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Transcript by Senator the Hon Mark Arbib

Social Housing – ABC24, Lyndal Curtis

Program: ABC24, Lyndal Curtis

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HOST: the Federal Government wants to overhaul the way public housing is funded in Australia.  The Social Housing Minister Mark Arbib says State and Federal Governments can’t bear the cost alone and he’s urging the housing industry to think of ways to deal with the issue. Senator Arbib is speaking now with our political editor Lyndal Curtis. 

LYNDAL CURTIS: Minister Arbib, welcome to News 24.

MINISTER ARBIB: Good morning Lyndal.

CURTIS: You’ve given a speech this morning saying that the public housing system is financially unsustainable, and that you’re pouring billions of dollars in but the system is failing some of the most vulnerable.  What’s gone wrong?

MINISTER ARBIB: Well, there’s a number of things that have gone wrong.  The Government at the moment is spending something like $5.6 billion extra in terms of social housing.  The stimulus is creating 19,300 new premises.  We’re renovating and providing repairs for something like 80,000 homes but at the same time as that the public housing waiting list continues to increase. There’s a number of reasons for it – under-investment from the previous government, but also a growing demand.  We’ve got an ageing population.  We have baby boomers now starting to come through the system, and the demand on the system only grows day by day. 

At the same time as that, we’ve got stock that is ageing as well and constantly needs to be upgraded.  So the financial demands on the States and Territories are immense.  At the same time demand only continues to grow, so in the long run over the next decade my view is that public housing is unsustainable in the current system.

CURTIS: Well, you’re already, as you say, you’re already throwing billions of dollars at it.  Will it need to be billions more to fix it and do you simply not have the money?

MINISTER ARBIB: Well, it’s not about more money.  We have to change the system.  There needs to be a reform in place.  As you’ve said, and as I’ve said, there is record amounts of money going in.  It is having an effect.  But at the same time as that we need to be doing things differently.  At the moment, there has been a focus on governments providing public and social housing and we need to ensure that the community sector, the non-for-profit providers, are actually empowered to do the job. 

These are organisations – and we look at the UK experience and the experience overseas – large community housing organisations that have the capacity and the size to leverage against their asset base, to lend money from the financial sector and actually to invest in social and affordable housing.  But the community housing sector has the real advantage of being to provide a mixed housing response, to be able to have affordable housing and social housing together and get the synergies out of that, and that’s something that I fully support.

CURTIS: Is there a problem, though, that the States rely on getting decent amounts of land tax to help fill their coffers.  They also have states – particularly places like Sydney, have problems with land supply.  Can the community sector compete in that market and are states really willing to build more public housing when they could be getting more money for private housing?

MINISTER ARBIB: Well, I think the States get a hard cop on this one.  They are working very hard, and the Territories are working very hard, in terms of the public housing sector.  Regarding the stimulus, they’ve been rolling out their houses at a very fast rate, up to 10,000 by Christmas.  At the same time as that, though, the financial pressures on them are immense from public housing.  Then of course, connected to this is the stress on affordable housing and all the land tax issues, etc.

But what we need to be doing is empowering those community organisations.  The States have sat down with us and have agreed to work towards a national regulation for community housing providers.  That’s – that work is under way right now.  That’s a big reform, and when that’s in place those community providers will actually have the scale they need and some and the security they need to go out and seek funding. The States recognise that and they’re working with us on it.  Of course, the pressures on the states will only grow.

CURTIS: You point out in your speech that a lack of public housing is a barrier to ending homelessness.  When Kevin Rudd came in to Government, when you won in 2007, he made lots of promises about ending homelessness.  Did you in effect put the cart before the horse: you focussed on homelessness when some of the real problems are getting the public housing to end that homelessness?

MINISTER ARBIB: Well, there is a very big connection between social housing, affordable housing and homelessness.  It’s not the only factor, it is one of the factors.  We need to get on top of the social housing issue but at the same time as that we are, in terms of homelessness, making great ground. There’s something like 190 new projects, really innovative projects, to deal with homelessness, such as the Common Ground project in Melbourne, such as the Ladder program that’s now put in place in Adelaide and Melbourne.  We are making real progress there and the support that we’re now giving to homelessness sectors, through Centrelink – 90 new officers – is having an effect on the ground.  But to get long-term change into the future we need to be approaching the issue of community housing and also affordable housing in a different way.  That means using the private sector, getting funds out of the private sector and ensuring that those funds are going into a public private partnership such as we’ve seen in Bonnyrigg in Sydney, so that we can expand out the number of premises we’re building, but we can also renovate the stock.  This is something the Federal Government is pushing hard but it’s also something the States and Territories accept. 

CURTIS: You’ve been in government for nearly four – since 2007.  You’ve poured billions of dollars into public housing, you’ve had a strategy for homelessness and yet we’re still left in the position where you say the system is financial unsustainable.   When can you make it right, when can you make it better?  Is this something that is going to take years?

MINISTER ARBIB: The next opportunity for change is really when the National Affordable Housing Agreement is renegotiated in the next two years.  We’re working already on plans for that and, of course, we’ll sit down and negotiate with the states.

Part of it, though, is getting the model right.  At the moment, funding for public housing is done on a per capita basis, which helps the larger states but also is a disincentive for construction.  What we’re after is to make sure it’s on a per dwelling basis, and that is something that we tried in the last agreement to get into place and certainly something that I’ll be fighting for in the next renegotiation.  It’s something that I know Minister Plibersek was working very hard when she was in this portfolio and certainly one of the ways forward.  But again, a lot of the issues that we are seeing in terms of this sector is the pressures that are coming from the community, which are only growing by the day.  We look at aged housing, and at the moment we project by I think 2028 that the demand for aged housing is going to double, which is a huge amount.  It’s impossible for any governments at the federal or state level to keep up with that sort of investment, so we’ve got to harness the private sector and we’ve got to harness the non-for-profits to make sure that we get those innovations that we’ve seen overseas. 

CURTIS: Mark Arbib, thank you very much for you time. 

MINISTER ARBIB: Thank you Lyndal.