussed as much. It's not given as much emphasis in the budget. It's not being talked about and it's not being written about.

Ms Campbell: The measures that were put in place in the previous budget go for a number of years. Mr McBride might be able to assist us.

Mr McBride: I think a lot of the measures announced in last year's budget haven't even commenced yet. NHFIC, the process that would set up the bond aggregator and the infrastructure funding, is due to start on 1 July this year. We spent the last year negotiating the NHHA, which I'm sure will be a topic of discussion later on. So a lot of those measures are still playing out. I think it would be fair to say that we're still bedding down the 2017-18 budget measures and that has been our focus through this year and will be for the next little while.

Senator RHIANNON: Meanwhile, the homelessness crisis in Australia is so extreme. You would know the figures as well as any of us, but they're worth repeating in the context of what we're trying to deal with here. The latest census data indicated a 13.7 per cent increase in homelessness. The latest statistics from the Australian Institute of Health and Welfare indicate—and I found these figures so shocking—that 261 requests for homelessness assistance couldn't be met on any single day. There are 261 requests per day not being met. Do you really think that we're on track to deal with those figures? Is that what we're concluding from your opening remarks?

Ms Campbell: Senator, I don't think we said that. We appreciate that this is a very difficult public policy area and we work closely with the states and territories. There are shared responsibilities in this area. As in most public policy challenges, we continue to work through that. I don't think we're ever able to say that something is resolved, but, as Mr McBride said, the measures that were introduced in the 2017-18 budget are continuing to be implemented, so I don't think that there is any suggestion that the department or the government is not focusing on this space.

Senator Seselja: In fact, Senator Rhiannon, you may recall that, when it came to homelessness funding, for instance, one of the big calls from the sector was, instead of having one-year, two-year and three-year funding agreements for homelessness, that there be certainty. I believe at the time the states and territories—and Mr McBride can correct me if I'm wrong—asked for five years, and we came through in the last budget. The reason we didn't have to restate it in this year's budget is that we committed to it in perpetuity for the first time, rolling it into a broader housing affordability agreement. So the characterisation that you're seeking to put forward is completely wrong. Being able to put that money in in perpetuity, which is more than what was asked for by the sector, gives significant certainty in terms of homelessness funding going forward. Of course, we continue to negotiate with the states and territories. We are very, very committed to making sure, in a range of ways—and much of that is in this portfolio and, of course, in other portfolios as well—that we are making housing affordable, including dealing with the serious issue of homelessness.

Senator RHIANNON: Thank you, Minister. I'd like to move on to the Productivity Commission report, Introducing competition and informed user choice into human services. For Hansard: I notice the laughter. I think it's quite timely, because so much of the problem we're dealing with is how housing is dominated by marketplace relations. But to ask a question here: the report makes a number of recommendations, including increasing competition between housing providers and charging social housing tenants market rent. I was interested in that; we've already gone down that track enormously, but it would seem that we're going down that track in an absolute way—if that's how it plays out. Can you give some examples of where similar reforms, as outlined by the Productivity Commission, have been implemented in other countries—or even jurisdictions—and resulted in a decrease in homelessness and an increase in rental affordability? Even one example.

Ms Campbell: Again, this is the shared responsibility with the state jurisdictions. I don't have the Productivity Commission report in front of me. Mr McBride may be more familiar with that.

Ms Wilson: No, I don't have it either.

Mr McBride: Neither do I. But I think that for both those examples, whether increased competition or market based rents, what we have seen in the emerging community housing sector is an aggregation of the sector. Whereas before you had lots of small providers, each with their own quite high overheads as a proportion of their income, they're now agglomerating. So we have smaller, bigger and more sophisticated community housing providers. That has led to fewer overhead costs as a proportion of their rents and more sophisticated funding arrangements so they'll be better placed to take advantage of the bond aggregator when it comes in from 1 July. We have also seen a move in that sector away from relying solely on income based rents to having a mixed market approach where they charge some people income based rents, some people discounted rents and some people full market rents as a way of cross-subsidising across their sector so that the sector remains viable. Ideally, with the benefit of the bond aggregator and other measures, it will grow.

Senator RHIANNON: But the question was: can you give us an example where it has worked? The trend in Europe is where the social public housing mix is up to 20 per cent or 30 per cent—I would imagine you'd be well aware of that—whereas in Australia it's 4.5 or 4.9 per cent and going down. And it's now really being pushed into the marketplace. I would go back. Ms Campbell, I think you asked if anybody had a copy of the report. But, surely, you must know what the essence of that report is? It very much is about increasing competition between housing providers and charging social housing tenants market rent. So my original question was: can you give an example of one country or one jurisdiction where it has worked?

Mr McBride: I guess my answer is that, arguably, it's starting to work here.

Senator CAMERON: Oh, rubbish!

Senator RHIANNON: What did he say?

Senator CAMERON: It's working here.

Senator RHIANNON: It's working here? I've just given you the homelessness figures! They're disgraceful! I really thought you'd come here and be embarrassed about it and have a whole lot of things to say about what you're doing.

Mr McBride: The question is not whether homelessness has got worse—and we acknowledge that it has. It's whether what the sector is doing now is putting them in a better position than they otherwise would be.

Senator CAMERON: Again, rubbish! This is just a joke!

Senator RHIANNON: It's tragic, because you're talking about people's lives. If people have security in their housing then their health is better, the education of their children is better, our communities work more successfully and it's better for the economy. Productivity can really start to get going. Housing is so fundamental, and you're taking us down the other track.

Mr McBride: I don't think anyone disputes that.

Senator RHIANNON: You may say it's not disputed, but if you follow this position, which you seem to be, of pushing social housing to the private market— Mr McBride: That's not what I said, Senator—

Ms Campbell: No, can I be really clear. This is a Productivity Commission report.

Senator RHIANNON: Yes. Ms Campbell: Has the government responded? Has the government clarified?

Mr McBride: No.

Ms Wilson: No.

Ms Campbell: There are a lot of reports that come out and government considers those reports. I don't think there's been a definitive position put forward following that report.

Senator RHIANNON: Has the department, following on from that response, been asked to prepare, in any way, for the implementation of any of the recommendations relating to social housing?

Ms Campbell: The minister talked about the National Housing and Homelessness Agreement that is being put in place from 1 July.

Mr McBride: Correct.

Ms Campbell: I don't think that that's directly related to the PC recommendations.

Ms Wilson: No, it's not.

Ms Campbell: But there were a number of measures announced in the 2017-18 budget that the government has put in place around homelessness. Your question relates to the PC report.

Senator RHIANNON: Yes.

Ms Campbell: Mr McBride has indicated that we haven't done any work to address those recommendations.

Senator RHIANNON: But my question was: have you been asked to prepare in any way for the implementation of the recommendations? Have you been asked? Unidentified speaker: No, not at this stage.

Mr McBride: The recommendations didn't relate only to our portfolio—also the Treasury portfolio. But we haven't been specifically asked to respond. Senator RHIANNON: You haven't been asked?

Senator CAMERON: I am not surprised.

Mr McBride: Many of those suggestions were in the Productivity Commission report weren't new. They have been floated in many reviews before, so it wasn't—

Senator RHIANNON: But the PC carries weight, as we know, which is why it's very relevant to explore that today. The reports recommends a 15 per cent increase in Commonwealth rent assistance to complement other contestability and competition reforms. What evidence is there that such an increase in the context of other recommendations is sufficient to avoid housing stress for all households?

Ms Campbell: Those recommendations are the Productivity Commission's recommendations. If you are asking about evidence that supports those recommendations I think that would be better directed to the Productivity Commission.

Senator RHIANNON: Yes, that obviously needs to be done but as this is so relevant to your future work it's very legitimate and very necessary to explore it here. Considering what you're saying about the productivity—but in the context of your work, what is your opinion on what increase would be sufficient, in the context of the other recommended reforms. I'm talking there about the Commonwealth rent assistance—that suggested 15 per cent.

Ms Campbell: It's not open to me or to any officer at the table to provide an opinion. We can talk to you about government policy and whether or not we have provided advice on that matter. To my understanding we have not provided advice on that matter.

Senator RHIANNON: Have you done any work on it, where you'd be looking at the CRA, because Commonwealth rent assistance has become so central to how housing is managed from the federal level and there is speculation periodically that that is going to dominate federal policy.

Ms Campbell: Commonwealth rental assistance is one of the large programs we manage, so we do from time to time have a look at it and look at what magnitude—and how it meets the needs, but we haven't provided any advice in the context of this PC report on CRA.

Senator RHIANNON: I just want to understand more with regard to Commonwealth rental assistance and how it sits, because it is now a very significant recommendation. The Productivity Commission carries a lot of weight. It's often the way governments are able to usher through policy—when it comes from the Productivity Commission. The central recommendation regarding housing assistance is to move to a single financing system, which would see the Commonwealth rental system used to be a subsidy for social housing or housing through the private market. So it would be a very significant change. Has that been given consideration in terms of—

Mr McBride: Commonwealth rent assistance also goes to the market and also goes to those in community housing. The difference the Productivity Commission was recommending is that it's paid to people in public housing.

Senator RHIANNON: Yes.

Mr McBride: As I said before, this is nothing new. I think it was in the Henry review and many reviews prior to that.

Senator RHIANNON: But isn't it that to you it is more dominant—that that becomes— Mr McBride: I don't think so.

Ms Wilson: I started my career working in public housing matters in the Commonwealth. That issue was around then as a proposition. It has been a perennial proposition put forward in a number of years over a very long period. Ms Campbell: Ms Wilson is retiring today—after a very long period!

Senator RHIANNON: All the best for your retirement.

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