New report confirms stable housing is key to work

A new report from the Productivity Commission dispels the myth that public housing is a disincentive to work and highlights the role of stable housing in employment outcomes. ACOSS has responded with a call for governments to maintain a strong social housing system and to improve security and affordability for private renters.

The Commission’s report, ‘Housing Assistance and Employment in Australia’, dispels the myth that the form of housing assistance people receive affects employment outcomes. In doing so, it cautions against any move towards market rents for public housing tenants, a recommendation of the recent Welfare Review led by Mr Patrick McClure.

“This report confirms what ACOSS has been saying for a long time, namely that it’s the level of disadvantage and employment support available that determines a person’s work opportunities, not the characteristics of the housing assistance they receive,” said ACOSS Deputy CEO Dr Tessa Boyd-Caine.

The Commission’s report highlights the difference between the level of subsidy provided to a single, childless Newstart recipient in public housing (about $6700 a year) and in private rental (about $3300 a year). It also notes that rents have increased well above price inflation over the past decade, while Rent Assistance is indexed only to CPI.

Dr Boyd-Caine continued, “The McClure Review correctly identified an inequity in the different treatment of public and private rental tenants on low incomes. ACOSS supports its recommendation for a review of housing assistance and rent settings, including the adequacy and indexation of Rent Assistance. However, the Commission’s report confirms our concerns that the McClure Review’s proposal to move public housing tenants to market rents would increase rental stress among public housing tenants without increasing employment participation.

“Reform should ensure that both public and private tenants receive adequate subsidies to protect them from rental stress and after-housing poverty.

“In the short term, we are looking to see a 30% increase in Rent Assistance in this Budget to provide immediate relief for struggling renters in the private market. Longer term, the Government should maintain its commitment to an independent review of payment adequacy every 3 years, and expand its scope to include the rates and indexation of all payments, including Allowances and Rent Assistance.”

The Commission’s report found that housing has an important ‘stability effect’ and that short tenures are a concern from an employment perspective. It finds that the more times a person moves in a 12-month period, the less likely they will be working at the end of the year. It also notes that public housing tenancies average seven years compared to 1.2 years in a private market.

“The Commission highlights Australia’s weak tenancy protections compared to other OECD countries, with shorter lease terms and notice periods for termination and ‘without-grounds’ lease terminations. This undermines stability and security for tenants, and likely has a negative employment effect.”

“Importantly, the Commission lends support to recent calls by community and housing peaks for reform of tenancy legislation to increase stability of tenure for renters in the private market, and suggests an increasing role for head leasing by governments,” Dr Boyd-Caine said.

Media Contact: Fernando de Freitas – 0419 626 155