Sector Disappointment as Budget Fails to Deliver Big-Picture Solutions for Homelessness

Despite earlier promises that the 2017 budget would make housing a centrepiece, the social sector claims the federal budget has failed to deliver the big-picture solutions needed to end homelessness.

In his budget speech, on Tuesday night, Treasurer Scott Morrison said the government had chosen to “put downward pressure on rising housing costs” and he outlined measures he claimed would “make a difference”.

“Whether you are saving to buy a home, spending a high proportion of income on your rent, waiting for subsidised housing, or you’re homeless, this is an important issue to you,” Morrison said.

“There are no silver bullets to make housing more affordable. But by adopting a comprehensive approach, by working together, by understanding the spectrum of housing needs, we can make a difference.”

As part of the package he revealed the Commonwealth would replace the $1.3 billion National Affordable Housing Agreement with a new set of agreements with the same funding, requiring states “to deliver on housing supply targets and reform their planning systems”.

He also announced a  “bond aggregator” to be managed by a new National Housing Finance and Investment Corporation (NHFIC), set to be established by 1 July next year.

According to the treasurer the NHFIC would provide long-term, low-cost finance to support more affordable rental housing, with states and territories also encouraged to transfer stock to the community housing sector.

Morrison also announced $375 million for a permanent extension of homelessness funding to the states, with a continued focus on supporting young people and victims of domestic violence.

But the social sector has criticised the budget as “unfair” and said homelessness will continue to rise under the new measures.

“While the increased security of funding for homelessness services is very welcome, the fact remains that we can’t house the 105,000 Australians experiencing homelessness each night until there is a real increase in public housing to get 200,000 people off waiting lists,” Homelessness Australia chair Jenny Smith said.

“The treasurer has failed in his promise to deliver a budget that focuses on fairness, opportunity and security for those doing it tough.

“The most fundamental form of security is a safe and affordable place to live, and yet this budget does nothing to get 200,000 people off public housing waiting lists.

“The best opportunity you can give your kids is a stable home, but 29,000 Australians under 18 will remain homeless under this budget.”

Homelessness Australia had previously called on the government to: roll back negative gearing and capital gains tax, increase the supply of public housing, better integrate existing services, invest in Housing First and Rapid Re-Housing services, increase the focus on prevention, establish better outcomes measurement and “close the gap” for Aboriginal and Torres Strait Islander people, none of which were allocated additional funding.

Smith said the budget was not “fair”.

“It fails to fix a broken housing system that encourages investors to own more than one house while 105,000 have no home at all,” Smith said.

“Maintaining the existing funding levels will allow homelessness services to keep the lights on, but they’ll still be turning away 275 people every day, and we’ll continue to see homelessness numbers climb.

“At the root of the homelessness problem is a chronic shortage of affordable housing for people on low incomes, and until we see bold and courageous leadership in this area, we will never end homelessness in Australia.”

Smith said the bond aggregator wasn’t a “silver bullet”.

“What is missing is the funding subsidy to allow community housing to house those on the lowest incomes. A bond aggregator will allow community housing to modestly increase the number of homes they build, but that doesn’t remove the need for governments to continue to provide an ongoing rent subsidy for tenants on the lowest of incomes,” she said.

“A bond aggregator isn’t a silver bullet. Australia is grappling with a big homelessness problem, but we’ve yet to see a big solution. This federal budget is a missed opportunity to show the courage and leadership needed to solve this humanitarian crisis.”

The WA Council of Social Service said they welcomed some of the “modest measures” on affordable housing but were “disappointed” no action was taken to tackle negative gearing.

“The new National Finance and Investment Corporation and the National Housing and Homelessness Agreement are first steps in addressing the housing crisis in this country, and provide much needed support for services and community housing providers,” WACOSS CEO Louise Giolitto said.

“We welcome the promised continuity of funding for social housing and welcome the promise of greater transparency and accountability for state governments in meeting social housing growth targets.

“It is, however, disappointing that once again we have seen no action to tackle negative gearing and reduce the competition for investment properties that continues to inflate housing prices, with the proposed Super Tax breaks simply adding to those pressures without addressing the underlying structural problems.

“Much more needs to be done to address rental affordability for those on lower incomes and the inadequacy of income support and Commonwealth Rent Assistance in the face of growing poverty and inequality within our community.”

Anglicare Victoria said the “mean-spirited welfare measures” punished the poor and overshadowed any positive moves on housing.

“Welfare payments in Australia are so low, that people on government benefits are shut out of the private rental market and trapped in poverty,” Anglicare Victoria CEO Paul McDonald said.

“Anglicare’s recent Housing Affordability Statement showed that even renting in a share house was beyond the reach of Victorians on Newstart or Youth Allowances.”

McDonald criticised the government for taking “a punitive approach” rather investing in people and increasing welfare payments so people could pay modest rents and cover basic costs of living.

University of Melbourne Professor Carolyn Whitzman said it was “the usual suspects” who stood to gain from the new measures.

“In advance of the 2017 federal government, Treasurer Scott Morrison said there is no magic bullet on housing affordability. While this is true of most wicked policy issues, there does need to be a comprehensive program based on evidence and the basic need of people to have a secure roof over their heads. This budget does not deliver on such a program,” Whitzman said.

“So who gains in the housing measures of the 2017 budget? The usual suspects: multi-property investors, people who already own homes and have no immediate plans to move, and housing speculators.

“Housing related budget measures fly in the face of popular opinion – 70 per cent of Australians are concerned about not being able to purchase housing, almost twice as many Australians support removing negative gearing as support it, and twice as many Australians are willing to stop their home value increasing in order to improve housing affordability as oppose this concept.

“It is possible that the current federal government will be a loser, if it does not offer up a comprehensive program to address affordable housing ahead of the next election.”

Labor dismissed the housing package as a “complete joke”.

In a joint statement Chris Bowen and Senator Doug Cameron said Malcolm Turnbull and Morrison had “failed” at the chance to reform negative gearing and capital gains.

“The package is a complete sham. The measures in the budget tinker at the edges but will do nothing to put first home buyers back on to a level playing field with investors or take the heat out of the housing market,” they said.

“The housing affordability measures announced in the budget fail the fairness test and don’t come close to the budget centrepiece the treasurer has been promising for months.

“It is a grab-bag of unrelated measures that will not address key drivers of housing unaffordability that are in the Commonwealth’s control like winding back negative gearing and capital gains tax discount.

“There is not a housing expert in the country who thinks the government should have left unchanged Australia’s housing tax concessions, the most generous housing tax concessions in the developed world. Yet this is what the government has done.”