CHAPTER 3 - The CSHA and Public Housing
Operation of the CSHA
3.1 Although its main purpose has not changed, the detail of each Commonwealth
State Housing Agreement (CSHA) has varied somewhat over the years. The
1996 CSHA represents a considerable change on earlier agreements, especially
in relation to Commonwealth State responsibilities. Prior to 1996, the
Commonwealth influenced the provision of housing assistance by the States
under the CSHA by placing restrictions on the use the States and Territories
could make of Commonwealth funds. States were free to run and manage their
programs subject to the conditions of the Agreement. For example, the
1989 CSHA limited the amount of funds the States could use for home ownership
and other non-capital purposes. States were also bound by `tied grants'
so that Commonwealth funds had to be directed into five specific purpose
programs:
- Rental Housing for Pensioners;
- Rental Housing for Aboriginals;
- Mortgage and Rent Assistance;
- Community Housing; and
- Crisis Accommodation.
3.2 The 1996 Agreement removed many of the restrictions on the States,
such as the limits on spending funds on non-capital purposes. The funds
from two of the specific programs, (Rental Housing for Pensioners and
Mortgage and Rent Assistance) were transferred into general CSHA funding.
The remaining specific programs could be similarly `untied' by agreement
between the Commonwealth and State Ministers. The Community Housing Program
was `untied' in late 1996. [1]
3.3 The aim of the changes in the 1996 CSHA was to allow the Commonwealth
to monitor outcomes and agree on strategic directions while giving the
States maximum freedom over provision of assistance. To achieve this a
system of performance indicators agreed between the Commonwealth and the
States was introduced. These cover:
- the total amount of assistance provided;
- the targeting of assistance to those in need;
- the affordability of assistance provided;
- the standard of rental housing provided;
- the levels of overcrowding and under-use of rental housing;
- consumer satisfaction;
- timeliness of assistance;
- efficient use of assets; and
- the value of assets. [2]
3.4 The 1996 CSHA also requires each State and the Commonwealth to agree
on a strategic plan for housing assistance. Requirements for Commonwealth
State plans were first introduced in the 1989 CSHA and were strengthened
in the 1996 CSHA. The strategic plans are now to contain, as a minimum:
- assessed need for various forms of housing assistance in the State
and agreed priorities within the assessed need;
- available funds for the period of the Strategic Plan, being Commonwealth
State funding contributions and any net income earned from the use of
assets, including net proceeds of any asset sales and other asset realisations;
and
- agreed targets and strategies for the use of assets and available
funds in relation to the assets and available funds.
Commonwealth State responsibilities
3.5 There was little support in submissions and evidence to the Committee
for a major change in Commonwealth and State responsibilities in relation
to the provision of public rental housing and cash assistance to low income
recipients to enable them to afford housing. Several submissions specifically
rejected any suggestion that only one level of government (either Commonwealth
or State) should have sole responsibility for housing assistance. [3]
3.6 National Shelter, for example, argued that difficulties would be
encountered if either level of government had sole responsibility for
housing. Basing its arguments on an unpublished report by Commonwealth
State housing officials, the Report of the Functional Review of Housing,
1990, National Shelter stated that the transfer of sole responsibility
to the Commonwealth would cause difficulties because the Commonwealth
had no control over infrastructure and urban and land development planning.
In addition the Commonwealth had a lesser ability to respond to State
and local needs and market conditions. On the other hand, the States would
have difficulty in ensuring housing outcomes without the help of the Commonwealth
as they had no control over areas such as taxation, income security policy
and interest rates. [4]
3.7 Other witnesses perceived potential problems: Both the National Association
of Tenant Organisations (NATO) and the Tenant Union of Victoria pointed
to the Commonwealth's role in taxation and suggested that there needed
to be Commonwealth as well as State involvement in housing. [5]
3.8 There was little support in evidence for the proposal that had been
discussed by the Council of Australian Governments over the period 1995
to 1997 to divide the responsibility for housing assistance so that the
Commonwealth assumed responsibility for rental subsidies for both public
and private tenants while the States assumed sole responsibility for the
provision of housing.
3.9 The majority of submissions argued that the Commonwealth as well
as the States should be involved in the provision of public housing. Some
argued that the provision of housing and of subsidies could not be separated.
Shelter NSW told the Committee that:
It would be inconceivable for the Commonwealth to provide billions
of dollars in housing subsidies to meet their affordability objective
without having significant input into the effectiveness of these subsidies,
which will be predominantly determined by the supply of low cost housing
in the public and private rental markets. [6]
3.10 Submitters such as the Brotherhood of St Lawrence, felt that only
the Commonwealth had the resources to provide the level of assistance
needed for public housing. [7] Others argued
that a degree of national consistency was desirable in order to provide
equity between citizens in different States and saw this as a role for
the Commonwealth government. [8] Submissions
in that group considered that the CSHA was instrumental in ensuring that
low income, disadvantaged people had access to the security of tenure
afforded to public housing tenants. [9]
3.11 The Department of Social Security was alone in presenting a contrary
view on the issue of the balance between Commonwealth and State responsibilities.
It saw advantages in sole State responsibility for the provision of housing
because the States have responsibility for key housing related areas such
as urban planning and infrastructure provision and rental regulation.
In the Department's view such an approach would clarify accountability
as well as assist with efficiency, effectiveness and policy co-ordination
especially in providing housing assistance for people with disabilities
and other disadvantaged groups. [10]
3.12 Nevertheless, the Department also noted that:
Governments may decide that particular areas of housing assistance
are of sufficient national importance to justify a shared Commonwealth-State
interest. [11]
3.13 Activities such as income support and taxation measures which are
Commonwealth responsibilities and planning regulation and service delivery
which are State responsibilities have a direct impact on the success of
housing programs. In the Committee's view, the provision of affordable
housing for the most vulnerable groups in the community is of considerable
national importance and there should be no change to the current system
of involvement by both the Commonwealth and the States in housing assistance.
Recommendation 3: The Committee recommends that the provision
of public and community housing remain a joint Commonwealth State responsibility.
3.14 There was support from a number of the submissions for the broad
framework of the 1996 CSHA, in particular for the Commonwealth to be involved
in the setting of national targets and priorities and in monitoring outcomes
of assistance achieved by the States. For example Shelter NSW considered
that the 1996 CSHA had great potential to work, if it was given the chance.
[12] There were however differences in views
about the extent of Commonwealth involvement in such a framework. Some
organisations considered that more detailed assessment and monitoring
of the States' performance than currently occurs. In ACOSS's view, the
following areas needed monitoring:
- rates of stock acquisition which reflect progress towards meeting
assessed housing need against `locational' targets for the siting of
new housing;
- accessibility of State Housing Authority planning, administration
and performance evaluation processes to early and continuous input by
applicants and tenants, their organisations and advocates;
- levels of consumer satisfaction (before, during and post-occupancy),
determined through a range of methods such as direct surveys, focus
groups and discussions with tenant organisations;
- design quality including the extent to which special needs are met,
environmental sensitivity and energy efficiency;
- effectiveness of linkages with urban and regional developmental policies;
and
- the extent and quality of communication with tenants through newsletters,
letters and other notices. [13]
3.15 National Shelter called for a national housing strategy or policy
covering a wide range of housing measures including changes to the taxation
system, the provision of more public housing and increases in rent assistance,
a better land use planning system with greater emphasis on the development
of infrastructure in urban areas, measures to improve the legislative
framework for legislative tenancies and greater provision for crisis accommodation.
[14]
3.16 National Shelter's approach would entail the Commonwealth becoming
involved in areas currently the responsibility of the States including
residential tenancy legislation and land use planning. Quite apart from
the major practical difficulties that such a system would pose, the States
are likely to oppose any increase to Commonwealth involvement in housing
matters. Queensland, Western Australia, and the Northern Territory all
expressed, in their submissions the view that Commonwealth involvement
in the provision of housing should be to reduced to the minimum possible.
[15]
3.17 Western Australia and the Northern Territory suggested that the
Commonwealth should limit its involvement in housing to the provision
of funds to the States. [16] Queensland also
shared this view. They all argued that CSHA funding should move towards
an outcome-based funding model, with improved reporting requirements and
simplified planning processes. The current bilateral planning process
was described as `extensive' and Queensland argued that individual State
priorities did not get sufficient emphasis. All the States stated that
they wanted more flexible arrangements which would allow each of them
to negotiate bilateral funding levels to meet outcomes agreed between
each State and the Commonwealth. [17]
3.18 The New South Wales Department of Urban Affairs and Planning expressed
general support for the changes introduced in the 1996 Agreement. In particular,
it supported its greater flexibility compared with earlier Agreements,
in the application of grant funds and assets to different forms of housing
assistance. NSW also welcomed the commitment to a nationally consistent
set of performance indicators to measure the outcomes of the housing assistance
system. [18]
3.19 Faced with extremely high (and continually rising) private sector
rents in the inner and middle ring areas surrounding Sydney and a shortage
of affordable housing, the NSW department identified the following three
key weaknesses in the current Agreement:
- the three year Agreement does not facilitate recurrently funded models
for supply of housing such as leasing dwellings or using borrowed private
sector funds;
- the 1996 CSHA does not attempt to integrate planning and policies
under the CSHA with Department of Social Security Rent Assistance; and
- the financial arrangements under the current CSHA do not necessarily
ensure the operational viability of housing providers. [19]
3.20 The inclusion in the CSHA of specific rent levels for public tenants
was suggested in some submissions. [20] Currently
the Commonwealth sets rent assistance for private tenants but the States,
through rebated rents, have responsibility for assistance to public tenants
and determine public rent levels.
3.21 The Department of Social Security considered that the Commonwealth
should take responsibility for both rent assistance for private tenants
and rebated rents for public tenants. It argued that the current system
of dual responsibility led to a loss of efficiency and effectiveness as
well as a lack of accountability and transparency. These problems arise
because separate systems make it difficult for either level of government
to identify needs and set affordability goals for low income renters (private
and public) as a group. [21]
3.22 One approach would be for the Commonwealth to make a common rent
assistance payment to both public and private tenants. Concern was expressed
in submissions that since limited funds are available, this would result
in public tenants receiving less than their current rebate rather than
private tenants seeing their assistance increased to match that of their
counterparts in public housing For example the Illawarra Social Housing
Forum stated:
Within a `cost neutral' scenario as proposed by the Federal Government,
the Forum considers that a significant increase in assistance to private
renters would lead to a corresponding reduction in public housing assistance
(both in terms of reduced stock construction and maintenance and the
amount of subsidy available to public tenants). [22]
3.23 However a common payment is not the only way of increasing uniformity
and consistency between rent assistance and rental rebates. The DSS submission
indicated that the aims of greater uniformity and consistency, both between
States and between public and private tenants, could be achieved through
the existing system if the Commonwealth and the States worked together
to achieve that goal. [23] This second approach
was supported in submissions. For example, ACOSS recommended a national
system of rental rebates for public tenants with clearly defined benchmarks.
Ecumenical Housing considered that a common framework for rent assistance
in the private sector and rebated rents in the public sector was achievable,
without, at least initially, moving to identical payments. [24]
3.24 Some submissions specifically opposed introducing a common payment.
For example, National Shelter argued that the rental rebate system in
public housing ensured affordability for the tenants and was cost-effective.
However such a system was unsuitable to private rental as it was likely
to increase private sector rents. For this reason they advocated the continuation
of separate systems. [25]
2.25 The Committee considers that the Commonwealth should have a role
in rent assistance for public as well as private tenants so that consistent
goals can be set for all low income renters. In the absence of the introduction
of a common payment for both public and private tenants, consistency can
be achieved through the inclusion in the CSHA of agreed criteria for ceiling
and rebated rent levels.
Recommendation 4: The Committee recommends that maximum rent
levels and the rebated rent scales for public housing be included in future
Commonwealth State Housing Agreements.
3.26 The Committee does not consider that the evidence put before it
supports the argument for major changes to the current arrangements within
the Commonwealth State Housing Agreement. While the Committee understands
the desire of some States to have less Commonwealth involvement in housing
programs, the Committee considers that the need for national consistency
is so important that the Commonwealth must ensure that the States are
meeting national goals.
3.27 The Committee considers that the framework in the 1996 CSHA of agreed
targets and performance measures provides a good basis for accountability
by the States for their activities, but that new agreements should be
sought into ways of improving outcomes, particularly by ensuring that
funds allocated to the States for housing are actually used for this purpose
and are spent or committed within an agreed time frame.
Recommendation 5: The Committee recommends that on its expiration
on 30 June 1999, the 1996 Commonwealth State Housing Agreement be replaced
by a new Agreement which retains the specification of performance and
the strategic planning processes which are in the existing Agreement measures
and addresses the issue of State accountability.
A needs-based approach to funding for the States?
3.28 A number of the States and Territories raised the issue of State
housing need and how it is measured. In their view, this is an issue of
central importance in how States receive Commonwealth funds under the
CSHA. The NSW Department of Urban Affairs and Planning, for example told
the Committee that it saw a case for the Commonwealth to recognise the
higher housing unit costs in New South Wales and to distribute its housing
assistance funds accordingly. [26]
3.29 The New South Wales position on needs-based funding was supported
by the Northern Territory Department of Housing and Local Government.
Although it operates in an environment which is at the other end of the
spectrum to inner-city Sydney, it shares a very high level of need with
its NSW counterpart:
The Territory's needs for housing are, on a per capita basis, undoubtedly
much greater than other States because of its backlog of Aboriginal
housing, the costs of construction in the Territory (including building
to cyclone code), the remoteness of the locations where housing is required
and diseconomies of scale. However, the Territory is severely disadvantaged
in providing housing because this is not taken into account in the allocation
of CSHA funds...which are distributed on a per capita basis rather than
a needs basis. [27]
3.30 New South Wales recognised that a shift from the current (simple)
per capita funding approach to a needs-based approach would not be easy
to achieve:
There is not an agreed measure of need and there are many different
ways of looking at it. We recognise there are policy options that may
be more or less successful in meeting those needs. It is disappointing
that under the interim agreement we have not been able to progress agreement
about how to measure need. We consider this is critical to governments
being able to agree on future directions. [28]
3.31 The Western Australian government commented in its submission about
New South Wales' emphasis on needs. This highlights just how difficult
it would be for all the States to agree on a reformed funding formula:
Western Australia strongly believes there should be no change to the
current funding model of per capita distribution to the States and Territories.
Needs based funding favours the larger States and reinforces the problems
of the Sydney housing market at the expense of the smaller States. [29]
3.32 Both Territories governments also claimed that their circumstances
warranted special consideration and increased funds. In their case, it
was the relatively large size of their public housing stock which has
become a burden to their social housing budgets. The ACT Government told
the Committee:
The ACT inherited aged and poorly maintained public housing stock from
the Commonwealth and capital debt on the housing stock. The ACT subsidises
the Commonwealth by providing public housing to tenants who would otherwise
access the private rental market, in most cases with DSS Rent Assistance.
[30]
3.33 Both Territory governments considered that by having a large proportion
of their low income renters in public housing (because they had inherited
a large public housing stock from the Commonwealth), they were assisting
the Commonwealth government by reducing the number of people who might
otherwise be eligible for Rent Assistance. They were not being compensated
for this through the current CSHA and called for reforms. [31]
3.34 In its submission and in evidence to the Committee, the ACT Government
called for long term housing reform:
From the ACT government's point of view, [it is] certainly concerned
to get some redress of the imbalance between the costs that the ACT
government is bearing in respect of the high level of public housing
that it has. [32]
The Committee considers that the ACT government should contemplate ways
of raising additional revenue (perhaps by imposing a tax on temporary
residents) and to allocate the funds thus raised towards its public housing
stock.
3.35 The Northern Territory Government saw its position in similar terms:
Public housing stock levels have been as high as 21-22 per cent currently
estimated at 14 per cent. This high level of public housing provides
an implicit subsidy to the Commonwealth's rent assistance payments.
If the Northern Territory were to have a public housing portfolio proportional
to the national average, the cost to the Commonwealth Government in
increased rent assistance would be of the order of $9M per annum. [33]
3.36 The overall figures indicate that a higher proportion of renters
in the Territories access public housing as compared with the States,
where larger numbers of renters have no other option than to rent privately.
For example, 13.5 per cent of ACT renters were in public housing compared
with the Australian average of 6.7 per cent. It is important to bear in
mind, however, that public housing renters pay according to the income
they receive. With their larger public housing stock, the Territories
are more likely than most of the States to have public housing tenants
who can afford to pay rents that approach market rent levels.
3.37 The Committee has only touched on the very complex issues raised
by the States in this area and it does not consider that it would be helpful
to offer simplistic solutions. With its higher property values, it is
not surprising that NSW would wish to move to a needs based funding. It
could be argued that it would be discriminatory towards some States to
move away from per capita funding, especially since each State is bound
to interpret the concept of `housing need' in relation to its own circumstances.
3.38 Queensland and Western Australia could argue that they need extra
funding on the basis that they are major growth areas in terms of population
and housing. The Committee recognises that a consensus position between
the parties would be difficult to achieve but it is up to the parties
negotiating the CSHA to reach an acceptable arrangement.
3.39 Reforms to the CSHA could include changes to areas such as the performance
indicators, detailed financial arrangements and the areas to be covered
by the State planning processes. In considering changes to those areas,
a balance needs to be struck between the desire to provide a maximum level
of accountability and the need to simplify reporting requirements for
the States. The Committee considers that the current level of detail in
the performance measures and planning processes does strike such a balance.
The New Zealand experience
3.40 New Zealand introduced reforms to housing assistance in the early
1990s. The reforms were broadly along the lines of the proposals considered
by the Council of Australian Governments. Prior to 1991 the New Zealand
system was similar to the Australian system. Public tenants paid income
related rents, generally 25 per cent of their income in rent. The maximum
amount of rent payable was the assessed market rent for the dwelling.
Private tenants could be eligible for an Accommodation Benefit, which
paid a lower level of assistance than that received by public tenants.
[34]
3.41 From 1991 to 1995 New Zealand phased in changes. As a result of
the changes tenants in public housing now pay market rents, and receive
a cash accommodation supplement which is also available to private tenants.
The reforms were introduced as it was considered by the New Zealand government
that the previous system was inequitable in that public tenants received
higher levels of assistance than private tenants, that public housing
was an inefficient use of housing resources as tenants stayed in public
housing even if their circumstances changed and that public housing was
not reliably allocated to those most in need. The previous system was
also seen as hiding the true level of subsidy and promoting a conflict
of interest as the New Zealand Housing Corporation (which owned and ran
public housing) had to meet both commercial and social objectives. [35]
3.42 The New Zealand changes were much criticised in evidence and submissions
to the inquiry because they increased the financial difficulties of tenants.
For example the Goulburn regional housing council commented that:
As has been shown in New Zealand, the provision of housing support
income has only led to increased rental payments without any benefit
to the tenant. [36]
3.43 Evidence was given to the Committee that there had not been general
rent increases as a result of the changed policies, although rents had
risen in some areas, such as Auckland, for other reasons. [37]
The New Zealand Ministry of Housing stated that the reforms did reduce
the affordability of housing for some public tenants, but increased affordability
for private tenants. [38] This result was to
be expected since the new assistance available to public tenants was set
at a lower level than that previously available.
Public Housing
3.44 The Department of Social Security's submitted to the Committee that:
As at 30 June 1996, there were approximately 375,000 units of public
housing stock throughout Australia, representing approximately 6 per
cent of total dwellings. In addition, there were around 17,400 units
of Aboriginal housing stock (total public and community housing stock
stood at 392,571). [39]
The total value of the public housing stock was estimated by DSS to be
approximately $34 billion at June 1996. [40]
3.45 The manner in which Australia's public housing stock is distributed
throughout the States and Territories is detailed in Table 1 below:
Table 1
PUBLIC HOUSING STOCK BY STATE
|
NSW |
VIC |
QLD |
WA |
SA |
TAS |
ACT |
NT |
| 1994 |
126180 |
66774 |
43734 |
33601 |
60742 |
14208 |
12406 |
9101 |
366746 |
| 1995 |
128599 |
67788 |
45969 |
33928 |
59738 |
14329 |
12491 |
8696 |
371538 |
| 1996 |
131038 |
68268 |
47618 |
34060 |
58774 |
14353 |
12500 |
8549 |
375160 |
Source: Department of Social Security, Housing Assistance Act 1989, Annual
Report, 1995-96, p.49.
3.46 The availability of public housing varies from State to State. South
Australia has a relatively large public housing stock (11 per cent), almost
on a par with the Australian Capital Territory (12 per cent) and only
bettered by the Northern Territory (17 per cent). The high level of public
housing available in the Territories is the result of building programs
undertaken by the Federal government to house people who came to work
in both Canberra and Darwin when those cities were being developed, especially
in the post-war period.
3.47 Victoria is at the other end of the spectrum with public housing
stock standing at about 3.7 per cent of total dwellings. The low level
of public housing availability in Victoria may partly explain why the
Committee received more submissions (116 out of the total 299 submissions)
from that State than from any other in the country. A large number of
submitters expressed concern that the existing public housing stock was
being further eroded as the State government sold ageing and well located
stock:
In the past 12 or 18 months there has been the sale of around $3.5
million of public housing stock and around $7 million in land sales
from public housing stock (in Latrobe Shire). Little of this has actually
been injected back into the upgrade and maintenance of the housing stock,
despite earlier assurances that this would occur. [41]
3.48 The Housing Assistance Act 1989 Annual Report 1995-96 suggests that,
in total, the proceeds of sales were being used for improvements and upgrading
of dwellings. Sales of land and dwellings realised $42.5m. in 1995-96,
while $88m. was spent on improvement and upgrading of dwellings. [42]
However, it is apparent from evidence given at the Melbourne hearing that
the proceeds of sales in one area are not necessarily expended in the
same area. [43] In total, Victoria's public
housing stock increased by 511 dwellings in 1995-96. [44]
3.49 The majority of public housing occupants are social security recipients.
Statistics show that 90 per cent of public housing tenants around Australia
receive some social security benefits, 78.2 per cent relying on benefits
as their main source of income. [45] The situation
varies slightly between the different States.
3.50 In recent years the number of yearly additions to the public housing
stock provided under the CSHA has declined from around 14,000 in 1989-1990
to around 4,000 in 1995-96. [46] The Department
of Social Security attributed this decline to a the States needing to
spend housing funds in a number of areas other than building new housing.
These included spending funds to upgrade the quality of public housing
stock, to repay debt to the Commonwealth and private borrowings and spending
a small amount on administration. [47] National
Shelter identified a 40 per cent decline in the (real) level of Commonwealth
funds since 1985-86 as another factor contributing to a decline in additions
to public housing stock. [48]
3.51 An analysis of figures provided in the annual report on the administration
of Housing Assistance Act 1989 indicates that, in 1995-96 around 54 per
cent of all funds (including State matching funds and funds generated
by housing operations including sales of dwellings) was spent on construction
and purchase of dwellings, about 12 per cent on repayment of previous
Commonwealth loans, 15 per cent on improvements to dwellings and less
than 1 per cent on administration. [49] In
recent years there has been a slight reduction in the proportion spent
on construction and purchase, and some increase in the proportion spent
on improvements, as is shown by Table 2.
3.52 Table 2 shows that there has been an increase in expenditure on
community housing, which would result in an increase in overall stock.
There has also been an increase in home ownership expenditure, which in
part reflects the financial difficulties faced by home ownership assistance
programs in some States in the early 1990s. The expenditure on assistance
in the private market included assistance with rental bonds and relocation
expenses.
3.53 The States need to repay past Commonwealth loans from new Commonwealth
grants because although all current Commonwealth housing funds to the
States are grants, prior to 1989 loans had been provided as well. [50]
States have also been faced with declining income from rents because the
majority of public tenants are now on such low incomes that they qualify
for rental rebates. [51]The public housing
stock is ageing resulting in greater demand on funds for upgrading and
maintaining the stock.
3.54 Another factor that is increasing financial pressure on the States
is that a greater number of people with special needs are now being accommodated
in public housing. Costs of provision for some special needs groups can
be higher than average. [52] All these factors
mean that, in the absence of increased funding levels, the rate of additions
to the public housing stock could continue to decline in future.
Table 2
Expenditure on Public Housing Funds (per cent)
| Title |
Purchase and Construction |
Improvements |
Repayments to Commonwealth |
Administration |
Leasing |
Home Ownership |
Community housing |
Assistance to private renters |
Other |
| Year |
% |
% |
% |
% |
% |
% |
% |
% |
% |
| 1991-92 |
66 |
10 |
10 |
0 |
0 |
0 |
3 |
4 |
6 |
| 1992-93 |
60 |
11 |
11 |
0 |
0 |
3 |
3 |
4 |
9 |
| 1993-94 |
59 |
11 |
13 |
0 |
1 |
3 |
4 |
6 |
3 |
| 1994-95 |
60 |
12 |
14 |
1 |
0 |
1 |
6 |
4 |
1 |
| 1995-96 |
54 |
15 |
12 |
0 |
0 |
2 |
5 |
4 |
7 |
Source: Housing Assistance Act 1989 Annual Reports from 1991-96.
3.55 The Department of Social Security commented that little direct evidence
was available on the condition of the public housing stock, however some
evidence was available from recent surveys. In general, public housing
had a higher incidence of structural problems than private rental housing.
[53] The Consumer Satisfaction Survey, conducted
for the Report on Government Service Provision, (1997), found that 23
per cent of (public tenant) respondents were very satisfied with the condition
of their dwelling, 43 per cent satisfied and 23 per cent somewhat or very
dissatisfied. The 1994 Australian Housing Survey found that the quality
of the housing stock was high, and that the incidence of problems was
similar amongst both public and private renters.
3.56 The Committee considers that public and community housing are the
forms of tenure that meet the needs of the most disadvantaged in our community.
The issues surrounding this are canvassed in detail in Chapters 5 and
6 of this Report. However, the Committee wishes to indicate that it is
strongly supportive of continuing Commonwealth government capital funding
for public housing.
Recommendation 6: The Committee recommends that the Commonwealth
provide capital funding for public housing at levels sufficient to ensure
that the public housing stock is at least 6 per cent of total housing
stock.
Advantages and disadvantages of public housing
3.57 Both in submissions and other evidence to the Committee, a number
of organisations argued that public housing was the most effective form
of housing assistance for low income earners. For example People for Public
Housing stated:
We believe that public housing ranks higher than other rental housing
tenures in terms of providing appropriate housing... I think it is fair
to say that public tenants are far more likely to get maintenance done
than tenants in other housing tenures.
Public housing provides a greater degree of affordability. That is not
to say that public tenants are rich people; there is still a lot of poverty
within public housing and there are certainly pockets in public housing.
Public housing today provides security of tenure and there is certainly
great concern that security of tenure is maintained. [54]
3.58 On the issue of security of tenure, the NSW Tenant and Community
Initiatives Program State Advisory Committee commented:
Part of the increased security of tenure public housing tenants have
is that the processes for termination of a tenancy are considerably
fairer and more extended, and also, as a result of Supreme Court decisions,
based much more on just cause. [55]
3.59 The Committee received a number of submissions from individual public
tenants citing the numerous advantages of public housing over private
rental. Difficulties and costs involved in moving, including resettling
children into new schools, were among the reasons given for valuing security
of tenure. The submitters also cited as an advantage, the greater peace
of mind resulting from having a stable home. [56]
3.60 The Department of Social Security's submitted that public housing
tenants are provided with cheaper, more affordable housing, stating that:
The performance information published in the Report on Government
Service Provision 1997 showed that of rebated tenants, approximately
60 per cent paid less than or equal to 20 per cent of their assessable
income in rent, while the remaining 40 per cent paid less than or equal
to 25 per cent of their income in rent. (However in practice a small
percentage of people may pay more than 25 per cent of income due to,
for example, failure to advise SHAs of changes in income.) [57]
3.61 The main criticisms made of public housing relate to maintenance
issues; limited choice of locations and limited choice of dwellings. According
to the Australian Institute of Health and Welfare (AIHW), 51 per cent
of public housing tenants report that there are two or more problems with
their dwellings (compared with 45 per cent of private renters in receipt
of rent assistance). [58] Poor location in
relation to employment opportunities and essential services were another
problem. Shelter NSW told the Committee:
While public tenants do enjoy the benefits of security of tenure, a
significant proportion of public housing is poorly located, especially
in terms of the broad acre housing estates. Additionally, as a result
of long public housing waiting lists in some areas, tenants do not have
a great deal of locational choice. [59]
3.62 The limited choice of location and potential for low-income tenants
to be concentrated in certain areas raises the issue of whether large
housing estates create pockets of disadvantage in the community in such
a way that those who find themselves living in that situation can no longer
access jobs and break out of poverty.
3.63 In its paper on housing published earlier this year, Ecumenical
Housing Inc. called for the rules to be changed so that:
Public rental subsidies would not begin to phase out until the relevant
core social security payments cuts out completely, thus reducing the
Effective Marginal Tax Rates for public tenants taking up part-time
work. [60]
3.64 Ecumenical Housing's call stems from the following dilemna: part-time
work can mean that people receiving social security benefits and public
housing rent rebate can lose those benefits as their income rises, there
is a strong disincentive to work. At the moment, the interaction between
the income test for public housing rebates, social security payments and
the tax system result in high effective marginal tax rates for tenants
in public housing.
3.65 The Department of Social Security recognised that workforce disincentives
were an `inevitable consequence' of targeting assistance to those most
in need. [61] The Committee believes that the
department should investigate ways of reducing those disincentives, particularly
as they affect younger people's chances of accessing the job market.
Recommendation 7: The Committee recommends that the
Department of Social Security investigate ways of reducing disincentives
to work inherent in the current system of housing assistance payments.
Changes to the provision of public rental housing
3.66 Reforms to the provision of public housing under the 1996 CSHA are
currently being discussed between the Commonwealth and the States. Areas
being covered include:
- eligibility; rent levels; and tenure arrangements. [62]
3.67 Both Victoria and Queensland have announced changes which increase
the level of rents paid by tenants in receipt of rebates so that tenants
pay 25 per cent of their income in rent. Another major change introduced
by those States relates to the provision of a tenancy on limited term
leases instead of granting the public housing tenant the right to reside
indefinitely as was the case in the past. They have also tightened eligibility
requirements for public housing. [63] Under
the terms of the 1996 CSHA, it is up to the individual State and Territory
to decide whether to introduce changes of the type just discussed. Some,
for example the ACT are not willing to do so. [64]
Views on the proposed changes in the 1996 CSHA
3.68 The Committee is concerned that other States introduce policies
similar to those that have been introduced by Victoria and Queensland,
they would result in an increase in the proportion of public housing tenants
who are on very low incomes and have special needs. A number of submissions
expressed concerns about such policies. For example People For Public
Housing (New South Wales) commented that:
Targeting public housing to those with the `greatest need' is also
causing concern to public tenants and community welfare services. Housing
too many people with disabilities or welfare needs too close together
is providing a management nightmare. Public housing communities are
like any other communities, they develop naturally and are made cohesive
through the social capital that is built up over many years. By forcing
people out who have improved their situation and only housing those
with welfare needs, the informal supports that occur in communities
are simply not present. [65]
3.69 The Victorian and Queensland governments announced their policies
of limiting tenure in public housing to short or medium term leases after
this inquiry was advertised. Nevertheless, some submissions from community
organisations expressed concern that such policies might be contemplated
and deplored what they saw as its negative effects on severely disadvantaged
people. For example Shelter NSW stated:
What we are concerned about is that, if you take away people's security
of tenure and put them on three or five year leases, you have created
the most massive poverty trap. People want their housing that is stability
for their lives and they will do almost anything to manipulate their
circumstances to retain that housing, If they know they are in a low
income job and that a job will push them over a means test that would
mean they would lose their housing, they are likely to leave that job.
So you have created a massive disincentive to employment and an incentive
for people to manipulate their circumstances to meet the means test
they know will be coming at the end of their lease period. [66]
3.70 The Committee acknowledges that there could be some disincentives
for public tenants to work to increase their income if they thought that
this might make it difficult for them to stay in their house. The Committee
would be concerned if the new policies introduced in Victoria and Queensland,
made public housing tenants so fearful of losing their home that they
refrained from looking for work or from seeking jobs that paid better
salaries.
3.71 The Brotherhood of St Laurence suggested that one way of addressing
this problem might be to require public tenants on higher incomes to pay
the full cost of renting their house rather than ask them to move out.
[67] The Committee endorses this approach.
The extra funds thus obtained by the State public housing body could be
allocated towards capital spending on new public housing stock.
Recommendation 8: The Committee recommends that the Commonwealth
negotiate with the States for security of tenure for public tenants to
be included in the negotiations for the next CSHA.
3.72 Commonwealth and State and Territory governments are concerned about
the social results of concentrating low income earners, especially those
with special needs, in large public housing estates. For example in New
South Wales a Neighbourhood Improvement Program for large public housing
estates has been introduced. Its objectives include to:
- the reduction of concentration;
- finding solutions to design problems of large estates which compound
nuisance and annoyance problems;
- improvement of the social mix; and
- the introduction of mechanisms to give tenants more control of their
housing and neighbourhoods. [68]
3.73 The Committee considers that, given the level of supply and the
level of need for public housing from those on very low incomes and with
special needs, it is necessary to target public housing closely to those
groups. Accordingly efforts by States and Territories to redevelop large
public housing estates in order to reduce large concentrations of very
low income tenants in one place are welcome and need to continue.Re-development
can also be undertaken to better match public housing stock with the needs
of the tenants. For example many of the tenants are single people or older
couples without children and require smaller properties such as units
or townhouses rather the traditional three or four bedroom type housing
on a large block. State Housing Authorities are aware of the need to adjust
their stock to reflect changing needs. [69]
Recommendation 9: The Committee recommends that the States and
Territories continue to address the issue of redevelopment and improvement
of public housing estates as a matter of priority.
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FOOTNOTES
[1] Submission No.261, vol 2, pp.13-16 (Department
of Social Security).
[2] Housing Assistance (Form of Agreement) Determination
No 1, 15 July 1996 clause 4(4).
[3] Submission No.200, p. 20 (National Shelter).
[4] Submission No.200, pp.20-21 (National Shelter).
[5] Transcript of Evidence, p.35 (NATO
and Tenant Union of Victoria).
[6] Submission No.232, p.46 (Shelter NSW).
[7] Transcript of Evidence, p.68 (Brotherhood
of St Laurence).
[8] Submission No.294, p.4 (Consumer Law Centre),
Submission No.200, p.19 (National Shelter), Submission No.203 p.5 (Outer
East Public Housing Campaign).
[9] Submission No.67, p.13 (Tenant and Community
Initiatives Program State Advisory Committee).
[10] Submission No.261, p.58 (DSS).
[11] Ibid.
[12] Transcript of Evidence, pp.126-127
(NSW Shelter).
[13] Submission No.282 pp.41-42 (ACOSS).
[14] Submission No.200, p.47 (National Shelter).
[15] Submission No166, pp.12-13 (Northern Territory
Department of Housing and Local Government), Submission No.133, p 4 (Western
Australian Government), Submission No.301, p.9 (Queensland Department
of Public Works and Housing).
[16] Submission No166, pp.12-13 (Northern Territory
Department of Housing and Local Government), Submission No.133, p 4 (Western
Australian Government).
[17] Submission No.301, p.9 (Queensland Department
of Public Works and Housing).
[18] Submission No.280, p.37 (NSW Department
of Urban Affairs and Planning).
[19] Submission No.280, pp.37-38 (NSW Department
of Urban Affairs and Planning).
[20] Submission No.282, p.25 (ACOSS).
[21] Submission No.261, p.55 (DSS).
[22] Submission No.77, p.8 (Illawarra Social
housing Forum).
[23] Submission No.261, p.56 (DSS).
[24] Transcript of Evidence, p.73 (Ecumenical
Housing).
[25] Submission No.200, p.44 (National Shelter).
[26] Transcript of Evidence, p.214 (Ms
Milligan, Department of Urban Affairs and Planning).
[27] Submission No.166, p.11 (NT Department
of Housing and Local Government).
[28] Transcript of Evidence, p.212 (Department
of Urban Affairs and Planning).
[29] Submission No.133, p.3 (WA Government).
[30] Submission No.239, pp.1-2 (ACT Government).
[31] Ibid.
[32] Transcript of Evidence, p.287 (Mrs
Birtles).
[33] Submission No.166, pp.4-5 (NT Government).
[34] Submission No.293, pp.4-5 (New Zealand
Ministry of Housing).
[35] Submission No.293, pp.7-13 (New Zealand
Ministry of Housing.
[36] Submission No.14, p.2 (Goulburn Regional
Housing Council Incorporated.
[37] Transcript of Evidence, pp.317-318
(DSS).
[38] Submission No.293, p.23 (New Zealand Ministry
of Housing).
[39] Submission No.261, p.37 (DSS).
[40] Submission No.261, p.37 (DSS).
[41] Transcript of Evidence, p.51 (La
Trobe Shire Council).
[42] Department of Social Security Housing
Assistance Act 1989, Annual Report 1995-96 p.56, Table A2.01 and Table
A2. 02.
[43] Transcript of Evidence, p.56 (Ms
Hardy).
[44] Department of Social Security Housing
Assistance Act 1989, Annual Report 1995-96 p.49, Table A1.05.
[45] Australian Bureau of Statistics (ABS)
Renters Survey, AGPS 1994, p.28.
[46] Department of Social Security Housing
Assistance Act 1989, Annual Report 1995-96 p.49, Table A1.05.
[47] Transcript of Evidence, p.311 (DSS).
[48] Submission No.200, p.5 (National Shelter).
[49] Department of Social Security Housing
Assistance Act 1989 Annual report 1994-95, p.51.
[50] Submission No.161, vol 2 p.15 (DSS).
[51] Transcript of Evidence, p.216 (NSW
Department of Urban Affairs and Planning).
[52] Transcript of Evidence, p.220 (NSW
Department of Urban Affairs and Planning).
[53] Submission No.261, p.39 (DSS).
[54] Transcript of Evidence, p.156 (People
for Public Housing).
[55] Submission No.67, p.13 (NSW Tenant and
Community Initiatives Program State Advisory Committee).
[56] See Submission No.6, p.1 (Mr J R Freeman);
Submission No.46, p.1 (Ms Teresa M Logan); Submission No.60, p.1 (Mrs
Yvonne Freeman); Submission No.62, p.1 (Ms Shirley Rochow); Submission
No 90, pp.1-2 (Ms Mary Slikva); Submission No.120, p.1 (Mr L H McFarlane)
and Submission No.122, p.1 (Mrs J Davies).
[57] Submission No.261, p.21 (DSS).
[58] Australian Institute of Health and Welfare
(AIHW), Australia's Welfare 1995: Services and Assistance, AGPS,
Canberra, 1995, p.110.
[59] Submission No.232, p.19 (Shelter NSW).
[60] Ecumenical Housing Inc, National Housing
Policy: Reform and Social Justice, Ecumenical Housing, 1997, p.61.
[61] Submission No.261, p.35 (DSS).
[62] Transcript of Evidence, p.324 (DSS).
[63] Mrs Anne Henderson, Minister for Housing
(Victoria), News Release, Major Reforms For Victorian Public Housing,
June 7 1997, p1; Dr David Watson, Minister for Public Works and Housing
(Queensland), Media Release, Housing Reforms To Benefit All, October
17 1997, pp 1-2.
[64] Transcript of Evidence, pp.299-300
(ACT Housing).
[65] Submission No.290, p.6 (People for Public
Housing (NSW).
[66] Transcript of Evidence, pp. 115-116
(Shelter NSW).
[67] Transcript of Evidence, p.80 (Brotherhood
of St Laurence).
[68] Submission No.280, p.21 (Department of
Urban Affairs and Planning, NSW).
[69] Submission No.280, p.9 (Department of
Urban Affairs and Planning, NSW).