Senate Report on Poverty and Hardship

Affordable housing can play an important role in reducing poverty by providing households with more income to access essential services and enjoy opportunities to participate in the economic, social and cultural life of their community. In this way, access to affordable housing has the potential to prevent the inter-generational transmission of poverty and disadvantage (page 161).

Housing is usually the single greatest cost facing most households, particularly for low-income earners. Housing costs have increased rapidly over the last decade. At the same time, however, the availability of ’affordable housing’ – that is housing that low-income households can afford without experiencing housing stress has declined. ’Housing stress’ refers to people having to pay such a significant proportion of their income for housing that they suffer severe financial consequences. It generally refers to those households who pay 30 per cent or more of their household income in housing costs. Households in the bottom 20 percent of the income distribution are especially vulnerable to housing stress (Page 122).

The most extreme example of housing stress is being homeless. Homelessness in Australia was described during the inquiry as a ’national disgrace’ (Page 124).

An Analysis of 2001 Census data on homelessness shows that 20 years ago:

• There were 74 280 homeless households in the 2001 Census, compared with 72 850 in 1996. In 2001, 78 per cent were single person households, 13 per cent were couples, and 9 per cent were families. These findings are similar to 1996.

• Over half (54 per cent) of the homeless population were aged 25 years or older, including one-quarter (24 per cent) who were 45 years or over. However, 36 per cent were young people aged 12-24 years, and another 10 per cent were children under 12 years accompanying adults.

• Overall, there were more males in the homeless population (58 per cent), but women are now a substantial minority (42 per cent), compared with 30-40 years ago.

• Indigenous people are more likely to experience homelessness than other Australians overall, 2 per cent of the population identify as Indigenous, but 9 per cent of the homeless were Indigenous.

• Approximately 60-70 per cent of people in improvised dwellings, boarding houses and SAAP experience a sustained period of homelessness (six months or longer) (Page 125).

Public and Community Housing

Public housing comprises those dwellings owned (or leased) and managed by State and Territory housing authorities. Australia has relatively low levels of public housing, in 2004 about 5 per cent of all households lived in public housing tenures, the proportion ranging from 3 per cent in Queensland to 13 per cent in the Northern Territory (Page 129).

Community housing is rental housing provided for low to moderate income or special needs households managed by community-based organisations that are at least partly subsidised by government. This form of housing aims to provide a choice of housing location, physical type and management arrangements. Some forms of community housing also allow tenants to participate in the management of their housing. As at June 2003, there were some 337 959 public housing dwellings occupied nationally with a further 29 367 community housing dwellings (Page 129).

Public housing is funded jointly by the Commonwealth and the States under the Commonwealth State Housing Agreement (CSHA). Under this program, public housing tenants pay no more than 25 per cent of their income in rent. The new five-year CSHA commenced on 1 July 2003. The Agreement provides funding of $4.75 billion over five years for primarily public housing, but also for community, Indigenous and crisis housing. The Agreement includes provision for bilateral housing agreements between the Commonwealth and the State/Territories, allowing each jurisdiction more flexibility in delivering housing assistance according to its priorities and circumstances (Page 129).

Public housing provides an essential avenue by which many low-income households are able to secure affordable and appropriate housing of an adequate standard. Evidence indicates, however, that the steady decrease in funding to public housing; increased maintenance costs and the costs of upgrading the public housing stock; and increasing demand for affordable housing, is threatening the long-term viability of the system (Page 129).

Submissions also commented on the decline in funding for the CSHA. ACOSS stated that expenditure on the CSHA has declined in real terms since the 1980s, and between 1984-85 and 1994-95 ACOSS estimated that per capita levels of spending on social housing via the CSHA declined by 25 per cent (Page 130).

Concerns were also expressed at the increasing ’welfarisation’ of public housing. Over the last decades public housing has been increasingly rationed to the most disadvantaged in the community whereas historically it provided affordable housing for low to moderate income households. Most new tenants are now on some form of Centrelink payment or benefit being on a low income of itself is therefore no longer the main criteria for being eligible for public housing. Approximately 80 per cent of households renting from State housing authorities in 1997-98 relied on pensions and benefits as their principal source of income. Although people with a disability represented 17 per cent of the total population aged between 15-64 years in 1998, 39 per cent of public housing tenants of this age group in 1998 were people with a disability. In June 2002, of all income units in public housing almost one in three contained an adult with a disability (Page 131).

ACOSS noted that the social housing system cannot be sustained if both income related rents and targeting remain. ACOSS also noted that public housing is carrying significant unfunded maintenance and redevelopment liabilities and faces a cash flow crisis which has meant virtually no new stock has been added nationally as capital national level has declined from 362 967 dwellings in 1999-00 to 354 124 dwellings in 2001-02.37 The BSL advised that annual additions nationally to public housing have declined from between 10 000 and 15 000 to less than 5000 dwellings in the last few years. The Brotherhood noted that internal revenue now generated in Victoria’s public housing only covers the cost of rental operations but is not sufficient to fund the acquisition of new stock, improvements to older stock or redevelopment of estates (Page 132).

Submissions argued that it was vital that a viable public housing system be maintained and be adequately funded. Shelter NSW stated that: It is vital for capital funding levels to increase substantially, given that funding reductions together with increased targeting of public housing to at risk groups have led to a steep decline in new construction (combined with a blow out in waiting lists) and an equally steep decline in rental returns with higher percentages than ever of tenants on statutory benefits (Page 133).

The provision of a viable public housing system would, however, require considerable expenditures. Shelter NSW estimated that it would cost $2 billion a year to provide a sustainable system in NSW alone ’you have 130,000 units of public housing and we are talking about tripling that. It is a lot of money. But then you would end up with a sustainable social housing system which would house not just very poor people but up to moderate income people’ (Page 133).

Reference: Senate Community Affairs References Committee Secretariat, E. Humphery, C. McDonald, P. Short, L. Peake, and I. Zappe. (2004). A hand up not a hand out: Renewing the fight against poverty, Report on poverty and financial hardship. The Senate Community Affairs References Committee Secretariat, Senate Printing Unit, Parliament House, Canberra. Pages 122 – 133.