Social housing, housing affordability – Interview with 2SM, Sydney
E & OE proof only
Subjects: Social Housing, Housing affordability
Journalist: Thanks very much Minister for coming on our show, I know it was pretty short notice and you’re a very busy man. I can call you Mark, is that alright, is that OK?
Minister Arbib: Of course, of course you can.
Journalist: Mark, we have a problem with this low cost housing. I noticed in an article that was in the Financial Review where ‘Senator Arbib said the future of public housing was with the private sector because it was not financially possible for Government’s to provide an estimated $24 billion needed for social housing by 2020’ and that seems to be quite a big problem because if you look at also there is an article in today’s paper that says that your average rental figure is $485 a week in Sydney.
Now as a person, say you’ve got a husband/wife and two children, and the guy is earning $60,000 per annum. By the time he pays his tax he’s left with about $45,000 and of course then he pays his rent and he’s left with $20,000 which is about $400 a week, which isn’t a lot of money. So, I was trying to think myself of ways that we could somehow fix this and I thought, well, as you know, if I’m a private investor and I have a house that I lease out I get tax deductions by way of negative gearing and depreciation. So why in fact these people on lower incomes, why couldn’t the government look at maybe giving them some sort of tax relief which would help subsidise their rental, which would maybe help the government as far as the low cost housing. What do you think Mark?
Minister Arbib: Well first off Max I have to say you’re 100 per cent right about the lack of affordable housing in this country. We are looking at shortfall of around 500,000 homes for lower income people, and if you look at the waiting lists for public housing that’s up to over 200,000 at the moment. So, people are under a great deal of stress in terms of finding a house and those that have a house are also under great stress financially so it is a big, big problem. The Government, of course, is looking at ways that we can alleviate that.
But I have to say Max, currently, and most people wouldn’t know this. We’re spending federally about $20 billion to try and create more affordable housing. We’re actually in the process of creating something like 80,000 new homes to try and increase supply and it’s one of the big issues, and you’ll know this with your background, one of the most important things we can do is try and increase the supply of housing. Now we are doing that through things like the stimulus. People haven’t realised but the stimulus actually will lead to 19,300 new public homes being built across the country.
The other one that is very important is the National Rental Affordability Scheme and there the Government is supporting 50,000 homes to be built with a rental deduction for around 20 per cent over the next decade. So it’s very important that we continue on with that work. It’s a huge investment and it’s supporting something like 15,000 jobs in the construction sector, so it’s what the Government’s actually doing right now.
Journalist: I see, and where are these homes, the majority, what state are they being built, obviously it’s right across Australia. Is New South Wales getting a fairly good slice of this, because as I say we, our self and the Northern Territory or Darwin particularly, Sydney and Darwin seem to be the most expensive places to rent properties?
Minister Arbib: New South Wales is getting one of the largest shares. They’re going right across the country at the moment. It came out of the stimulus package from the Global Financial Crisis and not just did we build new stock, we are also providing maintenance repairs to the current public housing stock. The repairs, we are looking at something like 80,000 repairs being undertaken by State and Territory Governments. I have to commend the New South Wales Government, their Department of Housing, they’ve done very well in terms of the stimulus stock.
But also they’re working closely with community housing and not-for-profit providers and I guess what I was trying to say in that article, and it was from the speech I gave in Redfern, that the stress on the system at the moment is only going to grow with the ageing population. In the last ten years Government have spent over $10 billion on social housing and the number of homes has decreased.
Journalist: Do you retain those homes Mark, does the Government retain those homes or do they sell them off?
Minister Arbib: Well each State is different, but the vast majority they would retain. There has been some transferring of stock from Government to community housing providers and that is something we support. The reason why I am such a big supporter of the community housing system is that they focus on low cost and affordable housing and what they do is they cross subsidise social housing by also building mixed estates. So they provide social housing and low cost affordable housing in the same estates. If you’ve been out to Bonnyrigg there is a public housing estate out there which is run by St George Community Housing, it’s a mixed estate and it’s such a fantastic model of where we need to take affordable housing.
Journalist: And you’ve got young people and elderly people all living in the same environment. That’s…
Minister Arbib: Exactly, but even better than that, you walk through the estate and you wouldn’t know which was a public house or a house owned by the government. You wouldn’t know which was affordable housing or privately owned. They all look very, very similar. That is for me the model you want, cause when you’re dealing with social housing, public housing, we’re dealing with some of the most vulnerable people in the community and we want to make sure that we provide them with the best housing possible. But at the same time as that, one of the problems you’ve had with public housing estates is they entrench disadvantage.
Journalist: With ghettos, you remember with ghettos.
Minister Arbib: Exactly
Journalist: Which we don’t want.
Minister Arbib: And we do not want that, that is not good for anybody. Public housing shouldn’t be a destination for people, it should be a transition for many people. While there are many vulnerable people, the elderly, people with mental illness, homeless people who will be in long term social housing. For many people they do have the capacity to work and social housing can at times stop them from getting back into the private rental market but can also stop them getting a job. So I want to make sure that we’re building mixed communities that encourage people to leave public housing, move off into affordable housing if they can possibly do that.
Journalist: Mark, one thing I mentioned, I had last week the Treasurer of New South Wales Mike Baird on and I mentioned to Mike, I said what about the idea of New South Wales if you pay the stamp duty when you sell the house, not when you buy it? So as you know, it’s quite a big cheque you’ve got to write out when buy a property for stamp duty, but when you sell it of course it comes out of the proceeds of the sale but also it means that the person that is buying the house well they in fact are borrowing whatever 70 per cent of it or 50 or whatever their borrowing on that particular property and the state would lose no revenue. Do you see some merit in that?
Minister Arbib: The States at the moment have a great deal of charges and taxes that obviously provide an obstacle to first home buyers but also add to affordability or the home pressures. And what we are doing is we are working with the states through the Treasurers, this is through the COAG council of reform and a great deal of work has been done there looking at those issues to see what can be done to try and reduce down charges for the developers and the builders so that they can pass on those savings to people looking to buy into the marketplace. That is work that is being undertaken now. But I think what you’re saying there is worth looking at, no doubt about it.
Journalist: Well it makes no difference to the revenue of the State, they still get the same revenue. I did suggest it once when Michael Egan was Treasurer but he put it on the back and forgot to take it off the front and he called that vendor tax but that didn’t last very long as you know.
Minister Arbib: What did Mike Baird say?
Journalist: He was going back to his colleagues to discuss it, because I think it just makes a lot of sense and it means that the State is not out of pocket at all and I think the same thing with my suggestion to you giving these people on low incomes some sort of a tax benefit off their taxable income it may save the the government’s more money as far as sort of providing these low cost housing. Another thing, I don’t know how much more time we’ve got, but another thing I would like to discuss with you Mark, even just very briefly, is disabled housing. That is another problem we have at the moment.
I know at Sunnyfield a lot people are doing a great job there but I do notice in today’s paper where disabled residents of a historic Sydney home are to be moved on with a not-for-profit organisation planning to develop a complex of seven-story unit blocks on the side. Now this was given to these people some, I don’t know, 50 years ago and of course now they’re knocking it down and these people, well, they have to be relocated. A lot of people have lived there for 40 years, it’s going to be very difficult for them. I think, I thought that maybe they could be relocated to a particular home and then bought back once they re-develop it, they should be the first ones back there but I don’t know whether that is going to happen.
Minister Arbib: Max, I actually read that article this morning and I thought that was what the State Minister, the New South Wales Minister, I think was trying to say that many of those people that are leaving will be, will be hopefully bought back. But also he was good enough to say that he will work with those residents to try and make sure that the system meets their needs. So as you’ve said, it is crucially important that we’ve got supported housing for people with a disability but certainly with an ageing population it’s going to become more of an issue. One of the beauties of the stimulus housing we’re providing is the universal aspects to it so much of it is built for people who do have a disability which is very good to see.
Journalist: Yes, that…
Minister Arbib: Can I just go back to something you said before. One of things we do provide to people who are low income earners who are finding housing unaffordable is Commonwealth Rent Assistance and that provides something around, on average about $100 a fortnight in support to people who are renting in the private rental marketplace. That is helping about a million people so it’s pretty significant and certainly does provide support.
Journalist: Well you’ve told me a lot Mark and I appreciate that and our listeners and I thank you very much for coming on the show, federal Minister.
Minister Arbib: Happy to come back anytime Max, it was a lot of fun.
Journalist: I appreciate it, thanks very much
Minister Arbib: Thanks Max, bye bye.