Bills Digest 80 1995-96 Housing Assistance Bill 1996


Numerical Index | Alphabetical Index

WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments.

This Digest was available from 8 May 1996

CONTENTS

Passage History

Date introduced: 8 May 1996
House: House of Representatives
Portfolio: Social Security
Commencement: Clauses 7-11, which deal primarily with housing assistance grants, commence on Royal Assent or 1 July 1996, whichever is the later. All other clauses commence on Royal Assent.

Purpose

To authorise the Commonwealth to enter into financial agreements with the States and Territories for the provision of housing assistance.

Background

Brief History and Current Arrangements

The two main sources of government assistance for housing are the provision of public housing (essentially through the Commonwealth - State Housing Agreement - CSHA) and the provision of rent assistance to low income tenants in private dwellings.

The CSHA commenced in 1945 and is the Commonwealth Government's main housing program. Since 1945 a series of financial assistance agreements have been negotiated between the Commonwealth and the States with a view to providing housing assistance to people in need. Current legislative authority for the CSHA is contained in the Housing Assistance Act 1989 (the Principal Act) which provides the legal framework for the latest Agreement. The Housing Assistance Amendment Act 1992 amended the Principal Act to extend the current CSHA to 1995-96 and the Housing Assistance Amendment Act 1993 provided for minor changes in expenditure made available for various programs under the CSHA for 1993 to 1996.

Initiatives by the Chifley Labor Government resulted in the first CSHA being finalised between it and the six States in November 1945. Commonwealth - State Housing Agreements have been negotiated with the States in 1945, 1956, 1973, 1978, 1984 and 1989. The Northern Territory was included in the CSHA in 1981 and in 1989 the Australian Capital Territory became a party to the Agreement.

Approximately one half of all Commonwealth funding for housing comes under the CSHA umbrella. The remainder goes primarily to rent assistance (for those in private rental accommodation) which is provided Department of Social Security and Department of Veterans' Affairs clients; specific programs for Aboriginal and Torres Strait Islanders including the Community Housing and Infrastructure Program and Aboriginal Hostels Ltd which are administered by the Aboriginal and Torres Strait Islander Commission; and funding for organisations to provide residential care for the elderly, including nursing homes and hostels. The Commonwealth also funds a number of programs that help people into more independent living arrangements or to provide for their ongoing support needs, such as the Supported Accommodation Assistance Program, the Home and Community Care Program and the Commonwealth - State Disability Agreement.

The majority of Commonwealth funding under the CSHA is in the form of capital grants, mainly for the provision of public housing. The States and Territories have a host of housing and housing related schemes that are funded via the CSHA including schemes for public housing, community housing, loans for home purchase and rent assistance.

The majority of the funding provided by the Commonwealth to the States and Territories is required to be matched by those jurisdictions on a dollar for dollar basis, half with State grants and half through home purchase assistance loans. State and Territory governments are also encouraged to combine CSHA home purchase assistance funds with private funds to expand their lending programs. As well as general funds for public rental housing and home purchase assistance schemes, some funds are allocated for specific programs. The Agreement provides for an annual Commonwealth - State Assistance Plan for each State and Territory which includes an assessment of housing need, resources available and priorities for assistance. The States and Territories administer the housing operations and determine practices with the Housing Assistance Plan.

The main areas funded in the 1995-96 Budget for the CSHA were - public rental housing, pensioner rental housing, Aboriginal rental housing, community housing, mortgage and rent assistance and the provision of crisis accommodation.

A total of $1065.8 million has been allocated to the various sub-programs of the CSHA in the 1995-96 Budget. It should be noted that $993.1 million of the total allocated came from the Housing and Community Amenities function in the Budget and that the remainder of the funds, $72.8 million, comes from the Social Security and Welfare function in the Budget. Table 1 shows the distribution of payments of 1995-96 CSHA funds by State and Territory.

Performance of the CSHA

Five key concepts have been identified as approximate indicators of CSHA performance - accessibility; affordability; appropriateness; security of tenure and equity. A review of the evidence appears to indicate that the CSHA is performing reasonably well in terms of these indicators with the exception of arguably the most important one, accessibility. Statistics relating to waiting lists for public housing and the number of recent additions to waiting lists for public housing shows that there is a substantial shortfall in the provision of public housing dwellings. For example, the number of families on waiting lists for public housing in Australia has grown from 126,000 in 1982-83 to 232,000 in 1993-94. (1)

(For a full discussion of the performance of the CSHA in recent times see Public Housing In Australia, The Australian Institute of Health and Welfare 1994).

Re-negotiation of the CSHA

As noted, the existing CSHA was signed in 1989. It will be replaced by a new agreement to commence from 1 July 1996. The December 1995 Report on Government Service Provision by the Steering Committee for the Review of Commonwealth/State Service Provision outlined a number of recent developments in public rental housing. In relation to the CSHA, the Report said that the Commonwealth, State and Territory Governments are working to reform the planning and delivery of housing assistance provided through the CSHA and that re-negotiation of the CSHA is intended to be a major strategy in assisting people to improve access to affordable housing. Proposed reforms to the CSHA are said to include:

  • clearer roles and responsibilities for the Commonwealth, State and Territory governments, with increased flexibility for jurisdictions to invest in resources across a mix of housing assistance;
  • measures to improve the transparency of financial arrangements;
  • an outcomes focus with agreed measures of performance, including an agreed needs methodology as a key input into planning and setting targets;
  • a clearer emphasis on commercial management of housing stock, and diversification of supply and providers;
  • potential for contestability of supply; and
  • consumer choice in the type(s) of assistance.(2)

It is reported that the above changes will be achieved through negotiation of a performance-based strategic plan with each State and Territory.

The Liberal and National Parties' Housing and Urban Design Policy 1996

During the 1996 election campaign, the Liberal and National Parties gave a number of commitments in relation to the CSHA, including to renegotiate the CSHA with the States and Territories with a commitment to:

  • a separation of roles and responsibilities between levels of government and clarification of objectives;
  • the principle that new tenants in public housing are not charged more than 25% of their income as rent;
  • the principle that existing tenants in public housing are not disadvantaged;
  • introducing accountable strategies for addition and replacement of housing stock to ensure that proceeds of sales of public housing to tenants are reinvested in public housing;
  • encouraging private sector integration in public housing, with the States and Territories leasing back on a long-term basis;
  • encouraging the States and Territories, housing authorities, and private investors and the non-retail finance industry to enter shared ownership arrangements; and

facilitating, in consultation with the States and Territories a consistent national approach to the asset management of their public housing stock.(3)

Major Differences Between Housing Assistance Bill 1995 and Housing Assistance Bill 1996

On 29 November 1995 the Keating Government introduced the Housing Assistance Bill 1995 (the 1995 Bill). That Bill lapsed with the dissolution of Parliament on 29 January 1996. While the Housing Assistance Amendment Bill 1996 (the 1996 Bill) is, for the most part, identical to the Keating Government Bill, major differences do exist, these include:

  • a new paragraph (g) is contained in the Preamble to the 1996 Bill which provides
housing assistance will, as far as possible, offer a choice between different forms of assistance and between different providers of assistance and include the provision of targeted subsidies to home purchase aspirants; and
  • a new paragraph (j) is contained in the Preamble to the 1996 Bill which provides
encourage private sector involvement in the provision of appropriate and affordable housing; and
  • paragraph (i) to the Preamble to the 1996 Bill [paragraph (h) in the 1995 Bill] is amended by removing the following words which are a reference to the Better Cities Program
... as appropriate, in view of the regulatory and other functions of those bodies with respect to the design, planning and management of cities and towns; and
  • a new subclause 11(2) is contained in the 1996 Bill which provides
The Consolidated Revenue Fund is appropriated for the purpose of the making of grants or other payments under this Act (not exceeding, in total, $1,067,863,00) in the financial year beginning on 1 July 1996.

The statement of the Minister in the Second Reading Speech to the 1996 Bill should be noted in regard to subclause 11(2). The Minister said

It is intended that the next Commonwealth State Housing Agreement will operate from 1 July 1996 and will continue to be targeted to meet the needs of people who are most at risk of housing related poverty. It will be an interim agreement for up to 3 years aimed at achieving a number of fundamental reforms. As such, it will provide a basis for further significant longer term reform to achieve even greater improvements in the efficiency and effectiveness of government housing assistance. The agreement will be funded by a special appropriation in 1996-97 of approximately $1.068 million. Funding for subsequent years will be determined as part of the Commonwealth budgetary process and in light of progress in implementing longer term reforms and the report of the National Commission of Audit.

Table 1: Details of Payments to be Made Under the Commonwealth - State Housing Agreement, 1995-96 ($m) (estimated)

             NSW      VIC     QLD      WA      SA      TAS     ACT   NT     TOTAL   

CSHA Block   257.7    193.5   135.8    70.3    50.7    28.4    18.2  13.5   768.1   
Assistance                                                                          

Pensioner    18.5     11.2    9.8      4.2     3.8     1.8     0.5   0.5    50.4    
Housing                                                                             

Aboriginal   17.8     3.6     32.4     16.2    8.5     1.0     0.0   19.7   99.3    
Housing                                                                             

Community    23.4     17.4    16.8     6.6     5.7     3.0     1.2   1.2    75.3    
Housing                                                                             

Mortgage     10.5     7.8     6.0      2.9     2.6     0.8     0.5   0.3    31.5    
and Rent                                                                            
Relief                                                                              

Crisis       13.5     10.0    7.1      4.4     3.3     1.6     1.1   0.4    41.3    
Accommodatio                                                                        
n                                                                                   

Total        341.4    243.5   207.9    104.6   74.6    36.7    21.5  35.6   1065.9  


Source: 1995-96 Budget Paper No. 3, p. 43.

Main provisions

Clause 4 sets out the objects and aims of the Bill, these include the provision of financial assistance to the States and Territories to ensure people can obtain affordable, secure and appropriate housing, and to make payments for the purposes of housing research, development, demonstration and evaluation. The main aim of the Bill is to assist those most in need, including the homeless and those discriminated against in the private rental market.

Clause 5 allows the Minister to determine the form of a inter-government housing agreement. An agreement is to include provisions relating to certain matters including:

  • the making of grants to a State/Territory;
  • the amount, or formula for determining the amounts of grants;
  • the obligations of a State/Territory in relation to the spending of grants; and
  • the rights and obligations of people to whom assistance is to be provided.

An instrument determining, varying or revoking an inter-government housing agreement is subject to disallowance by Parliament.

Clause 6 allows the Commonwealth to make a inter-government housing agreement substantially in accordance with the form of an agreement determined by the Minister under clause 5.

Clause 7 accords the Minister power to authorise housing assistance grants to a State/Territory. Grants are to be made on the terms and conditions set out in an inter-government housing agreement. Clause 7 is subject to clauses 9 and 11.

Clause 9 prohibits the Minister from making a grant unless the Minister and State/Territory Minister have agreed, in accordance with the inter-government housing agreement, on the amount a State/Territory will spend from its own financial resources on housing. Where the Minister, after consulting the State/Territory Minister, believes that a State/Territory will not spend all the amount agreed to, the Minister may reduce the amount payable by the Commonwealth to the State/Territory and authorise payment of the unspent amount to another State/Territory. Such reallocations are to be on terms and conditions determined by the Minister.

Clause 10 authorises a grant to be made in the first grant year (1996-97) eventhough no inter-government agreement is in force. Such a grant is to be made on such terms and conditions as the Minister determines would be in an inter-government agreement if such an agreement was made.

Clause 11 appropriates from the Consolidated Revenue Fund for the purpose of grants and payments under this Bill $1 067 863 000 million for 1996-97.

Endnotes

(1) The Australian, 13 February 1995

(2) Steering Committee for the Review of Commonwealth/State Service Provision, Report on Government Service Provision, December 1995, pp. 127 and 128.

(3) Liberal and National Parties' Housing and Urban Design Policy 1996, pp. 9 and 10.

Contact Officer and Copyright Details

Ian Ireland Ph. 06 277 2438
Greg McIntosh Ph. 06 277 2414
17 May 1996
Bills Digest Service
Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

PRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

ISSN 1323-9032
© Commonwealth of Australia 1996

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Published by the Department of the Parliamentary Library, 1996.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 17 May 1996

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