Julie Owens (Parramatta, Australian Labor Party, Shadow Assistant Minister for Citizenship and Multicultural Australia) Share this | Hansard source

I am pleased to speak on this bill, the Social Services Legislation Amendment (Housing Affordability) Bill 2017. What this government bill does is introduce an automatic rent deduction scheme that can be mandatorily applied to all tenants receiving social security or family assistance payments who live in public or community housing. Currently, under the Compulsory Rent Deduction Scheme, social housing tenants are able to request that Centrelink withholds a portion of their income support payment to directly pay their rent and other costs, such as utilities. So there is already a scheme. It's voluntary—people in social housing can ask to have a portion taken—and the scheme is already used by 86 per cent of households in the public and social housing sector.

But this bill goes further than that in that it creates an Automatic Rent Deduction Scheme. Under that scheme, state and territories, as well as community housing providers, would be able to request that the secretary withhold a portion of tenants' income support and/or family tax benefit payments and use these funds to directly pay rent and utilities costs on behalf of those tenants. The bill would allow automatic deductions from people in receipt of the age pension, disability support pension, carer payment and family tax benefit as well as those relying on Newstart or youth allowance. It would extend across the broad range of people receiving government payments. It would mean that funds could be withheld from tenants without their permission if a state chooses to apply it in this way. States and territories would have the absolute discretion to decide whether the Automatic Rent Deduction Scheme would apply in their jurisdiction and the extent to which it is applied.

The government argues that evictions as a result of rental arrears of public household tenants are a cause of homelessness. According to data from the states and territories, in 2013-14 more than 8,900 households living in social housing were more than three weeks in arrears of rent and 2,300 people were evicted from public housing due to rent arrears. But given there are nearly 400,000 households living in public and social housing, that is actually a small number—less than 2.5 per cent—of people who are more than three weeks in arrears. So this is a very big stick, to use the government's language, to use on a circumstance that applies to a very small number of people. As I said, 86 per cent of people in social and public housing are already using a voluntary rent deduction scheme, as of 2015-16. We also know, because of evidence to the inquiry, that 90 per cent of tenants have no problems meeting their rental obligations at all.

The Parliamentary Library has also advised that over the five years from 2011-12 to 2015-16 national rent collection rates have averaged over 99 per cent across public housing, community housing and state owned and managed Indigenous housing. So we have a sector that is working 99 per cent of the time. But for that one per cent, we have a measure that this government wants to introduce that will make it possible for states and territories to make it mandatory for all those tenants—all of the 99 per cent that are managing quite well, as well as the one per cent—to have money taken from their payments without their consent. It's a disproportionate response. It is a very big stick for a problem that involves only a relatively small number of social and public housing tenants.

The Senate inquiry also heard that rental arrears are not a significant cause of homelessness—and we know this. Those of us that have organisations in our communities that work with the homeless will know that it's more likely to be complex issues such as mental illness, substance abuse, family violence and a lack of affordable options that contribute more greatly to homelessness in Australia than social housing rental arrears. I would urge the government to look at the broader causes of homelessness rather than impose such a harsh process on people in social and public housing.

A form of compulsory rent reductions, I have to say, was actually recommended in The road home: a national approach to reducing homelessness white paper, which the former Labor government commissioned. At the time of losing government in 2013, we did actually have a piece of legislation to enable a compulsory rent reduction scheme, known as the Social Security Legislation Amendment (Public Housing Tenants' Support) Bill 2013,which lapsed in the 2013 election. It was quite different to this very harsh, one-size-fits-all approach that the government has. There are a number of critical differences.

Firstly, under Labor's proposal the changes in the public housing tenants' support bill would only have applied to tenants who had rental arrears of more than four weeks, and only once other reasonable recovery action had been taken. This included requirements to connect people to financial counselling and other services. In the Labor proposal we had something that only applied to people who were in trouble, rather than this harsh measure that applies to 100 per cent of people, of whom 99 per cent are now doing just fine.

Also under Labor's bill, the deductions in the public housing tenants' support bill were capped. Deductions, under the public housing tenants' support bill, could only apply temporarily, up to 12 months after arrears were addressed to enable a person's circumstances to stabilise. The amount deducted was able to be varied in accordance with changes in rental and utility amounts, provided the tenant was notified. So Labor's proposal provided solutions for people who were in difficulty; the government's approach applies to everybody across the board.

There have been a number of stakeholder concerns, as you'd expect. The majority of stakeholders are strongly opposed to an automatic rent deduction scheme; most argue that compulsory deductions can only be justified in very limited circumstances to prevent imminent homelessness, and with strict oversight. They talk about some of the circumstances in which you find tenants who would be incredibly harshly dealt with under this government's very large stick. Withholding a portion of income for rent decreases the capacity of tenants to respond to emergencies, such as the need to replace an appliance or pay a large bill. Currently, it is common practice for social housing tenants to negotiate with the housing provider to defer a rental payment so they can meet unexpected expenses when they occur. As we all know, many people in social housing are on very, very tight financial constraints and aren't able to respond to those unexpected expenses. There is also concern that those who are named on the lease will shoulder an unfair proportion of costs. For example, as in other households, there are some cases where several adults share the rent. There is no capacity in this process for that to be taken into account.

In their submissions, welfare organisations have recommended that a cap be placed on the amount that the secretary may deduct from a tenant's income support payment to ensure that a minimum residual amount is available to meet the tenant's other needs. The Salvation Army has suggested the cap could be set at 30 per cent of household income. There are a number of different definitions and indicators of housing stress, but most of the definitions are that where households are spending more than 30 per cent of their gross income on housing costs they are in housing stress.

There were several witnesses to the inquiry that raised concerns that the amount deducted could include an amount to cover damage to the rental property. There was a universal condemnation of that. It was of concern that social housing tenants may not have damaged the property themselves and, as a cohort, are less likely to follow up on their rights to review and appeal as a result.

So there are many concerns with this bill as it stands. I would urge the government to consider why they feel the need to apply such a very large stick—again using their language—on people who are already coping quite well with the payment of rent. As the inquiry stated, 99 per cent of social, public and community housing tenants are paying their rent on time. There is a very small number that aren't. We would recommend that the government also look at Labor's proposal back in 2013, which addressed those who were having difficulty but left alone those who were capable of managing their own finances.

Again, this government is very, very good at attacking those who are most vulnerable. It can be very harsh in its approach to people experiencing difficulty. We would urge it to reconsider. There will be a Senate inquiry, and we will be looking very closely at the outcome of that inquiry as we put together our final view on this bill. But, as it stands, it's unreasonably harsh and it targets a broad range of people when perhaps it would be more appropriate if the government provided support mechanisms for those who are experiencing difficulty, rather than apply these harsh measures to the whole sector.

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