Views on the bill
The proposals in the Treasury Laws Amendment (National Housing and
Homelessness Agreement) Bill 2017 [Provisions] (the bill) seek to secure
improved housing and homelessness outcomes by requiring states and territories to
develop detailed housing and homelessness strategies, and to commit to improved
data collection and reporting in exchange for significant Commonwealth funding.
Overall, evidence to the committee supported the intent of the bill to
improve housing and homelessness outcomes, with many stakeholders endorsing the
proposed improvements to accountability and transparency.
This chapter examines the evidence received in relation to the proposed
framework. It first considers the roles and responsibilities of the Commonwealth
and the states and territories and the conditions that must be satisfied under
the new arrangements in order to receive Commonwealth payments for housing
services. The chapter then focuses on the proposed commencement date for the
new framework, the new mechanisms to measure performance and data collection,
and the level of funding available for housing services.
Need for a new national housing agreement
The majority of evidence received by the committee in relation to this
inquiry supported the recommendations that were made by the Economics
References Committee in its report on the inquiry into affordable housing. In
particular, submitters endorsed the proposed reforms to improve accountability
and transparency, and to improve way that the Commonwealth and states and
territories fund and subsidise housing outcomes.
For example, Shelter NSW considered that under the current framework
there is limited transparency about the use and actual outcomes of funding
under the current National Affordable Housing Agreement (NAHA)—including the
amount of financial contributions the states and territories are providing to
support housing services.
ACOSS also welcomed the development of a new National Housing and
Homelessness Agreement (NHHA) with the stated objective of improving
transparency and accountability in the way affordable housing funding is used.
The Treasury and Department of Social Services outlined the need for a
new NHHA, as the NAHA has not met three of its four performance benchmarks.
Indeed, noting the NAHA's failure to achieve all of its benchmarks,
considered that the new NHHA presented a great opportunity to reform the
funding arrangements for affordable housing and homelessness.
National Affordable Housing Consortium was also in favour of significant
reform in the way that the Commonwealth and states and territories fund and
subsidise housing outcomes. It noted:
One of the shortcomings of the NAHA was that it set out very
broad targets that were not realisable given the mismatch between the limited
funding and industry-wide scope of the Agreement. These fabulous aspirations
had the downside of setting NAHA up to fail.
The role of the Commonwealth—a national strategic plan?
Homelessness Australia considered that the new requirement for state and
territories to develop housing and homelessness plans should be extended to the
Commonwealth to develop a national strategic plan. It noted that the
Commonwealth has policy responsibility for most of the critical drivers of
Australia's housing affordability crisis. In Homelessness Australia's view, the
explanatory memorandum 'shifts blame to the states and territories for outcomes
that are primarily driven by federal policy drivers, including increasing
homelessness, and housing stress in the rental market'.
In a joint submission to the committee, the Governments of Victoria,
NSW, Queensland, WA, Tasmania, ACT and NT (state and territory government joint
submission), expressed the view that the bill will make the states and
territories responsible for:
...responding to and financially supporting changes to
Commonwealth levers, such as migration, taxation, welfare and the level of CRA
[Commonwealth Rent Assistance], even though the States have no control over how
these levers are used. This approach fails to acknowledge the Commonwealth's
equal role in the functioning of the housing market and exacerbates vertical
fiscal imbalances, further constraining States' ability to fund critical
Shelter NSW also highlighted the need for greater shared responsibility
between the Commonwealth, states and territories. It considered that the reason
the NAHA had not achieved its stated outcomes was:
...such outcomes required the application of policy levers that
were unrelated to the funding provided through the Agreement, the most
important of which (most notably taxation) were Commonwealth responsibilities;
and since almost no such policy action was taken to address housing
affordability (and hence the underlying driver of homelessness), only one of
the objectives has shown any improvement over the life of the Agreement.
National Shelter considered that the new NHHA needs to include a
national affordable housing strategy in order to effectively address housing
affordability and avoid the problems encountered under the previous agreement
with meeting outcomes.
The Community Housing Industry Association also supported the need for
an overarching national housing strategy and urged the Commonwealth Government
to work with key stakeholders to develop a national housing strategy as a
matter of urgency. It noted that 'without strong Commonwealth leadership,
substantial improvement in housing affordability and homelessness outcomes
under this new agreement are unlikely'.
Dr Julie Lawson, Centre for Urban Research, RMIT University, stated:
Clear targets must stem from an overarching strategic plan
developed through co-operation with stakeholders. Committed, responsible and
appropriate leadership is required by the Commonwealth to affect change.
Mr Jeff Fiedler, National Development Worker, Housing for the Aged
Action Group Inc., supported the proposed requirement for states and
territories to have housing and homelessness strategies. However, he noted that
there is no requirement in the proposed bill for the Commonwealth to develop a
comprehensive plan to improve housing outcomes for all Australians. He
This is where a joint approach is required to ensure that the
Commonwealth is as accountable for having a commitment and responsibility for
housing and homelessness as are the states. We see this as the fundamental flaw
in this bill.
However, Mr Michael Brennan, Deputy Secretary of Fiscal Group, The
Treasury, highlighted that the Commonwealth Government had laid out a broad,
multifaceted housing strategy in the 2017–18 Budget. Mr Brennan explained that
the measures in the bill are only one element of this strategy, which also
tax changes in relation to the limiting of deductions for plant
the denial of deductions for travel expenses;
the creation of the bond aggregator;
the creation of the National Housing Infrastructure Facility;
changes to the foreign ownership regime; and
the superannuation changes to assist young first home buyers to
save for a deposit.
States and territories concerns about the new funding framework
The state and territory government joint submission included a range of
proposed amendments to the bill, noting that their first preference was that
the bill be rejected, and a new amendment to the FFR Act be drafted which:
...repeals the national specific purpose payment for housing
services and introduces a new national housing and homelessness payment. The
new legislation should operate in a similar fashion to the national health reform
payments and the only condition for receiving Commonwealth assistance should be
that the financial assistance is spent on housing and/or homelessness services.
Consistent with other national agreements, the detail of the partnership and
commitments that both levels of government enter into under the agreement can
be articulated in the new NHHA.
In summary, the state and territory government joint submission did not
agree with the proposed amendment to the FFR Act to change the way the
Commonwealth provides financial support for the delivery of services by the
states and territories. The state and territory government joint submission
argues that the bill proposes 'a more prescriptive and burdensome funding
regime as it imposes a number of conditions for states and territories to
receive funding'. It argues that this proposal contradicts the IGA FFR which
commits the Commonwealth to reducing its prescriptions on service delivery by
states and territories and provides that national agreements will not include
financial or other input controls imposed on service delivery by states and
territories. The state and territory government joint submission considered
The inclusion of detailed pre-conditions for states and
territories to receive Commonwealth funding proposed in Part 3B, section 15C
are input controls in direct contradiction of section 21 of the IGA FFR, and
will not necessarily support improved outcomes for people needing housing or
The state and territory government joint submission also expressed
concern that the inclusion of matched homelessness funding as a legislative
requirement is inappropriate. Instead, they argue that in order to allow
flexibility, funding arrangements should be included in the overarching NHHA. In
this context, the states and territories expressed concern that the inclusion
of a legislative requirement to match funding may set a precedent whereby the
Commonwealth increasingly uses 'such legislative requirements in the future in
an attempt to control how the States direct their funding'.
In response to these concerns, the Treasury explained that while the
bill represents the first time that matched funding has been legislated, it
simply continues the current policy under the NPAH which had been in existence
since 2009. Indeed, in evidence before the committee, the Treasury went on to
highlight that by legislating the funding arrangements, the Commonwealth Government
is providing greater certainty for frontline homelessness service providers.
Proposed legislated conditions
The state and territory government joint submission considered that the
proposed legislated conditions to be placed on the states and territories were
too prescriptive and lacked detail:
The highly prescriptive legislation proposed by this Bill
would result in a lack of flexibility for the Commonwealth and the States to
adapt to changing circumstances. While the Bill is prescriptive, there is
simultaneously a lack of detail about the nature and content of the
requirements provided for under the Bill, which provides the states with
limited guidance on how they can meet the Commonwealth's expectations.
Accordingly, the state and territory government joint submission
maintained that the bill may limit the ability of the states and territories to
be innovative in their service design and delivery; and may restrict
jurisdictions in their ability to respond quickly to economic, demographic and
Other submissions also called for more detail in the proposed legislation
regarding the conditions to be met by the states and territories, arguing that
a range of specific priority areas should be included—such as, including
measures and funding to: support women and children escaping violence;
support housing security for the ageing population;
support for Indigenous populations both within cities and in rural and regional
and to recognise NDIS participants as a priority cohort for housing in the
Potential for funding uncertainty
Much of the evidence received for the inquiry concerned the potential
impact the new conditional funding arrangements would have on funding certainty
and whether the new framework would allow the Commonwealth to potentially penalise
states or territories that did not demonstrate they had complied with the
For example, National Shelter was concerned that penalties or sanctions
should not impact funding vital to social housing provision or the provision of
homelessness services. Of particular concern was the potential to threaten
funding withdrawal or reduction if a state or territory's plans were not
determined to be 'credible'. It considered that in this area the bill was 'too
vague to understand or be supported'.
The state and territory government joint submission also queried the
impact penalties or sanctions could have on front-line social housing and
...billions of dollars of support for the most vulnerable in
our communities could be at risk each year if the Commonwealth rejects the
content of a state's own housing or homelessness strategy, or deems information
provided by a state as being not compliant with the legislation. This places
critical social housing and homelessness services at risk, prevents effective
forward planning by service providers and may have serious impacts on
This approach is punitive and disproportionate and does not
work toward the stated objectives of the NHHA of improving housing outcomes for
vulnerable people. The States are committed to working with the Commonwealth
toward improving outcomes, transparency, reporting and data collection, but
must have funding certainty to progress any significant reforms. The States
would support additional incentive funding from the Commonwealth for
initiatives beyond the scope of the current agreement.
Mr David Martine, Secretary, Victorian Department of Treasury and
Finance, considered that the potential for funding to be withheld if the states
and territories are not deemed to be fully compliant with the requirements of
the Commonwealth in their housing and homelessness strategies 'creates enormous
uncertainty for both state and territory governments and also for community
providers as well'.
Mr Martine considered that the potential for funding to be withheld by
the Commonwealth far outweighed any benefits of the bill, such as indexed
If the states and territories don't fully comply with the
requirements of the Commonwealth in their housing and homelessness strategies,
the funding could actually be withheld. That creates enormous uncertainty for
both state and territory governments and also for community providers as well.
While there might be some certainty that, if you do get funding, it will be
indexed, that is far outweighed by the uncertainty created by the fact that at
some point a Commonwealth bureaucracy or a Commonwealth government might take
the view that a state and territory housing or homelessness strategy is not up
to their requirements and then withhold funding. So the state and territory
view is that there's more uncertainty in this bill than under current
arrangements even though there is a bit more certainty around indexation.
The Community Housing Industry Association (CHIA) raised the question of
how funding would be reallocated where jurisdictions failed to meet the
legislative requirements. It noted that the bill does not clearly set out what the
consequences might be if the legislated conditions were not met, and whether
this would have an impact on funding allocations.
PowerHousing Australia argued that:
Greater certainty of terms need to be negotiated and clearly
articulated to minimise the loss or delay of funding, the consequences of which
could trickle down and jeopardise affordable housing and homelessness programs
as well as the vulnerable Australians who rely on them.
In relation to the potential for funding uncertainty and the risk of
funding being withheld from the states and territories, Mr Michael Lennon,
Chair, Community Housing Industry Association, observed:
It's hard to imagine, given that $1.4 billion is available
for funding, that states won't comply in the most basic forms...it would be a
negative and unwanted outcome for us to be in a circumstance where state
funding was being held back by a state. In our view, that could be addressed by
being more precise about what we mean by a strategy, and the core elements of
The Treasury considered that the bill seeks to strike a balance between achieving
accountability and transparency, and a degree of funding certainty. Mr Brennan
What the bill and the design of the agreement is attempting
to do is strike that balance appropriately by saying that the states will have
obligations to have a strategy, that the strategy has to meet certain minimum
benchmarks in order to be basically the sort of strategy that would give the
Commonwealth the confidence to invest in state housing systems—so, a strategy
on housing, a strategy on homelessness—that the states meet the matched funding
requirements and sign up to the data or the information requirements. If they
do so, if they meet those binary requirements, then effectively 100 per cent of
the funding will flow. It is not as though the Commonwealth would then withhold
funding for individual numeric performance indicators not being met. So it is
difficult to see how that compromises the principle of funding certainty. I
think there is a reasonable degree of funding certainty to the states and to
the sector if they can achieve those basic requirements.
Definition of 'credible housing strategy'
Paragraph 1.17 of the explanatory memorandum to the bill provides:
Under the terms of the NHHA being negotiated with States to
commence 1 July 2018, the Commonwealth intends that 100 per cent of NHHA
funding to be distributed to States will be subject to a limited number of
specific conditions set out in the FFR Act. The States will be required to
demonstrate that they have met these conditions to receive funding. The
having a current, credible housing strategy in
having a current, credible homelessness strategy in
providing housing and homelessness information to enable the
development and implementation of more transparent and consistent data
collection and reporting across the housing spectrum. [emphasis added]
The lack of clarity and the absence of a clear definition of the term
'credible' caused concern for some submitters.
The state and territory government joint submission expressed reservations
about the way a 'credible housing strategy' would be assessed by the
Commonwealth and the potential consequences if states and territories are
unable to meet the Commonwealth's expectations. The state and territory government
joint submission explained:
The Bill would permit the Commonwealth to reject the content
of a state government's Cabinet-approved housing or homelessness strategy
because it does not meet the Commonwealth's 'credible housing strategy'
expectations, which are not defined and are open to interpretation by the
Other submitters, such as National Shelter, also went as far as to
suggest that the bill be amended to clarify what defines a credible plan.
The Treasury did not agree with the above assessment, and did not
consider the use of the term 'credible' to describe housing and homelessness
strategies to be problematic.
Mr Brennan explained that, in effect, the requirements of a state housing or
homeless strategy are laid out in section 15C of the bill.
Section 15C outlines the requirements for housing and homelessness strategies
assistance is payable to the State under this section for the financial year on
condition that, at all times during the financial year, the State will:
a housing strategy for the State that:
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
includes such other matters (if any) as are specified in the primary housing
agreement or the supplementary housing agreement; and
the housing strategy available on a publicly accessible website.
assistance is payable to the State under this section for the financial year on
condition that, at all times during the financial 25 year, the State will:
a homelessness strategy for the State that:
addresses the priority homelessness cohorts identified in the primary housing
includes reforms or initiatives that contribute to a reduction in the incidence
of homelessness; and
includes such other matters (if any) as are specified in the primary housing
agreement or the supplementary housing agreement; and
the homelessness strategy available on a publicly accessible website.
Mr Brennan noted that further details or requirements could be laid out
in the NHHA.
Mr Brennan also noted that the final agreement will be a negotiated outcome,
and, as such, the Commonwealth would not be in a position to impose unilateral
requirements on the states and territories.
Further, the Treasury and Department of Social Services' submission
explains clearly that it is not the Commonwealth's intention to assess the
states and territories' housing and homeless strategies. The submission states
that the Commonwealth will not assess:
the form or content of a State's housing or homelessness
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
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.
The commencement date of the new funding arrangements proposed in the
bill is 1 July 2018. The Treasury and Department of Social Services explained
that the proposed amendments to the FFR Act contained in the bill are necessary
to give effect to the new NHHA by establishing the framework for the conditions
on which funding is payable to the states and territories, and to provide
certainty to States and homelessness service providers around funding post 1
Funding under the new framework will be conditional on states and
territories having both a primary and a secondary agreement in place. The NHHA,
which is still being negotiated, will be a primary housing agreement under the
new framework. Many submitters raised concerns about what would happen to
funding for housing and homelessness services if states and territories were
unable to meet the new conditions for payments if the primary and secondary
housing agreements are not agreed by the commencement date of 1 July 2018.
Homelessness Australia recommended that the transitional arrangements in
the bill be amended to extend the NAHA and NPAH if the new agreement was not
completed by 30 June 2018.
National Shelter highlighted the risk of rushing and forcing housing
agreements by the commencement date of 1 July 2018, emphasising that such a
move could be counterproductive to the development of reasonable and balanced
housing plans. It recommended the commencement date should be delayed to
December 2018 to ensure all jurisdictions are able to meet the deadline.
Similarly, the Aboriginal Family Violence Prevention & Legal Service
Victoria supported extending NPAH funding and transitional arrangements to
31 December 2018. It maintained that this would ensure sufficient time for
Commonwealth, state and territory governments to reach a 'well-considered
agreement with genuine capacity to improve housing outcomes and the
transparency, accountability and effectiveness of housing and homelessness
With respect to the NHHA, the Treasury informed the committee that there
is no reason why an agreement will not be reached by 1 July 2018 and that the
states and territories can have confidence that Commonwealth funding for
housing and homelessness services will continue to flow.
The Victoria Government advised the committee that it was working with
the Commonwealth and other states and territories to reach agreement before 1
July 2018. However, it indicated that it would support an extension to the
existing funding arrangements if a suitable agreement cannot be reached in this
timeframe in order to provide funding certainty to service providers and ensure
continuity of services.
Mechanisms to measure performance
National Housing Supply Council
A number of submitters highlighted the need to have a mechanism in place
to measure performance under the new NHHA and some proposed re-establishing the
National Housing Supply Council (the Council). The Council was established by
the Australian Government in May 2008 to monitor housing demand, supply and
affordability in Australia, and to highlight current and potential gaps between
housing supply and demand. The Council was abolished on 8 November 2013.
The Property Council of Australia considered that the re-establishment
of the Council would enable the measurement of the performance of the states
and territories to fulfil their requirements and deliver better outcomes.
The Tasmanian Council of Social Services submitted that an independent
body should be established to monitor and assess performance under the new
agreement. It explained:
This body would fulfil the functions of the now defunct
National Housing Supply Council, although it should have more authority than
that body did to collect, analyse, publish and assess progress on delivering
national and state housing plans. If adequately resourced and empowered it
could help to ensure that states are meeting their targets and thus eliminate
the need for financial penalties.
Mr Adrian Pisarski, Executive Officer, National Shelter submitted that
there needs to be a properly funded and properly staffed National Housing
Supply Council to provide the robust data needed to fully understand the extent
of the housing and homelessness problem. He stated:
...a National Housing Supply Council is critically important to
providing that robust evidence base and data that we really need to make
assessments about what the level of housing supply and affordable housing
supply ought to be, and then at least have a basis on how you apportion the
responsibility for meeting that.
Mr Michael Myers, Managing Director, National Affordable Housing
Consortium, recalled that all sides of politics and industry were supportive of
the establishment of the National Housing Supply Council:
The reason for that, to be really blunt about it, was that
the aim was to take the politics out of the figures. The aim was to provide a
clear evidence base where we could make a judgment about policy. Policy is all
about judgment, but the facts are the facts. Are things getting worse? Do we
need more affordable housing? You can then make a policy judgment and a finance
judgment about what the role of people is in doing it.
National Competition Council
CHIA also expressed concern regarding the announcement in the 2017–18 Mid-Year
Economic and Fiscal Outlook (MYEFO) that the funding that had been announced in
the 2017–18 Budget for the National Competition Council to monitor performance
under the agreement would no longer be progressed. CHIA considered that this
decision will undermine the accountability to which this legislation aspires.
However, the MYEFO made it clear that the Treasury would assist with the
implementation and ongoing assessment of performance under the NHHA, from
within existing resources.
Data collection requirements
The Treasury and Department of Social Services advised that the
Commonwealth intends to require states and territories to provide information
about housing, homelessness and housing affordability matters under the terms
of a primary housing agreement or a supplementary housing agreement. They
suggest that these terms could be specified in a data schedule to the primary
housing agreement or supplementary housing agreements; and could include, for
example, details of:
the data that is to be provided, including information relating
to performance indicators and benchmarks that may be used to monitor and report
on sector-wide performance through an annual performance dashboard;
jurisdiction-specific performance against the outputs of the agreement;
the evidence that enables a review of the agreement and future
development of housing, homelessness and/or housing affordability policies;
the evidence of government expenditure on housing and
homelessness, including for the purposes of matched homelessness funding; and
the manner in which data is to be provided, including format and
The Treasury and Department of Social Services also noted, that
consistent with current practice, it is proposed that the primary and
supplementary housing agreements and all reports produced by the Commonwealth
and states and territories (as set out in the agreements) would be made
The state and territory government joint submission expressed concern
that the bill may leave states and territories open to onerous data requests
from the Commonwealth Minister in relation to housing, homelessness or housing
affordability. They stated:
The States are very supportive of improved transparency,
reporting and data collection and willing to work with the Commonwealth to make
these improvements. However, this should not come at the expense of funding
certainty, which is a significantly disproportionate risk, nor should the Bill allow
for unconstrained data requests that increase overheads in administering the
NHHA. Any increases in administrative burden will also come at the expense of
housing and homelessness service provision.
ACOSS welcomed the requirement that state and territory governments
provide relevant information. However, it did not consider that it was clear
how the data will be improved to enhance accountability. ACOSS proposed an
expert group be established to develop a new set of indicators and nationally
consistent data definitions and standards.
Shelter Tasmania expressed the view that reporting requirements under
the NHHA should include Commonwealth spending as well at state and territory
spending. It suggested this would provide:
A more complete picture, and greater accountability for
spending, on the housing system would be gained by reporting of national
investments in Commonwealth Rent Assistance and tax subsidies for negative
gearing and capital gains tax discounts (including performance against affordability
indicators for the latter).
The Treasury advised that the Commonwealth had been working closely with
the states and territories to improve data consistency and transparency under
the new arrangements. Mr Brennan informed the committee that the multilateral
agreement, the new NHHA, would provide further guidance and detail on the new
information requirements. Mr Brennan also made it clear that the process of
refining the new data requirements would likely continue after the new NHHA had
Adequacy of funding levels for housing services
Many submissions reflected on the current funding levels for housing
services and whether they are sufficient to improve housing affordability.
For example, Shelter NSW suggested that the inadequate level of funding
in the system for housing and homelessness is the 'most important limitation on
any Agreement whose objective is to improve housing affordability or the more
limited task of improving responses and services for low income households in
In particular, in order to reduce homelessness, Shelter NSW argued that there
needs to be funding to improve the service system and to increase access to
social and affordable housing for vulnerable households.
With respect to funding under the new framework, Shelter NSW noted that:
...a substantial part of the funding under the NSPP funded part
of the operating deficits of state public housing operations. That means that
these funds cannot be directed to improving housing affordability as proposed
by the NAHA objectives, but rather, are required to help prevent further loss
of social housing.
Homelessness Australia also argued that the Commonwealth should commit
to additional funding for social housing:
In 2017, 195,000 Australian households are on social housing
wait lists. For many, the wait is indefinite. Each year, 288,000 Australians
came to homelessness services for assistance, and that number is only expected
to grow. Australia is in the midst of a housing and homelessness crisis.
Yet the Federal Government has failed to deliver any new
funding to support the increased number of people experiencing homelessness
every day. Over 66,000 people were turned away from a homelessness service last
year without receiving any support. Meanwhile there is a shortfall of 458,000
affordable homes across Australia.
Ms Jenny Smith, Chair, Homelessness Australia, said that while the
collaborative process that appeared to be proceeding between the Commonwealth
and the states and territories was encouraging,
adequate funding was critical to deliver effective housing and homelessness
plans, noting that for decades there has been 'inadequate funding to achieve
the growth in social housing and support that has been required'.
The St Vincent de Paul Society National Council Australia considered
that, without a significant boost to funding for social housing, the new NHHA
would not be effective:
Without significant investment from the Commonwealth, the
NHHA will ultimately fail to deliver the objectives stated in the Bill. To
support this investment, we believe funding should support a capital or growth
fund dedicated to the development of new housing stock for people on low
incomes, as well as funding for the maintenance of existing social housing
Associate Professor Lisa Wood expressed concern that the small increase
through indexing and recurrent funding would not meet the demands for social
housing, homelessness and domestic violence services. Professor Wood considered
that 'a new agreement without substantial additional funding for a problem that
is now far bigger than ever before is, at best, tinkering at the edges of the
problem and, at worst, setting it up to fail'.
She explained that there has been an accumulation of compelling international
and Australian evidence over the last decade demonstrating 'that increasing the
spending on social housing and ending homelessness is, in fact, a cost-saving
measure for government, to reduce the burden in other costly sectors such as
health and justice'.
The Treasury and Department of Social Services' submission advised that
from 2019–20, the Commonwealth's financial contribution will be the 2018–19
base indexed annually by Wage Cost Index 1.
Submitters, such as CHIA and the St Vincent de Paul Society National
Council Australia, questioned the appropriateness of the Wage Cost Index 1
formula, arguing that it does not factor in relevant drivers of housing demand,
such as population growth.
CHIA observed that the bill does not contain specific details on the
method by which payments under the NHHA will be indexed. As such, CHIA proposed
...the legislation set out the indexation method to be applied,
specifically that it reflects five-year trend growth in the number of
households for the housing component of the agreement and trend-growth in
population for the homelessness service component.
However, the Treasury drew the committee's attention to the fact that
the bill ensures for the first time, 'that the funding allocated to
homelessness services will be ongoing and indexed'. Mr Brennan explained that:
Over the next three years this equates to total funding of
around $4.6 billion, including $375.3 million of funding for homelessness...
Expanded scope of the new housing
The state and territory government joint submission noted the bill
outlines that the new NHHA will have a broader scope than previous housing
agreements and will now include housing affordability in the broader
residential property market. They noted that the Commonwealth has not committed
to any additional funding to address issues beyond the scope of social housing
and homelessness supports that are currently funded under the NAHA and NPAH. In
addition they considered that the bill:
...creates the risk that funding for critical services for the
most vulnerable will be diverted to a range of other areas that impact the
supply and cost of housing (for example, planning and zoning reforms,
assistance to people in the private rental market and home ownership).
The Treasury and Department of Social Services explained that the states
and territories had raised these concerns during negotiations; however, in the
Commonwealth's view, 'a greater emphasis on increasing housing supply
(including through planning and zoning reform) is the best way to improve
outcomes across the housing spectrum'.
Homelessness Australia also raised concerns about broadening the scope
of the NHHA without providing additional funding, and the risk that this may
result in redirecting resources away from the most vulnerable households. In
its view, the bill should be amended to:
...require that each state and territory and the Federal
Government should have housing plans that indicate the level of housing supply
needed to respond to housing demand, and that outlines the reforms and
initiatives that will be implemented to meet this need giving priority to
addressing homelessness and meeting the needs of people on low incomes.
Similarly, Shelter Tasmania expressed the strong view that there needs
to be additional funding from the Commonwealth to support the broadening of
outcomes (such as for affordable housing) under the NHHA. It raised concerns
that otherwise there was a risk already inadequate funding for the social
housing system could be eroded.
The Treasury informed the committee that the scope of the current NAHA
is very similar to the new NHHA, in that both are intended to span the entirety
of the housing spectrum.
As such, the Treasury explained that there is effectively no change to the
overall scope of the new bill and the new agreement compared to previous
The Treasury pointed out that:
The aspirational objective of the NAHA is that all
Australians have access to affordable, safe and sustainable housing that
contributes to social and economic participation (clause 6). The NAHA's
outcomes include that people can purchase affordable housing and people have
access to housing through an efficient and responsive housing market (clause 7,
paragraphs (c) and (d)).
Funding for remote housing
The Queensland government raised concerns that the 2017–18 MYEFO did not
include funding for remote housing beyond the expiry of the National
Partnership on Remote Housing (NPRH) on 30 June 2018.
The NPRH replaced the National Partnership on Remote Indigenous Housing
(NPARIH) in 2016. The NPRH is an agreement between the Commonwealth, Northern
Territory, Queensland, South Australia and Western Australia Governments.
The Queensland Government informed the committee that on
22 December 2017 it had been advised that the Commonwealth did not
intend to extend the remote housing agreement beyond its expiry date,
effectively shifting full responsibility for Indigenous housing to the states
The Queensland Government advised:
The removal of Commonwealth funding [for remote housing] will
increase pressure on Queensland to reprioritise already stretched resources,
and will likely result in reduced levels of service delivery to a highly
disadvantaged population, in remote locations where that disadvantage is felt
Mr Adrian Warner, Director of Intergovernmental Outcomes, Department of
Communities, Western Australia, also expressed concern that the Commonwealth
may be considering including remote housing within the scope of the bill and
the new NHHA:
To the extent that this bill contemplates funding to support
Indigenous housing outcomes that are currently funded under another agreement,
that would be a significant redirection of current funding away from social
housing or maintaining the current social housing system in a highly
disadvantaged area of remote community housing. So there would be significant
impacts if the scope of this bill and the proposed agreement were contemplating
funding for remote community housing unless funding were significantly
increased from current levels.
These concerns were echoed by other stakeholders. For example, the Local
Government Association of Queensland brought to attention the absence of any funding
allocation in MYEFO for remote indigenous housing and conveyed that the
Commonwealth had not confirmed whether the NPRH would be continued or replaced.
In response to these concerns, the Treasury advised the committee that
there was no Commonwealth Government decision and no Commonwealth Government
announcement about what will follow after 30 June 2018, when the NPRH
is due to expire.
The Treasury also informed the committee that the Commonwealth is currently in
discussions with relevant jurisdictions about future arrangements for remote
The committee believes that housing is fundamental to the wellbeing of
all Australians, and a driver of social and economic participation that
promotes better employment, education and health outcomes. The committee
acknowledges that despite Commonwealth spending of more than $9 billion since
2009, the current arrangements for Commonwealth support to states and
territories for housing and to address homelessness are not working to achieve
the benchmarks under the current NAHA.
Evidence presented to the committee from the states and territories, and
other stakeholders, established that there is a need for improved housing and
homelessness outcomes. The committee recognises this need and is confident that
the broad, multifaceted housing strategy outlined in the 2017–18 Budget, of
which the measures in the bill are an element, will secure improved outcomes in
a way that is achievable for states and territories.
The committee agrees with stakeholders that the funding of core social
housing and homelessness services is critical to protecting vulnerable
Australians. The committee considers 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.
With respect to the new legislative requirement for matched funding, the
committee notes that this has been a part of NPAH policy since 2009. Therefore,
the committee considers that including this policy in legislation provides
greater certainty for frontline homelessness service providers.
The committee notes the findings of the Senate Economics References
Committee in its report on the inquiry into affordable housing, and in
particular, the recommendation to improve accountability and transparency in
respect of housing and homelessness outcomes. The committee considers that this
bill acts on that recommendation by inserting requirements on jurisdictions to
develop detailed housing and homelessness strategies and to commit to improved
data collection and reporting in exchange for significant Commonwealth funding.
In this context, the committee considers that the bill strikes a reasonable
balance between achieving accountability and transparency, and a degree of
funding certainty to the sector.
The committee acknowledges the concerns expressed about the details of
the requirements for housing and homelessness strategies, data collection and
reporting. However, the committee believes that these concerns will be
addressed as part of the new NHHA negotiations.
The committee notes that the current the NPRH is due to expire on 30 June 2018
and that the Commonwealth is currently in discussions with relevant
jurisdictions about future arrangements for remote Indigenous housing. The
committee draws the government's attention to the concerns raised about this
funding during the course of this inquiry.
The committee recommends that the bill be passed.
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