Community Housing Federation of Victoria – Melbourne
Monday, 1 July 2013
Ladies and gentlemen, it is a great pleasure to be here this morning for this breakfast.
Before I start, can I pay tribute to the community housing organisations, who are represented in this room, and do such important work in not only ensuring the object of providing housing to so many people throughout our state, but also importantly advocating for the community housing sector, a sector that for many years now has been one that has been dropped, I think, from the government’s policy radar.
Housing is of such critical importance. It’s a crucial part of the economy in Australia. It goes not only to economic issues but to the whole social structure of the society in which we live. Of course thousands of jobs depend on the housing industry and it is undoubtedly an industry that has its ups and downs, and we see that now as we’ve seen that in the past, and no doubt we will see it in the future.
I want to speak briefly about a number of issues in the community housing space and then I’m happy to open up for questions and discussions which may be more useful to hear from your remarks about these matters. Can I say in relation to what Michael said about civil society that we believe that the organisations that form the broader civil society. I tend not to use the expression not-for-profit because that immediately connotes an economic framework, even though its not-for-profit, nonetheless it’s talking in an economic sphere; whereas, the sense of civil society, or the community in which we live, is a much more broad concept, which goes to relationships between individuals and organisations not just an economic relationship in the not-for-profit sense of it.
As Michael said, our belief is that the not-for-profit sector, the community sector, the sector of civil society, is something which is distinct from the sphere of government. But what’s happened increasingly over the last few years and decades is that government has used organisations and agencies within civil society almost as instruments or agencies of government itself. This has been boosted by the fact that government has sought to reduce the delivery of services through the bureaucracy and increase the delivery of services through community organisations.
But instead of just having an arm’s distance trust-trust relationship, what’s increasingly happened through more and more burdensome contractual arrangements is control of the sector, control of the outcomes and a lack of flexibility. That is something I want to reverse if elected – I used to say – on September 14. It won’t be September 14, but whatever date it may happen to be. And to start from the point that those community organisations essentially have grown organically from the communities in which they exist, and people have come together in order to address a problem or issue that they see in the local community, and we should be supporting those organisations, not seeking to control them.
It is for that reason that we oppose the establishment of the Australian Charities and Not-For-Profits Commission. We couldn’t see what mischief there was that required a whole new bureaucracy and we certainly can’t see why another level of red tape – which is what’s occurred – is necessary for organisations who arise from the community who are in almost every case highly trusted within the communities in which they exist and who are doing a very good job. That is why we’ve said that if elected, we would abolish the ACNC, we will return the regulatory powers to those bodies that had them in the first place, which is ASIC and the ATO primarily.
But we would establish a new Centre for Excellence for Civil Society, which would be there to do that important work of advocacy, of raising standards, whether it’s of governance or training of board members, or support for volunteers. All of those things which that sector wants to provide, a Centre for Excellence to do that, rather than a new regulatory body, which is in place at the present time.
Also consistent with that approach, we couldn’t see why there was the need to change the definition of charity as the government has done and so we’ve said that we would revert to the common law definition of charity. If there is a need to add some further categories of charity then we should do as we did in 2003 and simply add those categories rather than changing the whole definition and giving rise, I believe, to new litigation around an issue which has largely been settled so far as the law in Australia is concerned – so settled that this law went back to 1601, and if you can’t settle a law in four hundred years well then you never will.
Can I turn to housing more specifically, and where to from here with the National Affordable Housing Agreement, and the National Partnership Agreements.
As you know, the states and the territories and community housing providers are at the front line of housing services, the Commonwealth is not the primary government in this regard. The states and local government have much more say over housing broadly than does the Commonwealth Government although through the various agreements going back to the Commonwealth State Housing Agreement, from just after the Second World War, which has been continued in various manifestations since then, the Commonwealth has provided substantial degrees of funding to the states and territories under agreements such as NAHA. This is a $6.2 billion commitment over five years, which the current agreement was from November 2008.
The Coalition supports the objectives of NAHA but this agreement eliminates the requirement for matched funding from state governments. Secondly, it lacks accountability in our view and thirdly, it doesn’t tie funding of programs to outcomes. And so we see that there are deficiencies in the agreement in terms of the actual delivery of housing.
This is important in the context of Australia at the present time, that current estimates put the shortage of dwellings at about 250,000 and there are estimates that that is not going to decrease, that in fact it is going to increase in the coming years and some of those estimates say that we’re facing a shortage of 300,000 dwellings in as little as five to ten years’ time.
My view about this is that this is a social crisis in Australia. But it’s below the surface, by which I mean it’s not being talked about in the media, it’s not attracting attention of newspaper columns, it’s not being broadcast on the ABC or 3AW or whichever radio station you happen to listen to – you won’t hear much about this. It’s not being talked about in other public forums and yet it’s a real crisis which is occurring, and part of my view is that even though the Commonwealth doesn’t have primary responsibility in this area, we can at least try and raise the focus on this issue for more public discussion, because if you get more public discussion then you’re likely to get better outcomes from those governments and other organisations that are responsible for the delivery of housing in Australia.
That shortage flows through to all aspects of housing. It’s not just the ability to find housing, and that crosses all parts of Australia, but secondly, it then has impacts in terms of social housing and public housing and obviously it has an impact in terms of homelessness, the numbers of which have increased over the last few years in Australia.
In December 2012, NAHA was updated to include provisional performance benchmarks, but unfortunately this was at a national level only. One of the things we have to look at is how we can actually have some key performance indicators that can be measurable and which can be observable by anybody who can see what’s happening otherwise we’re not going to get the outcomes that we desire.
It’s difficult under current NAHA to ascertain which states and territories are successfully increasing affordable housing stock and how improvements can be made, and the difficulties that are faced in Victoria are replicated throughout Australia. There is no state in Australia, in my observation, that is not facing major problems in relation to its own public housing stock and the like.
Lack of data has been a common theme that has plagued the government’s reform agenda; many of the COAG reforms are languishing because of inadequate information. What we are looking to, if we are elected, is to greatly improve the Commonwealth-state relations by making NAHA competitive and performance-based.
States would be required to report regularly and would receive funding based on performance – a kind of competition policy approach to payments that we provide the States and Territories. By having some independent benchmark of what is to be achieved – not just leaving it to the states themselves to say yes they’re achieving – but some benchmark to do that and to tie some of the funding to that outcome so that there is an incentive for the States to actually bring about reform and to actually provide more dwellings. States would be required to report regularly and would receive funding based on performance.
The question is how responsive is Commonwealth housing policy to the needs of the sector – for example here in Victoria or the other states. The Commonwealth’s housing policy is failing community housing because of lack of transparency, accountability and cost control at a federal level. The Government’s performance on the National Partnership Agreement on Homelessness demonstrates this problem.
During his first term as Prime Minister, Mr Rudd committed $1.1 billion to homelessness after calling it a ‘national obscenity’ and called it a ‘down-payment on a long-term plan’.
The Federal Government refused to give homelessness providers any certainty, before recently agreeing at the 11th hour to a one-year funding agreement of $320 million, with the Commonwealth providing $159 million. Unfortunately, we have a situation now, where the Commonwealth has let its spending get out of control, making multi-billion dollar promises to other sectors, while housing and homelessness have largely missed out.
State governments and homelessness providers and their clients were treated poorly during this process and still have no certainty in terms of funding beyond 1 July 2014 and, as we know, regrettably homelessness has actually increased over the past year.
Under Labor’s watch, homelessness has increased – between 2006 and 2011 ABS Census figures which show a 17 per cent increase in the number of homeless people in Australia – or over 15,000 – from 89,728 in 2006 to 105,237 in 2011.
Compounding this failure, on 2 May this year the National Audit Office released a report which revealed major failings in the Government’s key homelessness funding deal with the states and territories, the National Partnership Agreement on Homelessness. According to the ANAO report, the Government is unlikely to achieve its own target of a 7 per cent reduction in homelessness by 1 July – that is today – and obviously it is pretty clear that 7 per cent hasn’t been achieved by now.
The Coalition is committed to combating the many and complex causes of homelessness, supporting homeless Australians with real, practical assistance and preventing even more Australians from falling into homelessness. At a high level we will focus on retiring debts so that the $7 billion currently spent on interest payments can be used more effectively by the Government, or preferably in my view, by charities doing their work, and community organisations in our community, and the private sector to help vulnerable people right throughout the country.
Growth and sustainability strategies for social housing are important and we are committed to working with state governments around Australia to help seamlessly transfer public housing to the more dynamic and responsive community housing sector, where appropriate.
Social housing represents an important safety net for Australians; however, we are committed to helping Australians who are struggling on low incomes and/or welfare payments to become self-sufficient.
Just last week we opposed the government’s measures in relation to welfare recipients in housing in terms of quarantining some of their payments because we thought this would have an even greater adverse impact upon them. In one of those coalitions that occur from time to time in the Senate, the Greens and the Coalition opposed it and the government as I understand didn’t proceed with it, but I’m not fully on top of that because they rammed about fifty bills through the Senate in about the last day, and we were still getting to terms with that.
According to officials from the Commonwealth’s Department of Families, Housing, Community Services and Indigenous Affairs, at the December 2012 estimates hearings, Labor has spent over $26 billion on housing and homelessness and yet homelessness has increased and housing is become more scarce and unaffordable.
Taxing and spending on public and social housing can only treat the symptoms and will lead to more people to needing government support.
There have been so many housing ministers in this government that we can’t even keep count of them – Ms Collins will be the fifth or sixth housing minister under this government if that appointment is made today. I think that in itself says something about the approach of the government to housing that it’s regarded as such a low priority that it’s just become a revolving gate in terms of housing ministers.
Successive ministers have boasted that the Government made a direct financial contribution to 1 in 20 new homes built since 2008. This is clearly wrong-headed. The end goal should not be to spend ever greater amounts of public money on housing. If elected, we would provide support for those who genuinely need it, and not increase the number of people in support.
One thing I can say we won’t do, and that is to make grandiose statements about no child will live in poverty by such a date, or there will be nobody in homeless by x date, and then not do the hard work to actually achieve that. Rather than make the grandiose announcements, we are much more committed to practical, competent government about better results on the ground for individuals and families and communities. The Coalition will always support projects which empower individuals and reduce pressure on increasingly overcrowded public housing.
The Coalition supports the NRAS concept but we believe it’s not being managed adequately at the current time, and as you all know, it’s currently well short of the targets which were established for it.
It is $4.5 billion over 20 years to provide incentives to developers and investors who build rental housing for low and moderate income families at 20 per cent below the market rate. It provides $7,486 per dwelling per year for 10 years, plus $2,495 per year from state and territory governments in financial or in-kind support, making almost $10,000 in total.
The Government promised to build 50,000 NRAS dwellings by 2012 – as at 3 June of this year only 14,101 had been completed according to the latest FaHCSIA NRAS Performance Report.
The Coalition would look at how we engage the sector, the individual and institutional investors to revive interest in the scheme and provide more dwellings. If you go back to my earlier point, if we’ve got a 250,000 shortage of dwellings here in Australia, then the objective has to be to provide more dwellings. Anything other than that is not going to solve the ultimate problem – whether we are talking about private dwellings, whether we are talking about public housing or homelessness – in the end if you haven’t got enough places then you’re going to have problems. It’s fairly simple in our view that that’s got to be a major objective of government.
We would consider allowing small investors to be directly involved and build houses for low-income renters rather than the current system of only allocating bulk incentives. One of the things I think we’ve got to do in relation to NRAS is to apply a much more rigourous ‘use it or lose it’ approach. It’s not the objective of NRAS to have a system in which there is trading in incentives and allocation. What we want them to be doing with those incentives and allocations is to be actually building houses, and so we have to tweak the system to make it much more workable than it is at the present time.
Private rents as you know have increased by 30.2 per cent from December of 2007, to the March quarter of this year, according to the ABS, which is well above inflation. And as I’ve said, we’ve got this major shortage so far as housing is concerned. There are also tax structures that have an impact on the housing market, and one of those is increasing taxes, which are an important indication here, and you can hardly expect a Coalition politician to be giving a speech without reminding you that if elected we will scrap the Carbon Tax, which has increased building an average new home by between $3,800 and $5,000 according to the Allen Consulting Group and the Housing Institute. Of course the Carbon Tax rises again today, an average of about $540 per family will be the impact of the rise in the Carbon Tax from 1 July this year.
Penalising new home-buyers and builders for adding more modern, energy-efficient homes to housing supply will tighten the squeeze on existing dwellings, driving up rents and push low-income earners into marginal accommodation such as what we see at the motels and caravan parks and the like.
We all know that stamp duty is a significant impost for the housing sector, however it is currently a major source of revenue for state and territory governments and the Commonwealth would have to work constructively with those jurisdictions to look at how the overall system can be improved without impacting on the States’ abilities to provide essential services.
As you know the current government, under Mr Rudd’s first manifestation, appointed the Henry Committee to review taxation in Australia but then cherry-picked two or three or the recommendations out of Henry. Obviously there is a lot of work that has been done in terms of the tax system, and indeed the inter-related welfare reform in Australia, but it’s all sitting there gathering dust. Nothing has been done about it.
In terms of the long term issues facing Australia, one of the things we’ve said is we are committed to looking at those things again, but not just looking at them and having an inquiry for the purpose of having an inquiry and the feel good factor about it, but how we actually meet the long term challenges, particularly with an ageing population and an ageing demographic in this country.
The ageing of the population is probably the most significant social and economic issue facing Australia and yet again there is not a great deal of consideration of the impact of that. The impact for example, that there will be less workers per dependent than there are at the present time in 10, 15, 20 years. The increase in the number of older people and the impact that is going to have on housing including many older people who don’t have the financial wherewithal to be able to afford or maintain housing into the future. The number of people who are elderly, asset-rich but income poor at the present time – out in my electorate in Doncaster and Templestowe you’ve got increasingly elderly people, rattling around in huge houses, which is a large asset but with low incomes in many regards – and all the social consequences that flow with that.
Currently, we know that 44 per cent of the cost of a new house and land package is made up of taxes, including federal, state and local taxes according to the HIA. This of course hinders the supply of new housing and only exacerbates the housing shortage. So if we are concerned about the social and economic impact of housing then of course these are issues that we need to look at.
We support the current arrangements regarding negative gearing for investors, as this provides an incentive for investors to meet the demand for rental accommodation.
Private investment in housing provides stock of dwellings for renters in all income levels. The Coalition wants to encourage the involvement of private investment, because we know this has to be one of the crucial components, in terms of meeting the overall issues in the future. There is no silver bullet to this but there has to be a variety of approaches that could lead to practical outcomes.
Finally, can I encourage you to continue to provide us with your valuable insights? Unlike the government, we have had some stability on our side in terms of not only this portfolio but all the other portfolios, and as you know Tony has announced that the Shadow Cabinet will be the Cabinet if elected.
So the people that you have dealt with, the people that you have built a repour with, will be the people who will be ministers in government. In that regard, may I say that my junior Minister Marise Payne has done an enormous amount of work in relation to the housing sector throughout Australia, and I know maintains a very close relationship with people in all aspects of the housing sector including the youth and community housing sector in Australia.
If elected, we will continue to keep those doors open, and to provide, hopefully, some real programs that will meet the challenges that we face in the future. As I said before there won’t be grandiose statements, we won’t approach the next election as an auction because we think that’s not the way in which Australians are looking at the way they want to go forward. I think most Australians want to see practical outcomes delivered by a competent government, and if elected we hope to do that.