Bills Digest No. 83,
2017–18
PDF version [344KB]
Matthew Thomas
Social Policy Section
27
February 2018
Contents
Glossary
Purpose of the Bill
Background
National Affordable Housing Agreement
National Partnership Agreement on
Homelessness
Problems with the NAHA
Committee consideration
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
The ALP
The Greens
Independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Key issues and provisions
Primary and supplementary housing
agreements
Determination by legislative
instrument
Nature of the housing agreements
Need for a national housing strategy
Insufficiency of funding
Distribution of funding
Housing strategy to meet ‘demand’
Homeless strategy
Need for greater clarity
Provision of data
Designated housing agreement
Concluding comments
Date introduced: 25
October 2017
House: House of
Representatives
Portfolio: Treasury
Commencement: 1
July 2018
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at February 2018.
Glossary
Table 1: abbreviations and acronyms
Purpose of
the Bill
The purpose of the Treasury Laws Amendment (National
Housing and Homelessness Agreement) Bill 2017 (the Bill) is to amend the Federal Financial
Relations Act 2009 to repeal the current National
Specific Purpose Payment for Housing Services and replace it with new
funding arrangements under which payments to the states and territories will be
contingent on their being party to primary, supplementary and designated
housing agreements.
Background
National
Affordable Housing Agreement
Following the adoption of a new Intergovernmental
Agreement on Federal Financial Relations (IGA), the Rudd Government
introduced the National Affordable Housing Agreement (NAHA) in
2009.
The NAHA replaced the Commonwealth-State
Housing Agreement (CSHA), which had, since 1945, been the main vehicle through
which Australian governments introduced housing policy initiatives and, along
with state and territory governments, provided funding for housing.[1]
Under the NAHA a number of existing
Commonwealth housing and homelessness assistance programs were rationalised
with a view to introducing a whole-of-housing system approach to housing
affordability and placing affordable housing at the core of the national
agenda. The programs that were rationalised included the Supported
Accommodation Assistance Program (SAAP), a joint Commonwealth-State funded
program that was introduced in 1985 to consolidate under one nationally
coordinated program a range of homelessness programs that were funded by
individual state and territory governments and the Federal Government.[2]
The NAHA is an on-going agreement, but one
that was subject to a five-year review, and that may be amended as necessary by
agreement of the Council of Australian Governments (COAG).[3]
The Agreement is supported by the National
Specific Purpose Payment for Housing Services which is an indexed
on-going payment to the states and territories to be spent on housing services,
paid at around $1.3 billion per annum.[4]
With the COAG reforms to Commonwealth-state
financial relations a number of changes were made to Specific Purpose Payment
arrangements. National Specific Purpose agreements, including the NAHA, were
not to be subject to prescriptiveness (conditionality) financial or otherwise;
the focus of Specific Purpose Payments was to shift to results, outcomes and
outputs and away from inputs; indicators were to be developed to measure
performance against agreed outputs and outcomes; and the COAG Reform Council
was to independently assess states’ and territories’ performance against the
indicators.[5]
In keeping with the changed arrangements, the states and
territories are not required to match Commonwealth Specific Purpose Payment
funding. Under the NAHA there is no identified program funding—that is, funding
that is provided for a specific housing or homelessness purpose (as was the
case under the CSHA). Instead, the states and territories are responsible for
determining the amount of funding to be directed to particular government housing
programs and services. They are not required to report on their allocation of NAHA
funding.
National
Partnership Agreement on Homelessness
Commonwealth funding to the states and territories to
support affordable housing services in particular areas is provided through
National Partnerships.
Under the National Partnership Agreement on Homelessness
(NPAH) funding is allocated to the states and territories primarily to support
the provision of homelessness services. This funding is required to be matched
by the states and territories.
When the NPAH was introduced it was funded
over four years from 2009–10 to 2012–13.[6]
In 2013 the Gillard Government allocated one year’s funding of $159 million
under the NPAH. This was to be a one-year transitional agreement for 2013–14
while the government negotiated ‘an integrated and holistic response to homelessness
beyond 2014’.[7]
As a part of the 2014–15 Budget the Government provided $115
million to extend the NPAH for a further year.[8]
In the 2015–16 Budget, the Government allocated $230 million over two years to
extend the NPAH until 30 June 2017.[9]
The funding was to be targeted towards frontline services, focusing on women
and children experiencing domestic and family violence and homeless youth. On 9
December 2016, the Government announced, in advance of the 2016–17 Budget,
that it would be providing just over $117 million to the homelessness sector
for one year, to provide certainty to homelessness service providers.[10]
Under the National Partnership Agreement on Remote Indigenous Housing (NPARIH)—now the National Partnership on Remote Housing (NPRH)—funding
of around $4.68 billion has been allocated over ten years towards the provision
of housing for Indigenous people in remote communities. The Agreement is due to
expire in June 2018 and it has been reported that some of the state and
territory governments that are party to the Agreement are concerned that the
Commonwealth funding will not be continued.[11]
Problems
with the NAHA
In a 2013 report comparing the performance of the
jurisdictions with regard to their response to homelessness, the COAG Reform
Council expressed some criticism of the performance framework set out in the
NAHA.[12]
The Council argued that further work was needed to improve the measurement of
sustainable housing outcomes for people who are homeless or at risk of
homelessness. The Council also indicated that it had experienced difficulty in
assessing performance against NAHA outcomes due to insufficient data and an
inability to link activities under National Partnership Agreements to the NAHA
objectives.[13]
A 2013 Australian National Audit Office (ANAO) evaluation of
the implementation of the NPAH made similar criticisms of this agreement’s
performance measurement and reporting framework.[14]
Among other things, it argued that any future agreement should link payments to
the achievement of agreed milestones, and that state and territory governments
should be required to report financial information to provide assurance to the
Minister that they were making appropriate levels of co-contribution.
More recently, figures from the 2016 COAG Report on Performance 2016
indicate that three of the four key benchmarks identified in the NAHA have not
been met.[15]
Australia’s stock of public housing has fallen
consistently over recent years.[16]
While this reduction has been offset to some degree by an increase in the
supply of community housing,[17]
the overall stock of social housing is not increasing at a rate sufficient to
keep up with demand.[18]
As at 30 June 2017, there were 189,404 applicants on the waiting list for
social housing across Australia.[19]
In 2016–17 an estimated 95,000 requests—261
requests per day—for assistance from specialist homelessness services providers
were unable to be met.[20]
The Government has for some time expressed
dissatisfaction with the performance of the states and territories under the
NAHA.[21]
It has also criticised the NAHA for a perceived lack of transparency and
accountability. For example, in an address to the Australian Housing and Urban
Research Institute in early 2017 Treasurer Scott Morrison stated:
This agreement is a one way ATM providing
important resources without accountability for outcomes ... NAHA does not link
funds to delivery of supply, even for public housing ... ever since matched
capital arrangements were removed from Commonwealth State Housing agreements
the growth in social housing stock has flat-lined ... we are frustrated by the
lack of accountability and results for this significant taxpayer commitment.[22]
In view of the failings of the NAHA, the
Government indicated its intention to introduce a new National Housing and Homelessness
Agreement (NHHA) as a part of its 2017–18 Budget measures.[23]
The new three year national agreement is to
link funding to state and territory governments to specified outcomes in
priority areas; include bilateral schedules with clear targets, improved
transparency and reporting for each state and territory; and, provide indexed
funding towards the provision of homelessness services, to be matched by the
states and territories.[24]
The National Competition Council was to be
responsible for the ongoing assessment of performance under the NHHA, with $6.5
million provided to it over the forward estimates for this purpose.[25] This funding was subsequently
withdrawn as a part of the 2017–18 Mid-Year Economic and Fiscal Outlook, with
the Treasury to ‘assist with the implementation and ongoing assessment of
performance under the National Housing and Homelessness Agreement, from within
existing resources’.[26]
Committee
consideration
The Bill was referred to the Senate Economics Legislation Committee
(the Economics Committee) for inquiry and report by 6 February 2018.[27]
In its report, the Economics Committee supported the Bill.[28]
In response to concerns from submitters that the Bill could
pose a threat to the delivery of funding for essential social housing and homelessness
services, the Economics Committee stated that it considered ‘that the proposed
framework for a new national housing agreement between the Commonwealth, states
and territories will ensure adequate ongoing funding for housing and
homelessness services’.[29]
The Committee also considered that ‘the Bill strikes a reasonable balance
between achieving accountability and transparency, and a degree of funding
certainty to the sector’.[30]
While the Committee acknowledged concerns regarding the lack
of detail in the Bill and Explanatory Memorandum about the required content of
housing and homelessness strategies, data collection and reporting, it believed
that ‘these concerns will be addressed as part of the new NHHA negotiations’.[31]
Senators from the ALP and the Greens made additional
comments, which are discussed below.
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
(Scrutiny of Bills Committee) has considered the Bill and raised some concerns.[32]
These are discussed in the Key issues and provisions section below.
Policy
position of non-government parties/independents
The ALP
In the lead-up to the 2016 Federal Election the Australian
Labor Party (ALP) indicated its intention, if elected, to negotiate a tougher
deal with the states and territories under the NAHA.
As a part of its proposed National Affordable Housing
Strategy, the ALP committed to working with the states ‘to drive better
outcomes and performance in the National Affordable Housing Agreement,
including strengthening benchmarks across the housing affordability spectrum
such as housing supply, planning reform and inclusionary zoning’.[33]
In an address to the St Vincent de Paul Society in the
lead-up to the 2017–18 Budget, Shadow Minister for Housing and Homelessness,
Senator Doug Cameron stated:
we want transparency and accountability from state and
territory governments in [the National Affordable Housing Agreement]. We want
to see inclusionary zoning and growth targets. We want to see increased stock
through the $1.3 billion NAHA funding every year.[34]
The ALP Senators on the Economics Committee made
additional comments in the report on the Bill. They are highly critical of the
Bill and of the Government’s housing strategy more generally, on a number of
grounds.[35]
Firstly, they argue that the input controls that the Bill
would place on the states and territories as a condition of funding will not
necessarily contribute to improved performance against housing and homelessness
outcomes under the National Housing and Homelessness Agreement (NHHA). The ALP Senators
argue that ‘a far more effective way to improve housing and homelessness
outcomes under the NHHA would be to build mechanisms into the Agreement that
provide a clear basis for outcomes’.[36]
Secondly, the ALP Senators argue that, despite its 2017–18
Budget measures and proposed new NHHA, the Government does not have a truly
comprehensive plan to improve housing affordability. Any such plan, they
maintain, must include the reform of existing negative gearing and capital
gains tax discount arrangements.[37]
Thirdly, the ALP Senators are critical of the fact that
the Government had not reached an agreement with the states and territories
about the details of the Bill before its introduction to the Parliament.[38]
Similarly, they criticise the Government for having failed to provide any
details about future funding arrangements for remote Indigenous housing.[39]
Finally, the ALP Senators agree with a number of
submitters to the Inquiry that the Bill poses a risk to ongoing assistance to
the states and territories ‘while it retains provisions that would allow a
Commonwealth Minister to make a subjective or capricious judgement about the
validity, credibility or prospects of success of a state or territory’s housing
or homelessness strategy’.[40]
While the ALP Senators have serious reservations about the
Bill they nevertheless ‘do not believe the Bill should not be passed’ given
that such an outcome would result in funding for homelessness services—which is
contingent on the Bill’s passage—being placed under threat.[41]
The Greens
The Australian Greens (the Greens) are critical of the
Bill’s perceived failure to contribute to ensuring the provision of housing as
a human right. The Greens made a number of recommendations with a view to
assisting the promotion of housing as a human right. These include:
- developing
a national strategic plan and re-establishing a body similar to the abolished
National Housing Supply Council
- allocating
funding to meet the current shortfall and expected demand for social housing,
as determined by a national body and with reference to a national housing
strategy and
- removing
from the Bill the threat of withdrawal of funding as a sanction, and replacing
it with alternative sanctions that do not impact on funding for social housing
or homelessness services.[42]
Independents
The independents do not appear to have publicly expressed a
position with regard to the Bill.
Position of
major interest groups
Stakeholder submissions to the Economics Committee have
raised a number of concerns with the Bill and the NHHA that it would enable. Some
of the most substantial of these may be broadly characterised as follows:
- The
Bill requires state and territory governments to produce housing and
homelessness plans and commit to various reforms and initiatives but makes no
similar demands of the Federal Government. This fails to acknowledge that,
firstly, housing assistance is a shared government responsibility, and,
secondly, that the Federal Government has responsibility for a number of areas
that have some influence on housing affordability.[43]
- The
Bill makes additional demands of state and territory governments and broadens
the scope of the national housing agreement but provides no additional funding.
This is despite the fact that existing Federal Government funding levels do not
reflect the costs of maintaining and operating the current social housing
system.[44]
- The
Bill allows for the Federal Government to withhold funding to the states and territories
if they fail to meet the stipulated terms and conditions. Were this
conditionality to be exercised, this could harm vulnerable people who are in
need of affordable housing and at risk of or experiencing homelessness.[45]
- While
the Bill is prescriptive, reintroducing conditionality that was absent under
the NAHA, neither it nor the Explanatory Memorandum provides sufficient detail
regarding the required content of housing agreements. For example, the
Explanatory Memorandum indicates the states will need to have in place a
‘credible housing strategy’ and a ‘credible homelessness strategy’ in order to
receive Commonwealth funding, but gives very little guidance as to what a
strategy will need to contain in order to be deemed credible.[46]
Financial implications
Estimates of the financial impact of the measure are
reported in the Explanatory Memorandum to the Bill and 2017–18 Budget Paper No.
2.[47]
The total cost of the measure over the forward estimates period
(2018–19 to 2020–21) is $375.3 million. This funding towards the provision of
homelessness support services is to be matched by the states and territories.
It should be noted that the additional funding for
homelessness services only makes up part of the total funding that will be
provided under the new NHHA. The balance of the funding for affordable housing
measures will be the funding that is currently allocated under the National
Affordable Housing Specific Purpose Payment.[48]
Statement
of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[49]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise human rights concerns.[50]
Key issues
and provisions
Section 14 of the Federal Financial Relations Act sets
out the arrangements under which National Specific Purpose Payments for housing
services are made to the states and territories. As noted above, these payments
provide support for the NAHA. Item 3 of Schedule 1 to the Bill
repeals section 14, thereby doing away with those payments.
Item 4 of Schedule 1 inserts proposed new
Part 3B into the Federal Financial Relations Act which sets out the
new arrangements under which funding for affordable housing and homelessness
programs and services is to be provided to the states and territories. Essentially,
payments relating to housing, homelessness and housing affordability matters
may be made to a State under two separate arrangements:
1. the State is a party to both a primary housing agreement and
a supplementary housing agreement for the financial year
2. the State is a party to a designated housing agreement.
Primary and
supplementary housing agreements
Determination
by legislative instrument
Within new Part 3B, proposed subsection 15C(2) of
the Federal Financial Relations Act provides for the Minister to make a
determination for a payment to be made to a state or territory to be expended
in accordance with both a primary and supplementary housing agreement. Proposed
subsection 15C(3) provides that such a determination is a legislative
instrument, but one to which section 42 of the Legislation Act
2003—which provides for the disallowance of legislative
instruments—does not apply.[51]
The Explanatory
Memorandum states that this exemption is justified because:
The determinations facilitate the operation of an
intergovernmental scheme involving the Commonwealth and a State and are made
for the purpose of that scheme. In this instance, the scheme is the primary
housing agreement supported by the supplementary housing agreements or the
designated housing agreement, and payments made by the Commonwealth are for the
purposes of that scheme.
This is consistent with other payment arrangements, such as
NSPPs and National Health Reform payments, where there is an obligation on the
Commonwealth to make payments in a prescribed manner as part of an
intergovernmental body or scheme involving the Commonwealth and the states.[52]
The Scrutiny of Bills Committee has drawn Senators’
attention to this proposed exemption, stating that it is ‘of the view that the
removal of parliamentary insight is a serious matter’.[53]
However, the Committee goes on to note that ‘in this instance, the removal of
parliamentary oversight appears to be consistent with subparagraph 44(1)(a) of
the Legislative Act 2003, which provides that the section 42
disallowance process does not apply to instruments if the enabling legislation
‘facilitates the establishment or operation of an intergovernmental body or
scheme’.[54]
Given this, the Committee has stated that it ‘leaves to the Senate as a whole
the appropriateness of exempting these determinations from disallowance’.[55]
Nature of
the housing agreements
Proposed subsections 15C(4)–15C(8) of the Federal
Financial Relations Act stipulate the terms and conditions under which
financial assistance will be payable to the states and territories. The assistance
must be spent in accordance with both the primary and supplementary housing
agreements (proposed subsection 15C(4)).
The primary housing agreement is similar to
the current NAHA in that it is a high-level agreement entered into by the
Commonwealth and each of the states and territories. It is to contain details
of how funding will be provided, any national objectives, and envisaged
outcomes and common details that apply to all jurisdictions.[56]
Item 2 in Part 1 of the Bill inserts the formal definition of primary
housing agreement into section 4 of the Federal Financial Relations
Act.
Supplementary housing agreements are
specific to the individual states and territories. They are to outline how the
state or territory intends to implement its housing and homelessness strategy
and to acknowledge differences in the states’ and territories’ housing markets
and policy priorities.[57]
Item 2 in Part 1 of the Bill inserts the formal definition of supplementary
housing agreement into section 4 of the Federal Financial Relations
Act.
Need for a
national housing strategy
A number of submissions to the Senate Economics
Legislation Committee inquiry into the Bill (the Inquiry) argued that the Bill
is one-sided; it requires state and territory governments to produce housing
and homelessness plans without making a similar demand of the Federal
Government.
While housing has not traditionally been a Commonwealth
responsibility, the Federal Government is accountable for a number of areas
that have a significant impact on housing affordability.[58]
In view of this, several submitters maintain that the Government should, in
collaboration with the states and territories (and external stakeholders),
develop a long-term national housing strategy. Without such a strategy, and a truly
cooperative approach, they insist, it will not be possible to make meaningful inroads
into the problem of housing affordability:
ACOSS strongly urges the Australian Government to work with
state and territory governments as well as relevant peaks, organisations
representing low-income tenants and prospective home-owners, financial
institutions, housing and homelessness service providers, and those directly
affected by policy change in this area to develop a national housing and
homelessness plan containing national targets and complemented by a suite of
policy reforms and necessary funding to achieve them.[59]
Housing affordability is a complex and important issue and requires
joined up approaches across all levels of government to achieve outcomes.
However, this Bill shifts responsibility for housing affordability to the
States alone. This is not feasible. To tackle housing affordability, the
Commonwealth must use the levers it has at its disposal (such as taxation,
migration and income support, including the level of [Commonwealth Rent
Assistance]) and work in partnership with the States. There is no mechanism in
the Bill that compels the Commonwealth to exercise these levers or undertake
any activity to address housing affordability.[60]
If the legislation is to fulfil its promise it needs to be
framed within an over-arching national housing strategy and supported by a
commitment from all levels of government to the additional investment which is
needed to boost the supply of social and affordable housing. The National
Housing and Homelessness Agreement itself provides an ideal vehicle to draw all
jurisdictions together in constructive dialogue around a national housing
strategy. We urge the Commonwealth government to engage with the other levels
of government and with the community housing sector and other stakeholders on a
long-term national housing strategy as a matter of urgency. Without strong
Commonwealth leadership, substantial improvement in housing affordability and
homelessness outcomes under this new agreement are unlikely.[61]
Insufficiency
of funding
A majority of stakeholders maintain that existing
Commonwealth funding to the states is insufficient, and has not kept up with
housing and service delivery costs.
This shortfall, it is argued, restricts state and
territory governments’ ability and willingness to restore and expand
Australia’s run-down public housing stock. The nature of the problem has been
identified by Australian housing experts for some time, and is summarised in a
Reform of the Federation White Paper issues paper:
Current public housing rents are heavily subsidised and
generally well below market prices. The rental income states and territories
receive is insufficient to support critical stock redevelopment, or cover the
cost of maintaining existing stock. This problem is exacerbated as properties
age and the costs of property and tenancy management increase. As a result,
public housing is not sustainable in its current form. This has created a
perverse incentive for state and territory housing authorities to either sell
stock or transfer it to community sector providers. This reduces maintenance costs
to state and territory governments and has contributed to a reduction in the
number of public housing dwellings...[62]
The Government has made a commitment to introduce an
affordable housing bond aggregator that could help to attract institutional
capital into Australia’s social housing sector.[63]
However, the success or otherwise of this initiative will depend on the degree
to which the Government is prepared to close the financing gap associated with
social and affordable housing investments.[64]
Housing experts Michael Perusco and Guy Johnson have estimated that the
Government contribution to closing this gap will need to be in the order of
$2.5 billion per year.[65]
In any case, other housing experts have argued that a
government-backed aggregated bond financing model—along with the clearer
targets and more transparent cost accounting that the NHHA is intended to provide
for—cannot replace the need for an enduring program of federal funding for
operational expenses. If a sustainable social housing system is to be achieved,
then Chris Martin and Hal Pawson argue this will demand:
capital funding for new social housing stock, distributed
according to an assessment of current and projected needs in each state and
territory; recurrent funding, distributed according to the number of social
housing dwellings in each state and territory and an assessment of reasonable
net recurrent costs; and clear accounting by social housing providers for costs
of provision and the contributions of tenants, government funding and other sources
of income towards meeting these costs.[66]
In short, Martin and Pawson maintain that ‘both state and
territory housing authorities and non-government affordable housing providers
need a larger subsidy than present funding provides’.[67]
Distribution
of funding
Under current arrangements funding to the states and
territories is distributed on a per capita basis. There is no suggestion that
this arrangement is to be changed under the NHHA. A number of housing experts,
such as Martin and Pawson, and submitters to the Inquiry, have argued that this
is a flawed method of distribution, and one that should be changed. For
example, NT Shelter insists that ‘funding received from the Commonwealth under
NAHA and NPAH for affordable housing and homelessness is manifestly inadequate
for the particular and unique circumstances facing the Northern Territory’.[68]
Because there is such a high level of disadvantage across the Northern
Territory, NT Shelter maintains that the allocation of funding on a per capita
basis is ‘not appropriate and delivers nonsensical distributions’.[69]
As NT Shelter sees it, ‘if the state of public housing and homelessness in the
NT was comparable to that of other states and territories [then] a per capita
distribution would be reasonable’.[70]
ACOSS has similarly argued that the allocation of funding on a per capita basis,
irrespective of differences among the jurisdictions, is a fundamental flaw that
has limited the effectiveness of the NAHA.[71]
Housing
strategy to meet ‘demand’
Under proposed subsection 15C(5) of the Federal
Financial Relations Act the state or territory to which the financial
assistance is payable must have a housing strategy that specifies ‘the level of
housing supply needed to respond to projected housing demand, and outlines the
reforms and initiatives that will be implemented to meet this need’.
It is worth noting that while the Bill uses the terms ‘demand’
and ‘need’ interchangeably, the meanings of the terms are quite distinct. While
‘demand’ refers to the desire of consumers for housing, ‘need’ refers to people’s
requirement for housing.
It is also important to bear in mind that there is a great
deal of variability in estimates of housing demand. For example, the National
Housing Supply Council (NHSC) estimated that in 2011 there was an
Australia-wide shortfall of 284,000 dwellings.[72]
Subsequently, the Reserve Bank of Australia (RBA) estimated a housing supply
shortage of between zero and 30,000 dwellings in 2015[73]
and the Australia and New Zealand Banking Group (ANZ Bank) is reported to have
estimated a shortfall of 250,000 dwellings in 2016.[74]
Estimates from other sources suggest that there is no
housing shortfall in Australia as a whole, but rather, a housing oversupply.
For example, based on an analysis of housing supply and demand in Australia at
a regional level, Ben Phillips and Cukkoo Joseph have estimated that between
2001 and 2017 the Australian housing market experienced an oversupply of
164,000 dwellings.[75]
The point is that without some consistency in the
assumptions and methodologies employed by analysts, housing supply and demand
estimates will always vary, and sometimes substantially. This has significant implications
for the usefulness, and the Commonwealth’s assessment of, state and territory
housing strategies.
In 2008 the Rudd Government established the NHSC to monitor
housing demand, supply and affordability and to identify gaps between housing
supply and demand.[76]
Since its abolition in 2013, there has been no official independent estimate of
housing supply and demand in Australia. In its submission to the Inquiry, the
Community Housing Industry Association observed:
In the absence of any independent forecasting agency such as
the National Housing Supply Council, it is difficult to see how the States and
Territories will be able to design credible strategies to meet projected
housing demand (particularly the demand for housing which is affordable and
available to people on low to moderate incomes). Equally, it is difficult to
see how the Commonwealth could assess the credibility of the demand forecasts
or the adequacies of the strategies proposed to meet demand without the benefit
of an independent forecaster.[77]
As noted above, the Treasury is to be
responsible for monitoring progress under the NHHA.
It is also a condition that the strategy be made available
on a publicly accessible website.[78]
Homeless
strategy
The state or territory must have a homelessness
strategy that gives attention to the priority homelessness cohorts identified
in the primary housing agreement and ‘includes reforms and initiatives that
contribute to a reduction in the incidence of homelessness’.[79]
As is the case for the housing strategy, the homelessness strategy must be made
available on a publicly accessible website.[80]
Generally speaking, submissions to the Inquiry are
critical of the perceived lack of necessary detail regarding the required
contents of housing and homelessness strategies. According to the Explanatory
Memorandum, it is intended that the NHHA will provide that state and territory
housing and homelessness strategies must be ‘credible’ if the states and
territories are to receive Commonwealth funding.[81]
However, the term ‘credible’ is not defined in the Explanatory Memorandum and,
beyond a few very general details, ‘little information is provided about the
expected scope, purpose, focus, level of detail and quality of information
required in the plans’.[82]
Need for
greater clarity
In their submission, a number of the states and
territories have argued that the Bill, while prescriptive, ‘provides the states
with limited guidance on how they can meet the Commonwealth’s expectations’.[83]
Most submissions to the Inquiry have recommended that the Bill be amended to
better clarify the minimum criteria that must be met by the states and
territories in order for them to meet the Commonwealth’s requirements and
receive NHHA funding.
In the joint Treasury and Department of Social Services
submission to the Inquiry, the departments attempted to allay concerns about
the lack of detail regarding the relevant requirements. The submission states:
... the Commonwealth will not assess: the form or content of a
State’s housing or homelessness strategies; the validity or robustness of
supply and demand projections in a State’s housing strategy or supplementary
housing agreement (bilateral schedule) – and funding will not be conditional on
whether projected supply is met; or the validity or robustness of reforms or
initiatives in homelessness strategies – and funding will not be conditional on
the nature or delivery of these reforms and initiatives.[84]
A number of submissions have been critical of the Bill’s not
spelling out the consequences of a state or territory’s failure to have in
place a housing and homelessness strategy, or to meet their other requirements
under the Bill, outlined below.[85]
Several submitters have also expressed concern that the imposition of financial
penalties could have a negative impact on disadvantaged people who are reliant
on affordable housing and homelessness services.[86]
To counter this possibility, ACOSS has suggested that
assurances should be given that financial penalties will not be imposed where
this would impact on funding for housing services for people on low incomes. And,
instead of imposing financial penalties that will impact on funding for housing
and homelessness services, ACOSS has proposed that the Commonwealth require
governments that are not meeting set targets to provide a public explanation
and develop and publish a plan to improve their performance.[87]
The Community Housing Industry Association has proposed that the states and
territories should be given a specified period in which to comply with their
requirements, after which the withheld funding would be ‘reallocated to a
capital funding pool to be offered on a competitive basis to community housing
providers in the relevant jurisdiction’.[88]
This, the CHIA argues, would ‘underpin the integrity of the conditionality
requirement in the legislation and at the same time ensure that housing
outcomes for lower income people are not compromised by withdrawal of funding
from the system entirely’.[89]
As noted above, it is a condition of the current NPAH that
the states and territories match the homelessness funding provided by the
Commonwealth. This requirement is retained under the new arrangements set out
in proposed subsection 15C(7). ACOSS has argued that this
requirement should be extended to include matched state and territory funding
for housing programs, as was the case under the CSHA.[90]
This would be with a view to ensuring growth in the stock of affordable housing
for people on low incomes.
Provision
of data
The states and territories must also provide to the
Minister any information relating to housing, homelessness and housing
affordability specified in the primary or supplementary housing agreement. This
must be in a manner and time-frame determined in accordance with the primary or
supplementary agreement.[91]
As a number of the states and territories see it, making
payment of funding under the NHHA conditional on their fulfilling any data
request of the Minister is unreasonable. They argue ‘there is no valid reason
for putting funding for the community’s most vulnerable people at risk by
making funding conditional on the delivery of undefined information requests’.[92]
While they insist that they are ‘very supportive of improved transparency,
reporting and data collection and willing to work with the Commonwealth to make
these improvements’ they feel that ‘this should not come at the expense of funding
certainty’ and that the Bill should not ‘allow for unconstrained data requests
that increase overheads in administering the NHHA’.[93]
In their joint submission to the Inquiry, the Treasury and
Department of Social Services have attempted to assuage concerns that funding
essential for the provision of housing and homelessness services could be
withheld from the states and territories, stating:
The approach reflected in the Bill addresses the concerns
expressed by States that directly tying funding to the delivery of achievement
of performance requirements could be seen as putting funding for core services
at risk.
The Bill, and the associated explanatory material, provides
funding certainty to the States and service providers. It proposes that 100 per
cent of funding will flow to the States provided they have housing and
homelessness strategies in place, and contribute to the development and
implementation of a nationally consistent data set and transparent reporting.
It also retains the requirement for matched homelessness funding in line with
current arrangements under the NPAH.[94]
Designated
housing agreement
Proposed section 15D provides for financial
assistance to be made to a state or territory under a designated housing
agreement. Item 2 in Part 1 of the Bill inserts the formal
definition of designated housing agreement into section 4 of the Federal
Financial Relations Act.
Unlike primary and secondary housing agreements, a
designated housing agreement does not have any associated legislated
conditions. So long as states and territories meet the terms and conditions
stipulated in the designated housing agreement, they will qualify for financial
assistance from the Commonwealth. The purpose of the designated housing
agreement is to provide the Minister with the flexibility ‘to enter into other
agreements as needed from time to time’.[95]
As with the primary and secondary housing agreements, the amount payable under
a designated housing agreement will be specified in a determination that is a
legislative instrument—but is not disallowable by the Parliament.[96]
The Scrutiny of Bills Committee has expressed some
concerns with regard to the absence of terms and conditions applicable to
designated housing agreements in the Bill itself.[97]
The Committee also has reservations about the lack of a requirement in the Bill
for housing agreements to be subjected to either Parliamentary or public
scrutiny.[98]
It has suggested:
it may be appropriate for the Bill to be amended to:
-
include some high-level guidance as
to the terms and conditions that States will be required to comply with in
order to receive payments of financial assistance under a designated housing
agreement; and
-
include a legislative requirement
that any primary, supplementary or designated housing agreements are:
- tabled in the Parliament within 15 sitting days of being
made, and
- published on the internet within 30 days of being made.[99]
The Treasurer, Mr Scott Morrison has rejected the first of
the Committee’s suggestions on the grounds that including in the Bill
additional guidance on terms and conditions that states would be required to
comply with may ‘unduly limit the Commonwealth’s ability to provide financial
assistance in the future and the States’ ability to respond flexibly to
jurisdiction-specific circumstances’.[100]
Mr Morrison noted the second of the Committee’s suggestions, but responded that
‘all agreements under the Federal Financial Relations framework are available
publicly on the Council on Federal Financial Relations website’.[101]
In its response to Mr Morrison’s advice, the Scrutiny of
Bills Committee reiterated its concerns and proposals to address them.[102]
Concluding
comments
As noted above, should it be passed, the Bill would repeal
the current funding arrangements on 30 June 2018, irrespective of whether or
not new primary and supplementary agreements have been reached with the states
and territories. Until such time as these agreements have been settled, the
states and territories would receive no funding for housing and homelessness
services. As ACOSS sees it, this arrangement ‘seems to be intended to pressure
negotiating parties to come to agreement to ensure the continuation of
funding’.[103]
However, ACOSS is concerned that the short timeframe could result in less than
effective agreements being arrived at.
ACOSS has proposed that the current arrangements should be
extended to 31 December to ensure that a funding gap does not occur if
agreements are not able to be settled before 30 June 2018.[104]
Should the Bill fail to pass before 30 June 2018 then this
could result in NPAH funding not being paid to the states and territories, as
the NPAH agreement expires on this date.
However, funding provided under the NAHA would continue.
Until such time as the Bill is passed and the Federal Financial Relations
Act amended, the Commonwealth is required under section 14 of the Act to
provide NAHA funding of around $1.3 billion to the states and territories.
[1]. Commonwealth and
State Housing Agreement Act 1945. For an historical account and
comprehensive analysis of the CSHA, see P Troy, Accommodating
Australians: Commonwealth Government Involvement in Housing, The
Federation Press, Sydney, 2012.
[2]. Department
of Families, Housing, Community Services and Indigenous Affairs (DFHCSIA), Which
way home? A new approach to homelessness, Commonwealth of Australia,
Canberra, May 2008, pp. 27–8.
[3]. The
National Affordable Housing Agreement and National Partnership Agreements are
available on the Council on Federal Financial Relations website, ‘National
agreements’.
[4]. Financial
assistance is paid under section 14 of the Federal Financial Relations Act.
[5]. R
Webb, R de Boer, M Harrington, C Kempner, J Phillips and M Thomas, Federal
Financial Relations Bill 2009, Bills digest, 103, 2008–09,
Parliamentary Library, Canberra, 2009, p. 6.
[6]. Council
of Australian Governments, National
Partnership Agreement on Homelessness, [Commonwealth of Australia,
Canberra], December 2008.
[7]. M
Butler (Minister for Housing and Homelessness), $159
million for national homelessness agreement, media release,
18 March 2013.
[8]. Australian
Government, Budget
measures: budget paper no. 2: 2014–15, p. 205.
[9]. Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 165.
[10]. M
Turnbull (Prime Minister), S Morrison (Treasurer), C Porter (Minister for
Social Services) and Z Seselja (Assistant Minister for Social Services and
Multicultural Affairs), $117
million in new homelessness funding, joint media release, 9 December
2016.
[11]. H
Davidson and C Wahlquist, ‘Indigenous
minister under fire over funding for remote housing’, The Guardian,
22 December 2017.
[12]. COAG
Reform Council, National
Affordable Housing Agreement–Homelessness 2011–12: comparing performance across
Australia, COAG Reform Council, Sydney, 30 April 2013, pp. 33; 42–3.
[13]. Department
of Prime Minister and Cabinet (PM&C), Reform
of the Federation: white paper: roles and responsibilities in housing and
homelessness, Issues paper no. 2, 2014, p. 47.
[14]. Australian
National Audit Office (ANAO), Implementation
of the National Partnership Agreement on Homelessness: Department of Families,
Housing, Community Services and Indigenous Affairs, Audit report, 31,
2012–13, ANAO, Barton, ACT, 2013, pp. 18–19.
[15]. Department
of Prime Minister and Cabinet (PM&C), Council
of Australian Governments: report on performance 2016,
Australian Government, Canberra, March 2016, pp. 11–14.
[16]. Public
housing refers specifically to dwellings that are owned or leased by state and
territory housing authorities to provide affordable rental accommodation.
Public housing is one of four forms of social housing, with the others being
state owned and managed Indigenous housing (SOMIH), community housing, and
Indigenous community housing. Steering Committee for the Review
of Government Service Provision, Report on Government Services 2018: volume G: housing, Productivity Commission, Canberra, 2017, p. 18.2.
[17]. Ibid.
Community housing is ‘rental housing provided for low to moderate income and/or
special needs households, managed by community-based organisations that have
received a capital or recurrent subsidy from government’.
[18]. From around 2007, the states and territories have been transferring an
increasing amount of public housing to community housing providers, and, at the
2009 Housing Ministers Conference, a target was set to increase community
housing stock to make up 35 per cent of the social housing sector. See H
Pawson, C Martin, K Flanagan and R Phillips, ‘Recent housing transfer experience in Australia: implications for
affordable housing industry development’, AHURI
Final Report, 273, Australian Housing and Urban
Research Institute, Melbourne, 2016, p. 2.
[19]. Steering Committee for the Review of Government Service Provision, Report on Government Services 2018: volume G: housing, op. cit., p. 2 Table 18A.5; p. 1 Table 18A.6; p. 2, Table 18A.7.
[20]. Australian
Institute of Health and Welfare (AIHW), ‘Specialist
homelessness services annual report 2016–17, Unmet demand for specialist
homelessness services’, web report, AIHW website, last updated 12 February
2018.
[21]. When he was Minister for Social Services, Kevin Andrews suggested that
the Government intended to make the National Affordable Housing Agreement more
competitive and performance-based—making more demands of the states and
reintroducing tied funding. K Andrews (Minister for Social Services), Remarks
to the Community Housing Federation of Australia (CHFA) Housing and NDIS Forum,
Manuka oval function centre, speech, 27 March 2014.
[22]. S
Morrison (Treasurer), Address
to the Australian Housing and Urban Research Institute, Melbourne,
speech, 10 April 2017.
[23]. Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 155; Australian Government, A new National Housing and Homelessness Agreement,
Reducing pressure on housing affordability fact sheet 1.7,
current at 12 May 2017, p. 2.
[24]. Australian Government, A new National Housing and Homelessness Agreement, op.
cit., p. 2.
[25]. Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 155.
[26]. S
Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year
economic and fiscal outlook 2017–18, p. 186.
[27]. The
terms of reference, submissions to the Senate Economics Legislation Committee
and the final report are available on the inquiry
homepage.
[28]. Senate
Economics Legislation Committee, Inquiry
into the Treasury Laws Amendment (National Housing and Homelessness Agreement)
Bill 2017 [provisions], Report, The Senate, Canberra, 2018, p. 29.
[29]. Ibid.,
p. 28.
[30]. Ibid.
[31]. Ibid.
[32]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 13, 2017, The Senate, 15 November 2017, pp. 61–3.
[33]. B
Shorten (Leader of the Opposition), Chris Bowen (Shadow Treasurer) and D
Cameron (Shadow Minister for Housing and Homelessness, Labor’s
plan for housing affordability and jobs, media release, 21 April 2017.
[34]. D
Cameron (Shadow Minister for Housing and Homelessness), Address
to the St Vincent de Paul Society affordable housing lunch, speech,
5 May 2017.
[35]. ALP
Senators, Additional comments, Inquiry
into the Treasury Laws Amendment (National Housing and Homelessness Agreement)
Bill 2017 [provisions], op. cit., p. 35.
[36]. Ibid.
[37]. Ibid.,
p. 36.
[38]. Ibid.,
p. 40.
[39]. Ibid.,
p. 42.
[40]. Ibid.,
p. 48.
[41]. Ibid.
[42]. Ibid.,
pp. 53–4.
[43]. See
for example Victoria State Government, NSW Government, Queensland Government,
Government of Western Australia, Tasmanian Government, ACT Government and Northern
Territory Government, Joint Submission
to Senate Economics Legislation Committee, Inquiry into the Treasury Laws
Amendment (National Housing and Homelessness Agreement) Bill 2017 [provisions],
18 December 2017.
[44]. See
for example Australian Council of Social Service (ACOSS), Submission
to Senate Economics Legislation Committee, Inquiry into the Treasury Laws
Amendment (National Housing and Homelessness Agreement) Bill 2017 [provisions],
21 December 2017.
[45]. See
for example Homelessness Australia, Submission
to Senate Economics Legislation Committee, Inquiry into the Treasury Laws
Amendment (National Housing and Homelessness Agreement) Bill 2017 [provisions].
[46]. See
for example ACOSS, Submission,
op. cit.
[47]. Explanatory
Memorandum, Treasury Laws Amendment (National Housing and Homelessness
Agreement) Bill 2017, p. 3; Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 155.
[48]. Australian Government,
Budget measures: budget paper no. 2: 2017–18, p. 155.
[49]. The
Statement of Compatibility with Human Rights can be found at pages 16 and 17 of
the Explanatory
Memorandum to the Bill.
[50]. Parliamentary
Joint Committee on Human Rights, Human
rights scrutiny report, 12, 2017, The Senate, Canberra, 28 November
2017, p. 96.
[51]. Federal
Financial Relations Act, proposed subsection 15D(2) is in equivalent
terms.
[52]. Explanatory
Memorandum, Treasury Laws Amendment (National Housing and Homelessness
Agreement) Bill 2017, p. 14.
[53]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 13, 2017, op. cit., p. 61.
[54]. Ibid.,
pp. 61–2.
[55]. Ibid.,
p. 62.
[56]. Explanatory
Memorandum, Treasury Laws Amendment (National Housing and Homelessness
Agreement) Bill 2017, p. 10.
[57]. Ibid.
[58]. These
areas were spelled out in the NAHA: The Commonwealth is responsible for
leadership for national housing and homelessness policy including Indigenous housing
policy; income support and rental subsidies; immigration and settlement policy
and programs; financial sector regulations and Commonwealth taxation settings
that influence housing affordability; competition policy relating to housing
and buildings; provision of national infrastructure; housing-related data
collected by the Australian Bureau of Statistics and Centrelink; and
coordination of homelessness data collection from States and Territories.
[59]. ACOSS,
Submission,
op. cit., p. 5.
[60]. Victoria
State Government, NSW Government, Queensland Government, Government of Western
Australia, Tasmanian Government, ACT Government and Northern Territory
Government, Joint Submission,
op. cit.
[61]. Community
Housing Industry Association, Submission
to Senate Economics Legislation Committee, Inquiry into the Treasury Laws
Amendment (National Housing and Homelessness Agreement) Bill 2017 [provisions],
19 December 2017, p. 2.
[62]. PM&C,
Reform
of the Federation: white paper: roles and responsibilities in housing and
homelessness, op. cit., p. 18.
[63]. Australian Government, Budget measures: budget paper no. 2: 2017–18, p. 169.
[64]. The
financing gap is the difference between the low rates of return available on
social and affordable housing investments and the market returns available on
alternative investments with similar risk profiles.
[65]. M Perusco and G Johnson, ‘What the Federal Budget 2017 means for housing and homelessness’, ProBono
Australia, 10 May 2017.
[66]. C
Martin and H Pawson, ‘Australia
needs to reboot affordable housing funding, not scrap it’, The
Conversation, 20 February 2017.
[67]. C
Martin and H Pawson, ‘Budget
2017 charts new social and affordable housing agenda’, The Conversation,
12 May 2017.
[68]. NT
Shelter, Submission
to Senate Economics Legislation Committee, Inquiry into the Treasury Laws
Amendment (National Housing and Homelessness Agreement) Bill 2017 [provisions],
18 December 2017, p. 1.
[69]. Ibid.,
p. 2.
[70]. Ibid.
[71]. ACOSS,
Submission,
op. cit., p. 3.
[72]. National
Housing Supply Council, 2013
State of supply report: changes in how we live, National Housing Supply
Council, 2014, p. 1.
[73]. M
Kohler and M van der Merwe, ‘Long-run
Trends in Housing Price Growth’, Reserve Bank of Australia Bulletin,
September Quarter 2015, p. 26.
[74]. ‘Is
there still a housing shortage in Australia? ANZ research says about 250,000
dwellings’, Property Observer, 23 March 2016.
[75]. B
Phillips and C Joseph, Regional
housing supply and demand in Australia, Working paper no. 1/2017,
Centre for Social Research and Methods (CSRM), Australian National University,
Canberra, 2017, p. 1.
[76]. The
Treasury, ‘The
National Housing Supply Council’, The Treasury website.
[77]. Community
Housing Industry Association, Submission,
op. cit., p. 6.
[78]. Federal
Financial Relations Act, proposed paragraph 15C(5)(b).
[79]. Federal
Financial Relations Act, proposed subsection 15C(6).
[80]. Federal
Financial Relations Act, proposed paragraph 15C(6)(b).
[81]. Explanatory
Memorandum, Treasury Laws Amendment (National Housing and Homelessness
Agreement) Bill 2017, p. 7.
[82]. ACOSS,
Submission,
op. cit., p. 7.
[83]. Victoria
State Government, NSW Government, Queensland Government, Government of Western
Australia, Tasmanian Government, ACT Government and Northern Territory
Government, Joint Submission,
op. cit., p. 3.
[84]. The
Treasury and Department of Social Services, Submission
to Senate Economics Legislation Committee, Inquiry into the Treasury Laws
Amendment (National Housing and Homelessness Agreement) Bill 2017 [provisions],
December 2017, p. 13.
[85]. See
for example ACOSS, Submission,
op. cit., pp. 7–8.
[86]. See
for example Council to Homeless Persons, Submission
to Senate Economics Legislation Committee, Inquiry into the Treasury Laws
Amendment (National Housing and Homelessness Agreement) Bill 2017 [provisions],
pp. 4–5.
[87]. ACOSS,
Submission,
op. cit., p. 8.
[88]. Community
Housing Industry Association, Submission,
op. cit.
[89]. Ibid.
[90]. ACOSS,
Submission,
op. cit., p. 5.
[91]. Federal
Financial Relations Act, proposed subsection 15C(8).
[92]. Victoria
State Government, NSW Government, Queensland Government, Government of Western
Australia, Tasmanian Government, ACT Government and Northern Territory
Government, Joint Submission,
op. cit., p. 5.
[93]. Ibid.
[94]. The
Treasury and Department of Social Services, Submission,
op. cit., p. 4.
[95]. Explanatory
Memorandum, Treasury Laws Amendment (National Housing and Homelessness
Agreement) Bill 2017, p. 9.
[96]. Federal
Financial Relations Act, proposed subsections 15D(1) and (2).
[97]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 13, 2017, op. cit., p. 62.
[98]. Ibid.
[99]. Ibid.,
p. 63.
[100]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 15, 2017, The Senate, Canberra, 6 December 2017, p. 109.
[101]. Ibid.
[102]. Ibid.,
pp. 109–10.
[103]. ACOSS,
Submission,
op. cit., p. 6.
[104]. Ibid.
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