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Jun 29, 2012

Housing affordability falls further: COAG report shows Australian governments fail housing reforms

Australia’s state and federal governments need to go back to the drawing board on the National Affordable Housing Agreement with today’s Council of Australian Governments (COAG) Reform Council report showing it is getting harder for many more households to put a roof over their heads.

“The National Affordable Housing Agreement is clearly not working. For three years in a row the COAG Reform Council has reported that housing affordability is getting worse, particularly in the rental market,” said Australians for Affordable Housing campaign manager Sarah Toohey.

“We don’t know enough about what states are doing with funding under the National Affordable Housing Agreement to actually solve this problem.”

“The COAG Reform Council report released today shows that 61 per cent of the very lowest income households in Australia (those on the lowest 10 per cent of incomes) are in rental stress. That’s up from 49 per cent just two years ago.”

“Housing stress is also becoming a broader issue, with 42 per cent of renters on the lowest 40 per cent of incomes struggling with housing costs, up from 37 per cent.”

“These households, already on very low incomes, now have to make ends meet with less and less after they pay their rent. It means cutting back on the basics, like clothes, food, transport and school costs.”

“The report also shows that home ownership is still out of reach of low and moderate income households.”

“Even before the introduction of the Agreement in 2009, social housing in Australia was being short-changed. The new COAG process highlights the problem and helps governments track their progress. Now we’ve seen that governments are going backwards, it’s clear they need to change course.”

There are three key changes needed to turn the National Affordable Housing Agreement around:

  1. Establish an Affordable Housing Growth Fund. The operating funding for running state housing systems should be split from the capital funding to grow the number of houses available. This will help make sure states are building enough housing for those who need it.
  2. Improve transparency of government spending. It is unclear how states spend funding they receive under the National Affordable Housing Agreement. Clearer accountability on spending would make it easer to track which areas are improving and why.
  3. Index the agreement properly. The way funding under the National Affordable Housing Agreement is indexed means that it has increased at a rate below inflation agreement over the life of the Agreement. In real terms funding has been going backwards, and will continue to do so unless the Agreement is indexed properly.

“All state and Territories need to agree to renegotiate the National Affordable Housing Agreement, or we’ll continue to see report after report that shows the agreement is simply not working.”

“Australians for Affordable Housing is calling on all levels of government to come together to negotiate a National Affordable Housing Agreement that tackles the real problems in our housing system.”

% of low income households in rental stress
NSW Vic Qld WA SA Tas ACT NT Aust
Capital city 50 49 46 39 33 38 32 35 45
Rest of state 43 26 41 26 17 22 na np 36
Total 48 41 43 36 29 28 32 33 42
% of very low income households in rental stress
Households in the lowest 10% of incomes 68 67 58 58 43 42 38 35 61

Source:
COAG Reform Council, Affordable Housing 2010-11: Comparing performance across Australia, National Affordable Housign Agreement

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