Australian Housing Minister Says No to Lifting Support Payments for Renters

Australian Housing Minister Julie Collins speaks to journalists in Canberra, Australia, on June 20, 2018. (Michael Masters/Getty Images)

Australia’s housing minister has turned down calls to raise support payments to help vulnerable tenants cope with surging rents.

This came after a report by the Productivity Commission indicated that government rent assistance payments failed to keep up with the ballooning rental market.

The commission suggested the federal government peg support payments to rents or frequently adjust them to deal with price increases.

However, Housing Minister Julie Collins said lifting rental payments was not on the government’s agenda.

“We are focused on delivering our election commitments,” she told ABC radio.

Report’s Findings

The commission’s report was released following a review of the National Housing and Homelessness Agreement (NHHA), in which the federal government provides $1.6 billion (US$1.04 billion) each year to states and territories to improve Australians’ access to secure and affordable housing.

Nevertheless, the report found the agreement ineffective in preventing homelessness and housing stress.

“Over the life of the NHHA, housing affordability has deteriorated for many people, especially people renting in the private market,” Commissioner Malcolm Roberts said.

A real estate sign is seen at a property in Sydney, Australia, on Sept. 6, 2022. (Lisa Maree Williams/Getty Images)

The report noted that average low-income renters spent more than a third of their earnings on rent. One in five low-income households had less than $250 left after paying their weekly rent.

“The NHHA, intended to improve access to affordable, safe and sustainable housing, is ineffective,” Roberts said.

“It does not foster collaboration between governments or hold governments to account. It is a funding contract, not a blueprint for reform.”

Meanwhile, the housing minister welcomed the commission’s findings, saying they would provide insights for the national housing supply and affordability council and a government’s homelessness and housing plan.

“This report confirms that the last decade of policy inaction by the former Liberal-National government has left us with serious housing challenges across the country,” Collins said.

Proposed Solutions to The Housing Crisis

To solve the current housing crisis in Australia, the Productivity Commission proposed two approaches: providing more support for low-income renters and eliminating barriers that prevent housing supply growth.

At the same time, the commission said erecting more social housing was just part of the solution.

“Building more social housing will increase the supply of housing affordable for low-income households, but social housing is relatively costly and can only be a partial solution to affordability,” the report said.

It also recommended the government reserve social housing for those most vulnerable to homelessness in the long-term, as well as focus on improving the affordability of the private rental market.

“Governments should trial a housing assistance model that provides equivalent assistance to people in need, regardless of whether they live in public, community or privately owned housing,” the report said.

While calling on the government to set robust targets for new housing supply, the commission noted that the first-home buyers support scheme did not do much to improve housing affordability.

Specifically, the commission pointed out that providing first-home buyers with more resources would increase demand for housing. It said if an increase in housing supply did not accompany this elevated demand, the government’s assistance would likely push up house prices.

“State and territory governments should phase out assistance provided to first-home buyers through grants and stamp duty concessions, unless measures are tightly targeted to support people experiencing marginalisation in the market and who would otherwise be locked out of home ownership,” the report said.

Nevertheless, the federal government has brought forward its regional first home guarantee scheme, which will come into effect on Oct. 1 and provide a guarantee of up to 15 percent to 10,000 eligible applicants in regional areas.