Isn’t it time for the federal government to tackle social housing and its implications

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In a recent speech at a real estate developer forum, Jason Falinski, Liberal MP for Sydney and Chairman of the Standing Committee on the Survey of Housing Accessibility and Supply in Australia, said that “since World War II the housing commission had a lot of negative impact on vulnerable communities and I wonder if its construction actually helps people in struggling communities.

His comment and his use of the pejorative term “housing commission” have been strongly criticized by the governing bodies. Homelessness Australia, the Community Housing Industry Association and National Shelter issued a statement opposing “in the strongest terms Mr. Falinski’s misrepresentation of the sector and disregard of the important contribution that affordable housing makes to the well- to be Australians in need “.

Judging by the catastrophic lack of support from the federal government for social housing since taking power in 2013, it would appear that Falinski’s views are generally shared by his colleagues. Unfortunately, this prospect translates into a desperately poor performance nationally in increasing the number of social housing.

A recent report from the Australian Institute of Health and Welfare (AIHW) tracks the number of social housing units built over the past decade. He paints a dark picture. During the last term of the Labor Party (2007-2013), there was some growth in the number of social housing. In 2008, there were 378,554 social housing units.

When the Labor Party left office in 2013, there were 408,676 social housing units; an increase of just over 30,000. This came after social housing was dramatically neglected during the Howard era (1996 to 2007), from 6.1 percent of the housing stock in 1995- 96 to 4.7 percent in 2005-06.

The increase during Labor’s tenure was mainly due to the fact that social housing was used as a stimulus to counter the impact of the global financial crisis.

The Commonwealth Government has provided $ 5.638 billion to build new social housing and an additional $ 400 million has been allocated for repairs and maintenance of existing social housing.

Over the next three years, approximately 19,700 new social housing units were built and approximately 12,000 housing units in very poor condition were purchased. The amount allocated to social housing was the federal government’s most important commitment to counter the economic impacts of GFC.

In 2020 it were 416,190 social housing units. Thus, during this seven-year period of the coalition being in the federal government, the number of social housing increased by a negligible 7,515 units or 1,100 units per year.

Aside from Mr Falinski’s comments, when Commonwealth housing spending is examined, it is evident that there is minimal support for social renting despite its potentially overwhelmingly positive impacts on households accessing it.

Most of the public expenditure on housing for low-income households is absorbed by Commonwealth Rent Assistance for tenants in the private rental sector. In the 2021-2022 budget, $ 5.3 billion was allocated for rent assistance – more than three times the amount allocated to support for social housing services and the homeless in the state / territory – barely $ 1.6 billion.

The amount budgeted for social housing and homelessness represents approximately 0.03% of the 2021-2022 federal budget.

Despite a host of economists, social organizations and the Master Builders Association urging the federal government to use social housing construction to counter the Covid-19-induced recession, the government refused to accept the suggestion. Its main counter-argument was that social housing is a state responsibility.

It seems that the main reason the federal government does not support social housing is mainly based on the idea, as Jason Falinski asserted, that social housing is a negative phenomenon and that, implicitly, government spending on it. regard should be minimal, and the housing supply is “best left to the market”.

Scott Morrison, in his rejection of Labor’s plan to spend $ 10 billion on social and affordable housing if he regains power, commented: “They want to spend more to build less. We’ve seen them do it before because they thought government was the only answer to the challenge ”.

He concluded that “the best antidote to rising house prices is supply. This has always been the case ”.

Data indicates that there is a worsening housing affordability crisis in Australia. In addition to the more than 100,000 homeless people, hundreds of thousands of individuals and families can no longer access property and have to depend on the lightly regulated and insecure private rental sector for long periods of time, if not their entire lives.

Buying a home can be financially crippling. In June 2021, it was estimated that nationally 41.3% of households with a mortgage (1.53 million households) suffered from financial stress. In June 2016, 20% were.

Financial stress is defined as having less than 5 percent of your income after paying all expenses. Although rent increases have not kept pace with increases in house prices, the proportion of low-income households (40% of households at the bottom of the ladder) experiencing rental stress is substantial.

In 2017-2018, 43.4% of private renters were from low-income households and among these, 50.2% suffered rental stress.

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There is no possibility that the market will solve the crisis. It is estimated that there is a shortage of 437,000 social housing units and 213,000 affordable housing units.

State governments are also to blame and certainly could do a lot more, as recently illustrated by the Victorian government pledging to spend $ 5.3 billion on social and affordable housing over the next four years.

However, the federal government is in the best fiscal position to dispel the crisis. Unfortunately, it is obvious that there is absolutely no possibility of this happening under a coalition government.


Alan Morris is Professor, Institute for Public Policy and Governance
Sydney University of Technology


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