Matthew Thomas and Bill McCormick
Australian Government expenditure on housing and communities
in 2018–19 is estimated to be $5.3 billion, representing 1.1 per cent of total
Australian Government expenditure.
This administrative category consists of housing, urban and
regional development, and environment protection. Table 1 presents a breakdown
of funding allocations against these sub-functions.
The environment protection sub-function initiatives include:
the protection and conservation of the environment; water and waste management;
pollution abatement and environmental research. This includes funding sources
such as the Emission Reduction Fund (mentioned in the Fuel and Energy brief) and
the Reef Trust.
Table 1: total housing and communities expenditure
(millions)
|
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Housing |
3
051 |
3
141 |
3
107 |
3
057 |
3
096 |
| Urban and regional development |
1
288 |
1
773 |
1
152 |
1
399 |
570 |
| Environment protection |
939 |
992 |
1
005 |
1
068 |
1
101 |
| Total |
5
278 |
5
906 |
5
264 |
5
524 |
4
767 |
Source: Australian Government, Budget strategy
and outlook: budget paper no. 1: 2019–20, 2019, p. 5–27.
Note: Figures may not add due to rounding.
Key trends
Table 2: real growth rates—housing and communities
expenditure, percentages per annum*
|
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2019–20
to 2022–23 |
| Housing |
0.7 |
–3.4 |
–3.9 |
–1.0 |
–8.2 |
| Urban and regional development |
34.6 |
–36.6 |
18.6 |
–60.2 |
–70.0 |
| Environment protection |
3.3 |
–1.1 |
3.8 |
0.7 |
3.4 |
| Total |
9.4 |
–13.0 |
2.5 |
–15.7 |
–24.8 |
Note:
*Estimates of real fiscal growth
rates are based on 2017–18 dollars with the consumer price index as the
deflator, and have been calculated by the Parliamentary Library. Estimates may
vary compared to 2018–19 Budget due to rounding.
Housing
As can be seen from Table 2, expenses for the housing
sub-function are estimated to decrease by 8.2 per cent in real terms over the
forward estimates. This reduction is largely attributed to decreasing payments
under the National Rental Affordability Scheme (NRAS), which was closed to new
applicants as a part of the 2014–15 Budget; and ‘a forecast reduction
in the construction and acquisition of Defence Housing Australia (DHA)
properties in 2020–21’.[1]
Around half of housing sub-function funding is made up of
the Australian Government’s contribution to the National Housing and
Homelessness Agreement (NHHA). Funding is provided under the NHHA largely for
the delivery of social housing and homelessness services.[2]
NHHA funding for social housing has been maintained at the same levels as those
provided under the previous National Affordable Housing Specific Purpose
Payment. Housing experts have argued
for some time that Australian Government funding for social housing is
insufficient and has failed to keep up with housing and service delivery costs.
It should be noted that funding for housing support is also
provided in the form of Commonwealth Rent Assistance (CRA), under the Social
security and welfare function. This funding remained
relatively constant at around $4.4 billion for each of the three years to
2017–18, with the estimated
figure for 2019–20 being $4.6 billion. Successive Australian Governments
have for some time placed a greater emphasis on rental subsidies to support
eligible renters in the private rental market than on providing support for
social housing.
Further funding for housing support has been provided in
recent years through financing of the National
Housing Finance and Investment Corporation (NHFIC) and the National Housing
Infrastructure Facility (NHIF). As a part of the 2017–18 Budget the Government allocated
$63.1 million over the forward estimates towards the establishment
of the NHFIC and $118.0 million over three years from 2018–19 towards the NHIF.
The NHFIC operates the NHIF and an Affordable Housing Bond Aggregator
(AHBA), both of which are intended to encourage private investment in
affordable housing.[3]
While a number of housing experts welcomed the introduction
of the AHBA, they have pointed
out that without government support to close the financing gap between the
costs of delivering new community housing and the income received by community
housing providers (from concessional rents and CRA), the AHBA is unlikely to
result in substantial growth in affordable housing.
It has been reported
that community housing organisations have been ‘left confused’ about the
absence of funding for community and affordable housing in the Budget. National
Shelter spokesperson, Adrian Pisarski is said to have stated: ‘we would have
thought that with $100 billion worth of expenditure [on infrastructure] going
forward, there could have been something in there for affordable housing, there
wasn’t. ... Affordable and social housing is essential infrastructure, so there
should have been some direct line linking that spending with affordable
housing’.
Environment protection
The environment protection
sub-function funding will increase by 3.5 per cent in real terms from
2019–20 to 2022–23 due in part to the new measure Practical Environment
Restoration and the Emission
Reduction Fund. The latter now forms part of what is termed the Climate
Solutions Fund. It will receive $2 billion over 15 years from 2019–20 to ‘boost
agricultural productivity, support jobs for Indigenous communities and improve
biodiversity and water quality, and reduce greenhouse gas emissions’.
Significant policy announcements
Table 3: Allocation for the Practical Environment
Restoration package (millions)
| Budget measure |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
| Practical Environment Restoration |
– |
54.8 |
29.6 |
28.0 |
25.0 |
The $137.4 million package for Practical Environment
Restoration will be funded over a four year period and go towards one existing
and two new programs:
- $100.0 million to establish an Environment Restoration Fund to
provide grants for on-ground restoration and protection projects focusing on
threatened and migratory species and their habitats; coasts and waterways;
recycling and waste reduction; and other priority and emerging environmental issues
- $28.3 million to establish the Communities
Environment Program, providing $150,000 to each federal electorate in
2019–20 for up to 20 community led environment projects with grants ranging
from $2,500 to $20,000
and
- an additional $9.2 million
to the Wet Tropics Management Authority’s Yellow Crazy Ant Eradication Program
to control yellow crazy ants in, and adjacent to, the Wet Tropics World
Heritage Area. (Note that separate programs relate to red fire ants and
Argentine ants. See separate Agriculture and Water brief).
[1].
The National Rental Affordability Scheme (NRAS) was introduced by the
Rudd–Gillard Government in the context of the 2008–09 Budget as a part of its
broader package to address housing supply pressures and as part of the stimulus
package in response to the global financial crisis (GFC). Under the scheme, the
Australian Government provides an annual incentive to investors for up to ten
years as a refundable tax offset or payment. This is augmented by a state or
territory annual contribution, which may take the form of cash grants,
concessions on stamp duty or the provision of discounted land over the same
period. Properties developed under the NRAS are made available to low- to
middle-income earners at 20 per cent below market price for each of the ten
years for which an NRAS incentive is received. NRAS incentives are due
to fully expire by the end of the 2026 calendar year.
[2].
Social housing consists of public housing, community housing, state-owned
and managed Indigenous housing (SOMIH) and Indigenous community housing.
[3].
The National Housing Finance and Investment Corporation will use the National
Housing Infrastructure Facility to provide grants and concessional loans to
support the creation of housing-related infrastructure and the Affordable
Housing Bond Aggregator to provide finance to registered community housing
providers by aggregating their lending requirements and issuing bonds to
institutional investors.
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