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Feb 6, 2012

AAH Budget Statement 2012-13: Easing Housing Stress

Click here to view the full budget statement:
Easing Housing Stress: AAH Budget Statement 2012-13

Housing stress affects more than one in ten Australian households. However households in the private rental market experience the greatest hardship with one in four households in housing stress.

This is a national crisis that needs to be immediately addressed as a priority in the 2012- 13 Budget and form the basis of a National Housing Strategy.

Excessive levels of rental housing stress are driven by inadequate supply of affordable rental housing, as well as by inadequate incomes. Consequently, both supply side and demand side solutions are required to provide immediate relief to those in housing stress and a sustainable framework for the supply of affordable housing into the future.

Increasing the supply of affordable housing will require an overhaul of the way housing programs are funded, however these reforms outlined below, will take time. In order to immediately boost the supply of affordable housing, and prevent a downturn in the building industry, where private investment in dwellings is expected to halve in the 2012-13 financial year, Australians for Affordable Housing is calling on the Government to fund an immediate a $2.5 billion stimulus payment in the 2012-13 budget to deliver 8,300 social housing properties. This would boost the capacity of the social housing sector, pave the way for future reform and help to prevent a downturn in building activity.

Please share your thoughts on our federal budget submission in the comment section below.

  • Yat

    This is a big issue.

    The primary objective of our housing market must be to provide housing that 30% of incomes can procure where modification and term is at the discretion of the inhabitant.

    Where a housing market does not deliver that objective then the Government must intervene.

    This is the basis on which Australian society is built.

    There are moral, macro-economic, and micro-economic foundations for this being one of the pillars of Australias success.

    One important micro-economic aspect is that housing costs drive wage costs.

    At the macro-economic level housing costs impact on wage costs makes production in Australia uncompetitive.

    This is why jobs are bing sent offshore.


    Pumping money into the demand side will only work if receiving those funds has a linkage to the driving down of prices for housing generally – not up.

    The concern with using Rental Assistance to chase up prices is that it is funded from consolidated revenue and not from the housing industry.

    Therefore, the housing industry has no incentive to come up with housing at a price that will clear the market – it becomes a permanent subsidy.

    The type of thing that is needed is a pool of money that landlords can receive only if it is franked in some creative way by the selling of housing at 30% of incomes to renters – for example.

    Once that is in place where there is shortfall the government must enter the market supplying housing for sale at prices that are 30% of incomes and compete with industry for that supply.

    This retains employment, and materials supply revenues, in the industry, but to the extent that private enterprise cannot supply housing at those prices then it’s share of the market reduces.

    This means that market energies are aimed at the 30% of income mark, rather than restricting supply.

    It may even be that the industry needs to be nationalised for a period.

    The consequences of housing costs on wages, in the context of driving jobs overseas [which is plain for all to see] demonstrates that this issue is beyond particular industry interest and is in the nature of a National Emergency.

    The industry has been given several years now to get the job done. Not withstanding it’s best endeavours, it clearly is incapable of doing the same.

    It’s time to see that and step in.

  • Pols

    One would imagine that if Australians For Affordable Housing were to create a political party and run in the upper house of each jurisdiction that, with an appropriate party name to clearly associate with those groups you have segmented in your splash page banner, that you would have a chance of being delivered the balance of power.

    If the Commonwealth determined to step in before that, given the impact of housing costs on wages and in turn on Australian national competitiveness and as a result the loss of jobs to offshore, then surely section 51(i) is a constitutional basis for doing same:

    51. The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:
    (i.) Trade and commerce with other countries

  • Jeremy Dixon

    The essential solution is public housing, that is a bullet that has to be bitten! The transfer not only of funding to the private housing associations but of actual public housing stock is a clear and present danger to long term housing affordability. It would be helpful to stop talking loosely of “social” housing, a vague term which is used to cover this transfer, so the matter could be more openly discussd and debated.


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