Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

I move:

That the House:

(1)

recognises the serious state of housing availability and affordability in the public, not for profit and private sector in many cities and towns in Australia and the hardship it causes those on low and fixed incomes;

(2)

notes that:

(a)

it is having a serious impact on many in the community including those on low and fixed incomes, pensioners, disability pensioners, veterans, young families and students;

(b)

the situation has been exacerbated by the dereliction of duty of State governments in failing to maintain adequate stocks of public rental properties, with unacceptably long waiting lists for public housing;

(c)

in Western Australia (WA), for example, it has been reported that there are 16,000 families on the Homeswest waiting list in May 2008, with similar trends in other states;

(d)

there has been a contraction of approximately 30,000 public dwellings, which, factoring in population growth over the last decade, amounts to a loss of 100,000 dwellings in the public sector;

(e)

this dereliction of duty is increasing the reliance on the private rental market, where housing is in short supply, new building approvals are plummeting and rental vacancy rates are at the lowest levels in 20 years;

(f)

Commonwealth Rent Assistance (CRA) is not adequately addressing the gap between the high level of rent being paid and what is affordable and that in many areas there are few, if any, housing choices available;

(g)

despite the twice yearly adjustment of CRA to the Consumer Price Index of 4.3 per cent, the average rental increase has been 7.1 per cent;

(h)

the median weekly rent of three bedroom houses has increased on a nationally weighted average by 46.75 per cent and, in fact, from June 1998 to June 2007 rents increased by 93.55 per cent in WA and by 105.88 per cent in the Australian Capital Territory (ACT);

(i)

rent assistance as a percentage of median weekly rent in WA has dropped from 31.8 per cent in June 2001 to 20.4 per cent in June 2007 and in the ACT from 25.6 per cent in June 1998 to 17.4 per cent in June 2007;

(j)

overall, renting has become less affordable nationally even for those in receipt of CRA;

(k)

according to national figures from the Australian Government Housing data set in June 2006, over one-third of CRA recipients pay more than 30 per cent of their income on rent, after CRA is factored in; and

(l)

public housing approvals plummeted to 131 new council approvals in March 2008, well short of the Australian Bureau of Statistics’ decade average of 350 new public housing approvals monthly; and

(3)

calls on the Federal Government to:

(a)

work with State governments through COAG to urgently address the national shortage of public, not for profit and private housing including delays in local government development approvals;

(b)

urgently review the adequacy of CRA paid to those on low and fixed incomes;

(c)

investigate making CRA or similar payment available to eligible recipients who are purchasing their own homes and who are experiencing severe mortgage stress, with the aim of keeping people in their own homes and taking some of the pressures off the public and private sector rental market;

(d)

consider changing the CRA formula to reflect the lack of choice and the increasing cost of rent beyond inflation, by linking CRA to actual rent using the highest median rent in each area;

(e)

target a proportion of assistance for development of housing in high employment growth areas, in recognition that for those looking for work in areas of high labour demand, high rents are acting as a disincentive for some people to escape the poverty cycle; and

(f)

pay particular attention to development options for multi-dwelling supported accommodation models to provide for those with disabilities who may formerly have been housed in institutions.

I am very pleased to put forward this motion and I have great hopes that members on both sides of the House will join me in acknowledging the serious state of housing availability and affordability in not only the not-for-profit sector but also in the private sector. I thank the member for Forrest for seconding this motion.

This is a problem of enormous dimension. Some may even call it a crisis, as people in the cities and towns of Australia face great hardship, particularly those on low and fixed incomes. It is probably a good idea to reiterate the words of University of New South Wales professor Julian Disney—and I have quoted him in the other chamber—who said recently:

Lack of affordable housing strikes at the heart of our lives, our communities, and Australia’s future prosperity. It impoverishes people, erodes families, destroys jobs, weakens the economy, and damages the environment.

Many of us here have heard the anecdotal evidence from our own electorates about housing availability and affordability. Statistics alone prove that problems of unaffordable housing have worsened alarmingly over the last 10 to 15 years. For example, average house prices relative to household income have almost doubled and average monthly payments on new loans have risen by more than 50 per cent. Mercifully, we have seen this fall slightly in the last couple of weeks. The proportion of first home buyers has fallen by about 20 per cent, the proportion of low-rent homes has fallen by at least 15 per cent and opportunities to rent public housing have fallen by at least 30 per cent. These are very disturbing figures.

It has been reported that there is a shortfall of some 30,000 houses in the public sector alone. In a majority of areas, it has been difficult to rent housing in the private sector even if you can afford rents of $500 to $600 a week. This has forced people in big cities recently to agree to pay six months rent upfront plus a bond to agents just to get to the front of a long, long list of applicants for rentals. This has left many families and individuals living in temporary accommodation—hiring caravans, living in cars or on the streets or, as I said, moving from one household to another. I have to ask: what sort of situation is this for families with children to be in? The situation is particularly dire for those on low and fixed incomes, as I said, such as people on pensions—whether they are age pensions or disability pensions—veterans and those who have little opportunity to increase their income stream. Those who rely on private rentals, which are scarce, expensive and continuing to increase in price, are under real stress.

There are many reasons for the housing shortage and the high prices, which are out of the reach of many people. They can be resolved with proper management and with political will. One of the big failings, as I have also talked about before, is the dereliction of duty of state governments in providing public housing now for several years. In Western Australia, I think there are about 16,000 people on the waiting list for public housing. That is why I am calling on the government today to work with the state governments through the COAG process to address the national shortage of public, not-for-profit and private housing. This includes addressing the long delays in local government development approvals.

Commonwealth rent assistance must also be urgently reviewed as to what benefit it can offer low- and fixed-income families as well as how it can be utilised. The fact is that Commonwealth rent assistance is indexed to CPI twice a year, which is just a touch over four per cent, but the rentals have gone up in the corresponding period by about seven per cent per annum. The CRA formula needs to reflect the lack of choice and the increasing cost of rent beyond inflation by linking CRA to actual rent using the highest median rent in each area.

In areas of high labour demand, high rents are acting as a disincentive for some people to escape the poverty cycle. In recognition of this, those looking for work should be a target of a proportion of assistance for the development of housing in high employment growth areas. We should pay particular attention to development options for multidwelling supported accommodation models to provide for those with a disability who may formerly have been housed in institutions. Many groups have made their voices heard on these issues over the last few years. Now is the time to show them that we in this place are taking responsibility and are listening to their pleas.

Mark Butler (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

This very extensive motion on housing raises an issue which our side of the House has taken very seriously—first of all, with the appointment of a housing minister, something not done by the previous government, and also, more substantively, with a range of measures that I will outline in the short time I have before the House. As well-intentioned and well-argued as this motion might be, those opposite wear like an albatross around their neck 12 years of neglect in the area of housing. This is another example of the creationist approach that they have to policy challenges being confronted by our side of the House—that on 24 November some higher being created the world and it had an existing housing affordability crisis, about which I see absolutely nothing in this motion.

We know that under the previous government there were cumulative cuts of almost $4 billion in real terms to the Commonwealth-State Housing Agreement. There was a cut of $50 million in the 1997-98 financial year. There was a four per cent efficiency dividend the same year. There was an ongoing one per cent efficiency dividend per annum. There was the removal of GST compensation in 2003-04, a year in which the housing agreement funding was cut by $100 million. There was no indexation by the previous government between 1996 and 2004-05. This trashing of the public and social housing sector under the previous government is taking some considerable time to unravel, which is why the government and the various state and territory governments are still in the process of finalising the National Affordable Housing Agreement.

It was not only to the area of social housing that the former government paid such little regard. At the same time as the agreement funding was being cut to such a degree, with almost $4 billion in real cumulative funding cuts over the 10 or 12 years that the last government was in place, there was no serious effort whatsoever to respond to dramatic developments in the private rental market. We know that after the dotcom bust, with a whole range of cheap interest rates and cheap money available, private money flooded into the housing sector leading to the biggest asset bubble in human history, worth in the developed world some $30 trillion, or 100 per cent of the combined GDP of those countries. We know that the Australian housing bubble was right at the top of the list. We know that Australia’s price-rent ratio, the best way of valuing the housing market, by the end of 2005 was 70 per cent higher than the 25-year average. Unsurprisingly, as the member opposite has indicated, private rents went up. That is what happens when the price-rent ratio gets so far out of kilter with the historic average. In the September quarter this year, private rents increased by 2.2 per cent, with an annual increase of about nine per cent. In my own electorate of Port Adelaide, 38 per cent of private renters are suffering from rental stress, paying more than 30 per cent of their income on rent.

We also know that vacancy rates across the country, as the member opposite has indicated, are at very low rates—in my city of Adelaide, at around one per cent, which is the lowest ever seen in South Australia. So what is the government doing about this? First of all, we appointed a member of the executive with particular responsibility for dealing with housing—the Minister for Housing, the member for Sydney—and she has started to fill a space left completely vacant by the previous government. Principally, in terms of the matters covered by this motion, that involves boosting the supply of affordable rental properties through $623 million of incentives over four years to increase supply by 50,000 rental properties rented at 20 per cent below market rates. If demand is still high, which I suspect it will be, there will be a further 50,000 rental properties from 2012.

This motion raises very important issues and raises them in a very eloquent written way. However, it does not get away from the fact that in 12 months this government has done more around housing, particularly affordable housing, than the previous government did in 12 years. (Time expired)

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to second the motion by the member for Pearce. I call on the House to recognise the very serious state of housing availability and affordability in the public, not-for-profit and private sectors in many cities and towns in Australia and the extreme hardship it causes those on low and fixed incomes. There is no doubt that this is having a very serious impact on many in the community, including those on low and fixed incomes, pensioners, disability pensioners, veterans, young families and students.

An article in the South Western Times on 9 October by Kate Murnane states:

Women and children are returning to lives of domestic violence because they cannot afford to meet the rising cost of rent. South West Refuge manager, Barbara Payne, said staff had difficulty finding suitable and affordable accommodation for mothers and children escaping domestic violence.

Mrs Payne is quoted as saying:

It’s difficult to break the cycle unless you have somewhere to go. People will remain or go back to an abusive relationship because they cannot find a house or cannot afford one.

I ask what modelling the government has undertaken on the effects of the doubling of the first home buyers grant for existing homes and the effect that will have on renters right across Australia. Will this put further upward pressure on rents, thereby increasing the numbers of Australians living under rental stress?

A further example of badly researched government policy which will impact on the availability of affordable rental properties is the National Rental Affordability Scheme. An Australian Taxation Office ruling jeopardises the participation of the charitable, not-for-profit sector in the scheme and the bill is the subject of a Senate inquiry due to report. The tax implications for the not-for-profit sector should have been covered in the drafting of the legislation. How many charitable organisations have already developed projects ahead of the first funding round? How many potential affordable rental properties are impacted by this drafted legislation? And how will tenant eligibility provide a pathway to homeownership? Income thresholds should be raised for those trying to save to buy into private housing, otherwise renters under this scheme will remain on welfare and rental assistance for longer than is necessary.

I have received a letter from the Tenants Advice Service Inc.—a not-for-profit community legal centre which protects tenants’ rights—seeking my support for increased Commonwealth funding for the existing system of social housing because it is unlikely that those providers will be able to increase their supply of dwellings without additional Commonwealth funding assistance and, secondly, seeking my support on another major problem with the National Rental Affordability Scheme. They believe this will not assist the supply of community housing—that is, affordable rental housing owned and managed by not-for-profit organisations. Why? Because dwellings assisted with the NRAS incentives may not have ownership or title vested in community housing organisations. It is of course the ownership of the title that assists the not-for-profit organisations to finance new dwellings. There are other community groups which provide housing for people with special needs; however, that is also precluded from the NRAS.

Australian families simply cannot afford to have their problems made far worse because the Rudd government has failed to do its homework. The situation has been exacerbated by the dereliction of duty of state Labor governments in failing to maintain adequate stocks of public rental properties, with unacceptably long waiting lists for public housing. My office was recently told by a local office of the Western Australian Department of Housing and Works, regarding supplies of public housing in Western Australia, that it was acceptable for applicants to pay up to 60 per cent of their Centrelink pension in the private rental market. I have had constituents in my office who are paying 65 per cent of their pension in rent, and we all know that 30 per cent is considered to be rental stress.

Figures show rent assistance as a percentage of median weekly rent has dropped from 31.8 per cent to 20.4 per cent in June 2007. Current rental rates would significantly increase this differential. The demand for rental properties in Western Australia is amongst the highest in Australia, with rents expected to increase by 10 per cent over the next six months. The waiting list for public housing has blown out to many years. Public housing for one-bedroom requests date back to 2004—a four-year waiting list. Two-bedroom housing applicants have been waiting since 2002 and three-bedroom applicants have been waiting since 2005. Similar and longer waiting periods are being experienced all over the south-west.

In my electorate of Forrest, over 6,200 people receive rental assistance from Centrelink. According to the West Australian, 18,000 Western Australians were in the queue for public housing at the end of August. Clearly there was not enough Labor state government investment in public housing during the booming economic years in Western Australia. (Time expired)

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I must say that I think the members on the other side of the House who have spoken to this motion should hang their heads in shame, because the decline in public housing and the blow-out in rental affordability did not happen under the Rudd Labor government, which has taken tangible steps to address the issue, unlike under the 12 long years of the Howard government. That was 12 long years of money for housing being pulled out of the states. I think it is an absolute disgrace that the previous government slashed $3.1 billion from the public housing budget—a 30 per cent cut in real funding.

I was actually a state member of parliament when the Howard government was elected. At the time of its election there was a waiting list for public housing, but within 12 months that waiting list had doubled. The severe cuts in funding by the Howard government have meant that social housing stock has not kept up with the growth in population. In my electorate there is a 13-year wait for public housing. That has been the case for a very long period of time, and it occurred under the Howard government. And then members on the other side of this House come in and sanctimoniously move motions condemning the Rudd government for the shortage of public housing. It did not happen over night.

One of the things this government has done is work with the states and territories. The Rudd government will bring together all funding for affordable housing under the new affordable housing agreement. The new agreement will at least maintain the funding levels of the program that is in place—something that did not happen under the previous government.

I notice that another part of the motion that has been put to the parliament by the members opposite calls for rental assistance to be increased. Simply increasing rental assistance in this climate will do nothing to address the supply problem. It is likely that the money would go straight into the pockets of the landlords.

In the electorate of Shortland, which falls within the Lake Macquarie area, there is currently a two per cent vacancy rate. One of the previous speakers from the other side said that a three per cent vacancy rate was thought to be a tight market, so you can just imagine how difficult it is for people to find accommodation within the Lake Macquarie area. And this situation has developed under the previous government. The Rudd government recognised the fact that there was a real problem with housing in Australia, and that is why we introduced measures such as the National Rental Affordability Scheme. That legislation was debated in this House in the last sitting week.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.