Bills Digest 80 1995-96
Housing Assistance Bill 1996
WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments.
This Digest was available from 8 May 1996
CONTENTS
Date introduced: 8 May 1996
House: House of Representatives
Portfolio: Social Security
Commencement: Clauses 7-11, which deal primarily with
housing assistance grants, commence on Royal Assent or 1 July 1996, whichever
is the later. All other clauses commence on Royal Assent.
To authorise the Commonwealth to enter into financial agreements with
the States and Territories for the provision of housing assistance.
Brief History and Current Arrangements
The two main sources of government assistance for housing are the provision
of public housing (essentially through the Commonwealth - State Housing
Agreement - CSHA) and the provision of rent assistance to low income tenants
in private dwellings.
The CSHA commenced in 1945 and is the Commonwealth Government's main
housing program. Since 1945 a series of financial assistance agreements
have been negotiated between the Commonwealth and the States with a view
to providing housing assistance to people in need. Current legislative
authority for the CSHA is contained in the Housing Assistance Act 1989
(the Principal Act) which provides the legal framework for the latest
Agreement. The Housing Assistance Amendment Act 1992 amended the
Principal Act to extend the current CSHA to 1995-96 and the Housing
Assistance Amendment Act 1993 provided for minor changes in expenditure
made available for various programs under the CSHA for 1993 to 1996.
Initiatives by the Chifley Labor Government resulted in the first CSHA
being finalised between it and the six States in November 1945. Commonwealth
- State Housing Agreements have been negotiated with the States in 1945,
1956, 1973, 1978, 1984 and 1989. The Northern Territory was included in
the CSHA in 1981 and in 1989 the Australian Capital Territory became a
party to the Agreement.
Approximately one half of all Commonwealth funding for housing comes
under the CSHA umbrella. The remainder goes primarily to rent assistance
(for those in private rental accommodation) which is provided Department
of Social Security and Department of Veterans' Affairs clients; specific
programs for Aboriginal and Torres Strait Islanders including the Community
Housing and Infrastructure Program and Aboriginal Hostels Ltd which are
administered by the Aboriginal and Torres Strait Islander Commission;
and funding for organisations to provide residential care for the elderly,
including nursing homes and hostels. The Commonwealth also funds a number
of programs that help people into more independent living arrangements
or to provide for their ongoing support needs, such as the Supported Accommodation
Assistance Program, the Home and Community Care Program and the Commonwealth
- State Disability Agreement.
The majority of Commonwealth funding under the CSHA is in the form of
capital grants, mainly for the provision of public housing. The States
and Territories have a host of housing and housing related schemes that
are funded via the CSHA including schemes for public housing, community
housing, loans for home purchase and rent assistance.
The majority of the funding provided by the Commonwealth to the States
and Territories is required to be matched by those jurisdictions on a
dollar for dollar basis, half with State grants and half through home
purchase assistance loans. State and Territory governments are also encouraged
to combine CSHA home purchase assistance funds with private funds to expand
their lending programs. As well as general funds for public rental housing
and home purchase assistance schemes, some funds are allocated for specific
programs. The Agreement provides for an annual Commonwealth - State Assistance
Plan for each State and Territory which includes an assessment of housing
need, resources available and priorities for assistance. The States and
Territories administer the housing operations and determine practices
with the Housing Assistance Plan.
The main areas funded in the 1995-96 Budget for the CSHA were - public
rental housing, pensioner rental housing, Aboriginal rental housing, community
housing, mortgage and rent assistance and the provision of crisis accommodation.
A total of $1065.8 million has been allocated to the various sub-programs
of the CSHA in the 1995-96 Budget. It should be noted that $993.1 million
of the total allocated came from the Housing and Community Amenities function
in the Budget and that the remainder of the funds, $72.8 million, comes
from the Social Security and Welfare function in the Budget. Table 1 shows
the distribution of payments of 1995-96 CSHA funds by State and Territory.
Performance of the CSHA
Five key concepts have been identified as approximate indicators of
CSHA performance - accessibility; affordability; appropriateness; security
of tenure and equity. A review of the evidence appears to indicate that
the CSHA is performing reasonably well in terms of these indicators with
the exception of arguably the most important one, accessibility. Statistics
relating to waiting lists for public housing and the number of recent
additions to waiting lists for public housing shows that there is a substantial
shortfall in the provision of public housing dwellings. For example, the
number of families on waiting lists for public housing in Australia has
grown from 126,000 in 1982-83 to 232,000 in 1993-94. (1)
(For a full discussion of the performance of the CSHA in recent times
see Public Housing In Australia, The Australian Institute of Health
and Welfare 1994).
Re-negotiation of the CSHA
As noted, the existing CSHA was signed in 1989. It will be replaced
by a new agreement to commence from 1 July 1996. The December 1995 Report
on Government Service Provision by the Steering Committee for the
Review of Commonwealth/State Service Provision outlined a number of recent
developments in public rental housing. In relation to the CSHA, the Report
said that the Commonwealth, State and Territory Governments are working
to reform the planning and delivery of housing assistance provided through
the CSHA and that re-negotiation of the CSHA is intended to be a major
strategy in assisting people to improve access to affordable housing.
Proposed reforms to the CSHA are said to include:
- clearer roles and responsibilities for the Commonwealth, State and
Territory governments, with increased flexibility for jurisdictions
to invest in resources across a mix of housing assistance;
- measures to improve the transparency of financial arrangements;
- an outcomes focus with agreed measures of performance, including an
agreed needs methodology as a key input into planning and setting targets;
- a clearer emphasis on commercial management of housing stock, and
diversification of supply and providers;
- potential for contestability of supply; and
- consumer choice in the type(s) of assistance.(2)
It is reported that the above changes will be achieved through negotiation
of a performance-based strategic plan with each State and Territory.
The Liberal and National Parties' Housing and Urban Design Policy
1996
During the 1996 election campaign, the Liberal and National Parties
gave a number of commitments in relation to the CSHA, including to renegotiate
the CSHA with the States and Territories with a commitment to:
- a separation of roles and responsibilities between levels of government
and clarification of objectives;
- the principle that new tenants in public housing are not charged more
than 25% of their income as rent;
- the principle that existing tenants in public housing are not disadvantaged;
- introducing accountable strategies for addition and replacement of
housing stock to ensure that proceeds of sales of public housing to
tenants are reinvested in public housing;
- encouraging private sector integration in public housing, with the
States and Territories leasing back on a long-term basis;
- encouraging the States and Territories, housing authorities, and private
investors and the non-retail finance industry to enter shared ownership
arrangements; and
facilitating, in consultation with the States and Territories a consistent
national approach to the asset management of their public housing stock.(3)
Major Differences Between Housing Assistance Bill 1995 and Housing
Assistance Bill 1996
On 29 November 1995 the Keating Government introduced the Housing Assistance
Bill 1995 (the 1995 Bill). That Bill lapsed with the dissolution of Parliament
on 29 January 1996. While the Housing Assistance Amendment Bill 1996 (the
1996 Bill) is, for the most part, identical to the Keating Government
Bill, major differences do exist, these include:
- a new paragraph (g) is contained in the Preamble to the 1996 Bill
which provides
housing assistance will, as far as possible, offer a choice
between different forms of assistance and between different providers
of assistance and include the provision of targeted subsidies to home
purchase aspirants; and
- a new paragraph (j) is contained in the Preamble to the 1996 Bill
which provides
encourage private sector involvement in the provision of appropriate
and affordable housing; and
- paragraph (i) to the Preamble to the 1996 Bill [paragraph (h) in the
1995 Bill] is amended by removing the following words which are a reference
to the Better Cities Program
... as appropriate, in view of the regulatory and other functions
of those bodies with respect to the design, planning and management of
cities and towns; and
- a new subclause 11(2) is contained in the 1996 Bill which provides
The Consolidated Revenue Fund is appropriated for the purpose
of the making of grants or other payments under this Act (not exceeding,
in total, $1,067,863,00) in the financial year beginning on 1 July 1996.
The statement of the Minister in the Second Reading Speech to the 1996
Bill should be noted in regard to subclause 11(2). The Minister said
It is intended that the next Commonwealth State Housing Agreement
will operate from 1 July 1996 and will continue to be targeted to meet
the needs of people who are most at risk of housing related poverty. It
will be an interim agreement for up to 3 years aimed at achieving a number
of fundamental reforms. As such, it will provide a basis for further significant
longer term reform to achieve even greater improvements in the efficiency
and effectiveness of government housing assistance. The agreement will
be funded by a special appropriation in 1996-97 of approximately $1.068
million. Funding for subsequent years will be determined as part of the
Commonwealth budgetary process and in light of progress in implementing
longer term reforms and the report of the National Commission of Audit.
Table 1: Details of Payments to be Made Under the Commonwealth - State
Housing Agreement, 1995-96 ($m) (estimated)
NSW VIC QLD WA SA TAS ACT NT TOTAL
CSHA Block 257.7 193.5 135.8 70.3 50.7 28.4 18.2 13.5 768.1
Assistance
Pensioner 18.5 11.2 9.8 4.2 3.8 1.8 0.5 0.5 50.4
Housing
Aboriginal 17.8 3.6 32.4 16.2 8.5 1.0 0.0 19.7 99.3
Housing
Community 23.4 17.4 16.8 6.6 5.7 3.0 1.2 1.2 75.3
Housing
Mortgage 10.5 7.8 6.0 2.9 2.6 0.8 0.5 0.3 31.5
and Rent
Relief
Crisis 13.5 10.0 7.1 4.4 3.3 1.6 1.1 0.4 41.3
Accommodatio
n
Total 341.4 243.5 207.9 104.6 74.6 36.7 21.5 35.6 1065.9
Source: 1995-96 Budget Paper No. 3, p. 43.
Clause 4 sets out the objects and aims of the Bill, these include
the provision of financial assistance to the States and Territories to
ensure people can obtain affordable, secure and appropriate housing, and
to make payments for the purposes of housing research, development, demonstration
and evaluation. The main aim of the Bill is to assist those most in need,
including the homeless and those discriminated against in the private
rental market.
Clause 5 allows the Minister to determine the form of a inter-government
housing agreement. An agreement is to include provisions relating to certain
matters including:
- the making of grants to a State/Territory;
- the amount, or formula for determining the amounts of grants;
- the obligations of a State/Territory in relation to the spending of
grants; and
- the rights and obligations of people to whom assistance is to be provided.
An instrument determining, varying or revoking an inter-government housing
agreement is subject to disallowance by Parliament.
Clause 6 allows the Commonwealth to make a inter-government housing
agreement substantially in accordance with the form of an agreement determined
by the Minister under clause 5.
Clause 7 accords the Minister power to authorise housing assistance
grants to a State/Territory. Grants are to be made on the terms and conditions
set out in an inter-government housing agreement. Clause 7 is subject
to clauses 9 and 11.
Clause 9 prohibits the Minister from making a grant unless the
Minister and State/Territory Minister have agreed, in accordance with
the inter-government housing agreement, on the amount a State/Territory
will spend from its own financial resources on housing. Where the Minister,
after consulting the State/Territory Minister, believes that a State/Territory
will not spend all the amount agreed to, the Minister may reduce the amount
payable by the Commonwealth to the State/Territory and authorise payment
of the unspent amount to another State/Territory. Such reallocations are
to be on terms and conditions determined by the Minister.
Clause 10 authorises a grant to be made in the first grant year
(1996-97) eventhough no inter-government agreement is in force. Such a
grant is to be made on such terms and conditions as the Minister determines
would be in an inter-government agreement if such an agreement was made.
Clause 11 appropriates from the Consolidated Revenue Fund for
the purpose of grants and payments under this Bill $1 067 863 000 million
for 1996-97.
(1) The Australian, 13 February 1995
(2) Steering Committee for the Review of Commonwealth/State Service
Provision, Report on Government Service Provision, December 1995,
pp. 127 and 128.
(3) Liberal and National Parties' Housing and Urban Design Policy
1996, pp. 9 and 10.
Ian Ireland Ph. 06 277 2438
Greg McIntosh Ph. 06 277 2414
17 May 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
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ISSN 1323-9032
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1996.
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Last updated: 17 May 1996
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