National Shelter welcomes the opportunity to provide this submission to the Australian Labor Party Discussion Paper on Housing Affordability. Our submission is based upon National Shelter’s role as Australia’s peak housing advocacy organisation, our Policy Platform, Meeting Australia’s Housing Challenges, developed over a number of years in consultation with our members across the country, as well as more recent consultations National Shelter conducted around the National Affordable Housing Agreement.
National Shelter has worked closely with Australian Council of Social Services (ACOSS), Homelessness Australia, the National Association for Tenants’ Organisations, and the Community Housing Federation of Australia (CHFA) to develop An Affordable Housing Reform Agenda, which provides extensive goals and recommendations to reform our housing system. The Reform Agenda, published in March 2015, recommended adopting clear targets to increase the supply of affordable housing and reduce homelessness:
National Shelter believes that Australia’s Future Tax System Review must form the starting point for further discussion of tax reform around housing and land dealings in order to tackle housing affordability.
There are currently a range of tax settings which distort the behaviour of home owners and investors in the Australian system which need to be addressed. These distortions encourage over-investment in large, more expensive properties for owner occupiers and to the upper end of the market for investors in rental properties. They create inflationary pressure as investors and owner occupiers compete for the same properties. These policies appear to conflict with Australia’s principal housing policy of the past 50 years, to encourage home ownership.
National Shelter supports policies which balance the goal of home ownership for most with settings to encourage investment in long term, secure, affordable, accessible and well located rental housing. As a principle, if the Australian tax system is to support investment in rental housing it could be better targeted to meet the shortfall in the supply of affordable housing available to lower income earners, which would deliver a social good in exchange for a tax benefit.
Australia faces a number of significant housing issues, including an unacceptable level of homelessness, high levels of housing stress amongst low income householdsand especially renters, and declining affordability of home purchase in major cities.
These various issues are closely interlinked and require coordinated intervention on a number of levels. Current government efforts are fragmented, split between various agencies at Commonwealth, State and Local Government levels. This Submission to the Reform of the Federation White Paper Taskforce fragmentation is a greater issue than overlap or duplication, and requires greater cross-government collaboration to make a genuine impact.
In housing assistance, the greatest issue is the inadequacy of levels of assistance. This inadequacy shows itself on social housing in the form of long waiting lists for assistance, while in Commonwealth Rent Assistance (CRA) it shows itself in the high proportion of households who are in housing stress despite receiving assistance.
This inadequacy in both forms of support is a significant contributor to levels of homelessness. None of the three alternatives canvassed in the Discussion Paper offers any clear way of alleviating this inadequacy. Option 2 is essentially a “status quo” option, while Options 1 and 3 offer significant rearrangements of responsibilities. Both the reform options appear to have significant problems and drawbacks without appearing to solve any of the significant problems facing housing assistance.
Housing programs present particular challenges both in relation to responses to Vertical Fiscal Imbalance (VFI) and approaches to Horizontal Fiscal Equalisation (HFE).