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Budget 2018: Morrison silent on housing affordability with social housing on ‘starvation rations’

Australia’s social housing has existed on “starvation rations” for decades.

Australia’s social housing has existed on “starvation rations” for decades. Photo: AAP

On the issue of housing affordability, Treasurer Scott Morrison’s silence on budget night spoke volumes.

Despite a growing population, rising inequality, and sky-high property prices in cities and regions around the country, the 2018 federal budget turned a blind eye to issues of affordability, supply and social housing.

Affordable housing advocates expressed dismay at the absence of government initiatives and funding for social (government and non-profit-owned) housing.

The Community Housing Industry Association (CHIA) warned that housing affordability – “one of the biggest pressures facing Australian households” – will continue to get worse without government intervention.

CHIA executive director Peta Winzar called for “a sustained effort” from all levels of government to fix housing affordability, particularly for those on low and moderate incomes.

“Because being able to afford somewhere to live is more important than a generic tax cut,” she said.

In response to the budget disappointment, CHIA reiterated calls for a national housing strategy that creates affordable housing, removes “distortions in the housing market” via tax reform, and funds 200,000 new social and affordable dwellings over the next decade.

“Home ownership remains a challenge for many families on low and moderate incomes and more than 40 per cent of low-income renters are in housing stress,” Ms Winzar said.

“Unless we have a National Housing Strategy and the programs to support it, housing will still be on the front pages of the paper in 12 months’ time, when tax cuts promised [on Tuesday] hit people’s bank accounts. And it will still be a problem in 2024 when the 37 per cent tax bracket is eliminated.”

Social housing on ‘starvation rations’

According to University of New South Wales housing policy expert Dr Chris Martin, Australia’s social housing has existed on “starvation rations” for decades.

This week’s budget didn’t bring any relief for the ailing sector.

“Last year the budget made a few small steps towards a plan for improved affordable housing policy, but this budget hasn’t made any advancements,” Dr Martin said.

Dr Martin paints a picture of a national housing market in crisis, with a private housing system “subject for speculation”, and a social housing system starved of funding and unable to keep up with demand for affordable housing.

“We have a social housing sector that hasn’t kept pace with the demands made on it by a growing population. In particular, it hasn’t been able to respond to the increased pressure that low-income households are under in a private housing market where the cost of owner-occupied housing has risen very substantially,” Dr Martin said.

“As a consequence, low-income households are having to compete with higher-income houses for rental and losing out in that competition.”

One of the budget’s few nods to affordable housing was an $11 million expansion of the pension loan scheme. The ‘reverse mortgage’ scheme encourages older owner-occupiers to keep their house rather than move into aged care, by allowing them to borrow against their home and boost their fortnightly income to 150 per cent of the Age Pension.

While some argued that this measure could dissuade older Australians from downsizing and thereby freeing up larger homes for first home buyers and families, Dr Martin believes there is a more fundamental problem underpinning the housing debate.

“The bigger issue is that older people have so much wealth tied up in their housing. The reverse mortgage idea is a way of tapping that wealth,” Dr Martin said.

“Wouldn’t it be better if we had a system that didn’t result in houses being great stores of wealth, and other assets made us wealthy instead? So that your home in retirement was just that, a home.”

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