Why the COAG NAHA may not be the agreement we wanted

My daughter is always reminding me to be careful what you wish for and the latest COAG round of agreements creating a NAHA may be a case in point.

On November 29, 2008 the Council of Australian Governments (COAG) agreed to transfer housing and homelessness programs and measures into a new National Affordable Housing Agreement (NAHA). 

The idea for a NAHA emerged from the National Affordable Housing Summit Group in 2004 as a means to rationalise the elements of housing policy and programs into a new agreement which would be broad and deep in conceptualisation and reach. A NAHA should be a breakthrough in public policy in regards to housing and homelessness in Australia. It was an opportunity many have prepared for over nearly 15 years across successive governments. It is a change for the better. 

Unfortunately the NAHA falls short in a variety of areas. It does provide impetus on key programs and policy directions, a framework if you like. By including taxation measures, planning, policy and programs it does bring the elements together in framework. However, it appears somewhat misdirected and still characterised by an inability to resolve key tensions between the Commonwealth and States and Territories and may have created further differences in approach between States, to a common problem.

It is still unclear exactly what the NAHA contains, briefings I have received  have indicated it will include:

 The Commonwealth, States and Territories Housing Agreement (CSTHA),The Supported Accommodation and Assistance program (SAAP), Commonwealth Rent Assistance(CRA), The National Rental Assistance Scheme (NRAS, The Housing Affordability Fund (HAF), First Home Owners Scheme (FHOS), First Home Savers Scheme (FHSS) as well as the other measures mentioned above.

The NAHA contains a Special Purpose Payment (SPP) worth $6.2b and a range of Partnership Agreements for homelessness ($800m matched Commonwealth and States), social housing ($400m over 18 months, C‘wealth funding) and Indigenous housing ($1.92b. C’wealth over 10 years).The $6.2b NAHA would appear to only cover the existing money plus indexation for CSHA and SAAP.

I write this as an outsider to the negotiations but as a critical observer close enough to make a number of points which I believe need to be addressed before we may consider the NAHA to be the key breakthrough we have been arguing for.

The role of public and community housing

The major weakness in the NAHA is its apparent misunderstanding of the role of and scale required for public and community housing. The NAHA contains no growth funding to the base levels of funding from the Commonwealth to the States. In fact, the $46m indexation provided in the NAHA is a decline in the real value of base funding for public housing, community housing and homelessness funding, due to the inadequate level of indexation in the agreement.

The basic problem, that National Shelter and the Affordable Housing Summit Group have been suggesting solutions to, is the need to separate the ongoing operational cost of the system from capital costs. We have suggested the Commonwealth pay an additional amount equivalent to Commonwealth Rent Assistance (CRA) to public housing authorities to cover the operational costs so that we could clearly distinguish what money was available for operations relative to putting additional properties on the ground.

There is still discussion about the Commonwealth committing to a per-dwelling subsidy to public housing to create an equivalent operational subsidy to CRA in NFP housing and we support that. As long as that is done on a basis which does not disadvantage any jurisdiction or amplify differences between states. A per dwelling subsidy creates the right incentive to bring stock levels up.

This failure to increase the base funding is a potentially fatal flaw in the NAHA. Advisors to P.M. Rudd have assured National Shelter they need no convincing about the case for increased public and community housing and yet the COAG agreement did not increase funding to this area except through a short term partnership payment of $400m over 18 months. Broken down to a State level, Queensland for example could expect to receive 20 -25% of that additional funding or $80 -$100m over 18 months, approx$ 52m- 60m per annum. The Queensland Government by itself has already committed an additional $100m per annum over a 5 year period outspending the federal Government by 200%.

The other rider to this is we now understand the additional money for social housing is actually targeted at homelessness, or those at risk of homelessness and therefore part of the homelessness response rather than a merited addition to social housing stock. It is also more to do with economic stimulus (hence the short time frame) and again not a recognition of the need to build public stocks and address reform.

This means that States and Territories are having their core funding levels cut whilst being asked to produce more housing, albeit only a small amount, 2000 properties max, which also appear to be under costed or reliant on more additional State contributions in land e.g.. Relative to the scale of the problem it is a great disappointment and potentially exacerbates problems inherent in the CSHA.

The other major shift in policy is the removal of any restrictions on the transfer of public housing stock to the community housing sector. Previous agreements either limited the amount of housing  that could be transferred out of public housing to community organisations or insisted on Commonwealth permission to do so. The NAHA has no restrictions. Public housing tenants do not receive Commonwealth Rent Assistance (CRA) where community housing tenants are eligible. This difference creates a distortion between the two approaches.

Rather than deliberately removing the distortion, by providing an equivalent subsidy, the Commonwealth is inviting States to engage in large scale transfers of housing from public housing authorities into community housing to attract CRA. The potential of this could add an additional $800m per annum to Commonwealth Treasury outlays[1], but would not necessarily add any new stock to the system.

There are a range of reasons why this is so, but the major one is some State’s reluctance to transfer ownership and title with stock, preferring to transfer management only. Even if the title were transferred there is no guarantee that Community Housing organisations would be in a position to leverage the asset to add supply to their books. Public housing authorities have been unable to achieve this and even large NGO entities like Brisbane Housing Company have not been able to achieve significant leverage, even though their tenants attract CRA.

The tragedy is the lack of recognition of the role public housing plays in Australia. It is my view and the view of Queensland Shelter, National Shelter and the Summit Group that there is still a vital role for traditional public ownership of housing stock. By and large it is well supported by tenants has wide community support and provides a genuine alternative to home ownership for low income earners. It has also been run down by years of neglect and forced into a role it was never designed for. There is a real need to reform our public housing system and the negotiation of a NAHA was an opportunity to address reform.

Reform discussions should be around the respective roles for community and public housing, who where and under what conditions people are housed, broadening eligibility and ensuring good social mix, developing appropriate support arrangements, relative funding levels between the Commonwealth, States and Territories, simplifying application and assessment and sorting out the respective roles of different parts of the housing system. An opportunity to progress this has been missed.

We should be proud NRAS!

A comment made to me by a number of people subjected to my frustration about the lack of recognition for public housing is, “You should be proud of NRAS!”, to which I respond yes, but! The 'but' relates to the fact NRAS was never designed to be a solution in its own right. It had to be complimented by increased investment in public housing.

NRAS can house people at income levels equivalent to public housing and at lower rent levels than the 80% of market but requires additional support to do this. States would need to raise their contribution to provide an approach which had a deeper subsidy, lower rents and could be complimented by longer tenure. This approach is outlined in the Affordable Housing Summit Group proposals.

This approach would be to look at housing supply in two bands A and B. A to cover a more deeply subsidised product expected to house the most disadvantaged and requiring some additional support from States, either through adding capital or level of incentive. Band B would then be the standard NRAS subsidy level for 80% of market rental and targeting incomes in the second bottom quintile.

NRAS is a welcome addition to the range of measures required to address the chronic housing issues we face and will grow and should provide a focussed solution to specific concerns, but it is not a replacement for, or alternative to investment in public housing.

Addressing Homelessness

When Prime Minister Rudd was first elected, he made addressing homelessness a priority. This was widely applauded at the time and remains a big tick item for most in our neck of the woods. The approach was to develop a green and white paper process, engage a consultative group to advise government and to include the response within the NAHA. All of this was sound.

We are still waiting for the White paper to come out as I write and so, even though we have an additional $400m from the Commonwealth, to be matched by the States and Territories over 4 years, we do not have a clear understanding of the direction they will take. We do know now that the $400m for social housing will actually be targeted to addressing homelessness. This is a welcome measure but again points to the NAHA being more an agreement about homelessness than housing.

It is good thing the government wants to address homelessness but it has always been my personal view that the way to address homelessness is not found by pouring money into homelessness crisis responses but through building an adequate housing system which has support built in.

SAAP has been a good program and will presumably now end with the white paper and as we do not fully appreciate how the government intends to utilise the money it is difficult to make very meaningful comment about it.

What we can say is that even $400m additional spending by the Commonwealth over 4 years translates to 100m per annum. When broken down by States Queensland could expect 26% or $26m additional per annum. It is not an adequate amount for the task in hand. Even when matched by the State it will add a potential of $52m per annum to homelessness services. This amount will not even cover wages if a new award is struck, so may not represent additional growth to the service system.

Compare this to the $265.5m the Queensland Government has spent itself over the past 4 years, or $65m per annum and we have still seen homelessness grow during that time.

Remote Indigenous housing

The NAHA has identified $1.92b of spending on remote Indigenous housing over 10 years, or $192m per annum. As this is dedicated to remote communities in Queensland this will be to add housing to Deed of Grant In Trust (DOGIT) communities, now Aboriginal and Torres Strait Islander Councils.

Queensland may receive up to one third of this additional money, or $60m odd each year. This is a significant amount, but building costs are high in remote Australia and we may see an additional 150-200 additional properties added per annum. Any additional housing on these communities will be welcome and will begin to address the overcrowding experienced on all our remote Indigenous communities.

Queensland Shelter is beginning to engage with Indigenous Community Housing Organisations and may also identify a role and advice in relation to this measure. At this stage it is welcome. Some critics will argue it is sending money to unviable remote communities and will encourage the maintenance of communities which are economically unviable in the long term.

My view is Aboriginal and Torres Strait Islanders themselves need to have the dialogue around viability and work with governments to ensure remote communities have a viable economic base. It seems to me their viability may improve over time as Australia inevitably develops northward. There will be viable economy in the north if for no other reason than water.

Aboriginal and Torres Strait Islanders have already been removed from land. Most of these remote communities have their history of relocation, institutionalisation and isolation amounting to a form of apartheid in Queensland. Still they have taken on another identity as home, as country, as community. They may not be perfect places and have dysfunctional aspects but they are also places of great strength and solidarity for their populations.

Housing plays an incredibly important role in all places and overcrowding is a great source of disharmony causes incapacity to engage in many other activities (school, training, health, employment etc). For many, remote communities will be places to leave to seek opportunities, but they will always remain home. Economic viability should not be seen as the only justification for place and investment.

The critical issue will be how the money is spent, under what conditions, how it helps resolve current problems, rather than what hoops Local Indigenous Authorities have to jump through to justify their portion.

We would like this money used to assist those Aboriginal and Torres Strait Islanders most disadvantaged, but we also would like to see this money utilised to create better relationships between the States and Indigenous communities, to help add economy, skills, expertise and management of the assets. In short to add value rather than create tensions between the parties involved. We hope we have a role to play in that space.

Improved housing is possibly the most important single element of improving health, education, employment and other outcomes, it is critical to “Closing the Gap” and needs to be done with, rather than to Aboriginal and Torres Strait Islander people.

Most Aboriginal and Torres Strait Islanders live, like most Australians, in our cities not in remote areas. It is important to improve conditions in remote Australia, but it is equally important to ensure Aboriginal and Torres Strait Islander people in our cities are not forgotten.

Conclusion

In conclusion, the NAHA fails a number of tests I would apply to it. It does not provide for even the proper maintenance of Australia’s public housing system, let alone real growth. It will exacerbate differences of approach between the States. It has not addressed distortions between community and public housing. It has fallen short of providing for a continuum of needs approach to address the continuum of issues we face.

The confusion about this is apparent when we compare the process NAHA to the economic stimulus package. Hundreds and possibly thousands of people have contributed over the past 5 years to the creation of an agenda to address a long standing set of problems with how Australia treats housing. We hold some powder dry to see what the Henry Review and the White paper say, but it only took five minutes for Government to decide to throw an additional $1.5b in 6 months at potential first home owners.  This speaks volumes about priorities and processes.

It has provided a framework and we should now all dedicate ourselves to improving the framework and the measures it contains. It is easy to be disappointed for what we may have missed but we are still a long way in front compared with a year ago. I do like to finish on a positive note.

Adrian Pisarski