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".
The Social Services Legislation Amendment (Housing Affordability) Bill 2017 introduces a framework that builds on the voluntary rent deduction scheme and makes it automatic. It allows for rent and utilities to be deducted from income support payments and family tax benefits for occupants who are living in social housing. It also makes amendments to the National Rental Affordability Scheme Act 2008 so that it streamlines and simplifies the administration of the NRAS until it ceases operations in 2026-27.
As other members in this House have mentioned, it is part of the broader policy to help people who are at risk of becoming homeless. I just want to say a few words about the scale of that. There are actually about 10,000 people at any one time in social housing who aren't up to date on their rental payments and about 2,500 people are actually evicted because of their failure to pay. There are many who are in rental arrears. This system allows their rental payment responsibilities to be automatically deducted from their income support payments. It is a good initiative. I have quite a lot of people in this situation in my electorate. We have many people who are in receipt of income support payments and family tax benefits. The community housing sector and the private rental market has this phenomenon happening only too often, but this only applies to people in community housing. So it is specific, but it does address a real problem. It was defined in the 2016-17 budget after a request from the states and territories, and they are the ones that do operate a lot of these social housing initiatives; housing commission and/or community housing is in their space.
As a precondition in the scheme, the minister responsible for housing in one of those relevant states or territories must write to the Commonwealth Minister for Social Services, setting out the social housing policies of that state or territory and how these policies protect tenants from financial hardship. The automatic rent deduction scheme deductions are limited. It's not just automatic deductions willy-nilly; it's limited to the amounts that are due for rent and the utilities that are bundled up in that rent in the social housing space. Any arrears that are incurred due to the suspension of an income support payment cannot be deducted from a single payment under the ARDS when the payment recommences.
The member for Barton said that they were going to move an amendment about people in the cashless debit card trial or under income management to limit the deductions from that quarantined period. Under these amendments, that is already there. If you are part of an income management scheme or a cashless debit card trial, deductions will only be taken from the restricted portion of the income support payment.
The other amendments are to the National Rental Affordability Scheme. Schedule 3 of the bill refers to changes in the NRAS operations. It is a scheme that is designed to deliver a vast amount of cheaper-than-market rent into areas where there is rental stress. You only have to look at some of the rents in the capital cities of Sydney, Melbourne and, to a lesser extent, Brisbane to realise how expensive some of these metropolitan rents are. The NRAS was set up to assist people such as essential service workers and low-income workers who couldn't afford to work in the cities where their services were needed. But there are always things that don't turn out the way you think they are going to. There are people further up the chain in the scheme who aren't passing on the payments that they receive under the NRAS to the investors in the scheme who are providing these houses. Some of these amendments will correct this problem. They give the government general regulation-making power to enable it to make changes to the NRAS regulations to protect those investors up until 2026, when the NRAS ceases operating. There are other amendments that allow specific regulation-making powers to support the operation of the NRAS and to further protect investors through changes which include requiring the participants to pass on the state and territory payments to those people who have provided the building and made the investment.
In this scheme, 99.5 per cent of the middlemen are honest and they pass on the funds that they receive from the states and territories. But, no matter what scheme governments develop, there's always someone that will abuse the system, unfortunately. It came to my attention when I was in the ministry in this section that there were some people who were rogue operators, and they weren't passing on the payments. But this will allow the regulations to make that mandatory. It will also give special dispensation where a tenant is inadvertently charged more than the 80 per cent limit, provided the tenant is compensated.
As I mentioned, a small number of approved participants do not do the right thing, and that's where these regulations are aimed at. It's not to make the scheme harder to operate; it's to make it fair and just. It will also allow regulatory actions if there are other episodes of undesirable conduct. The amendments will also permit the Secretary of the Department of Social Services to accept an enforceable undertaking from an approved participant if the approved participant is told, 'You have to behave.'
The government is committed to putting in place measures to reduce the risk of homelessness for social housing tenants and to reduce rental costs for low- and moderate-income households. This bill will do that. It is a scheme that is delivering benefits in many parts. There are NRAS schemes out in regional Australia which are making modern houses available to people on low and middle incomes who really deserve somewhere decent to stay. In some of these regional areas there is actually a shortage of housing. So it's been of benefit to both metropolitan and regional. But, as I said, when participants in the scheme don't pass on the funds that they've received at the top end of the scheme to the people who are actually providing the housing, we have to change the regulations to enforce a change of behaviour.
In summary, the Automatic Rent Deduction Scheme is a growth on the existing voluntary scheme. It is limited to rent that is due for the community and social housing sector landlords and whatever utility payments are due within that. Nothing more can be done, but it will prevent a lot of people abandoning houses, which does happen under the voluntary Rent Deduction Scheme. People can sign up and get into community housing and then, a month later, or two months later, go along and sign out of the scheme at Centrelink but the landlord is the last person to hear about it. Some tenancies are abandoned with damage to the properties as well. Again, most people respect the benefit and the support that they receive from the Australian taxpayer but there's always one portion, no matter what scheme you have—but, in this case, it's rental support—that abuses the system. These changes will mean that is removed as a possibility, because the funds will be deducted automatically. I do stand in support of this because it is practical and it's a real issue for many people that they aren't able to manage their rental obligations. This will be a way of protecting them from some of their not necessarily consciously delinquent behaviour but the behaviour that ends up with them being in arrears and being forced out of their accommodation or just abandoning it. I commend these bills and the amendment to the House.
I'm speaking in support of the amendment that's been moved by the member for Barton and shadow minister for social services. The Social Services Legislation Amendment (Housing Affordability) Bill 2017 extends the voluntary Rent Deduction Scheme to be mandatorily applied to all tenants receiving social security or family assistance payments who live in public or community housing. That's the first element of the bill. The second element of the bill refers to the National Rental Affordability Scheme and providing a bit more clarification about the term 'below market rent' and also some flexibility in respect of vacancy periods—broadly, principles that Labor supports.
This is a bill that, however, doesn't really address some of the key issues of housing affordability and homelessness in Australia. Once again, given the opportunity, this government have missed the mark when it comes to providing a real response to some of these key issues that are seeing, unfortunately, a large number of Australians sleeping rough throughout the country. The Abbott-Turnbull-Morrison government has had over five years to develop some meaningful reform in this area, but they've really given up on governing and they've slashed the original cap of 50,000 dwellings in the National Rental Affordability Scheme to 38,000. Despite serious housing stress and a lack of affordable housing options in Australia, they've failed to restore Labor's original cap and failed to deliver an extension of the NRAS. They've done nothing to meaningfully address issues of housing affordability, they've done nothing on homelessness, they've taken very little action to improve mental health services and mental health outcomes, they've given no assistance for additional housing for women leaving situations of domestic violence and they've given no help to vulnerable Australians to access more affordable housing options. Any member in this place will tell you about the massive waiting lists that exist for public and community housing in this country at the moment. In the area that I represent, people can wait up to eight years to get and access public or community housing. That's simply too long. For a wealthy, developed nation like Australia to treat people in that circumstance when they're at their most vulnerable is unacceptable.
Changes to the treatment of tax concessions for property investors and genuine investment in social housing are needed to address the cost of housing for everyday Australians. But, like many things with this government, it's all been too hard, particularly given how focused they've been on their internal shortcomings over recent years. We've seen this before from this government. Vested interests get in place and lobby the government to ensure that they don't take real action to deal with some of the issues around housing affordability. Most notably, the very generous and in some cases the largest tax concessions in the world that exist for investors in property in this country have had an effect on the housing market and have distorted affordability outcomes, particularly in the big capital cities. I'm referring, of course, to the government's continued support for the massive tax concessions that exist around negative gearing and capital gains tax discounts on the sale of investment properties in this country. It appears that the Prime Minister and the Treasurer are more interested in ensuring that there is a tax concession for someone that is seeking to negatively gear their ninth or 10th investment property rather than in providing support for first home buyers or people who are looking to get into public housing or, indeed, providing more public housing to ensure that those waiting lists reduce.
We've seen only this week that again the government are on with their scare campaign about negative gearing, relying on a report prepared by the Master Builders that is completely wrong. It appears they didn't even read Labor's policy around negative gearing, because the policy grandfathers anyone that's currently in the system and ensures that the reforms to negative gearing only apply prospectively to those who are seeking to negative gear beyond a certain date and allows negative gearing to continue just so long as it is in respect of off-the-plan developments and new housing. The philosophy there is that it will grow the housing stock, that it will generate jobs in the important housing industry and increase the stock, thereby taking pressure off house prices and pressure off rents. Many of the people who are the subject of this bill today are in the situation they're in because they can't afford to buy a house and they certainly can't afford to rent a house given the exorbitant house prices.
At the same time, when it comes to rental affordability, those opposite have hobbled the National Rental Affordability Scheme with a cap of 38,000 dwellings. That's a reduction on the cap that Labor had put in place when we were in government, trying to improve affordability for people in rental markets throughout the country. This decision has been widely criticised by housing sector stakeholders, including the Property Council of Australia. It was the Property Council that backed reforms to negative gearing and capital gains tax discounts as well. These much-needed changes to CGT and negative gearing are key measures to help holistically address the growing social and economic inequalities that contribute to housing affordability issues.
The Abbott-Turnbull-Morrison government is at odds with an ever-increasing list of organisations and individuals arguing for reform of negative gearing and capital gains tax concessions in this country. They include the International Monetary Fund, the OECD, the government's own financial systems inquiry, the Grattan Institute, ACOSS, the Committee for Economic Development of Australia, and the Australian Institute of Company Directors. All of these organisations have been calling for some years for reform to negative gearing and capital gains tax discounts because of the distortions in the housing market that they produce and the effects that they have on housing affordability that lead to situations like the one that we're debating here, with people being unable to afford a house in the normal rental market and pressure being put on the public housing system, leading to some of the consequences that are dealt with in this bill.
Winding back tax concessions like CGT and tax discounts is a more equitable and efficient way of raising revenue, but it also deals with some of the distortions that I mentioned earlier. Labor's housing affordability policies have been specifically designed to provide that affordability element—to take pressure off rental markets but also to stimulate new housing supply by continuing to allow negative gearing arrangements for investments in new housing stock whilst protecting existing investments. Only Labor is committed to tracking and tackling housing affordability issues that grip the nation. In many respects, it is the No. 1 issue for household budgets throughout the country.
Labor's always said that the vast majority of income support recipients are more than capable of managing their own finances. This bill does go to those types of issues: how far you should seek to intervene in people's own affairs and the managing of their finances, particularly those who are public housing tenants and their ability to pay their rent on time. In the case of rent, we know that most social housing residents are excellent tenants and prioritise their rental payments. It's a fact that the rate for public housing and social housing in the last five years, to 2015-16, was over 99 per cent. In those five years leading up to 2015-16, for 99 per cent of the time public housing and social housing tenants paid their rent. That's why the government's proposed scheme in this bill is a disproportionate response. There's not really a big issue for many public housing tenants when it comes to paying rent on time and paying rent in full. Although the number of evictions of social housing tenants is only a small proportion, abandonment of the premises also occurs and homelessness is a result of both. What the studies find is that, in a lot of cases, when it comes to homelessness with respect to public housing, mental health issues, drug addiction and other health issues are bigger factors than paying rent on time. However, the automatic rent deduction scheme, in its current form, risks tenants being forced into serious financial hardship. This is an issue that's been identified by the Senate committee that looked into the bill. In their inquiry into this element of the bill, they found that there wasn't really an issue. Although we all want to ensure that people aren't forced into situations of homelessness, this bill could go too far by intervening into the affairs of those who are receiving social security payments in the country.
There's a principle in social security, and that is the inalienable nature of the payment to the recipient of the payment. In other words, the payment that's provided to someone who's on a pension, including a disability support pension, or is receiving other Centrelink benefits or is on Newstart, should go directly to them and shouldn't go to third parties. That principle has been whittled down over some years by things like the intervention in the Northern Territory, cashless welfare cards and the like. Labor's philosophy is that this should occur only in extreme circumstances and, given those particular factors about the rates of nonpayment and the rates of late payment of rent in public housing, we don't really see the need for drastic measures such as this.
In respect of the bill, generally, there are some good elements related to clarifying definitions regarding the National Rental Affordability Scheme. However, I reiterate the point that I made earlier—that some elements of this bill go too far. Once again, the government isn't really dealing with the issue at the heart of some of these measures—and that is the fact that rental and housing affordability in Australia is at incredibly unaffordable levels. It's been identified that the massive tax concessions that exist around housing for investors in this country are driving a lot of that unaffordability. Unless you are dealing with those tax concessions—negative gearing and capital gains tax discounts—you are not fair dinkum about housing affordability in this country. Only the Labor Party have that set of fair dinkum policies to really improve affordability and ensure that ultimately we reduce the amount of homelessness in this country and ensure that everyone in Australia has the opportunity of that great principle, that human right, of a roof over their head.
The provision of shelter for any human being and their families, whether in Australia or around the world, is a vital part of people being in control of their lives. It brings safety and a sense of belonging. While the provision of housing is very much a state government matter, it is important that we as a federal government do everything we can to put downward pressure on housing affordability and to ensure that this is possible. The Social Services Legislation Amendment (Housing Affordability) Bill 2017 will help low-income earners avoid the rental arrears spiral. The government's amendments in the Social Services Legislation Amendment (Housing Affordability) Bill will make changes to, firstly, the Automatic Rent Deduction Scheme and, secondly, the National Rental Affordability Scheme to address issues raised through the Senate committee inquiry and with the states and territories.
The Automatic Rent Deduction Scheme will enable rent and utilities to be deducted from welfare payments for occupants living in social housing. There has been an extensive consultation process with state and territory governments and the social housing sector. The committee's inquiry into the bill received 32 submissions and heard from eight witnesses as part of the public hearing. The Automatic Rent Deduction Scheme will be limited to rent and utilities only. Arrears incurred due to suspension of an income support payment will not be deducted from a single payment when the payment recommences. Ministers from participating jurisdictions will write to the Minister for Families and Social Services outlining the social housing policies in each state and territory. Welfare recipients will have their social housing deductions paid directly to their social housing provider and then receive the remainder of their social security or family assistance payments. Welfare recipients will not be able to change or cancel the deductions without the social housing provider's knowledge, which they are able to be do under the current voluntary rent deduction scheme.
There have been concerns from all levels of government and the community about evictions from social housing due to rental arrears, which can result in homelessness. These changes will help prevent arrears and reduce evictions and property abandonments from social housing in a managed and affordable way. Importantly, it will also help to reduce the incidences of people going into a situation of homelessness. We have seen the impact of homelessness for people not only in my community but across Victoria, where I'm based, and across Australia. Where people fall out of the system, they often end up in a situation of moving from house to house and in other situations can end up on the street as well. We have many organisations in my electorate, such as the Seaford Housing Action Coalition and Community Support Frankston, providing the necessary support to people who may be homeless and may be in need. In particular, it is important through this bill and the actions we are taking to prevent these situations arising in the first place. While a cure is very important—and I've worked locally to re-secure a homeless meals service back in Frankston as well as to secure funding recently for a local hot shower for those who are homeless and those who are in need—it is important that we take further action, such as via this bill, to prevent those situations arising in the first place.
Going further around the content of this amendment bill: social housing lessors in participating states and territories can choose to use the Automatic Rent Deduction Scheme. However, they will be required to submit individual requests for each tenant they intend to use the scheme with. Tenants will only be subject to the scheme when they have entered into an agreement with a lessor authorising such deductions. State and territories estimate that the social housing system is losing more than $30 million each year in unpaid rent and administrative costs. This places an unnecessary and additional burden on the already financially strained social housing system. The Automatic Rent Deduction Scheme will work alongside government funded financial counselling and other financial support services to ensure welfare recipients continue to be housed safely and affordably whilst sustaining their tenancy.
The government amendments to the bill also allow the National Rental Affordability Scheme regulations to empower the secretary of the Department of Social Services to grant dispensation from the '20 per cent less than market rent' rule where a particular charge for rent is higher than the maximum permissible through inadvertence and the tenant has been compensated for the mistake. The department has consulted with National Rental Affordability Scheme stakeholders to identify ways to improve the administration of this system and reduce the regulatory burden on approved participants. Over 30 submissions were received, with a range of suggestions on how the legislative framework for the National Rental Affordability Scheme could be streamlined to support the efficient and effective administration of the system going forward.
The object of this system is to encourage large-scale investment in housing so as to increase the supply of affordable rental dwellings and reduce rental costs for low- and moderate-income households. To accomplish this, the National Rental Affordability Scheme provides approved participants with a financial incentive for a period of 10 years to rent dwellings to eligible tenants—low- to middle-income earners—at a rate of at least 20 per cent below the market rate. The National Rental Affordability Scheme Act requires the regulations under it to prescribe that the rent charged for an approved rental dwelling must be at least 20 per cent less than the market rent at all times during the year. The term 'at all times during the year' has been subject to conflicting interpretations over the years. This bill removes the prescriptive nature of the current vacancy provisions to allow greater flexibility for the National Rental Affordability Scheme regulations to prescribe permitted vacancy periods. The bill also inserts provisions into the National Rental Affordability Scheme Act to provide express legislative authority for the regulations to vary conditions of allocation and to put it beyond doubt that conditions may be varied or imposed after an allocation has been made. These provisions will reduce the risk to the Commonwealth when varying or imposing new conditions on existing allocations to address emerging risks.
The ability to substitute dwellings is crucial to achieving the National Rental Affordability Scheme's objective of increasing the supply of affordable rental dwellings. I am pleased that the Minister for Social Services, the cabinet and others within our government—and I know that this issue is supported across the chamber as well—have worked together to ensure that we are taking action with respect to housing affordability. This bill will help people to avoid homelessness to begin with. I continue to work in my electorate to advocate for people who are homeless and those who are in need. We must take a preventive approach to this, not just an approach once people are already in that situation. Let's continue to work together, along with the states and territories across Australia, to not only further improve the social housing stock across Australia but to also take action to assist those who are in need to avoid homelessness in the first place.
Close to 120,000 Australians have no home. A disproportionate number of them are young, but one of the most rapidly growing groups without housing or shelter are older Australians. It says a lot about the priorities and the general level of paralysis within this government that we're only today finally getting the chance to debate the Social Services Legislation Amendment (Housing Affordability) Bill 2017. It was first introduced on 14 September 2017. It was intended to give effect to elements of the government's housing statement that was contained in the May 2017 budget. If nothing else, the bill is a stark reminder to us all that homelessness has not somehow gone away.
The bill also reminds us that this government continues to avoid the big issues in housing. Like many of its policies in other areas, it is reactionary, it is a punishment and it is fails to protect the needs of those who are the most vulnerable. Rental stress, out-of-reach house prices and the simple problem of finding somewhere to live that is close to work are not far from the minds of many, if not most, Australians. You'd be forgiven for thinking that, because house prices in Sydney and Melbourne appear to have topped out for the time being, this government seems to think that it's a case of game over and problem solved. If it truly believes that, it is delusional.
From the outset, I wish to thank the member for Jagajaga and her staff for the generous help and support they've always provided to those of us who cannot claim to have anything like her understanding of these matters. Let me also take the opportunity to thank her too for the enormous contribution that she has made in this place since 1996 to reforming public policy over what has been a long and distinguished time in public life. I'd also like to thank Senator Doug Cameron from New South Wales for his long and ongoing interest in the provision of housing for those who are the most vulnerable and thank him for his ongoing efforts and support.
In the years since this bill was presented, we have yet further evidence that the housing market and housing policy continue to fail so many of our citizens in so many ways. Those failings are captured in two excellent reports that together show that current policies are not delivering an adequate supply of housing for the underprivileged, for renters or even for first home buyers. The first of those is the ninth in the annual series of reports on rental affordability that are prepared by Anglicare, Rental affordability snapshot2018. The second is the Grattan Institute's March 2018 study, Housing affordability: re-imagining the Australian dream. Both are compulsory reading for anyone who is seriously interested in the issues that are before us today. Each, in its own way, exposes the degree to which a reordering of government priorities and a reallocation of public funding is needed to address housing affordability.
Taken together, these two reports show governments don't need to spend more; they just need to direct funding to where it will do the most good. Governments need to pare back the tens of billions spent annually on unproductive tax concessions, such as negative gearing and capital gains tax discounts, and redirect a portion of those funds to those who are in real need. At the same time, governments must address the stop-go pattern in housing starts that damages confidence in the housing sector and perpetuate chronic areas of undersupply.
The government needs to get its priorities right. Anglicare is one of Australia's most respected and highly credentialed peak charitable bodies. The ninth in its series of rental affordability snapshots follows the pattern of previous reports, showing that low-income earners have little or no chance of buying their own home and are effectively excluded from the private rental market. In its April 2016 report, Anglicare surveyed the rental market and found that, with the over 75,000 rental properties that were then available across Australia, only 21 properties were affordable for single adults living on Newstart and only one was suitable for young people living on youth allowance. They found that despite the high level of pensions compared to the allowances, affordable rentals were extremely limited for a single person living on any government payment.
Anglicare's April 2017 report showed a dire shortage of affordable rental houses for people on low incomes. Nationally, only six per cent of over 67,000 dwellings that were surveyed were suitable for any of the 10 selected households in receipt of government benefits. The 2018 report shows the position has continued to slide and has been further exacerbated by the loss of some lower cost properties to Airbnb. The report makes it plain too that rents in many regional areas are not that much lower than those in the capital cities. So, even where work is available, those on low or even average incomes will struggle to find affordable housing anywhere in Australia. None of this should be a surprise, nor should we expect any significant improvement in Anglicare's 2019 report, notwithstanding the myriad of bandaid measures in the Treasurer's 2017 budget, many of which were recycled in this year's budget.
Private rents in the last year in most markets moved up by around 2.7 per cent, enough to outstrip wage increases and the CPI. Over the decade to April 2017, the minimum wage rose 31 per cent and inflation went up 27 per cent but rents soared by 48 per cent. Government payments such as Newstart and youth allowance have fallen in real terms since the mid to late 1990s, which is shameful. Affordability issues and supply shortages at the lower end of the housing market are now deeply ingrained in the system. In the then Treasurer's 2017 budget, he claimed that there are no silver bullets to make housing more affordable but, by adopting a comprehensive approach by working together, we can make a difference.
Having listed a couple of worthwhile and not-so-worthwhile initiatives, the Treasurer concluded his budget announcements on housing by claiming that the measures he outlined represented a comprehensive package that can make a difference. The trouble is, of course, that the then Treasurer's proposals do precious little to directly address the biggest problem with housing affordability in our biggest housing markets. There are disastrous effects of negative gearing and capital gains concessions on house prices, housing affordability and household indebtedness. That's not to mention the billions of dollars that the federal budget haemorrhages every year to underpin the entire madness.
Compounding the then Treasurer's credibility problem, he spent the last year and a half wrongly claiming that a rationalisation on negative gearing and capital gains tax concessions would ramp up rents and take a chainsaw approach to the housing market. He's even continued down that track whilst knowing full well that such rhetoric is totally at odds with the thinking of most independent commentators and the advice of his own department. The trouble with his two massive tax concessions is not just that they force up house prices and corrupt the housing market but that they also punch a huge hole in the federal budget. Such a hole, in fact, that there is little left over to help those locked out of home ownership and the private rental market.
Back in 2016, the respected Grattan Institute estimated that capital gains and negative gearing concessions were actually contributing to higher taxes on all Australians. To quote their media release:
Long overdue changes to negative gearing and capital gains tax would save the Commonwealth Government about $5.3 billion a year.
Their 2018 study merely amplifies these criticisms, concluding that present policy has not delivered the volume and type of housing we need to meet demand, given our current rate of population growth. It's still my favourite statistic on the budget looting effects that these two overblown tax concessions caused that in 1998-99, the year that capital gains tax discounts and negative gearing were joined, there were 1.3 million tax-paying landlords, making a collective return of $700 billion in tax to the government. By 2010-11, all up there were 1.8 million landlords, making a combined tax loss of $7.8 billion. That should shock those opposite.
The odds are it's a whole lot worse now. In the early 1990s, investor demand accounted for about 16 per cent of home loans. After dipping during the GFC, it climbed to a total of 55 per cent of total home loans before APRA controls were tightened in 2015. APRA controls have tightened again and again, and the investment share of housing demand has dropped. The government seems confident that that has fixed the housing-demand problem, and I'm not too sure about that, because investors still make up the majority of homebuyers. In any event, the drain that negative gearing and capital gains tax concessions impose on the federal budget remains a cancer on the system.
As The Salvation Army pointed out in its submission to the community services committee's inquiry into this bill, if just a part of the excessive and unnecessary tax expenditures on negative gearing and capital gains tax were put into providing more affordable housing, the country would be a whole lot better off. We could easily double the $1.7 billion that the government annually spends on public and social housing if a fraction of the money he offered up in unproductive tax concessions was redirected to those most in need.
The sharpest decline in homeownership, according to the Melbourne Institute, since 2002 has been among couples with dependent children—so the families that I care for. In 2002, 55 per cent of individuals in this family type were homeowners but, by 2014, it had slid to 38 per cent. A similar fall in homeownership in the 18- to 39-year-old group saw ownership rates down from 36 per cent in 2002 to 25 per cent in 2014. First home owner grants offered by state and territory governments have become less favoured and arguably less popular form of housing assistance. New dwellings financed by first home buyer schemes decreased from 29 per cent of the market in 2009 to 13 per cent in 2017.
In the last four years, the size of the average mortgage rose by $70,000 or about 19 per cent. Home loan affordability is at its 2015 peak but loan repayments are still above the notional stress level of 30 per cent of family income. From 2011 to 2016 average rents across the country rose from $285 a week to $335 a week, or about 17 per cent. Over the same period, the CPI rose by about 10 per cent. Private debt levels partly driven by housing costs are at an all-time high and the second highest as a percentage of income in the world. Once interest rates start to rise there will be a significant increase in debt and rent stress, particularly if wages don't start to rise too.
For its part, the Commonwealth has devoted a disproportionate level of budget support to underpin spending on investment properties. At the lower end of the income scale, the Commonwealth provides around $4.5 billion a year to 1.35 million low-and moderate-income households in the form of Commonwealth rent assistance. But, even after Commonwealth rent assistance is taken into account, about 40 per cent of those receiving this form of help experience rental stress—that is, they are paying more than 30 per cent of their weekly income in rent. I'd also add that, by propping up the rental market instead of providing affordable housing, we're putting further stress on families because they have no permanency of dwelling and they have to move, often causing their children to have to move school and creating more and more stress for already stressed families. Our national stock of public housing has fallen in recent years, and this has only been partially offset by a rise in community housing. Together, they are insufficient to meet demand, and around 190,000 applicants are on waiting lists for social housing around Australia—and climbing every week.
Since the Rudd government's reforms in 2009, the federal government has provided significant support through the states and territories to help those on low incomes and the homeless via the National Housing and Homelessness Agreement. The current government has pledged to retain NHHA funding to around $1.3 billion per annum until the scheme is replaced. It says that funding will be maintained at or around the current levels, which is good but it needs to increase. As part of its 2017-18 budget proposals the Commonwealth announced it will provide an additional $375 million over three years from 2018 on. So it's not that the government is doing nothing; it is that it is not doing enough. The real question is: are its priorities right? I would say no.
Commentators, such as the highly respected Ross Gittins, have said that the government is adopting a punishment model of social welfare. Most other commentators agree. On numerous occasions, as I read through various briefs, speeches and commentaries on the ARDS, I keep encountering statements to the effect that rental arrears are not a massive issue. To quote from a recent Bills Digest:
Over the five years from 2011-12 to 2015-16 national rent collection rates have averaged 99.4 per cent for public housing, 99.2 per cent for community housing and 99.2 per cent for state owned and managed Indigenous housing.
So, really, a tiny number of rental arrears. The rate of evictions is also extremely low, less than one per thousand tenants per year.
The Labor bill on housing contained none of the nasties that this government has introduced, and even some Liberal senators have identified them as being punitive. To quote Ross Gittins when speaking about the government on this issue:
They seem all toughness and no love. They want to be seen as the great punishers and straighteners—(Time expired)
I too rise to speak on the Social Services Legislation Amendment (Housing Affordability) Bill 2017. The fact is the Abbott-Turnbull-Morrison governments have consistently failed to take meaningful action to tackle Australia's housing affordability crisis. It is indeed a major crisis that the nation faces. It's very much a crisis in regional areas like mine, the North Coast of New South Wales, where we see housing affordability as a major issue, particularly with prices and rents increasing. The waiting list for public housing in my region now extends for more than 20 years. All we have is inaction from both the federal government and indeed the New South Wales state government. In regions like mine, we blame the National Party for this massive inaction. I often say in this House that National Party choices hurt. When it comes to their inaction on housing affordability, that certainly is an area where National Party choices really do hurt people living in the regions and rural areas. In contrast, we in Labor have always been committed to tackling the issue of housing affordability.
Addressing homelessness also means addressing the broader issues that can lead to homelessness—for example, taking effective action to improve matters like mental health services or providing assistance for women fleeing domestic violence and ensuring vulnerable Australians have affordable housing options. This bill instead imposes an automatic rent reduction scheme on social housing tenants. Make no mistake: it's not a serious attempt to address housing affordability. Homelessness is a very serious issue. We have an obligation to prevent it at every possible opportunity. That's why the former Labor government tried to introduce a rent deduction scheme. At the time, the Liberals opposed that particular scheme and also at the time, their shadow minister, the member for Menzies, claimed it would increase housing stress and financial hardship, yet now, in this bill, what they have introduced is a scheme that is much harsher than the voluntary one that Labor had initially proposed. Labor's scheme would have applied only to people who were in arrears and at risk of homelessness. The bill before us today would apply to everyone. This includes pensioners, people on disability support pensions and those on carers payments. People who have been responsibly paying their rent for years and in fact decades will all be caught up.
This bill is based on legislation introduced by the Labor government in 2013, but this government's changes go way too far and are essentially unfair. We know the majority of social housing tenants manage their budgets well and pay their rent on time. This bill worryingly extends the existing rent deduction scheme so that it can be applied more broadly by the states and territories. It also allows community housing providers to automatically withhold a portion of the tenant's income support and/or family tax benefit payment and use these funds to directly pay rent and utility costs on behalf of those tenants.
In the original legislation under Labor, however, the rent deduction scheme was voluntary and applied only if requested by the tenants or if the tenant was in arrears. Under current rules, amounts deducted vary according to changes in rental and utility amounts. The tenant is always notified. But these new proposals do not require that the tenant actually be notified. This bill provides permission for the deductions of amounts related to the loss of or damage to property, and there are grave concerns this will particularly negatively impact victims of domestic and family violence. In fact, many of these differences could severely and negatively impact all tenants of public and community housing.
Currently it's common practice for social housing tenants to negotiate with their housing provider to defer a rental payment in order to meet an emergency payment—for example, replacing an appliance or when they have a large bill. These are instances that regularly occur. But these proposed changes will potentially reduce the capacity of tenants to meet these unexpected expenses. We know this will lead to increasing stress and cause disempowerment amongst those tenants. It is a very harsh, punitive measure that the government is looking to introduce. There is also quite limited detail in the bill. We have no idea how payments will be deducted and how it will be tracked. There is also concern that in situations, for example, where you have several adults sharing the rent, only the person named on the lease will be liable for these deductions, and that means they're unfairly financially targeted.
This bill is about much more than the unfair increase and stringency regarding rental deductions for people in community housing. It highlights an ever-present and sadly increasing issue all over Australia and, indeed, as I'd like to speak about, in my electorate of Richmond, in the Far North Coast of New South Wales. That issue is housing affordability and the rising rate of homelessness. The fact is that, in more than five years under this very chaotic and divided Liberal-National government, nothing has actually been done to effectively address the issue of housing affordability. This has then led to a greater need for more social and community housing. So the problem has gotten worse because of the five years of inaction.
Worse still, on top of all that, the Abbott-Turnbull-Morrison governments have cut important funding and services that sought to address homelessness, so the problem has been exacerbated. Whilst we may have seen various thought bubbles from the government on the issues surrounding housing affordability, they haven't acted on it or effectively done anything to address it. In my area and around the country, housing affordability is one of the most talked about issues of concern, and this government has indeed failed the Australian people by failing to take any meaningful action to tackle it. Adopting more punitive measures in the form of rent deduction, taking away even more of people's ability to manage their finances, will do nothing to address the larger issue of housing affordability, which, as I've said, this government refuses even to properly acknowledge.
When we look at the statistics, we see this is a problem in many areas around the country. I would like to highlight that there are parts of my electorate of Richmond that are listed, often, as some of the least affordable in the world. That, of course, is because of the massive disparity between house prices and wages. It is a major issue and one that is raised constantly.
I should point out that the former Prime Minister started 2017 by promising:
There will be a lot more to come on housing in the course of this year.
Almost two years ago the government announced task forces and models, and all of those things have come to nothing. The government said that this was a multifaceted issue. Very insultingly, of course, the former Prime Minister, we all recall, even suggested Australians should just buy their children a home. That was the former Prime Minister's way to tackle the issue. Of course, it shows just how out of touch the government is that they think that would be the answer. This also is a government that told the Australian people: get a better job, leave the city you're in or get rich parents. That's the answer of those opposite to these really complex, multifaceted problems.
As well as not addressing the housing issue, the government is putting more pressure on middle- and low-income earners. There is a long list of actions by this government that have led to the pressure that many families and individuals face. One of those things is, for example, failing to protect penalty rates and pushing for further cuts to penalty rates, lowering people's incomes. So they have their incomes going down as well as having housing stress. We have seen the government vote, I think, eight times to cut penalty rates. There were all those National Party members voting to cut penalty rates. We have also seen the government cut family support payments and target vulnerable Australians with their robo-debt program. We've had all these things put in place whilst we have a housing affordability crisis, culminating in difficult and challenging circumstances for many individuals and families across the nation. Those opposite simply refuse to acknowledge that homelessness and housing stress are both a symptom and a cause of poverty and disadvantage, factors which have been exacerbated at the hands of a cruel and uncaring government.
In 2016 the International Monetary Fund made clear that Australia has one of the fastest rising income inequality rates. Their prediction in 2018 was just as dire, with a review of Australia's economy being much less favourable than the government portrayed it. Housing affordability was a major factor in this, so the government cannot continue to ignore this massive problem in front of them. While the government is walking away from social and affordable housing, there is also more competition for rentals, which in turn is pushing prices up and pushing more people into short-term accommodation and homelessness. The cycle of disadvantage continues.
These are issues that we on this side of the House have consistently raised and called on the government to act on. Today, again, we are raising them and calling on the government to act. But, instead, the government just talk about themselves and their chaos and disunity. This is particularly highlighted by the National Party. We've just seen them talking amongst themselves about who's going to be leading them. There's been lots of infighting. They're focused only on themselves. I represent a regional area. I want to talk about the regional and rural areas of Australia. The National Party refuse to fight for them, refuse to stand up for them. They just talk about themselves, while at the same time we have really serious issues, like the lack of access to affordable housing in our regions. It is a serious, desperate and urgent matter, yet all they do is talk about themselves.
On the other hand, Labor has a strong history of acting on this issue. Indeed, under the Rudd and Gillard Labor governments, we took major action when it came to this area. We built more houses and oversaw the biggest increase in housing stock. We had the National Rental Affordability Scheme, under which an additional 36,000 homes were built. That had benefits for regions like mine, northern New South Wales. It made a major difference for people to actually be able to access affordable housing.
This program, in total, would have provided 50,000 homes right across the country. Unfortunately, the government then capped and slashed this program when it was elected. It was very unfortunate because it was a program that made a huge difference. In contrast to the government's cuts, a Shorten Labor government has a plan to address a whole range of housing issues. We've talked about developing and implementing a national plan to reduce homelessness. It is so important to have that on the federal government's agenda. We've talked about reinstating a minister for housing and homelessness and re-establishing the National Housing Supply Council. We have, very importantly and consistently, for a long period of time talked about our important reforms to negative gearing and capital gains tax concessions and how important it is to have that on the agenda. Areas like mine have responded very positively to those particular reforms. They will make a major and very important difference. As part of our policy, we've also talked about the need to double the fees and penalties on foreign investment rules to help put first home buyers on a more level playing field with investors. Across the whole scheme, when it comes to housing affordability and homelessness, Labor has really listened and worked with the community to develop a whole series of proposals to address these issues.
Very importantly we'll also address the gendered components of homelessness. On the night of the 2016 census, 6,866 older women were experiencing homelessness—that's a huge number—and over 180,000 were renting. That is a major number to keep in mind. When the statistics are released, we see that older women are often at greater risk of homelessness and the rates of older women experiencing homelessness are not only growing but rapidly accelerating. Labor will provide $88 million over two years for a new safe housing fund to increase transitional housing options for women and children fleeing domestic and family violence, young people exiting out of home care and older women on low incomes who are at risk of homelessness. That's because we understand that it's important to have that intervention when people are at that extreme risk of homelessness. We have to have those policies right across the board to make sure we can effectively provide that support to people who are at risk of homelessness.
There are, in many areas, great individuals and groups that do a lot to assist people. In my community, there is a whole variety of groups, but there is one I would like to highlight: Mr John Lee, the founder and president of a homes outreach provider called You Have a Friend. I have spoken about John Lee before. I'd like to mention him because it is important. His organisation supports more than 300 people throughout my electorate. It supports people who are homeless, facing homelessness or are, indeed, marginalised. You Have a Friend supports these people by, very importantly, providing meals and friendship as well. John Lee has been providing this service for many years and doesn't receive any government support. For eight years, he has been effectively campaigning for a homeless shelter in Tweed. I commend his advocacy in this particular area. He's been ignored by the state government and ignored by the Nationals member for Tweed Geoff Provest, who lied when he falsely promised to deliver a homelessness shelter. He actually stated that to the community. Because of claims like that and many other reasons, our community distrusts the National Party. Also, for years, Geoff Provest and the National Party have failed to address the growing need in our area when it comes to homelessness and providing shelters. Mr John Lee's also fought for increased housing supply throughout our area and, in particular, the Tiny Homes project. He feels strongly about that, as we do in Labor. I would certainly like to commend John Lee again because it is important that people who work hard like him—and there are many services throughout the North Coast and Northern Rivers who do a great job—continue to get the support of our local community.
We look to our regions and our rural areas and what do we see? In my area we see a federal government and a New South Wales state government that have done nothing when it comes to addressing homelessness. Their inaction is overwhelming. Whilst they are not acting, the crisis is continuing and it's exasperating all the time. It is a major concern. I have continuously condemned the National Party for their inaction. There are many reasons for which the National Party have abandoned the people of the regions and of rural Australia, but this issue is major. It is a really big crisis right across the board and it's one that I'll continue to criticise them for. It's only a Labor government that will actually take that action. A Shorten Labor government will put tackling homelessness and housing affordability back on the national agenda. It should be on the national agenda. There should be a comprehensive approach right across the board to address all of these issues because the situation is so dire. We certainly have a strong history of doing that when we were in government before. This government has failed to act, and it is now an absolute crisis, but a Shorten Labor government will address these all of these issues when it comes to tackling homelessness and housing affordability.
I rise to speak to the Social Services Legislation Amendment (Housing Affordability) Bill 2017. It's a narrow and technical bill which addresses a small part of a huge national problem: housing affordability and homelessness in Australia. The extent of the problem is massive. It is in fact a national disgrace.
We're all conscious of the visible face of homelessness, people sleeping rough out of doors, whether it be in the south, in the cities, in winter, freezing cold, or whether it be where I'm from, in the north of Australia, living rough on the streets or in the long grass. The problem is much deeper than the visible face of homelessness in our cities, as bad as that is. There are many, many thousands of people living in insecure and temporary overcrowded accommodation—hundreds of thousands—in boarding houses, in backyards, in tents and in caravans and sleeping on friends' couches. It's a problem that disproportionately affects women and children. Often they are fleeing violent partners or dangerous households. Women's refuges are often full, having to turn people away. According to the recent State of homelessness in Australia's cities report, one in 20 homeless people may be a veteran. That is part of this national disgrace.
On any night, one in 200 Australians is homeless. That would be a figure that would shock a lot of Australians, and it should. They might be asking themselves: how has this happened? How can it be that, in this lucky country, we've got so many people in such a desperate situation, when we're one of the richest countries in the world? I know that many people, seeing the visible homeless in our streets, are overcome by a sense of hopelessness. They often walk past those homeless people with averted eyes, not wanting to look into the eyes of those without a home, often those who have mental health problems that either resulted in them becoming homeless or have been exacerbated and brought on through their homelessness. I understand that many people go through that thought process of, 'Should I drop $2 into the cup on the pavement?' or, 'What good can $5 do here or there?'
I guess it is an issue where we see very plainly that governments are important. This is an issue where governments have a responsibility to help those in need, to help those who are down on their luck, and Labor takes this responsibility very seriously. One of Labor's great leaders and great prime ministers, Ben Chifley, said:
We have a great objective - the light on the hill - which we aim to reach by working the betterment of mankind not only here but anywhere we may give a helping hand.
Governments can make things better, and governments should make things better. We in Labor believe that we are here to make things better for all Australians.
Housing affordability and homelessness are serious issues, and they're a growing problem. As I've said, homelessness here in Australia is a national disgrace, and it is a problem that's got worse in recent times, during the period of the Abbott, Turnbull and now Morrison conservative governments. This is a problem that is getting worse. On census night 2016, nationally, there were 116,427 people homeless, up from 102,439 in 2011. My electorate of Solomon is in the Northern Territory, where the Bureau of Statistics counted 13,734 homeless people in 2016.
Much of the increase in homelessness between 2011 and 2016 was as a result of more people living in severely crowded dwellings. Homelessness is not just because there are not enough houses, of course. But severe overcrowding suggests there is a need for more housing that is affordable to low-income earners.
Labor has announced a range of policies to address the problem. Those opposite don't seem to have too many answers. They don't seem to have too many policies. Homelessness and housing affordability don't seem to be a priority for them. I guess it's difficult to understand the problem while enjoying the view from somewhere in northern Sydney overlooking the harbour, but I encourage those opposite—perhaps we need an envoy for homelessness; perhaps we need someone to go out there into the regions of Australia or even just to go out onto city streets to see how desperate this situation has become.
We're all very familiar with rapidly rising house prices in our largest cities. Million-dollar houses are now commonplace in many of our suburbs, and owning a house has become something of an impossible dream for many of our young people. But what's less obvious is that these rising prices at the top end of the market cascade down to lower-priced houses and apartments for sale and rent. This means that even the cheapest accommodation becomes too expensive for people on low incomes. Housing prices have moderated somewhat in recent months, but lower sale prices will still afford little or no relief to low-income renters.
So to this bill. It has good intentions. As far as it goes, which is not very far, it should be supported. But I do have concerns with it. To summarise: the bill sets up an Automatic Rent Deduction Scheme which would allow deduction of rent from the income support payments and family tax benefit payments of all social housing tenants. The bill requires rent under the National Rental Affordability Scheme to be at least 20 per cent under market-value rent.
The first question that comes to mind about these provisions is: why are they necessary? In his second reading speech, the then Minister for Social Services, Mr Porter, said:
This bill will implement an Automatic Rent Deduction Scheme to help reduce homelessness for social housing tenants who are in serious rental arrears that could, and in many cases does, lead to eviction or housing abandonment.
I'm not entirely convinced by this argument. When the bill was scrutinised in the Senate committee, Labor senators supported the intention of the bill to prevent homelessness, but thought the provisions were too broad, that there should be a cap on deductions and that the relationship of this bill to other forms of income management should be clarified.
Is it in fact the case that rental arrears are a significant cause of homelessness? We know that some 90 per cent of public and social housing tenants have no problems paying their rent. Almost all of those use current voluntary rent deduction schemes. While nonpayment of rent can be an issue, and is a problem for state and territory housing authorities, eviction and homelessness are often caused by more complex problems, as I've mentioned, such as mental illness, substance abuse, family violence and a lack of affordable alternative housing.
I'm also concerned that a compulsory scheme, as proposed in this bill, will take away options and decision-making power from tenants. Often they have to make day-to-day or week-to-week decisions about pressing financial matters—for example, the fridge has died, the car rego is due or, for us in the Top End, there's been the disaster of your air-conditioner going on the blink in the build-up. But if a proportion of their income has been compulsorily committed, they have less flexibility to meet other pressing expenses. Currently, tenants can negotiate with their housing provider to defer a rental payment to meet other unexpected expenses. Taking decisions like this out of their hands makes it harder for them to take responsibility for their actions and learn how to manage their finances. If tenants are subject to other forms of income management or cashless debit cards, they may be left with only a very small portion of their income to spend at their own discretion.
I am aware that, during the Rudd-Gillard governments, there was legislation introduced for a compulsory rental deduction scheme in 2013, but that bill lapsed at the 2013 election. I'm also aware that some of the states, including some Labor states, support this legislation. Victoria and the ACT oppose it. I have firsthand experience of housing affordability and homelessness from my time with the St Vincent de Paul Society in the Northern Territory. In the Northern Territory, we have significant homelessness problems. One of the things I was pleased that we could do in that time—and I still continue to work with Vinnies in a voluntary way—was establish some social housing in Coconut Grove so that we could assist particularly young families—women and children, in particular—in their time of need.
Charities such as Vinnies today continue to visit people living in very difficult circumstances, making sure that they can continue to provide support to those people and hopefully prevent them from falling into homelessness as well as support the homeless on the streets with soup vans and the like. Charities, including Vinnies, who do great work helping people who are either, as I said, homeless or at the risk of homelessness is important. It is a good way for people to contribute and to do something themselves. But I believe it's the role of government to help those who are in need or are homeless.
That's why Labor as the alternative government have developed and published our national plan to reduce homelessness. As the opposition, our role is to oppose the government, hold it to account and expose its short-comings, of which there are many. Importantly, we also put ourselves forward to the citizens of Australia as the alternative government with policies to address the issues now facing all Australians. Homelessness is clearly a national problem. It's a national disgrace, and a Shorten Labor government will implement a national plan to reduce homelessness in cooperation with the states and territories. This will be a long-term plan, as it needs to be, and it will address homelessness and the issues that contribute to it—mental health, trauma and substance abuse, as I've mentioned.
There is a massive gap in housing policy. A Labor government will provide national leadership on housing affordability and reducing homelessness. Labor took to the 2016 election a policy to halve homelessness by 2025. The particular focus for our homelessness policy will be to support women and children escaping family violence being forced out of their homes and into homelessness. Part of that will be providing $88 million for a safe housing fund to provide transitional housing for women and children escaping that family violence, for young people leaving out-of-home care and for older women on low incomes at risk of homelessness. So Labor has a clear plan for housing affordability, and some of the other contributions have talked about that.
In the time remaining, I just want to say that this bill will not solve the problem of homelessness in Australia. The only way we will be able to take effective action against homelessness and make housing more affordable is to elect a Shorten Labor government at the next election, because we know that this national disgrace of homelessness in the lucky country must end.
Some of the most distressing and difficult calls to my office come from people who are struggling with housing—whether they haven't got a place to live, whether they do and they're having problems with a landlord, or whether they're in public housing. I don't think it's hard to imagine how profound the concept of having a secure roof over your head is. Therefore, when it's at risk it is a very emotional and distressing situation.
I don't know when I first learnt of Abraham Maslow and his hierarchy of needs—I suspect it was when I did my first psychology subject back in the eighties—but that has come to mind as I've been considering this piece of legislation. Obviously, if you look at Maslow's hierarchy of needs, shelter is primary. I suppose I'd be much happier if this bill were to consider a housing-first approach to homelessness or to ensure there is support for people to maintain their tenancy rather than the approach it's taking. People also have primary needs for food, for being able to cook their food, for being warm. Then not far above that is the need for security and safety. So these are really profound issues that we're dealing with. But people also need to be able to look after the needs they have that are unexpected. It might be that at certain times of the year their household costs are high, whether that's due to car registration or back-to-school costs. What I'm most concerned about in what's being proposed by the government here is the lack of flexibility for people who live in public housing or who have probably only their welfare support to get them through this particular period of their life, and they have very little buffer. This is taking away a layer of flexibility that, until now, people have had. So I'm very uncomfortable with what seems to be a disproportionate response to the problem as far as the automatic rent deduction component of this bill goes.
I should note there are two different aspects to this bill. I will certainly be supporting the changes to the National Rental Affordability Scheme, and I will speak a bit more about that later. I want to focus on the automatic rent deduction. Under the proposal, states and territories, as well as community housing providers, would be able to request that the secretary withhold a portion of a tenant's income support and/or family tax benefit payments and use these funds to directly pay rent and utilities costs on behalf of the tenants. The bill will allow automatic deductions for people in receipt of not just one category of government support but a wide range: the age pension, the disability support pension, carer payment, family tax benefit, Newstart and youth allowance. This means that funds could be withheld from tenants without their permission, without them granting any consent, if a state chooses to apply it that way. We may well see that this is rolled out differently in different states, which just introduces another layer of confusion.
Maintaining a rental is important. Nobody questions that. But let's look at the actual problem that this legislation is supposed to address. The advice that I've seen from the Parliamentary Library shows that 343,000 households out of a total of 395,000 households in public or social housing, which is around 86 per cent, are already choosing to have voluntary rent deductions. Those are the 2015-16 figures. That's where people have absolutely stepped up and said, 'Yes, I would like it to come out directly.' That's a choice they've made. The other figure that we have here, which was presented to the Senate inquiry, shows that 90 per cent of tenants have no problem meeting their rental obligations. So you put those two things together and you wonder how big this problem is. The Parliamentary Library figures I've seen show that over the five years from 2011-12 to 2015-16—that might actually be four financial years—national rent collection rates have over averaged 99 per cent across public housing, community housing, state-owned housing and managed Indigenous housing. We're now starting to see the size of the problem. We're really talking about one per cent, yet we've got a bill that means it could happen to 100 per cent of people under Centrelink.
Labor took a different approach to this. When we were in government, we introduced the Social Security Legislation Amendment (Public Housing Tenants' Support) Bill 2013. I think that actually shows what our intention was; it was to support tenancy, not the much-loved big stick approach that those opposite have. We did this on the recommendation from the housing and homelessness white paper, which was called The road home: a national approach to reducing homelessness. I do think that we have an obligation, wherever possible, to prevent homelessness. That's because helping to maintain someone's tenancy is a way easier solution than helping them find a new place when they are homeless. Those are the principles that underlie it.
We did look to introduce an automatic rent deduction scheme four years ago with very special provisions around it. I might add that it was opposed by the Liberals. They opposed it. At the time, their shadow minister, the member for Menzies, claimed that it would increase housing stress and financial hardship. Those were the grounds on which it was opposed. Yet the scheme that they're choosing to introduce now, a few years later, is much harsher than the one that we looked at. Our scheme would only have applied to people who were in arrears and at risk of homelessness. The bill before us today applies to everybody. Whether they agree or not, it apples to everybody.
Our proposal also capped rental deductions to make sure that people weren't left without the ability to do some management of their own affairs or meet other commitments. This government bill doesn't place any limit on the amount of deductions, potentially leaving people with nothing to live on. There's nothing to protect people so that they can put some food on the table. If you combine it with the people on the cashless debit card trial, you can see how easy it would be for someone to end up with zero disposable income. You might say, 'Well, that's life. Those are the things that happen,' but what about treating people with respect and giving them some autonomy so that they can learn to manage their money?
I also look at this and think, 'What about kids going back to school?' It is really expensive equipping kids to start the school year. It's expensive equipping them to start the winter part of the year. My children seem to grow out of their shoes very fast in a school year. You hold off until September and finally have to give out and buy them a new pair of school shoes. Of course, by the end of January, they will have well and truly grown out of those. These are the sort of costs that we are not giving people flexibility to move around. I've also had the example raised with me of a domestic violence incident, where someone needs to fix something that has been damaged. You're taking away the flexibility to do that. I heard the member for Solomon say that this seems like well-intentioned legislation. I don't think the consequences of this have actually been thought through for people in their homes day to day and week to week as they try to deal with this. Remember, it will depend on what the states decide to do. There are a lot of unknowns.
When we looked at this principle, it was a requirement under our scheme that tenants be communicated with before the amount withheld was changed. There is nothing in this bill to do that. There is nothing to say that there has to be communication with the tenant. This bill also allows an amount to be deducted to compensate landlords for property damage. If you think about some of the causes of property damage and you look at domestic violence and family violence, those can be the circumstances in which property damage occurs. Our bill limited the deductions to cover only amounts for rent and utilities so that people were protected from being forced to pay for damage that was caused by other people. They are some of the safety things that we looked at that are completely absent from this legislation.
We are really concerned about the impact of this scheme as its proposed on tenants—that this is something that could genuinely push people into financial stress and poverty. We have always said that the vast majority of people receiving income support are more than capable of managing their own finances. In fact, it is ironic that this very issue came up a couple of days ago in this place during the payday lending debate that we had. I noted comments by the member for Mackellar, who made the point:
… there are people in this country who may be on low incomes, but they actually have a much better sense of how they spend their money than some of the bureaucrats in the Labor Party do. They don't need you to tell them how to do it. That's because, let me tell you, they're aware of what they're doing.
It's interesting to have a comment like that in one debate, yet have legislation like this.
I think there was a misunderstanding about what we want to see with payday lending, which are protections to ensure that people are not exploited by dodgy payday lenders. But, ironically, this legislation will push people towards that sort of source of income if they find they have a problem that they need money to deal with, like a broken fridge, a washing machine or a tyre that's not going and they can't get to their job. I just think we need to bring some consistency. You can't really argue to treat people one way in one piece of legislation and then come up with something like this in another piece of legislation.
What we're seeing here is a problem that financial autonomy is only really respected when it's convenient. Let's remember that 90 per cent of tenants have no problem meeting their rental obligation and rent collection rates have averaged over 99 per cent across every sector. That's why I would argue that this is a really disproportionate response to what has been defined as a problem, but quite a small problem. I'm very uncomfortable with the continuing demonisation of people who, at a time in their life when things are really tough and they've turned to the government for help to get them through, are going to be hit by something like this.
The other aspect of this bill is the National Rental Affordability Scheme. In the time that I've got, I'd like to talk about housing affordability. So little has been done by this government on what is genuinely a big problem. There is not a day that goes by in my electorate where people don't talk to me about their inability to find an affordable rental property or, further down the track, their challenges in trying to find a home that they can call their own. I held an Older Women and Homelessness Forum. It isn't just young people who are talking to me about these issues. There are older women who are deeply concerned about their future when they stop work and as they retire, and some of these women were not far from that. Others have seen friends not able to find a secure home and therefore making choices to live in unacceptable and not-safe environments.
They're the issues that we really should be dealing with. While I welcome seeing some amendments to the National Rental Affordability Scheme, it is a pity that it is so little. I remember when this scheme was launched I was fortunate enough to have the then Minister for Housing, Tanya Plibersek, in her role. That is now of course being picked up by the shadow minister for housing and homelessness, Senator Doug Cameron. Both those people have showed a deep commitment to this area of policy. The minister was able to come up to the Blue Mountains, and we opened several places that had been renovated under the NRAS or built specifically to be affordable accommodation. They are good-quality places that have provided people with a secure place to live. Our original scheme provided for 50,000 new, affordable rental buildings, and, given the strong interest in the scheme, we look to extend it to a total of 85,000 buildings. Unfortunately, of course, that program was capped at 38,000 dwellings by the Abbott government in the 2014-15 budget.
As I say, it is pleasing to see some mention of housing affordability. I think perhaps that the name of the legislation is a little bit misleading. I would much rather be seeing a holistic package that looks at a range of issues that will address housing affordability, and that is everything from addressing some of the tax situations that we have, which Labor will certainly do, to providing more capacity for community based housing.
Few things in life are more important than shelter. This bill, the Social Services Legislation Amendment (Housing Affordability) Bill 2017, seeks to extend the voluntary Rent Deduction Scheme so that rent can be deducted automatically from social security payments, including Newstart, pensions and family tax benefits. Importantly, Tasmania has not agreed to participate in this scheme, and neither have Victoria and the ACT.
A form of compulsory rent deduction was a recommendation from the Road Home homelessness white paper, which the former Labor government commissioned. The former Labor government introduced legislation to enable a compulsory rent deduction scheme, which did not proceed when the coalition came to power. I remind the House that the member for Menzies, who was the then coalition housing shadow minister, complained that Labor's bill would have driven people into housing stress. It's worth remembering that, back then, the coalition's policy on all Labor legislation was to oppose it, no matter the merits of it. I wouldn't mind seeing the member for Menzies come into this House and explain how he could oppose that bill but support this bill, which goes so much further. What a stark contrast between the Liberals in 2013 and the constructive approach of our side under the leadership of the member for Maribyrnong. We have been a constructive opposition. We have approved government legislation that we agreed with, we have sought to amend what we think could be improved and we have opposed what we do not support. That is the way this parliament is mean to work.
The fact is that the Liberals' record on affordable housing has been absolutely abysmal. We've got here the Liberal record to date, and it is stark. They've failed on so many fronts. The Abbott-Turnbull, now Morrison, government's record on homelessness is that it cut $44 million a year in capital funding for homelessness services in its first budget. In its first budget, it affected some of the most vulnerable people in the country. It failed to provide funding certainty under the National Partnership Agreement on Homelessness. It defunded Homelessness Australia, National Shelter and the Community Housing Industry Association to prevent them advocating for homeless Australians. It abolished the National Housing Supply Council and the Prime Minister's Council on Homelessness. It failed to appoint a dedicated minister for housing and homeless. It is now threatening funding cuts for remote Indigenous housing. It's an abysmal record, and this bill, while it goes some way towards addressing housing affordability and people's ability to stay in public housing, does not do nearly enough to address five years of failure.
Five years after the Liberals came to office—five years—we now have this bill before the House, drawing on the work done by Labor in 2013 but going so much further and incorporating some really nasty stuff, frankly. There are some real punches to the gut, which this government seems all too ready, all the time, to dish out to the poorest and most vulnerable people in this country. It is little wonder that our shadow minister seeks to attach to this bill an amendment that notes the government's manifest failure to address housing affordability. For five years, we've had budget cuts and inaction. We've had five years of making it harder for people to secure affordable housing.
There are some stark differences between this bill and the bill that the former Labor government presented to this parliament. Labor's bill to allow compulsory deductions would have applied only to tenants in rental arrears. This bill applies to all tenants whose income is supplied in whole or in part by social security. Labor's bill would have ensured that tenants were informed when deductible amounts were to be varied; this bill does not require that tenants be notified. Labor's bill limited deductions to rent, rental arrears and household utilities, and we agreed with domestic violence advocates who argued that allowing deductions for property damage could impact victims of domestic violence.
This bill allows for deductions to compensate for loss of or damage to property, and this is of particular concern. It's often women who put their names on the lease, and they're the ones who end up being legally lumbered with the bill when damage is caused through no fault of their own. I do understand the need for people to be responsible and accountable, but domestic violence is complex, and tackling it requires tact. It cannot be addressed with blunt instruments such as this.
Labor's approach, both with this bill and on housing and homelessness in general, is in stark contrast to the government's. We put people first. We value people. We want to help people take part in society, not kick them while they are down.
Homelessness is a real issue. On the most recent census night, 116,427 people reported being homeless, nearly 14,000 people more than in 2011. The number of people experiencing homelessness has risen by 13.7 per cent since 2011. The rate of people experiencing homelessness has increased by 4.6 per cent over the last five years. This government crows about a growing economy, about growth and jobs, and yet we've got some of the most vulnerable people in our country experiencing homelessness and not having a roof over their head. That rate should be going down, not up.
In Tasmania, my home state, homelessness continues to be a serious problem, and it affects people across all ages. The census in 2016 showed that 1,622 Tasmanians are homeless, more than half of them in the south and mainly in Hobart.
Most homelessness is hidden. Only eight per cent of homeless people sleep rough. This is worth saying because people think of homelessness as some poor guy sleeping on a park bench. It's much more complex than that. It's kids on Newstart or the jobseeking payments who can't afford rent. They can't stay in a share house. They couch surf. They move from place to place. It's insidious. It makes it much harder for people to find work and stay in work.
Homelessness costs the economy. It costs society and it costs the individuals, but it also costs the economy. So Labor will support the passage of this bill through this House, but we do intend seeing it referred to a Senate committee for a deep inquiry into its impacts, and I look forward to seeing what the recommendations of that inquiry are.
I am broadly in support of the intent of the Social Services Legislation Amendment (Housing Affordability) Bill 2017, but Centre Alliance reserve our position in the Senate. As many of the speakers have already said, there are two main elements to this bill: the establishment of an Automatic Rent Deduction Scheme for social-housing tenants and a tightening of provisions related to the National Rental Affordability Scheme, also known as NRAS.
The object of NRAS was to encourage large-scale investment in housing to increase the supply of affordable rental dwellings and reduce rental costs for low-income households. The technical legislative changes to NRAS that are before us today are welcome and, in my view, non-controversial. However, I would like to take this opportunity to speak out about why NRAS more broadly has merit and why it should be revived in the sense of us ensuring that we have some further funding going into the future in order to buy more housing stock.
NRAS was an opportunity for community organisations and mum-and-dad investors to be part of the affordable-housing solution. We need investors outside of state governments to grow affordable housing stock. That is the reality. Before I came into this place, I had the great privilege of working for an organisation that's called SYC, formally known as the Service to Youth Council. Their branch that looks after young people is known as HYPA. They were able to expand their transitional housing due to the NRAS. Because it was able to supplement the small amount of rent, they were able to offset the cost of building housing stock.
With respect to the Service to Youth Council, they had seven units from 1991 until ultimately 2009-10. However, by the end of the scheme in 2012, they had been able to increase those seven units in a very short period of time to 39 units. What did that mean? That meant that we had scores of young people supported with transitional housing and it provided wraparound services of youth workers in the afternoon and an overarching social worker who could ensure that there was case management for all of those young people and at no point was a young person charged more than 30 per cent of their income, which was often primarily youth allowance, to cover their rent. The scheme is successful for Service to Youth Council and that is because the focus is on it being transitional housing and equipping young people with the skills needed in order to successfully transition into the private rental market after a couple of years.
So I would urge the government to ensure that there is a policy lever for the wider Australian community, whether that be community organisations or mum and dad investors, to be part of ensuring that we have wide housing stock for affordable housing and that, ultimately, meaningfully addresses homelessness, more than anything else.
I'll move on now that I've talked about NRAS. I have beep talking about NRAS in this place for a couple of years. But I'd also like to talk about the Automatic Rent Deduction Scheme. Firstly, Centre Alliance, as a party takes a very dim view—and I've said this many times to governments, to ministers and to their advisers—when you do not disclose the costs associated with a policy. How can I, as a democratically elected member in this place, vote on to the government's proposed legislation when the government refuses to state how much it's going to cost? It is actually offensive that the government will not share with the parliament, as part of their decision making, how much of Australian taxpayers' money it's going to cost. That's the critical key here. This money does not belong to government. This is the taxpayers' collective pool of money. So, when you don't disclose it, it makes it extremely hard for me to support it. I find this lack of transparency and accountability actually quite offensive, and I hope that there are government ministers or decision makers in their team who are listening to this. I want to maintain constructive relationships with you. Centre Alliance wants to maintain constructive relationships with you. But, in order for us to have a strong working relationship with government, you need to be transparent with your policy settings. It is simply not good enough for the community that I represent to hide the monetary cost or benefit to the taxpayer.
Aside from the lack of transparency, there are a few other issues that I think are important to raise. There is merit in organisations having levers with the primary purpose of reducing homelessness caused by tenants falling into arrears. I also recognise that managing rental income is an administrative burden on state government housing departments where they have a large volume of stock and also on community housing organisations. I've yet to hear, should this legislation go through, whether either state governments or, indeed, community housing organisations are prepared to place what they will be saving with such an automatic scheme back into extra stock. I and Centre Alliance have some concerns with this legislation; however, as has been mentioned by many people in this House, those concerns will be examined further in another place.
I think the first concern and issue that we need to address is: should automatic deductions apply to all tenants or should it be a mechanism available for tenants who regularly fall into arrears? If this is a blanket payment for all tenants who are on Centrelink benefits, we will effectively create two classes of tenants in the community housing and public housing sector: those who are receiving a Centrelink payment and those who are in employment. I think we need to look very carefully at whether there will be some negativity associated with having two classes of tenant. Secondly, should there be a time limit for the automatic deduction? My belief is that it should really only apply for tenants who fall into arrears and, secondly, it should be for a temporary period of time—a maximum of, say, 12 months. After that time, one would like to think that the housing authority, whether that be public or a community based housing organisation, has been able to support the tenant to ensure that they don't fall into arrears in the future.
We also need to look at whether there should there be a limit on the capping. Should there be a limit to the amount of money that goes to arrears deducted from the Centrelink payment? We need to examine what safeguards will be in place so that tenants are not left with zero income simply because, in that fortnight's payment, their whole money went towards their housing. Ultimately that could lead to some disastrous outcomes where a person doesn't have any money for food, for medical needs and for ensuring that their children are supported to continue their education. I don't think there is a member in this chamber who wants to see a person destitute. The debts can be paid over a broader period of time. When I was with the Service to Youth Council and managing that housing program that I talked about earlier in my speech, we would work constructively with tenants who fell into arrears to ensure there was flexibility around their payments and really work from a position of goodwill to ensure that that debt could be paid quickly, recognising the other debts and commitments that they had.
In closing, while I will support this bill in this House, I'll be looking forward to working with the minister and his team—and, of course, the department—to ensure that this piece of legislation is in its best possible position when it's in the other place.
It's my great pleasure to rise and speak on the Social Services Legislation Amendment (Housing Affordability) Bill 2017. The bill introduces the framework for the Automatic Rent Deduction Scheme. The ARDS enables rent and utilities to be deducted from income support payments and family tax benefit for occupants living in social housing. The bill also makes amendments to the National Rental Affordability Scheme Act 2008 to streamline and simplify the administration of the National Rental Affordability Scheme, or NRAS, until it ceases operation in 2026-27. The primary objective of the ARDS is to reduce the risk of homelessness for social housing tenants, particularly those in serious rental arrears who could face eviction or housing abandonment. We see this as fundamental to ensuring that people facing housing stress have the security of housing which we know is an absolute right in our community and in our nation. I'm very pleased that the member for Mayo is supporting this bill.
The government committed to implementing a compulsory rent deduction scheme for social housing welfare recipients in the 2016-17 budget following a request by the states and territories. As a precondition for participation in the scheme, the minister responsible for housing in a relevant state or territory must write to the Commonwealth Minister for Families and Social Services setting out the social housing policies of that state or territory and how these policies protect tenants from financial hardship. I really want to emphasise that this is about protecting tenants from financial hardship. The last thing that this government wants to see is people being evicted because they have struggled to pay their rent. This gives them security and gives their families security, and we think that this is an incredibly important measure.
I want to stress that the ARDS deductions are limited to amounts for rent and household utilities only—the absolute fundamentals. Any arrears incurred due to the suspension of an income support payment cannot be deducted from a single payment under ARDS when the payment recommences. Where the tenant is also part of an income management scheme or cashless debit card trial, deductions will only be taken from the restricted portion of the income support payment.
The amendments introduced in this bill also clarify ambiguous provisions in the NRAS Act relating to the power to make regulations and lay the foundation to strengthen and simplify the future operation and administration of NRAS. The amendments provide general regulation-making power to enable the government to make changes to the NRAS regulations to protect investors until 2026 when NRAS ceases operating. The amendments also include specific regulation-making powers to support the operation of NRAS and to further protect investors through changes to the regulations, including requiring participants to pass on state and territory investments to investors in a reasonable time and also giving special dispensation where a tenant is inadvertently charged more than the 80 per cent limit, provided that the tenant is compensated.
While most approved participants in NRAS behave appropriately towards investors, a small number of approved participants don't do the right thing—which makes life exceptionally difficult for investors—by not passing on incentives promptly and engaging in other undesirable conduct. The government's amendments will permit the Secretary of the Department of Social Services to accept an enforceable undertaking from an approved participant. It's really important to emphasise that the government is committed to putting in place measures to reduce the risk of homelessness for social housing tenants and to reduce rental costs for low-and moderate-income households. The bill will do that through the implementation of the ARDS and the amendments to the NRAS Act.
I want to emphasise that so much of what the government is doing at the moment is concerned with addressing the issues of housing affordability and housing security. I had the great pleasure just a couple of days ago in Canberra to make a very important announcement under the Homes for Homes scheme, where some $200,000 has been provided. That great scheme, which is making some real inroads, is supported by a $6 million investment from the Commonwealth. That scheme will address a growing cohort of Australians who are really struggling with housing security, and they are older women—particularly women over the age of 55, who have suffered a relationship breakdown or have reached the end of their working life and they've got inadequate superannuation. We're making a lot of inroads into addressing that for women and giving them additional capacity to save for their superannuation. We are seeing an increase in the number of women who are facing housing stress, and I was absolutely delighted to make this announcement. This particular investment will go towards matching a number of women up in the one house and providing them with very secure housing at a reduced rental, which is capped at some 25 per cent of their income.
Right across the board, the government is working incredibly hard. I do have to say that we are really concerned about some of the resistance on the other side of the House to the amendments and the proposal under our Automatic Rent Deduction Scheme. I say this with a bit of regret. I know there are some members on the other side who support this. There are quite a number of Labor members in the states and territories who also support this measure, because they see this as fundamental to housing security. If the rental payments and the utility payments are deducted from overall income, a family then has peace of mind. The risk of falling into arrears is dramatically reduced. There is still scope for a family, where there is particular financial pressures, to raise issues in relation to the deduction and to deal with them on a case-by-case basis. It is really incredibly disappointing that we haven't seen universal support for this very important measure.
It's really tough to secure social housing, which provides families with the support that they need at a cost that they can afford. We all know that families come under extraordinary financial pressures. It certainly happens in my community in Corangamite, and I know it happens all around the nation. When there are competing pressures, this really ensures that the fundamentals are provided and that rent and utilities are paid for. It's really difficult to understand why this measure is not being supported by members opposite, just like all of the consternation with the cashless welfare debit card.
This is another really important measure where there is the opportunity to provide for the basics of life; to make sure there is food on the table; to make sure kids get the essentials in their family; to make sure that money is not spent as a priority on alcohol, on drugs or on cigarettes; and to make sure that the basics of raising a family are dealt with first. This is a measure that has seen so much incredible support, particularly in the communities where it is being rolled out. We heard about this in question time yesterday. It's really incredibly disappointing to see the resistance from Labor members and also the lack of understanding for many members who may not have spent a lot of time in Indigenous communities. It's very, very difficult to understand why this measure and measures like this are being resisted.
The other important thing I want to say is that the ARDS responds to the concerns of the states and territories. It works in partnership with the states and territories, the participating jurisdiction, by making the legislation less prescriptive about the form that an agreement can take between a tenant and a social housing provider. It also clarifies that the definition of a social housing lessor includes community housing providers registered under a law of a state or territory. I know there is a lot of support in some states, including some of the Labor states. I reference WA in particular. This stems from some discussions that I've had with the Labor government of WA, which recognises how important this is to the people of Western Australia. The Labor government in WA recognises how important this is for families in Western Australia, who are struggling and who need that sense of security.
There is no greater right for many families than the right to have a roof over one's head. The last thing that we want to see as a government is people being evicted or in severe housing stress with an accumulation of arrears because, for whatever reason, they have not prioritised their utility payments and their rental payments. So I commend this bill to the House. I commend this bill to the House because it is about justice. It is about standing up for families.
In everything we do as a government, we are putting Australian families first. We are putting Australians first. We are standing up for those who most need our help. In my portfolio responsibilities as the Assistant Minister for Social Services, Housing and Disability Services, I am really pleased to be standing up for those who haven't had, traditionally, a voice. Through a great deal of bipartisanship in this parliament—and I make particular reference to the work that's being done to bring the NDIS into full scheme, to roll out that incredible scheme for all Australians with disability—I'm really, really proud of the work that this government is doing to stand up for those who most need our help. It's a bit of a common theme when I meet with my constituents. They might seek some funding support for a particular interest of theirs, and I always make the point that, first and foremost, as a government, we need to be standing up for those who most need our help.
Madam Deputy Speaker Claydon, I might add that you and I did a lot of very good work in our parliamentary inquiry into family violence law reform. Again, that was all about standing up for those who have been impacted by family violence, because they most need our help.
So I'm really hopeful that the Labor Party might have a change of heart. They might see the merits of this very important bill, this important measure to stand up for families, to give them the financial security and the housing security that they so need. As I say, I commend this bill to the House.
I will just pick up on what the member for Corangamite just said about helping victims of domestic violence. The Social Services Legislation Amendment (Housing Affordability) Bill 2017, as it stands today, could mean that a tenant who is experiencing family or domestic violence could actually be liable for the damage caused to a rented property by someone who is an abusive partner. We don't support this mandatory Automatic Rent Deduction Scheme for all public- and social-housing tenants. Only when we are aiming to prevent homelessness should we apply automatic rent deductions.
We on this side of the House will keep those opposite accountable, and we will ensure that we move amendments in the Senate to make sure that those who are the most vulnerable, who are most at risk, those individuals who are in arrears, are not at risk of being left on the streets without a place to live, left behind by this government. We will move an amendment to cap the maximum deduction to prevent the scheme forcing people into housing stress and to make sure that people have money to meet their other needs and pay their other bills—for essentials, like food.
We will also move amendments to require that compulsory deductions can only be made for rent and utilities and not for property damage. This is to protect people from being unfairly held responsible for another person's actions, including in the case of family and domestic violence.
Around 86 per cent of public- and social-housing tenants use the Rent Deduction Scheme currently. At the moment, some social-housing tenants are also income support recipients. They can choose to have the Department of Human Services withhold a portion of their fortnightly payment already. Fancy that! Giving people a little bit of choice and control over their own lives! Simply because they are on income support does not mean they need to be treated in this way or demonised.
It's an absolute shame and an outright disgrace to see young people and potential home buyers being locked out of our housing market in this country, with housing stress on the increase and only one per cent of private rentals actually being labelled as affordable. The Abbott-Turnbull-Morrison government can't deliver a pizza—they'll probably deliver us another Prime Minister before their term ends—let alone deliver the housing affordability solutions that we need. They've been in government now for almost six years, and we are still waiting.