By Margaret Gleeson
SYDNEY — A meeting of commonwealth and state housing ministers on March 27 failed to resolve the impasse over financing public housing beyond the current agreement, due to expire on June 30, 1999. Under the agreement the federal government provides grants to the states for public and community housing, as well as other forms of housing assistance.
In 1995, the federal Labor government proposed to replace its grants to the states with direct payments to individuals (rental assistance payments to public and private tenants up to 25% of their income), leaving the states to finance the construction and maintenance of public housing from state revenue. There was also a requirement that state housing authorities charge market rents and target services to high need tenants.
These proposals were adopted by the federal Coalition government in 1996, but the states have not agreed to accept full responsibility for providing public housing.
An intensive lobbying campaign by housing activists and peak housing and welfare bodies from late 1996 stalled the "reform" process, pending a senate committee of inquiry.
After 12 months of deliberation (including 302 submissions and three days of public hearings), the committee reported on December 15. It recommended that public and community housing should remain a joint commonwealth-state responsibility and that the commonwealth provide capital funding for public housing to ensure it comprises at least 6% of total housing.
In response to recent decisions by the Queensland and Victorian governments to impose a strict means test on public housing applicants and restrict tenure to short- or medium-term, the senate committee recommended that security of tenure be included in the negotiations for the next commonwealth-state housing agreement.
Given the government's 1997 budget decision to cut rent assistance to shared households, the committee also decided that regional variation in rents is a factor in determining the level of rent assistance payments made by the department.
Data included in the committee's report reveals the government plans to cut commonwealth funds to public housing and increase rent assistance payments for those on waiting lists. The community housing organisation Shelter identified the 40% decline in commonwealth funds in real terms since 1985-86 as contributing to a decline in new stock acquisitions, from 14,000 in 1989-90 to 4000 in 1995-96. At the same time, rent assistance has risen from $225 million in 1984-85 to $1.6 billion.
Rent assistance is now the commonwealth's major form of housing assistance, but there is still a lack of housing affordability for people on low incomes. At present, 39% of rent assistance recipients (including 43% of nursing home residents) pay more than 30% of their income in rent; only 16% pay less than 25%.
Further cuts of $200 million have been announced by the Howard government. State governments have responded by tightening up on eligibility, freezing new construction and selling off properties. Meanwhile, the waiting lists get longer, private rents soar and more people are plunged into poverty and homelessness.
Although the senate inquiry did not challenge the view that housing is a commercial opportunity, it is unlikely that its recommendations will be implemented (including the Democrats' minority recommendation for a 10% funding increase for crisis accommodation).
At the housing ministers' meeting, federal minister Senator Jocelyn Newman refused to guarantee the states' unanimous demand for an end to cuts to public housing.