L IBR A R Y BR O THE R HO O D O F ST. L AURE NCE 67 - PDF document

B « 7 4 3 N o te s fo r B ro th e rh o o d of St L aurence p resen ta tio n to Senate c o m m u n ity affair^reference com m ittee In q u iry in to h o u s in g assistan ce L IBR A R Y BR O THE R HO O D O F ST. L AURE NCE 67 BR U N S WIC K STR E E T M o n d ay 4 A u g u st 1997 F ITZ R O Y VIC TO R IA 3065 D o n S iem on and M an d y L everatt In tro d u c tio n s an d th a n k y o u T h re e k e y q u estio n s fo r th is in q u iry : • w h y sh o u ld th e C o m m o n w ea lth p ro v id e h o u sin g assistance? • w h o needs assistance? • w h a t m o n e y is required? W h y s h o u ld th e C o m m o n w e a lth p ro v id e h o u s in g assistance? H o u sin g is a k e y m eans to stab ility fo r p eo p le (eg y o u n g hom eless, fam ilies) an d to h elp th em advance th e ir lives. T o achieve th is w e n eed to: • p ro v id e o r subsidise ex p en d itu re d eep ly to achieve a ffo rd a b ility (cf in co m e su p p o rt) • ensure en o u g h peo p le can get it—su p p ly , access • ensure p eo p le can keep it—se c u rity C o m m o n w e a lth role: • n o t ju st because o f its ro le in ‘in co m e su p p o rt’ (states p ro v id e all so rts o f e x p en d itu re su p p o rt eg education, h ealth subsidies) • b u t C o m m o n w e a lth has th e ab ility to p a y adequate subsidies • also can guarantee n atio n al ou tco m es, p lan n in g an d co o rd in atio n . M a jo r issue is m o re resources P u b lic h o u sin g is direct p ro v isio n b y g o vernm ent: • guarantees co st c o n tro l (expenditu re subsidies go to ren t, prices are co n tro lled ), • d irect c o n tro l o v er tre a tm e n t o f ten an ts • seen b y IC as m o st efficient an d effective. I n q u ir y in to h o u s in g a s s i s t a n c e : n o t e s fo r . . . . B r o th e r h o o d o f S t L a u r e n c e p r e s e n ta tio n p : \ p o h c y \ h o u s m g \ h o u s p r e s . n o t 2 2 5 8 7 4 3 f t

Presentation to Senate community affairs reference committee on Housing Assistance W h o n e e d s a s s is ta n c e ? C u rr e n t policies assum e th a t p riv ate m ark e t su ited to jo b seekers and p u b lic h o u sin g needed o n ly fo r special needs, o ld er p eople, em ergencies. T h is d iv isio n m ain ly reflects ratio n in g o f th e v e ry few p u b lic h o u sin g places. T argets fo r p u b lic h o u sin g sh o u ld be b o th th o se in an d o utside la b o u r m ark et: u n stab le h o u sin g is a b a rrie r to e m p lo y m en t an d w ill lead to lo n g er p erio d s outside w o rk (eg y o u n g people) p u b lic h o u sin g location is n o t a w o rk force b a rrie r fo r m o st (p articu lar locations) O in co m e testin g m ay b e m o re of a p ro b le m reflects stag n atio n in p u b lic h o u sin g (no relo catio n o f sto ck , h a rd fo r ten an ts to m ove). P u b lic ten a n ts n o t ‘over-subsidised’. H o riz o n ta l eq u ity —subsidies to h o m e o w n ersh ip are th e co rrect co m p ariso n . C o m p ariso n s b etw een te n a n t ten u res m isleading— ignores th e p u rp o se an d lo n g -term efficiency o f p u b lic h o u sing. R e n t A ssistance to p riv ate ten an ts valuable in s h o rt te rm b u t n o t m o st efficient o r effective w ay o f assisting (IC). B ro ad er assistance needed if value o f th is is to be m axim ised: to assure affo rd ab ility (ren t co ntrols) o r ex p an d low -cost su p p ly (tax incentives). 2

Presentation to Senate community affairs reference committee on Housing Assistance W h a t m o n e y is r e q u ir e d ? N o te th e ex ten t o f decline in C o m m o n w ealth fu n d in g —halv in g of capital grants. D esp ite c la im s th a t G o v ern m en t w an ts to direct assistance to th o se m o st in need, have seen red uctio ns in R A (eg to ro o m in g h ouse residents) as w ell as increase in p u b lic secto r rents. G o v e rn m e n t roles and resp o n sib ility n o t so m u ch an issue—k ey th in g is to get long-term C o m m o n w ealth co m m itm en t to su p p o rt subsidies at reasonable level of access in o rd e r to fu n d ad d itio n al su p p ly . C an be d o n e w ith off-budget d eb t fin an cin g (N ew m an). B o tto m lines fo r B ro th erh o o d in reform : • low -in co m e p u b lic ten an ts sh o u ld n o t see rents rise, • far m o re p eo p le sh o u ld get access to th is level of affo rd ab ility (th ro u g h p u b lic housing), • R A valuable as co m p lem en tary m easure fo r th o se left in th e p riv ate ren tal m ark et. 3

S E N A T E I N Q U I R Y I N T O H O U S I N G A S S I S T A N C E 1 . I N T R O D U C T I O N T he B rotherhood o f St L aurence w elcom es this opportunity to contribute to the Senate Inquiry into H ousing A ssistance. A lthough n o t a large provider o f housing - the B rotherhood’s contribution here is restricted to accom m odation for low incom e older persons such as room ing houses, hostels, nursing hom es and som e independent living units - the B rotherhood has a long-standing com m itm ent to the achievem ent o f secure, affordable housing for disadvantaged people in our society. T he B rotherhood was form ed during the D epression years. Its early years w ere therefore spent assisting fam ilies affected by unem ploym ent. In the im m ediate post­ O w ar years its attention turned to the plight o f low -incom e people living in rented slum dw ellings in the inner urban region o f M elbourne. T he founder o f the B rotherhood, Father G erard T ucker, in concert w ith other religious leaders such as O sw ald B arnett, w as instrum ental in the form ation o f the V ictorian H ousing C om m ission and the consequent developm ent o f public housing. In addition to this direct interest in housing, the B rotherhood has, through its long­ standing policy and research unit, produced a num ber o f publications concerned w ith the issue o f housing and housing affordability for low incom e and disadvantaged people. B efore addressing som e specific T erm s o f R eference, the B rotherhood believes that an understanding and definition o f housing assistance is required as there is little conceptual clarity in the debate as it has been conducted over the last three years since the “housing reform agenda” reared its head. 2 . T H E M E A N I N G O F H O U S I N G A S S I S T A N C E C urrently, “housing assistance” in A ustralia is pursued through tw o separate system s: R ent A ssistance (RA ) payable to eligible social security recipients in the private rental sector, and ren t rebates, w hich are sum s o f m oney deducted from the notional rents charged to tenants in public housing. T hese rebates are designed to ensure that low incom e households (again, com m only, pension and benefit recipients) do not pay m ore th an a designated proportion o f their incom e in rent. T he form er system is paid through the Federal D epartm ent o f Social Security, w hilst the latter is adm inistered by State H ousing A uthorities. R ent rebates are a form o f direct housing assistance because they not only incorporate a specific affordability benchm ark - usually set som ew here betw een 19% and 25% o f household incom e - but they are also tied to housing w hich is exogenous to the housing m arket proper. B y contrast, because it is capped, R A does not relate significantly to the actual level o f rents paid by low -incom e private tenants. R A 1