Australia’s housing minister has turned down calls to raise support payments to help vulnerable tenants cope with surging rents.
The commission suggested the federal government peg support payments to rents or frequently adjust them to deal with price increases.
However, Housing Minister Julie Collins said lifting rental payments was not on the government’s agenda.
Report’s Findings
The commission’s report was released following a review of the National Housing and Homelessness Agreement (NHHA), in which the federal government provides $1.6 billion (US$1.04 billion) each year to states and territories to improve Australians’ access to secure and affordable housing.Nevertheless, the report found the agreement ineffective in preventing homelessness and housing stress.
The report noted that average low-income renters spent more than a third of their earnings on rent. One in five low-income households had less than $250 left after paying their weekly rent.
“The NHHA, intended to improve access to affordable, safe and sustainable housing, is ineffective,” Roberts said.
“It does not foster collaboration between governments or hold governments to account. It is a funding contract, not a blueprint for reform.”
Meanwhile, the housing minister welcomed the commission’s findings, saying they would provide insights for the national housing supply and affordability council and a government’s homelessness and housing plan.
Proposed Solutions to The Housing Crisis
To solve the current housing crisis in Australia, the Productivity Commission proposed two approaches: providing more support for low-income renters and eliminating barriers that prevent housing supply growth.At the same time, the commission said erecting more social housing was just part of the solution.
It also recommended the government reserve social housing for those most vulnerable to homelessness in the long-term, as well as focus on improving the affordability of the private rental market.
“Governments should trial a housing assistance model that provides equivalent assistance to people in need, regardless of whether they live in public, community or privately owned housing,” the report said.
While calling on the government to set robust targets for new housing supply, the commission noted that the first-home buyers support scheme did not do much to improve housing affordability.
Specifically, the commission pointed out that providing first-home buyers with more resources would increase demand for housing. It said if an increase in housing supply did not accompany this elevated demand, the government’s assistance would likely push up house prices.
“State and territory governments should phase out assistance provided to first-home buyers through grants and stamp duty concessions, unless measures are tightly targeted to support people experiencing marginalisation in the market and who would otherwise be locked out of home ownership,” the report said.