Chapter 5
Housing as intergovernmental policy: roles, responsibilities and
accountability
5.1
A central theme emerging from the evidence received in this inquiry was
that all levels of government have an interest in addressing housing
affordability and improving the supply of affordable housing. Moreover, there
was broad agreement that good housing outcomes will only be achieved if all
levels of government coordinate and align their efforts.
5.2
The institutional architecture for housing policy, particularly in the
intergovernmental space, was found wanting by many witnesses. In particular,
there was strong support for establishing a body with equivalent functions to
the recently abolished NHSC. Some witnesses also recommended re-establishing a Council
of Australian Governments (COAG) ministerial council on housing and
homelessness (with the previous ministerial council having been abolished in
December 2013). This chapter explores and assesses these arguments.
5.3
This chapter also considers whether a national housing plan might help
improve the consistency and coherence of Australian housing policy. In
particular, this chapter outlines and weighs evidence suggesting that a
national housing plan could enhance intergovernmental efforts to improve
housing affordability, and help ensure the supply of affordable housing is as
efficient and effective as possible.
Roles, responsibilities and the need for
intergovernmental coordination
5.4
Both the Commonwealth and states and territories (and by extension,
local governments) are responsible for policy settings that shape housing
affordability outcomes. Moreover, both levels of government provide direct
housing assistance and homelessness services to help people unable to access
and maintain appropriate housing in the private market. The division of
responsibilities between the Commonwealth and the states and territories, and
the degree of overlap in these responsibilities, was set out recently in the
Reform of the Federation White Paper issues paper on housing and homelessness
(see Figure 5.1).
Figure 5.1: Summary of Commonwealth and Sate and Territory
roles and overlaps
Source: Reform of the Federation White Paper, Issues Paper
No. 2, Roles and Responsibilities in Housing and Homelessness (December
2014), p. 12.
5.5
The various responsibilities of each level of government, along with
shared roles and responsibilities, are also set out in the NAHA.[1]
5.6
It might be noted here that the critical question of which level of
government is responsible for what aspects of housing policy is, as DSS told
the committee, a matter currently under review as part of the Federation White
Paper process. Ms Felicity Hand, Deputy Secretary for Disabilities and
Housing, suggested that this aspect of the White Paper process was:
...an excellent initiative because, for many years, many
governments have struggled with this issue of supply and homelessness. To have
a review of who is doing what and how we make best use of all monies—state and
territory money and Commonwealth money—is a very good thing.[2]
5.7
Very broadly speaking, whereas the Commonwealth's current
responsibilities tend to lie on the demand side, the states and territories
responsibilities tend to fall on the supply side. Notwithstanding this rough
division, the overwhelming view from witnesses to this inquiry was that all
levels of government need to work in concert in order to improve housing
affordability and the provision of affordable housing. Thus, there was broad
agreement with DSS's suggestion that better housing outcomes would 'require all
levels of government to work together to address this issue, which directly or
indirectly, impacts all Australians'.[3]
5.8
This view was echoed by a wide range of individuals and organisations.
For instance, National Shelter stressed the need for a national,
inter-governmental approach involving states and local government.[4]
The REIA, meanwhile, told the committee that:
...governments at all levels have an important role to play in
improving affordability by addressing the structural factors that encourage
excessive demand for housing and reduce the responsiveness of supply. This is
to do with land release, council restrictions, development charges and fees. It
is a whole lot of different issues. As we mentioned, it is complex, and it
needs all levels of government to work together.[5]
5.9
The REIA made a similar point in its submission, arguing that the
Commonwealth needed to:
...take a leadership role and work with the other two spheres
of government, state, territory and local, in developing a coordinated and
strategic approach to the provision of housing. This means ensuring that
complementary policies, covering amongst other things first home buyers,
taxation and supply, are in in place to achieve this[6]
5.10
The UDIA contended that:
...all levels of Government have a critical responsibility in
ensuring all Australians have access to appropriate and affordable housing,
because of how fundamentally important it is to the community and economy, and
also because government policy has such a powerful and wide reaching impact on
affordability.
State and local governments have a primary role to play in
ensuring an adequate supply of land, providing sufficient local infrastructure
and services, and ensuring an efficient and effective planning system to
support new housing. At the same time, the Federal Government has a major role
in funding urban infrastructure, supporting affordability and social housing
programs, and in undertaking long term strategic population growth planning.[7]
5.11
The CFRC submitted that a 'consistent and assertive national approach'
to housing policy was needed to drive improved housing outcomes. It argued
that:
...the future governance of Australia's housing is a core issue
to be addressed. Effective governance is not a simple matter of one level of
government (the Commonwealth or the states/territories) being allocated
responsibility and accountability for housing policy. Nor is the simple
formulation of less government (regulation) and more market going to work. In
our view, the complexity of the issues involved, the significant impact of
other ('non-housing') national policy settings on housing outcomes (especially
fiscal, monetary and immigration policies) and the challenges mounting in our
housing system make national leadership essential.[8]
5.12
Each level of government, Housing Tasmania argued, has a role to play in
creating an environment conducive to the effective operation of the private
housing market:
Different policy levers are available at each level of
government to generate outcomes. The challenge to be met by all levels of
government is identifying, agreeing and implementing policy levers that will
encourage and support the private market to increase both general and
affordable housing supply.[9]
5.13
A common thread in the evidence this committee received was that the
various levels of government needed to better coordinate their efforts in
relation to housing issues. The UDIA pointed to a trend in recent years toward
blame shifting across the various levels of government, with housing policy
'marked by the refusal of governments to acknowledge their role, and a tendency
to try and defer that responsibility to someone else'.[10]
Similarly, the HIA told the committee of its frustration with:
...the fact that at various points along the continuum councils
point to state governments, state governments point to the federal government
and the federal government points to state government and local councils. The
three levels of government do not seem to be working in concert.[11]
5.14
HomeGround Services argued that the current lack of coordination and
agreed outcomes between governments (as it saw it) meant the housing
vulnerability of low income earners in Australia was not being properly
addressed:
Governments at all levels need to work together on a clear
set of agreed outcomes in order to realise secure housing for all Australians.
The current system shows what happens when efforts are not coordinated. For
example, the level of Commonwealth payments has a direct and significant impact
on rental revenues in the social housing sector and represents a cost shift to
the states. Similarly, the greater reliance on Commonwealth Rental Assistance
for tenants in private rental over investment in social housing in Victoria
represents a cost shift back to the Commonwealth government. Importantly,
neither of these strategies address the underlying need for more and better
housing for low income earners.[12]
5.15
The committee heard how effective action by one level of government was
often contingent on clarity and certainty about what the other levels of
government were doing. For instance, the Western Australian Local Government
Association (WALGA) identified certain areas of reform that local governments
might focus on to improve affordability outcomes, including land use planning
strategies, the development of surplus or underutilised local government-owned
land, and so on. Yet WALGA added:
Before progressing with any of these solutions, though, it is
critical that local governments have a well-informed housing strategy. To do
this, they need better access to data to identify local supply and demand
issues; they need clarity about state and Commonwealth plans, policies and
funding; and they need a commitment to supporting the outcomes from all levels
of government.[13]
5.16
The Local Government of Association of Queensland (LGAQ) made a similar
point. It argued that while there were many things that local governments could
do to improve housing affordability, many local governments in Queensland
simply did not have the fiscal capacity to bear the cost of some of these
initiatives, particularly in rural, regional and remote areas. Furthermore,
local governments often lacked the legislative or regulatory support 'to do
more than encourage or advocate for increased affordability in housing in
relation to many of the above identified initiatives'. As such, local
government initiatives in Queensland were often dependent on support, including
financial support, from the Commonwealth or the state government.[14]
5.17
The CFRC complained that since late 2009, COAG had not given adequate
attention to a substantial housing reform agenda. It noted that the NAHA, which
came into effect in 2009, was:
...intended to operate as a strategic framework for driving a
long term partnership with the states on improving housing outcomes. However,
in operation, the Commonwealth's influence appears to have been weakened by the
new framework and its capacity to drive reform has not lived up to expectations
so far.[15]
5.18
Given the broad consensus that all levels of government needed to work
together to address housing affordability issues, several witnesses expressed
concern that the current Australian Government appeared to be reducing (or
positioning to reduce) its involvement in housing policy. For example,
Dr Lucy Burgmann from the NSW Federation of Housing Associations said
she was concerned the Commonwealth's interest in housing policy appeared to be
waning, together with its 'appetite for involvement in the housing system as a
funder or policy maker'. She expressed specific concern that there were some
indications the current government would prefer to leave the housing system to
the states or the market to deal with. Against this backdrop, Dr Burgmann told
the committee that the Commonwealth:
...has a really important leadership role to play. Not a sole
role to play, but a shared role with the states, with local government, with
our industry and with other players. Because of the scale of the challenges
around housing affordability, which we and others have called a housing
affordability crisis, I think it requires us all to turn our attention to it
rather than to leave it to others or to just one part of the system.[16]
5.19
Dr Burgmann added that the Commonwealth controlled many of the taxation
levers that shaped the housing system (to the extent that a housing 'system'
could be said to exist). Moreover, she added, in relation to providing
affordable housing the Commonwealth was best placed to develop and implement
'creative financing mechanisms or guarantees that help trigger private
investment, which might be the only way to lead to at-scale affordability'.[17]
Professor Beer also argued that:
...there is an ongoing need for some federal engagement with
this issue because housing markets in this country operate not only at a state
and territory jurisdictional level but also at a national level, and so
national oversight is needed.[18]
5.20
Asked about the Commission of Audit's suggestion that the role of the
Commonwealth in relation to housing policy and service delivery should be
reduced, the Council for Homeless Persons responded:
The Commonwealth government holds all the demand drivers for
housing at the moment: it holds income, it holds taxation, it holds banking
regulation and it holds immigration, which are all key demand drivers, but it
has a very limited role in supply. From a state government perspective, I do
not think it is acceptable to have one side holding all the demand drivers and
the other side expected to pick up the supply problem that is associated with
those demands.[19]
5.21
Dr Heather Holst, Chief Executive Officer of HomeGround Services,
endorsed this view, adding that she would be:
...very sad to see the federal government withdrawing; in fact,
I think they need to take a step forward in this space.[20]
5.22
Some submitted that the current government's apparent relative
disinterest in housing policy simply represented more of the same, rather than
a break from previous governments. In its submission, the CFRC bemoaned what it
described as a lack of leadership and continuity of effort by the Commonwealth
in housing policy over the last three decades. It also warned that Commonwealth
policy capacity with regard to housing matters:
...has been largely eroded and there has been no long-standing
administration dedicated to housing since the early 1990s—a situation
contrasting with arrangements in the US, Canada, the UK and much of Western
Europe.[21]
5.23
It might be noted that the CFRC was no less critical in its assessment
of state and local government approaches to housing policy in recent decades.
It suggested that state governments:
...are (increasingly) starved of the resources necessary to run
housing assistance programs effectively and the essential coupling of housing,
urban and infrastructure policies that should drive new residential development
has been largely absent. ... Recently, in a further narrowing of the state level
housing policy agenda long standing housing departments have been absorbed into
welfare departments in most jurisdictions (WA is a laudable exception)
resulting in dilution of a broader housing policy outlook and expertise. Unlike
in most advanced economies, local or city governments have very limited and
poorly-defined roles in housing and lack the resources and capacity to influence
local housing outcomes or to catalyse local responses and bottom up innovation.[22]
5.24
Professor Hal Pawson from the CFRC also told the committee that
Commonwealth leadership was necessary, given housing policy 'is a national
issue that has national importance and is a cause for national action'.[23]
He added:
As emphasised in our submission, we believe that all three
levels of government have important housing responsibilities and powers. But we
also believe that experience has shown that fundamental reforms of the type
that we argue are needed cannot be achieved without national leadership from
Canberra. Partly that is because some of the most significant government
interventions in the housing market are controlled at the Federal level and not
by the states and territories.
We recognise that there are complexities to the Commonwealth
government's role in this kind of domestic policy area and that, under the
federal system, Canberra's ability to impose housing reforms would be limited
even under a government that wanted to do that. But we also think that it is
not tenable to pretend that, under the Federation, the Commonwealth does not
have a remit to lead and coordinate in this area.[24]
5.25
Ms Maria Palumbo from the Community Housing Council of South Australia
told the committee that she 'passionately' believed a national approach was
needed to improve housing affordability, and the Commonwealth needed to lead
that approach:
When the Commonwealth drives reform, things happen; when it
is left to the states, our experience has been that things meander.[25]
5.26
Mr Simon Schrapel from Uniting Communities and Dr Alice Clark from
Shelter SA endorsed these remarks, with both stressing the need for
Commonwealth leadership in the housing policy space.[26]
Mr Scott Langford from Junction and Women's Housing added his agreement to
these arguments, adding:
If you consider that access to appropriate and affordable
housing is really the backbone of both a civil society and a strong economy, I
fail to see how any argument can stand up to suggest that this is not an issue
of national importance. This is a huge opportunity for leadership, and we would
expect that some of that would come from the federal level.[27]
Commonwealth
role in supply side policy
5.27
Despite arguing the need for intergovernmental cooperation on housing
policy, DSS suggested that supply side issues were primarily a matter for the
states and territories. The policy levers to address supply, it told the
committee:
...sit primarily with the states and territories. The
Commonwealth largely has the demand levers, such as taxation, environment,
immigration and a whole range of other things... But supply issues, such as
planning approvals, state taxation, housing infrastructure changes and land
release, really fit in the state and territory domain.[28]
5.28
While it was generally acknowledged that the policy levers affecting
housing supply tend to reside with the states and territories (as discussed
further in chapter seven), witnesses also noted that the Commonwealth
could play a constructive role in this space. Noting the significant financial
contribution the Commonwealth made in relation to housing—for instance, in CRA
payments and money spent on residential aged care facilities—the HIA argued the
Commonwealth's role:
...needs to be more than simply writing cheques. They need to
take a role in assisting with state and local governments in the provisioning
of the necessary infrastructure to support housing developments.[29]
5.29
Similarly, when asked what role the Commonwealth might play in
addressing inadequate housing supply in Australia, the UDIA responded that the
Commonwealth had a 'clear role' to play in the provision of urban
infrastructure, including infrastructure such as telecommunications, major
roads, public transport and so on.[30]
Both MBA and the UDIA also argued that the Commonwealth had an important
coordination and leadership role to play in facilitating reforms on the
supply-side of the housing affordability problem:
When we talk about planning systems being delayed, land
supply and that sort of thing, they are not predominantly federal government
issues. But I think there needs to be involvement of the federal government in
planning for this, coordinating this and taking a strategic approach.[31]
State and territory spending on housing: accountability
and transparency
5.30
Several witnesses suggested there was currently a lack of adequate
accountability and transparency in how the states and territories used
Commonwealth funding for housing policies and programs. In order to address the
apparent need for 'greater accountability, greater openness and transparency',[32]
MBA suggested 'there needs to be tighter metrics in terms of conditions' around Commonwealth-state funding agreements.[33] JELD-WEN,
meanwhile, contended there was a 'gaping lack of information' on the outcomes
of state programs funded with Commonwealth money:
The paucity of readily available information on the
effectiveness of Commonwealth-funded State housing programs and initiatives has
reduced transparency and diminished accountability and contributed to
uncertainty about the value received from the commitment of scarce Commonwealth
taxpayer funds to joint housing programs delivered by State Governments.[34]
5.31
Junction and Women's Housing told the committee that competition for
Commonwealth payments might help promote greater transparency regarding state
and territory spending on housing policy:
We would argue that there is some benefit in some
directly-contestable funding for the community-housing sector. At the moment it
is passed through the states, and how that is then distributed is largely left
to the states. The reporting of that is ambiguous, in terms of what is provided
back to the Commonwealth. Competition is one way to foster transparency.[35]
5.32
The National Council of Women of Australia told the committee that the
Commonwealth should better target its spending to develop areas of particular
need, and related this back to the need for better accountability:
I think too that if you came to an agreement with
Commonwealth-state bodies, it makes it more accountable if you say, 'This is an
area of need that you need to put this money into for redevelopment. Let's see
what you do with it.' Quite often it can be scattered around, and there seems
to be very little accountability in some cases about what the money is actually
being spent on. You only have to look at the money supposedly spent in the
Northern Territory on Aboriginal housing, which we know has fallen far short of
any target, and very few houses have been built despite great aspirations about
fixing the problem of 10 years ago. They were going to build 750 houses in the
Northern Territory. I doubt they have built more than 75. Where has the money
gone? Where is the accountability of this money, where the Commonwealth hands
over the money and does not say, as with any good governance, 'What have you
done with it? Show us where you spent it and we'll see if it is worthwhile
giving you the next lot.' I think anyone who gives out money has a right to ask
what it is being spent on.[36]
5.33
Dr Winter also criticised the lack of requirements attached to how
states and territories used Commonwealth funding provided under the NAHA:
The other component of the NAHA reform we need to take is to
reintroduce and retie matching of funds. The current federal financial
agreements whereby there is not a tying of the matching of the funds I think
just leads to uncertainty on the federal government's part about where the
funds are going and what the states' contributions to those things are. So I
think some of that discipline of the old Commonwealth-State Housing Agreement
needs to be in a new national formal housing agreement as well.[37]
5.34
While some witnesses focused their attention on the apparent need for
enhanced accountability regarding the expenditure of public funding on housing
policies and programs, others referred to the burden associated with excessive
reporting. Community Employers WA, for instance, warned against excessive
reporting obligations, particularly in relation to the not-for-profit sector.
It suggested that housing providers were often forced to respond to:
...excessive questioning of line item by line items on minor
Grants comparing budgets to actual in instances where the overall spending is
in line with the authorised amounts.
As part of the Committee's Inquiry, we would support a
recommendation to continue focusing on how the overview and accountability
mechanisms can be designed to minimise the extent and level of compliance. We
would recommend that States and Territories, and recipients of funding grants,
be empowered and encouraged to deliver Affordable Housing more efficiently
without excessive reporting and red tape.[38]
5.35
Housing Tasmania argued that public accountability was in fact already a
key element of the current federal financial relations framework, including
National Agreements and National Partnership Agreements related to housing and
homelessness. The problem, according to Housing Tasmania, was not a lack of
emphasis on accountability, but rather that:
...the performance frameworks were hastily conceived and while
it has proved robust in some areas in others source data to measure performance
has been problematic. In addition some concepts are difficult to operationalise
into performance indicators such as social inclusion while other issues are
notoriously difficult to measure accurately, for example counting homelessness.[39]
The institutional architecture of housing policy
5.36
Given the importance of coordinated and integrated intergovernmental
approaches to housing policy, some witnesses made the case for improving the
institutional architecture of housing policy. Professor Jago Dodson from RMIT
University explained why he thought this architecture was currently lacking:
We do not have a particularly coherent system of organising
our housing policy in Australia. We have the federal government involved in
various aspects through the [Australian Taxation Office], the Treasury, the
RBA, the DSS and other agencies. We have state planning and housing agencies
involved in housing processes and we have a raft of local governments that deal
with housing considerations in various ways, including in relation to planning.
We lack a systematic way of coordinating all the policy settings at those
different levels of our governance system in a way that can work coherently and
with coordination towards social objectives that we as an overall society might
have set.
That means not only that our policy architecture is weak and
fragmented but also that it is interfacing with quite a complex economic system
around the supply of housing. If you take the finance sector, the building
sector, the construction sector and the planning sector, they all have their
own subsystem arrangements that also face problems of coordination in
responding to market processes.[40]
5.37
There was broad support from a wide range of witnesses for
re-establishing the NHSC, or a body like it. Some submitters also noted the
need to better represent and progress housing policy matters at COAG, and
argued for re-establishing a COAG ministerial council on housing and
homelessness. These arguments are outlined below.
National
Housing Supply Council (NHSC)
5.38
The NHSC was established in May 2008 to 'monitor housing demand,
supply and affordability in Australia, and to highlight current and potential
future gaps between housing supply and demand from would-be home-owners and
renters'. The NHSC's role was to aggregate and assess data on housing supply
and demand, and thereby strengthen the evidence base for decision making by all
levels of government. It also provided advice and recommendations on options
and strategies to improve housing supply and affordability. A key task of the
NHSC was the preparation of an annual State of Supply Report, which examined
housing supply over a 20-year horizon, with the intent of providing information
that would help government and industry improve supply.[41]
5.39
The NHSC consisted of a chair and eleven members, with appointments made
by the Minister for Housing in consultation with the Treasurer. Members had
expertise in areas relating to the housing sector, and sector representation
sought to encompass the housing, property and construction industry, planning
and development, infrastructure provision and financing, social welfare and
community housing, banking and finance, and housing research.[42]
5.40
The NHSC was abolished on 8 November 2013, along with a number
of other non-statutory bodies. The functions of these bodies, according to the
government, were no longer needed and could be managed within existing
departmental resources.[43]
A statement from the Prime Minister also indicated that many of these
non-statutory bodies:
...have outlived their original purpose or are not focused on
the Government's policy priorities. As a result, their work is best carried out
by the relevant government departments or agencies.
Ministers will continue to receive advice from a broad range
of sources including industry and community stakeholders, relevant departments
and from Ministerial Advisory Councils.[44]
5.41
However, the ministerial council on housing and homelessness was
abolished one month after the abolition of the NHSC, and the evidence received
by the committee would suggest that the NHSC's functions have not been absorbed
into Treasury. Indeed, Treasury acknowledged that with the NHSC disbanded, 'there
is no vehicle through which [Treasury] would then have responsibility to assist
the government' in relation to policy advice on housing supply.[45]
5.42
Asked about the importance of the work that was being done by the NHSC
(of which she was a member), Associate Professor Yates explained that it:
...coordinated information across all the states and
territories. It tried to standardise the source of that information. It put it
together in one spot. It was an independent source. The Housing Industry
Association, for example, has tried to replicate that, and that is a fair
enough thing, but there are vested interests, whereas the council was a
representative body across a whole range of stakeholders—developers, planners,
local government people, economists, finance people and housing policy people.
So you had a spectrum of interests—a coordination of information; the bringing
together of a wide range of stakeholders.[46]
5.43
Professor Beer spoke highly of the work that was being done by the NHSC,
and said that the academic community 'really relied on the solid data that they
put out'. He also suggested that the housing industry itself needs a
forecasting body to be able to assess likely demand.[47]
Professor Pawson submitted that the abolition of the NHSC had damaged the Commonwealth's
leadership capacity in housing policy, along with the 'scope for evidence based
policies'.[48]
Similarly, Shelter SA stressed the need for a strong evidence base on which to
make informed policy decisions, and argued that in this sense the NHSC was 'an
absolutely vital organisation that cost practically nothing, if anything, to
government.'[49]
5.44
Junction and Women's Housing agreed that the work being done by the NHSC
was very valuable, telling the committee that it had:
...found it to be a very useful source of information for
starting to understand where the supply issues are and what the dynamics in the
broader market are, at a macro level, and how that affects our local markets.
This has a significant role for us in terms of where we put our resources and
energy and where we see the opportunities to bring in private-sector
investment.[50]
5.45
The CFRC also submitted that the NHSC had been providing 'much needed
specialist advice and information on critical housing supply issues to
governments and the housing industry'. It noted that the 'the over-riding need for a regular and
authoritative Australia-wide housing demand and supply analysis remains
undiminished'.[51]
For its part, the UDIA suggested that prior to the existence of the NHSC:
...states kept various pieces of data in relation to housing,
housing supply and the like, but it was all different and very difficult to
compare. It was very much apples and oranges. The Housing Supply Council was
able to pull together a methodology in consultation with the various states to
ensure that we had a better and more consistent view of what was happening in
relation to housing policy and housing supply around the country.[52]
5.46
The HIA was somewhat more critical in its assessment of the NHSC. It
told the committee that while the NHSC had 'started off on the correct foot' in
looking at the housing supply chain, it:
...became a little bit waylaid and got involved in a lot more
policy development work and seemed to lose a lot of its initial terms of
reference. We therefore supported the Housing Supply Council being abolished
but believed that it should be replaced by something that would do the task
that it was initially set out for it to do—something along the lines of an
indicative planning council. It would be something where we would have a much
better understanding of where our future housing was going to be, what the time
lines for bringing those houses to market—whether or not they were detached
houses, multi residential or high-rise apartments; having a much better understanding
of where they would go and what the time lines for the delivery would be. That
would allow the industry and also the various governments to better understand
the best investment in infrastructure and other support systems that were
necessary to bring those houses to market, and we could better marry the demand
side with the supply side.[53]
COAG
ministerial council on housing and homelessness
5.47
Asked about the abolition of the COAG Select Council on Housing and
Homelessness, MBA responded that there was a need for:
...some sort of high-level institutional mechanism whereby
these sorts of difficult issues and public policies can be discussed. We would
argue that housing should be one of the top agendas for any government,
regardless of its political persuasion, because the complexity of the problems
need fixing and therefore it should not operate in an institutional vacuum. A
body like that, and perhaps a reinvigorated COAG process, is obviously
something that we would ask for.[54]
5.48
The CFRC also expressed concern that the ministerial council had been
disbanded, noting the important role it had played in coordinating and driving
'essential cross jurisdiction reforms to housing and homelessness programs'.[55]
5.49
At the same time, the committee heard evidence that the COAG system was
not conducive to receiving potentially valuable input from non-governmental
sources. For instance, Ms Palumbo argued that COAG might gain a broader view of
housing issues if, instead of simply drawing on the advice of officials and
ministerial advisers:
...there were a different advisory structure—I would say there
are peak bodies that should be involved; there are industry bodies that should
be involved. There should be a way of having a diverse voice, where ministers
are not just hearing from their key advisers, they are actually hearing from
the whole community. What tends to happen is that when there is a
representative from, say, the community sector there is a view that that
individual might be self-serving and they are only representing their agency
views and there is not a voice. It is about broadly representing the whole
group rather than an individual getting at a table and then pushing their
agency's views ahead of broader views. There needs to be a way of having a much
broader conversation so that there are shared views as opposed to that real
separation.[56]
5.50
Uniting Communities endorsed Ms Palumbo's comments, and added:
The problem is the COAG process is kept within governments
talking to each other. In just about every one of these domains, but certainly
in [housing policy], you have significant players with interests, not just
self-interest, who can make quite significant contributions to the debates and
the solutions. We do not engage those. Having separate advisory boards or
councils to ministers and then having the COAG process operating in some other
domain over here is not an effective way of developing good public-policy
solutions. You need to marry them in some way.[57]
The need for a national affordable housing plan
5.51
Given the complexity of housing policy and its inter-governmental
dimensions, a large number of submitters made a case for developing and
implementing a national plan for improving the supply of designated affordable
housing or housing affordability more broadly (or both). For instance, arguing
that the current institutional environment for housing policy was lacking in
coherence and allowed for 'all sorts of unintended side-effects and
dysfunction', housing researchers from Swinburne University wrote that Australia
required 'a national urban and housing policy to set a clear direction as to
what we want from our urban form and associated housing system.'[58]
5.52
Ms Jacqueline Phillips from ACOSS told the committee that a national
affordable housing strategy would recognise the complex policy levers across
the various levels of government that influence housing affordability. She
suggested that ideally a strategy would be developed through COAG or other
intergovernmental discussions.[59]
5.53
The UDIA noted that a national strategic plan on housing affordability
was needed, in part because the interests of the Commonwealth and the states
did not always coincide, leading to policy inconsistencies. Specifically,
whereas the Commonwealth has some incentive to facilitate population growth
because of the benefits to tax revenue, the states have an incentive to resist
growth because they bear the brunt of the infrastructure and service costs. It
recommended that the Commonwealth and states:
...collaborate to establish a national strategic plan,
providing funding for new urban infrastructure, and requiring cities to
maintain a rolling supply of development-ready land to meet demand driven by
population growth.[60]
5.54
The ABA also argued that a national housing affordability strategy was
needed to address the complex supply and demand factors shaping the market:
A national plan should contain a holistic approach based on a
better understanding of the motivations for home ownership by individuals,
families and communities, the incentives and disincentives for home ownership
during changing market and economic conditions, the barriers to home ownership
across different cohorts and geographical areas, the lessons learned from
policies, interventions and assistance programs designed to encourage home
ownership, and the potential responses which could better integrate public and
private sector initiatives, and in partnership.[61]
5.55
MBA called for all levels of government to work together to develop what
it termed a 'National Housing Affordability Agenda'. Such an agenda, as
envisaged by MBA, would include targeted reforms and agreed outcomes directed
to improving the supply-side efficiency of the Australian housing market, the
area MBA suggested was most in need of attention if Australia were to improve
housing affordability.[62]
5.56
MBA also recommended that the Commonwealth provide 'competitive,
efficiency dividend' payments to states, territories and local governments for
delivering certain housing affordability policy outcomes. Reflecting MBA's
emphasis on the need for a 'supply-side first' response to declining housing
affordability, the outcomes MBA suggested might be tied to such payments
related to improving land release, streamlined and more efficient planning and
approval processes, and reforms to infrastructure (or 'developer') charges.[63]
5.57
Over the course of the inquiry, the committee heard from a number of
local governments about the steps they had taken and the strategies they were
implementing on housing (including strategies specific to the supply of
affordable housing).
For instance, Brimbank City Council provided the committee with information on
its ten-year housing strategy, Home and housed. Like other local
governments, Brimbank City Council noted that while it was addressing housing
affordability through local strategies, ultimately a national level strategy
was needed:
Liveable homes, neighbourhoods and cities can only be the
product of purposeful, housing and planning policies coordinated across all
three levels of government to create the conditions for affordable and
appropriate housing. A long term, national housing plan that supports and gives
direction to housing development, particularly in Australia's capital cities,
is required to support the creation of multi-level partnerships to this end.[64]
5.58
NT Shelter argued that a 'genuine national housing policy' would help
policymakers and service providers overcome the confusion and fragmentation
that often confounded housing policy.[65]
Housing Tasmania, meanwhile, suggested that a national housing policy would
encourage intergovernmental cooperation to address housing issues within a
'whole-of-system housing policy framework'. This would, in turn, contribute to
'better housing outcomes for all Australians'.[66]
The LGAQ also argued for a national housing policy on the grounds that the
'complex issues concerning the provision of affordable housing, together with
the multiple components of "affordable housing" mean that a fully
integrated approach is needed to deliver successful solutions'.[67]
5.59
The Housing and Local Government Network, a grouping of local
governments in Victoria 'working to promote and support the increase supply of
affordable housing', was critical of existing policy settings. It argued that current
intergovernmental funding arrangements, such as the NAHA, left local councils
in the position of second guessing the direction of Commonwealth and state
housing policies. It called for:
...a significant overhaul of the current narrow, inflexible and
bureaucratic [NAHA] towards a mutually agreed and integrated intergovernmental
governance instrument based on an authentic spirit of good will and with local
government as an equal partner.[68]
5.60
In its submission, the CFRC set out what it considered the attributes of
successful international policy responses to housing affordability issues
similar to those facing Australia. The committee believes the attributes outlined
by CFRC are well considered, and as they might help inform the development of a
national housing affordability plan, considers them worth reproducing in full
here. They are:
-
A view of housing as being an integral part of economic, social
and environmental policy
-
Sufficient housing expertise both within and connected to
government, which is committed to building policies and relevant institutions
to deliver desired housing outcomes
-
A long term commitment to achieving desired housing outcomes, in
which government plays an assertive and important role in a constructive
partnership with all relevant public and private agencies
-
Progressive development of a modern institutional framework for
delivering government desired housing outcomes using a well-designed mix of
market and non-market mechanisms
-
A climate and practice where diversity, flexibility and local
innovation can flourish without leading to the abandonment of appropriate
national policy responsibilities and the efficient allocation of subsidies
according to need
-
Comprehensive and up-to-date market analysis and policy oriented
evaluation strategies that can help to ensure the efforts of government are
effective, responsive and appropriate
-
The adoption of balanced multi-tenure policies with a common
focus on increasing affordable and sustainable housing options, improving
tenure choice and pathways and supporting socially mixed communities.[69]
5.61
JELD-WEN, departing somewhat from the general consensus that a national
strategy was needed, cautioned that any attempt by the Commonwealth to impose a
national plan for housing supply might prove counterproductive:
The temptation to pursue a centralised, prescriptive national
planning strategy should be avoided. Instead, the Commonwealth should aim to
work co-operatively with State, Territory and Local Governments but with clear
lines of responsibility, supported by a new structure of financial rewards and
incentives tied to performance milestones, similar in approach to the previous
National Competition Payments. This approach offers the prospect of achieving
better and more durable outcomes.[70]
Committee view
5.62
Evidence received by this committee underlined the fact that many of the
key policy levers that shape the Australian housing market and housing
affordability rest with the Commonwealth. In particular, demand-side levers
such as taxation policy generally reside with the Commonwealth. Although many
supply-side policy levers fall within the remit of the states and territories,
the committee remains firmly of the view that the Commonwealth is best placed
to provide the leadership to coordinate and guide the cross-jurisdictional
reform necessary to improve the efficiency of housing supply across Australia.
As will be discussed further in subsequent chapters, the committee also
believes the Commonwealth has a central role to play in driving the development
of new affordable housing stock, whether through programs such as NRAS or other
mechanisms.
5.63
The committee welcomes the review of housing and homelessness policy
responsibilities being undertaken as part of the Federation White Paper process,
and notes that as part of the process the government has released an issues
paper, Roles and Responsibilities in Housing and Homelessness (December
2014). The committee anticipates the release of the Federation White Paper
later this year will prompt renewed public discussion about how optimal housing
and homelessness outcomes can be achieved within our federal system. It is the
committee's hope that the White Paper will recognise the important role the
Commonwealth has to play in this policy space, and the imperative for
intergovernmental coordination and cooperation. The committee also hopes that
the White Paper will serve as a foundation for a renewed bipartisan commitment
at the Commonwealth level to tackle the problem of housing affordability and
the shortage of affordable housing in Australia.
5.64
The need for and potential value of a long-term, national affordable
housing plan was made clear throughout the inquiry. The committee believes a
national affordable housing plan should be developed through an appropriate
intergovernmental forum, with substantive input from the community housing
sector, stakeholders in the housing industry and third sector representatives.
This plan would provide the direction and certainty needed to ensure housing
affordability improves and the supply of affordable housing is better matched
to housing need. A national affordable housing plan could potentially sit under
the umbrella of the NAHA. However, the committee believes the Commonwealth and
states and territories, through COAG, are best placed to determine if this
would be help or hinder the implementation of such a plan.
Recommendation 2
5.65
The committee recommends that, as a matter of priority, the Commonwealth
and states and territories agree to establish a ministerial council on housing
and homelessness within the Council of Australian Governments ministerial
council system.
Recommendation 3
5.66
The committee recommends the establishment of a new body, ideally a
statutory body, similar in function to the former National Housing Supply
Council, but also with responsibility for monitoring performance against a new
affordable housing plan (see recommendation 4) and measuring housing need
according to key demographic trends, socio-economic and cultural factors.
Recommendation 4
5.67
The committee recommends that the Commonwealth and states and
territories collaborate in the development of a long term, national affordable
housing plan, ideally to be developed through a new ministerial council on
housing and homelessness within the Council of Australian Governments
ministerial council system (see recommendation 2). While the shape of the plan
and its relationship to the National Affordable Housing Agreement would be
determined through the development process, the committee recommends that the plan:
-
include performance indicators, which should be monitored and
reported on by the body recommended at recommendation 3; and
-
include base funding, possibly drawn from the National Affordable
Housing Agreement funding envelope, with consideration also given to including
Commonwealth reward payments linked to achievement by individual jurisdictions
against the performance indicators.
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