Speaking at an affordable housing forum in Sydney on Thursday night, ACOSS CEO Dr Cassandra Goldie will call on Federal, State and local Governments to step up to the challenge of improving housing affordability in Australia, warning that we risk sentencing young people and those on low incomes to a life of insecure renting, or worse, if we fail to act now.
“Our housing policy settings are failing to deliver social, economic or intergenerational equity. The case for reform is compelling and urgent, and government action is essential,” said ACOSS CEO Dr Cassandra Goldie.
“Affordable supply is at critically low levels. Young people and those on low incomes are locked out of home ownership and the private rental market remains an expensive and insecure place to be.
“Home ownership rates have steeply declined for young people, with rates for those on low incomes falling fastest. While the proportion of investors has increased significantly, the proportion of first home buyers in the market has reached historically low levels. Meanwhile, 80% of those in the bottom 20% of incomes are experiencing housing stress in the private rental market (paying more than 30% of income).
“There are major areas in need of urgent reform.
“Firstly, we need to be addressing the tax concessions which help individuals with high wealth to profit from the housing market, and which keep first home buyers locked out.
“We all pay a high price for the special treatment of speculative investors in our housing system, particularly through negative gearing and capital gains. $6 billion in tax concessions each year, inflated house prices and rents, homelessness, divided cities and lost productivity.
“Foreign investors are not the main driver. With attractive tax breaks, the housing market is being fuelled by short-term investors looking for short-term gains. Land tax and stamp duty must also be addressed.
“Secondly, we are seeing a diminishing appetite by governments to invest in affordable housing programs. The last 30 years have seen a reduction in government investment in social and community housing by more than 25%.
“Currently, the future of major affordable housing programs is uncertain, with a major homelessness agreement due to expire in June and the future of national partnership agreements being considered by the federation review.
“In the last Budget, the Federal Government walked away from the only program we had for increasing private investment in affordable rental housing, the National Rental Affordability Scheme. This will save taxpayers $235 million over the forward estimates but cost us at least 12,000 affordable housing dwellings for low and moderate income households not to mention the untold social and economic costs of inadequate affordable housing supply.
“Thirdly, we need the Commonwealth, State and Territory Governments to design a serious joint approach to planning and infrastructure policy and investment. With a national shortage of some half a million affordable rental dwellings, affordable housing, transport and infrastructure should be a national infrastructure priority underpinned by an investment strategy which leverages public and private finance.
“The Commonwealth must be a national leader which recognises that housing affordability and public infrastructure have the ability to unlock much of our productive capacity, whilst delivering much better quality of life, with important health and social outcomes.
“This Budget must chart a new course and deliver a down-payment on future housing investment. It should also deliver necessary relief to those struggling on low incomes in the private rental market though an increase to Commonwealth Rent Assistance,” Dr Goldie said.
Media Contact: Fernando de Freitas 0419 626 155
Dr Cassandra Goldie will be speaking at the City of Sydney City Talks event tonight. More information here.
ACOSS Budget Recommendations: Housing and homelessness
(full ACOSS submission here)
1. Limit deductions for expenses relating to housing and other passive investments to income from the same asset – Revenue: $500 million ($1,000 million in 2016-17)
2. Establish a long-term Affordable Housing Growth Fund – Cost: $750 million in 2015-16 ($900 million in 2016-2017)
3. Review Commonwealth Rent Assistance and increase the maximum rate of CRA – Cost: $720.5 million in 2015-16 ($759.6 million in 2016-17)
4. Maintain funding for homelessness services and index to CPI or wage price index, whichever is highest – Cost: $160 million in 2015-16 ($170 million in 2016-17)
5. Improve the adequacy of NAHA indexation – Cost: $33 million 2015-16 ($34 million 2016-17)
6. Invest in the National Rental Affordability Scheme to increase the supply of affordable rental housing – Cost: $36 million in 2015-16 ($98 million in 2016-17).