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
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.
To authorise the Commonwealth to enter into financial agreements
with the States and Territories for the provision of housing
assistance.
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.
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.
(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.
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
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ISSN 1323-9032
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library,
1996.
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Last updated: 17 May 1996
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