Research Note 24 1999-2000

The Changing Face of Public Housing

Greg McIntosh
Social Policy Group
15 February 2000

Introduction

Both the Commonwealth and the States/Territories provide a range of funding programs and other assistance to help people obtain suitable housing. The two main sources of housing assistance come from the operation of the Commonwealth-State Housing Agreement (CSHA) and Rent Assistance (RA).

The CSHA

The CSHA is a joint Commonwealth-State arrangement which aims to assist both renters and purchasers obtain appropriate accommodation. It is mainly concerned with the provision of public housing but also provides funding for other types of tenure as well. The main identified funding priorities of the CSHA are public housing, community housing, crisis accommodation, Aboriginal rental housing, private rental support and home ownership support. In 1998-99 a total of $1276.6m was paid through the CSHA, $898.4m of which came from the Commonwealth with the remainder ($378.2m) coming from the States and Territories. (1)

Rent Assistance (RA)

RA (fully funded by the Commonwealth) provides rental assistance to low income households and individuals in the private rental market. Assistance is in the form of a non-taxable income supplement paid to people who receive income support payments or more than minimum family payment in recognition of housing costs in the private market. In recent years assistance via RA has exceeded that provided under the CSHA-in 1998-99 a total of $1505m.(2)

Other Assistance

As well as these two major programs the Commonwealth also provides other housing assistance primarily in the form of:

• funding for organisations to provide residential care for the elderly
• specific programs for Aboriginal housing (for example, the Community Housing and Infrastructure Program (CHIP) and the Home Ownership Program) which are administered by the Aboriginal and Torres Strait Islander Commission (ATSIC)
• specific programs designed to help people move into more independent living arrangements or to provide for their ongoing support needs-for example, the Supported Accommodation Assistance Program (SAAP), the Home and Community Care Program (HACC) and the Commonwealth-State Disability Agreement (CSDA)
• various taxation concessions such as negative gearing for rental properties and capital gains relief for the family home.

This Research Note is primarily concerned with government provision of public housing via the CSHA and trends that have occurred in this area in recent years.

Recent Changes to the Commonwealth-State Housing Agreement (CSHA)

1. Funding

The accompanying Table(3) shows total CSHA funding by program for the years 1996-97 to 1998-99. A key feature shown in the Table is the use of some CSHA funds for State Fiscal Contributions (SFCs). Some States and Territories, as part of the Commonwealth's debt reduction program agreed to at the 1996 Premiers Conference, elected to pay their share or part share of the debt reduction program via a reduction in CSHA funding. However, it should be noted that the total figures shown in the State Fiscal Contribution column are 'exaggerated' due to the fact that Queensland agreed to transfer funds from other portfolio areas ($84m in 1996-97, $89m in 1997-98 and $55m in 1998-99) for CSHA purposes to offset, or partly offset, the SFC reduction agreed to. Thus, the net effect on housing is less than that shown in the Table. Notwithstanding this, it can be seen that funding for the CSHA has declined since 1996-97. The decline in 1997-98 is particularly marked essentially due to a $93m cut to base funding (comprising a $50m budget cut and a 4 per cent efficiency dividend) and a further reduction of $150m due to the SFC from the States. The level of funding was partly restored in 1998-99 essentially via a reduction in SFC contributions but total funding in that year was still substantially less than that for 1996-97 because of the continual application of a 1 per cent efficiency dividend.(4)

CSHA Funding 1996-97 to 1998-99 ($'000)
	1996-97	1997-98	1998-99
Base Funding	873.1	780.4	772.6
Less SFCs	141.7	149.7	68.9
NET Base Funding	731.4	630.7	703.7
Aboriginal Rental Program	91.0	91.0	91.0
Crisis Accommodation Program	39.7	39.7	39.7
Community Housing	64.0	64.0	64.0
Total Commonwealth	926.1	825.4	898.4
State Matching Funding	427.4	382.0	378.2
Total Commonwealth/State	1353.5	1207.4	1276.6

2. Changes in Emphasis and Greater Jurisdictional Variation

• an increasing level of government and private/community sector cooperation and partnership in various housing schemes including joint ventures
• a greater emphasis on community and group housing as opposed to traditional public housing provision
• an increasing number of people with special needs being accommodated in public housing, largely as a result of the policy of de-institutionalisation.
• a trend in many of the States and Territories towards stricter eligibility requirements for public housing tenants and a general move away from long-term tenancy arrangements
• a move towards bilateral housing agreements between the Commonwealth and States/Territories that allows for greater jurisdictional flexibility in the delivery of housing assistance.(5)

3. Administrative/Accountability Changes

Major changes to the administrative/accountability framework within which the CSHA operates came with the 1996 Agreement which was in effect from 1 July 1996 to 30 June 1999. That Agreement saw a greater emphasis being placed on housing outcomes:

The intention of that 1996 CSHA was to enable the Commonwealth to take a national strategic approach to meeting housing needs in partnership with State governments. It was performance based and structured to let the States get on with the job of delivering quality housing programs while enabling the Commonwealth to clearly monitor and report to Parliament on State performance against agreed outcomes.(6)

4. The 1999-2003 CSHA

The current CSHA is effective from 1 July 1999 to 30 June 2003 and builds on the changes made in the 1996 Agreement but continues the downward trend in total funding as a result of continued efficiency dividends. Included in the Agreement is an emphasis on providing housing for those in need as opposed to providing secure tenure. As well, the importance of bilateral agreements is embedded in the Agreement which continues the emphasis in providing flexibility to the State and Territory jurisdictions. In terms of Commonwealth funding for the new CSHA the funding levels for the Aboriginal Rental Housing Program, the Crisis Accommodation Program and the Community Housing Program are maintained at the 1996 Agreement levels, i.e. an effective cut in real terms-see Table above. However, base funding grants are to be slowly reduced from $762.9m in 1999-2000 to $734.5m in 2002-2003 as the full efficiency dividend is applied to base funding. These reductions will necessarily see a proportionate reduction in State matching grants. In order to offset the expected effects of the introduction of the GST on the CSHA an additional $269m is provided by the Commonwealth from 2000-2001 to the end of the Agreement.

5. The Changing Face of Public Housing

1. Data provided by the Department of Family and Community Services, (FACS).
2. FACS Annual Report 1998-99 p. 71.
3. Adapted from Data supplied by FACS.
4. Data and background supplied by FACS.
5. For a more detailed discussion of these changes see Australian Institute of Health and Welfare, 'Australians Welfare 1999', Canberra 1999, ch. 5.
6. Australian National Audit Office, 'The Commonwealth-State Housing Agreement: Department of Family and Community Services', Auditor-General Report no. 17, 1999-2000, Canberra, 1999.
7. See for example, Australian Institute of Health and Welfare, 'Australia's Welfare 1993', Canberra 1993, ch. 3.

Comments to: web.library@aph.gov.au
Last reviewed 17 October 2001 by the Parliamentary Library Web Manager
© Commonwealth of Australia
Parliament of Australia Web Site Privacy Statement
Images courtesy of AUSPIC