Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

In accordance with the provisions of the Auditor-General Act 1997, I present the following report of the Auditor-General: Report No. 46 of 2005-06 entitled Performance Audit—Commonwealth State Housing Agreement follow-up audit: Department of Families, Community Services and Indigenous Affairs.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Housing and Urban Development) Share this | Link to this | Hansard source

I move:

That the Senate take note of the report.

I wish to take note of this report, because I think it is a subject which is of critical importance to the wellbeing of most of Australia’s vulnerable citizens. Sadly, I think there are few areas of public policy which have suffered more under the 10 years of the Howard government than their neglect of housing and urban development. Public housing, funded under the Commonwealth-State Housing Agreement, has borne the brunt of this neglect.

This report that we have here today highlights the need in the opinion of the ANAO to improve the level of accountability and transparency of the reporting for the Commonwealth-State Housing Agreement performance against agreed outcomes. Despite the fact that we have had Commonwealth-state agreements since 1945, a proposition is being advanced by this government that, essentially, questions of housing are matters of state responsibility and, if they are not matters of state responsibility, they are matters for the market. Despite the fact that we have had a Commonwealth-state agreement on housing for 61 years, this government claims that it knows nothing about it and that it has no responsibility for it. There is no minister for housing, no housing programs to speak of and no sense of the government’s responsibility to ensure that there is adequate equality of opportunity for all Australians. Particularly with regard to public housing, which is funded under the Commonwealth-State Housing Agreement, we see that this government has overseen a savage record of neglect.

The ANAO report talks a lot about risks and risk management. It notes that FaCSIA did undertake a risk assessment in response to its previous report in 1999-2000. It also notes that the current department that assumes responsibility for housing matters consulted only one stakeholder in its response. In other words, of the eight states and territories, only one was consulted. This is despite the vastly different issues and pressures that are faced by the states and territories with regard to the question of housing. I strongly endorse the ANAO’s suggestion that the department undertake a comprehensive risk assessment and that it broaden its consultation during the risk assessment process to encompass the full range of state and non-government stakeholders.

The Australian National Audit Office suggests that the risk assessment take place as part of the development of future agreements. But, at the moment, the greatest risk of all to social housing in this country is whether or not there will be future agreements. There is widespread concern amongst the stakeholders, be they state or territory governments, non-government organisations or providers of different types. Great concern has been put directly to me that there are constant rumours that the Howard government intends to walk away from public housing altogether when the current Commonwealth-State Housing Agreement expires. So this may be the last Commonwealth-State Housing Agreement if the government has its way.

Those fears are based on a rational assessment of the government’s performance to date. They are rational assessments based on what the government has actually done. Under the existing Commonwealth-State Housing Agreement, over the last 10 years real dollar support has declined by 30 per cent. There has been a 30 per cent cut in the level of funding support for public housing by this government. That is particularly shocking when we understand that secure, affordable housing is square one when we are talking about the opportunity for all Australians to get a fair go in this country. Having a decent place to live is the building block for almost everything else in life, whether it be finding a job, accessing education and training, or maintaining your health, social connections, friends and family. It is square one in terms of your social wellbeing.

Few areas of government policy hold a clearer mirror to a government’s values than its attitude to housing. The Howard government attitude is that the market is king with regard to the interests of housing, and provision of the housing needs of our most vulnerable citizens is, at best, perfunctory. Poor services for poor people are what this government can be characterised as standing for. It does not see that it actually has any obligations in this regard. Its reduction in funding to the Commonwealth-State Housing Agreement by almost a third has left the state housing authorities basically broke. Around Australia, it is the same story.

One particular example which I think is characteristic of the current situation is that of South Australia. In South Australia, the state authority receives $67 million a year in Commonwealth funding under the Commonwealth-State Housing Agreement. The CSHA has to repay $65 million per year for debt on loan repayments. So, in effect, the net Commonwealth contribution to South Australia for public housing is $2 million a year. That is the situation. The average age of existing housing stock in South Australia is 44 years. Fifty-four per cent of that stock has at least three bedrooms. All but 67 per cent of new applicants, however, are single people. So there is very old, obsolete stock being put in place and quite significant changes in the way in which people are seeking to use that stock. This is at a time when the Commonwealth has reduced its contribution to the provision of new stock by 30 per cent.

As a consequence of that policy, over the last 10 years the number of dwelling units available under the Commonwealth-State Housing Agreement arrangements has fallen from 372,134 in 1996 to 345,000 units as at the last available figures in 2003-04. That is a drop of 27,000 units in a 10-year period, at a time when the demand for housing has grown dramatically and when the cost of housing has risen to extraordinary levels. As a result of the reduction in stock and the availability of accommodation, the government policy has forced upon the states changes in the sorts of people who are able to use that stock. The number of new people getting assistance under the Commonwealth-State Housing Agreement has fallen from 50,000 in 1996 to 25,000 this year. There has been a drop of half in the number of new people. As a result, only half as many people have access to the moneys provided by this parliament. It is expected that by 2009 there will only be 15,000 each year who will access that stock.

So we have a reduction in funding, a change in the people who are getting access to it and a situation where people are poorer, their needs are greater and their opportunities to get into the private housing market are more limited. This is at a time when the housing market in the private sector is becoming increasingly expensive. The Commonwealth says: ‘We now have Commonwealth rent assistance arrangements.’ It is a disingenuous claim because the government uses figures based on the situation after its massive cuts to the programs in 1996. It claims that from 1997 rent assistance can be compared to current figures. In 1996, there was a reduction of some $200 million in Commonwealth assistance. If we take that into account and compare like with like, we see that rent assistance over this period has increased by 0.3 per cent. So we have increasing needs but no increase in the level of support from the Commonwealth. If we combine the Commonwealth-State Housing Agreement funds and the Commonwealth rent assistance funds in the period from 1996 to 2004 in constant dollars, we see a reduction in the level of funding by some $310 million. The Howard government spent over $300 million less on housing assistance in 2003-04 than it did in the period from 1996, when it came into office. (Time expired)

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

This Audit Office report is into the Commonwealth-State Housing Agreement. It is a follow-up audit on an earlier audit of the operation of that very, very important agreement between the Commonwealth and the states—and indeed the territories as well—on funding for the provision of public and community housing.

Let me first note the positive, which is that the Department of Families, Community Services and Indigenous Affairs has made significant progress in implementing the recommendations from the previous National Audit Office report into this area. But there are a couple of aspects that I do think need highlighting from this current report, most notably the finding that the timeliness and performance reporting, particularly through the Housing Assistance Act annual report, needs improvement.

This is something I have commented on myself in this chamber a number of times so I am pleased to see that the Audit Office agrees with me. As the report states here, throughout the 1999 Commonwealth-State Housing Agreement the annual report was tabled in parliament between 16 and 32 months after the associated reporting year. This improves slightly for the first report provided under the 2003 CSHA which was tabled 15 months after the end of the associated reporting year. That is still, in my view, grossly inadequate. We are talking about reporting on the data, on the performance of all the states and territories in conjunction with the Commonwealth, in fulfilling the components of the Commonwealth-State Housing Agreement, which is a significant amount of money—more than $1 billion a year—and also the data about how that money is being spent and delivered with regard to housing.

The department has suggested that it will endeavour to have the annual report—only endeavour, I might say—tabled by June of the year following the end of the grant reporting year. Whilst that is an improvement, I again agree with the Audit Office that it would be of benefit for it to be tabled earlier. I realise that there are limitations because data needs to be provided from the states and territories before it can be collated and presented to this parliament, but it is a crucial area where there have been significant failures, and obviously the blame for those failures needs to also rest with some of the state and territory governments.

The Audit Office also believes there is further scope for improvement of the information on the CSHA contained in the annual report and in the family and community services annual report as well. That is not a view that should be dismissed lightly. We have reports on this provision of public money into this very important area of public and community housing around the country. The reports are presented about 16 months after the appropriate reporting year and, even when they are presented, the amount of data is still inadequate. That is unacceptable and, in my view, it signals an attitude at federal level—and I fear at state level as well in some areas—that this area of public and community housing is really not that important any more. It has been turned into a residual housing area, it is seen as a welfare issue, an afterthought or a bottom end of the market view, and it really does not get the attention it deserves.

I remind all senators and the public in general that there have been studies conducted, including by very dry economic evaluating institutes such as the Productivity Commission and, more significantly, the former Industry Commission, which showed that using public money to provide public housing was the most efficient way of using public money to deliver housing outcomes. It is certainly more efficient than the huge amount of money that is spent at federal level now on rent assistance. I am not saying that rent assistance should be cut but I do say that if more focus was put on providing public and community housing it would actually produce a better outcome than just propping up the profits of private property investors—landlords—through giving extra rent assistance to their tenants.

It is also more efficient than providing, in effect, tax breaks and the cost of tax expenditures to people through things like negative gearing. The best value for money for the taxpayer is actually to spend money—more money—through the provision of public and community housing. The continual, gradual decline in the focus on this area at federal level, but also at state level in many areas and including Labor state governments, is a cause for great concern. I fear that the damage done in this area—the continual decline in public housing stock and the continual decline in the attention given to this area by governments, state and federal—may soon be irreversible and that is a great shame.

I draw senators’ attention to an article from the Guardian in the UK which I am sure you have already read today, Madam Acting Deputy President Moore. It talks about the property market in the UK but I think it is equally apt for Australia—and, in fact, I suspect it is even more applicable to Australia—and it refers to the obsession with property as a form of investment. To paraphrase this article by Mr Lionel Shriver and what he calls the property psychosis, there is a yearly increase in property values that keeps going up and is widening the gap between the haves and the have-nots, so more and more people at the bottom cannot afford to buy anything.

As I said earlier in the debate on the Welfare to Work legislation, there is a growing wealth gap between the haves and the have-nots in Australia and the cause of that wealth gap—if you like, the underlying earthquakes that are shifting the plates and causing those different groups in society to move further and further apart—is increasing property prices.

That gap was significantly enhanced and increased by the decision back in the year 2000 to provide a massive windfall to the highest income earners and the highest wealth individuals in this country through the discounting of the capital gains tax—a decision supported by the Labor Party on the grounds that the government would then close the loopholes regarding the tax treatments of trusts. The government never acted on that and the Labor Party was complicit in providing a massive tax break for the highest income earners. However much people want to beat up those Democrats who supported the GST, that particular decision by the ALP provided a far greater windfall to higher income earners and a far greater problem in its impact on those who are less well-off than any negative aspect that people might have perceived about the GST.

There is an extraordinary attitude towards housing in Australia—and I am not criticising people who invest in property. In fact, in many respects, it is an incredibly rational thing to do if you are able to do it. But it is about the only good in Australia which is regularly reported as positive if the price goes up. The more the price goes up, the more that is portrayed as a good thing. It is obviously a good thing if you are a property investor, but it is a bad thing if you are somebody who wants to access the housing market—a first-home buyer, a young couple, a young family or anybody who wants to have a property of their own. That is the source of the greatest gap, the growing gap, in wealth in Australia, which is becoming so large that it will soon be unbridgeable.

The Commonwealth-State Housing Agreement on its own cannot bridge that gap, but the lack of attention at federal level given to the crisis in housing affordability is a major indictment of this government. I have asked questions of the government about this area from time to time over the years. Their only response is: ‘Housing is a state issue. Our job at federal level is to keep interest rates low.’ It is good that interest rates are kept lower than they might otherwise be, although it depends on how you assess them in relative terms. But, in many ways, in combination with other factors—let me stress that—such as negative gearing tax breaks and capital gains tax breaks, keeping interest rates low may perversely make housing more expensive by people using it as an investment.

There is more that should be done there. The federal government have failed. The federal Treasurer specifically dodged this issue by sending it off to a Productivity Commission inquiry and then ignoring the recommendations that applied to the federal government to do something to address the crisis in housing affordability. It may be something that the government do not care about, as long as their mates are getting richer on the property investment market. Maybe they do not care, but millions of Australians are falling further behind, either by their inability to get into the housing market or by having to mortgage themselves up to their eyeballs and beyond to try and get into it. The lack of policy attention at a national level is a major problem, and it is inexcusable. I seek leave to continue my remarks later. (Time expired)

Leave granted; debate adjourned.