Australia has a housing affordability problem, with many Australians struggling to rent or buy a home, according to the Productivity Commission's review of the National Housing and Homelessness Agreement (NHHA) released today.
"The NHHA is intended to improve access to affordable housing, but it is ineffective. It does not foster collaboration between governments or hold governments to account. It is a funding contract, not a blueprint for reform," Commissioner Malcolm Roberts said.
"Over the life of the NHHA, housing affordability has deteriorated for many people, especially people renting in the private market. The median low-income renter spends over a third (36 per cent) of their income on rent. About 1 in 5 low-income households are left with less than $250 after paying their weekly rent.
"With the private market becoming less affordable, demand for homelessness services and social housing is rising."
As governments develop a new intergovernmental agreement and a national plan, there is an opportunity to better target the $16 billion they spend on housing assistance.
"As a first step, the Commission is recommending that all housing assistance be brought under the next intergovernmental agreement (the NHHA covers just 10 per cent of government spending on direct housing assistance). This will help governments prioritise spending to the people in greatest need.
"A two-track approach is needed to ease the pressure on low-income renters - the capacity for low-income renters to pay for housing needs to be improved and constraints on new housing supply need to be removed."
The $5.3 billion Commonwealth Rent Assistance program should be reviewed. There is a strong case to improve its adequacy and targeting. At the same time, State and Territory Governments should commit to targets for new housing supply and accelerate planning and other reforms.
"The safety net - homelessness services and social housing - should be improved. More support is needed for homelessness prevention and early intervention programs. As governments invest more in social housing, they should also test more flexible and timely ways to assist people," Commissioner Romlie Mokak said.
"The Commission is recommending the new NHHA have a greater focus on coordinated policy action across jurisdictions, homelessness prevention and early intervention, and Aboriginal and Torres Strait Islander housing."
A full copy of In Need of Repair: The National Housing and Homelessness Agreement is available from the Commission's website: www.pc.gov.au
