Thursday, 25 October 2018
Social Services Legislation Amendment (Housing Affordability) Bill 2017; Second Reading
I rise to speak on the Social Services Legislation Amendment (Housing Affordability) Bill 2017. I have to say at the beginning of my contribution that perhaps the title of the bill could have been something quite different, because I don't believe that this bill addresses the issue of housing affordability in this country in any way whatsoever.
We know that the vast majority of social housing tenants do the right thing and pay their rent on time, and have done so for many a long year. We also know that forms of automatic rent deduction may be an appropriate measure in protecting vulnerable individuals from falling into homelessness. Labor is very supportive of a system of rent deduction that is used only in very specific circumstances and is designed to protect vulnerable Australians. But that is not what this bill is doing. This is a blunt instrument that risks exacerbating the already difficult and challenging financial circumstances that vulnerable Australians in social housing find themselves in. Labor are also very aware of some of the challenges at the state level, and our proposed amendments, which will be dealt with at some point in the discussion of this bill, address those two issues.
The Automatic Rent Deduction Scheme proposed in this bill is far too broad in its application, and that makes it extremely difficult for Labor to support all the changes that this bill is proposing. Community groups in this space have expressed serious concerns that the government's plan will drive vulnerable individuals into poverty. The Liberals' plan to allow the compulsory and arbitrary deduction of income support and family assistant payments from tenants living in public and community housing sums up their attitude towards housing affordability. I think it also sums up their attitude towards Australians struggling with the cost of housing. It would apply, importantly, to people on disability support pensions and, most significantly, people on age pensions. Those opposite have no serious plan to address housing affordability. In this bill they have no serious plan to tackle homelessness, no action to improve mental health services in this context and certainly no additional assistance to women fleeing domestic violence. All they have is a plan to arbitrarily chip away at financial assistance and support for low-income and vulnerable Australians.
The reality is that this is a government that refuses to actually take any meaningful action on making housing more affordable. The government have refused to reform negative gearing. They have slashed the cap on dwellings under the National Rental Affordability Scheme. This is a government whose idea of a housing affordability strategy is to ask your parents to buy you a house, which says to me that they just don't get it. I know that in my own family circle there are a number of young people who have just given up on the idea of ever owning their own home, particularly in a major city. And that is not just the view of people in my own circle. I know it is the view of many young people. It seems to me that it is one of the great challenges in front of all of us in the political process. This government is out of touch and out of ideas when it comes to those issues, and ordinary, vulnerable Australians are paying the price. It is divisive and inconsistent. It's a policy scramble.
In relation to the National Rental Affordability Scheme component of this bill, Labor does support taking action to protect against fraud and providers that are not doing the right thing. That part of the bill we absolutely support. We understand the government will make amendments to address Labor's concerns with the NRAS part of the bill and we will support the government in doing so.
This bill proposes to create an automatic rent deduction scheme which can be mandatorily applied to public or community housing tenants who receive income support or family assistance payments. We think that's just too broad. As I said, we support mandatory rent deduction in certain circumstances but not arbitrarily, as this bill puts forward. Schedule 1 will enable state and territory community housing providers to withhold a portion of tenants' income support payments and use those funds to directly pay rent, utilities and other costs related to the dwelling on behalf of those tenants. Schedule 2 will enable providers to do this with family tax benefit payments. Schedule 3 makes changes to the administration of the National Rental Affordability Scheme by removing ambiguity in relation to the calculation of below-market rents in any given year, by providing flexibility in the way maximum vacancy period are prescribed and by authorising the variation of conditions to allocation and the transfer allocations to low-rent dwellings. I will speak in more detail about the amendments to NRAS shortly.
Schedule 1 and 2 go to automatic rent deduction schemes. Currently some housing tenants who are on income support can elect to have the Department of Human Services withhold a portion of their fortnightly payment and have it paid directly to their housing provider to cover rent and bills like utilities. This is called the Rent Deduction Scheme. Currently—and this is a very good outcome—86 per cent of public and social housing tenants use the Rent Deduction Scheme. It's also a very salient point in terms of the amendments that Labor is proposing to move. This bill will make the Rent Deduction Scheme compulsory. Going forward under the Automatic Rent Deduction Scheme, everyone who receives an income support payment or family tax benefit and lives in either public housing or community housing could have part of their payment withheld by Centrelink and paid directly to their housing provider whether they consent to it or not. Like the voluntary scheme, this amount would also cover both rent and bills like utilities.
It will be up to each state and territory to decide whether they want to be part of the Automatic Rent Deduction Scheme and, if so, how it would apply in their jurisdiction. We know, however, that the Victorian government and the ACT government have both said they will not participate in this scheme. Labor's rent deduction scheme is something that has been sitting with us as a party for some time. When Labor was last in government we tried to introduce an automatic rent deduction scheme. That was some five years ago. Labor did this pursuant to the recommendation from the housing and homelessness white paper entitled 'The Road Home'. The purpose of Labor's proposed rent deduction scheme was to protect vulnerable individuals at risk of homelessness—and it was targeted in its scope, unlike the broad brush of this particular piece of legislation.
The government's scheme, on the other hand, according to the National Social Security Rights Network, proposes a very broad management scheme for social housing, which ignores the complex causes of homelessness. Labor's proposal was targeted in that it would have applied to individuals who are in arrears and at risk of homelessness. The Liberals' scheme, on the other hand, will be a blunt and cold instrument that could be applied to everyone, irrespective of their circumstances. The government's scheme would encompass pensioners, people on the disability support pension and those on carer payments. Labor's proposal also capped rental deductions to ensure that people were not left without any ability to manage their affairs, meet their other commitments and put food on the table. The government's bill, on the other hand, does not place any limit on the amount of deductions, potentially leaving people with very little, or nothing, to live on. Labor's proposal would have required tenants to be properly advised of any changes in amounts withheld—and then they would at least have some say in what's happening to them. Labor's scheme could have exempted deductions for compensation made for damage caused by others, including as a result of domestic and family violence. This proposal does not do that. The Liberal bill, as it stands, could mean a tenant experiencing family or domestic violence could be liable for damage caused by an abusive partner. I don't understand how you could actually even countenance that if you know anything about family violence—although I understand that the government may consider moving amendments to address this.
Labor has serious concerns about the impact the government scheme will have on social housing tenants. It could push them further into housing stress and poverty. In particular, they have expressed concerns about the arbitrary nature of the scheme. That's at the heart of what our issues are—the arbitrary nature of the scheme, depriving tenants of the ability to flexibly respond to upcoming financial obligations. The Tenants' Union of New South Wales said:
It will remove agency from social housing tenants and prevent them from being able to manage their own finances. It will add layers of complexity to social housing tenancy agreements where allegations of end-of-tenancy costs or rent arrears are made, and in many cases will place vulnerable households under extreme financial stress in a way that is simply not warranted.
We understand the intent of these proposals, and Labor's position is well understood by the government.
There could be medical emergencies; there could be car repairs; there could be medical or dental expenses—those are some of the urgent ones. According to St Vincent de Paul, 'This may mean a short-term delay in paying rent, but enables the person on a very low income to manage their budget without having to report to charity. Those forced into the ARDS will have less control of their budget when crises arise.'
We know that public and community housing tenants are good tenants. The Parliamentary Library also advises that, over the five years from 2011-12 to 2015-16, national rent collection rates have averaged over 99 per cent across public housing, community housing and state owned and managed Indigenous housing.
To that end, the government's proposed scheme is quite a disproportionate response. The government's proposed scheme is a policy looking for a crisis. It is the government looking for yet another way to demonise vulnerable Australians.
On Labor's amendments: Labor does not support an automatic rent deduction scheme that is arbitrary. We do support, as I said, automatic rent deduction in some circumstances. Automatic rent deduction should only apply where it is part of preventing homelessness, and there should be a focus around these changes. Labor will move amendments in the Senate to ensure automatic rent deductions only occur where people are at risk of arrears and at risk of homelessness, and these deductions will only apply for a temporary period. We will move an amendment to cap the maximum deduction to under 30 per cent of payments to prevent the scheme forcing people into housing stress and to make sure people have money to meet other needs—to pay their bills.
We will also move amendments to require that compulsory deductions can only be made for rent and utilities and not property damage. This is to protect people from being unfairly held responsible for others' actions, including in cases of domestic and family violence, and to protect, as one of my colleagues expressed to me, people who are particularly vulnerable, like people living with a disability.
The Labor amendments will also prevent deductions being taken from the discretionary portion of an income-managed payment. Deductions should be taken from the quarantined portion of an income support payment. Labor amendments will require social housing landlords to inform the tenant of any changes in the amount to be deducted from their payment.
Labor's amendments would also ensure that, if a tenant's payment were suspended, the accrued rent could not be deducted when the payment resumed, potentially leaving people with nothing to live on. That's a very important point—the way in which arrears are met, and that not all of the arrears can be taken out of the next payment, because that will leave people with literally nothing to put into their cupboards or their fridge.
Without significant changes to the automatic rent deduction scheme, Labor will not be able to support this part of the bill in the Senate, which is why we are very much hoping that the government will split the bill. We also hope the government will make amendments to the bill to address these concerns. I understand that discussions are underway about that at the moment.
Labor has concerns over the interaction of the automatic rent deduction scheme and the deductions being made from income support payments through Centrepay, particularly payments for household goods under consumer leases with businesses such as Radio Rentals, Make It Mine, and Rent The Roo. Consumer leases cost low-income earners up to eight times the retail price of consumer goods.
The Senate passed a Labor private senator's bill in the 44th Parliament to exclude consumer leases as an eligible service reason for the purpose of the Centrepay third-party payment system. While Centrepay is closed to payday lenders, it remains open to consumer-leasing businesses which continue to inflict financial hardship on low-income earners. Labor remains committed to excluding consumer leasing as an eligible service for Centrepay.
The Senate inquiry heard overwhelmingly that rental arrears are not the main cause of social-housing evictions and that homelessness in Australia cannot be tackled without addressing issues of mental health, domestic violence and the lack of affordable housing. A Shorten Labor government would take a holistic approach to the issues of homelessness to ensure that all causes of homelessness and housing insecurity are addressed on rental arrears and a small number of social-housing tenants.
NRAS is a Labor program, and Labor will not oppose changes that the government has put forward to the NRAS that helped the achievement of the scheme's objective of increasing and maintaining the supply of affordable rental dwellings and reducing rental costs for low- and moderate-income households. Labor's original scheme provided for 50,000 new, affordable rental dwellings to be built. Given the strong interest in the scheme, Labor undertook to extend the scheme by a further 35,000 dwellings, providing a total of 85,000 dwellings.
In the 2014-15 budget, the Abbott government announced that NRAS would be capped at 38,000 dwellings. That decision has been widely criticised by the housing sector stakeholders, including the Property Council of Australia, the Housing Industry Association, the Urban Development Institute, Homelessness Australia, National Shelter, Mission Australia, ACOSS, the federation of community housing associations, Anglicare, St Vincent de Paul Society and many others. The short-sighted decision of the Abbott government, along with its failure to bridge the funding gap, has severely curtailed the supply of affordable rental housing in this country. Housing policy experts are unanimous that bridging the funding gap is essential to improving housing affordability and securing better housing outcomes for Australians.
Labor will support changes to NRAS that will encourage approved participants to retain their dwellings in the scheme and which minimise the loss of dwellings to the scheme. While we support changes contained in the bill to ensure rents for NRAS dwellings are at all times at least 20 per cent below the market rent valuations for the dwellings, Labor believes there needed to be some additional flexibility to allow unintentional rent overcharges to be refunded or credited to rent in a timely manner. The alternative is for approved participants and investors to face penalties in the form of reduced incentive payments for minor, technical and unintended breaches of the rental charge provisions which could easily be remedied by a timely refund or credit to the tenant.
Labor therefore welcomes the proposed amendments by the government following the Senate inquiry. These amendments are consistent with recommendations in the Labor senator's dissenting report. This includes an amendment that will permit the National Rental Affordability Scheme Regulations 2008 to include a power for the Secretary of the Department of Social Services to create a 'dispensation to 20 per cent at all times' rule for approved participants where there has been an unintentional overcharging of rent and the tenant has been compensated for the error. Labor will be supporting the government amendments to NRAS.
In conclusion, can I make these points: this bill does nothing to advance housing affordability and it does nothing to address homelessness. That is clear. This government is lacking vision in our view and lacks a genuine interest in tackling these issues which mean so, so much to many Australians, particularly young Australians. The government fails to acknowledge negative gearing as a key policy area in need of reform. The government has slashed dwellings under the National Rental Affordability Scheme.
This government has time and time again demonised income support recipients and vulnerable Australians. It has slashed $1 billion in pensioner concessions. It has changed the assets test, cutting the pension for 370 pensioners in this country. It has tried to cut pension indexation, which would have left pensioners $80 per week worse off. It has tried to axe the energy supplement of 1.5 million pensioners. It is trying to raise the pension age to 70. Centrelink call wait times and payment times have blown out exponentially. In the currently form, the automatic rent deduction scheme proposed in this bill would further demonise social security recipients, which is why I have consulted with my colleagues and have put forward the amendments that we have outlined. The uncaring nature and the unfair way in which the government is treating welfare recipients is reprehensible, and I believe the public is becoming aware of that.
I would like to say that the drug testing trial, from the overseas experience and the expert medical advice, will not address what the government is proposing it will address. This is just like the expansion of the cashless debit card after the Auditor-General found evidence of the benefits to be inconclusive at best; just like the out-of-control robo-debt system, which has caused so much heartache; just like the rules making it harder for people with additions to get treatments and just like the proposed expansion of the target compliance framework of the Community Development Program, without any thought or understanding of what it means to people living in remote Australia. In contrast, Labor takes an evidence based approach on policy issues. It is my sincere hope and expectation that the government will also take this approach and agree to the changes to the automatic rent deduction scheme that Labor has called for. I move:
That all the words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes:
(1) this Liberal Government slashed the original cap of 50,000 dwellings in the National Rental Affordability Scheme (NRAS) to 38,000;
(2) despite serious housing stress and the lack of affordable housing options in Australia, the Government has not only failed to restore Labor's original cap but has failed to deliver any extension to NRAS; and
(3) condemns the Government's continuing inaction to meaningfully address issues of housing affordability".