The Productivity Commission’s (PC) review of the National Housing and Homelessness Agreement (NHHA) found while it is intended to improve access to affordable housing, it is “ineffective”.
“It does not foster collaboration between governments or hold governments to account,” PC commissioner Malcolm Roberts said.
“It is a funding contract, not a blueprint for reform.”
Malcolm said over the life of the NHAA housing affordability has actually deteriorated for many Australians.
“The median low-income renter spends over a third (36 per cent) of their income on rent. About 1 in 5 low-income households are left with less than $250 after paying their weekly rent,” Roberts said.
“With the private market becoming less affordable, demand for homelessness services and social housing is rising.”
How can we improve housing affordability?
The PC report suggested that low deposit schemes, like the Government's new regional first home buyers scheme, and stamp duty concessions, should be phased out.
“The $16 billion governments spend each year on direct housing assistance could achieve more if it was better targeted to people in greatest need,” the report said.
“The nearly $3 billion given to first home buyers works against improving affordability. This money would be better spent preventing homelessness.”
Additionally, the PC report said the government needs to focus on improving rental affordability.
“A two-track approach is needed to ease the pressure on low-income renters — the capacity for low-income renters to pay for housing needs to be improved, and constraints on new housing supply need to be removed,” Roberts said.
The report said the $5.3 billion Commonwealth Rent Assistance program should be reviewed.
“There is a strong case to improve its adequacy and targeting,” it said.
“At the same time, State and Territory Governments should commit to targets for new housing supply and accelerate planning and other reforms.”