Speech by The Hon Mark Butler MP

Opening address, Powerhousing Australia Conference, Melbourne, Vic

Location: Melbourne

Thanks everyone for inviting me to be with you today. It’s a really great opportunity to talk to you, the members of PowerHousing, about the future of housing policy and particularly the role of the community housing sector. I’ve already, in a relatively short time as Minister for Housing and Homelessness, had a chance to meet a number of members of this organisation. I’ve really appreciated the openness with which you’ve welcomed me and talked to me about your product and what’s working really well and some things that perhaps do need some tweaking to make sure that we get the most out of our community housing and social housing programs.

It’s a real pleasure to spend a little bit of time talking about our views around the future of housing, because I think increasingly people are coming to recognise that there’s probably no other area of policy or politics more central to the health of our society than housing. It is perhaps the most fundamental of human rights – beyond water and food – the right to have a roof over your head, to have a place to call home. And for a country that aims, always, to be a fairer, more egalitarian society, housing policy will obviously always be a central element of the national policy discussion.

Recently, there has been a much needed shift to a philosophy nationally of housing first, including the decision some years ago to lift homelessness to be an issue of national priority, an issue of national focus, not just a secondary issue for national politics. But we also know that in addition to being a fundamental human right, housing or access to good affordable housing that is secure is a profound driver of economic participation and economic productivity. Workers having access to affordable housing near their work, or at the very least near transport hubs, is absolutely essential to growing the economic productivity and the economic prosperity of the nation. And as we know, that really was the main motivator behind the decisions in the mid part of the last century – earlier in some states – to establish public housing commissions, to provide affordable housing to working families.

Today, though, we know that the social housing challenge is far more complex than the challenges that were being faced by state governments in the mid-part of the last century. We know too well that demand is rising very, very quickly for social housing. This is being impacted by a number of factors, largely in the private economy. We know that housing affordability, whether it’s houses for purchase or houses for rent within the private rental market, housing affordability has been under pressure now for at least a decade. I’m very pleased that over the last eight quarters we’ve seen the HIA-CBA Housing Affordability Index improve eight quarters in a row. That is still off a very high base of affordability conditions that go back to a whole range of very difficult economic challenges around the housing bubble, which has impacted every rich economy in the world since 2000 or 2001. Although we’re making ground in this area, there is very strong pressure, in a demand sense on social housing because of the conditions out in the private housing market, no matter how they’ve improved over the last several quarters.

There are also demand pressures because of demographic changes, particularly in the area that I have a particular interest in; the ageing of the population. As people start to go into retirement with lower rates of homeownership, we’re seeing the pressure on the social housing market starting to increase. With the retirement of the baby boomer generation and the trends we’re seeing in home ownership rates of the generation aged 55 and up, I think we’re going to see continuing increases in the pressure on the social housing market just through the ageing of the population.

We also know that while demand has been rising for some time, supply has been declining for many years. The traditional supply of social housing through public housing commissions has been in steady decline for some time. That has largely been masked in the last three or four years through the social housing stimulus which I will address later. However, there is no indication at the moment that State Governments will reverse that decline in public housing stock anytime soon.

We also know that social housing needs to respond to the requirements of an increasingly diverse cohort of the Australian population than was the case during the mid-part of the last century when the State Governments were setting up the commissions for working families. We know that this is a diverse population that increasingly require a range of supports beyond just a roof over their head. They also need supports that really have little to do with housing such as mental health, drug and alcohol abuse, facilitating connections with employment, education and training and the like.

The conference themes of partnership and sustainability are really timely, given that very challenging backdrop. I wanted to talk in particular about the partnership theme because I know it’s a very strong ethos of your organisation. I think it’s fair to say that given the historical picture of social housing, which has been dominated by the Public Housing Commission at the state level, that partnership has not been a strong feature in the past. It particularly has not been a strong feature of public housing. Traditionally, the public housing model has largely been something that the State Government provides, unilaterally. There have been tenancy associations and such like in public housing systems, but they have not been anything like what I’ve seen in the community housing sector. We do need more partnership because of the complexity that I’ve discussed today. You know better than me that the community housing sector or the non-government social housing sector is very well placed to drive those partnerships on different levels, a few of which I want to discuss next.

Being a politician and a minister, the most obvious level of partnership is between your sector and the Government; not just the Commonwealth Government but state governments and local councils as well. There is the capacity for your member organisations to partner with other organisations including not-for-profit and commercial companies to achieve many goals. Your organisations’ capacity to find ways of leveraging capital to explore expansion opportunities through pooling different areas of expertise is immense. Against the backdrop of complexity I’ve talked about, your existing and potential tenants have a range of diverse needs. The opportunities you discover and take advantage of to partner with organisations that have different areas of expertise to meet the diverse needs of your tenants, I think is a particularly strong feature of the community housing sector. What it allows you to do is not just to deliver better service, but also for the capital leveraging opportunities to deliver more services. We’ve seen that as your Chair indicated through the expansion in your sector over recent years in addition to those traditional housing organisations or commercial organisations that work in this sector.

What we’ve also seen in community housing is partnership with quite different service organisations. As I’ve said we know that a roof over the head, a place to call home, is a most fundamental human right. Although it’s essential, we also know now it is often not adequate or sufficient in and of itself. People in social housing increasingly do require tenancy support services; they do require some help connecting to employment, education and training. They need help connecting their children, if tenants are families, to local schooling arrangements. They often, as I said earlier, need help connecting to mental health services, to drug and alcohol services and the like. I think this is something the community housing sector has a particular skill at delivering.

I know a number of your members provide these services in-house. For those who don’t, or provide some of those services in house, you are showing a particular skill at connecting with service providers who can deliver them. We’re trying to facilitate those partnerships through programs like Partners in Recovery, for example, to bring those relationships together more and more, and to provide funding streams that operate on the basis of those relationships existing.

The last partnership, but certainly not the least important I think marks community housing out from public housing is partnering with tenants themselves. I think this has not been a strong feature of public housing which has tended to operate on a one-way relationship basis where the Government provides you with housing. But it is an important element of our ambition, not just to provide a roof over the head, but to provide a home. I know that’s a strong theme of your organisation and your members.

For example, the sort of conversations that I saw happening with Evolve when I visited their new headquarters in Parramatta and I met with a number of members of their Tenants Council is something you just don’t see in the public housing sector, and I think something that really adds value to the bricks and mortar and the range of other support services that you’re able to provide. By giving that sense of dignity to tenants; that sense of ownership of the space to make it more than a house, to make it a home, I think that’s something your sector should be particularly proud of.

I do want to say a few things about your partnership with the Commonwealth Government over recent years because it really has been highly effective against a backdrop of very significant investment on our part. As you know, our housing agenda has been an active one. It’s been an assertive one, and it has been one backed with very significant amounts of money.

In the area of homelessness pre-GFC, we decided to lift the Commonwealth’s effort in this area to make it a national priority policy. Not only to expand services in the way that we have, but also to provide significant capital funding, largely through the Place to Call Home Program. This has allowed your organisations and a range of others to come up with really innovative models; the Common Ground model, the Ladder project and a whole range of others which really do lift the bar in what we’ve commonly understood as accommodation arrangements for people moving out of homelessness. So I’ve very proud of these achievements; it’s been through partnerships with organisations like yours that we’ve been able to achieve a lot of those ambitions.

Obviously the biggest expansion of social housing in our history has been through the Social Housing Initiative as part of the stimulus package, a very strong feature of our partnership. As you know we’ve built almost 20,000 new units and we’ve remediated about 80,000 additional units, many of which were largely uninhabitable before the repairs and maintenance element of that program. What has been particularly notable about that initiative is that we’ve achieved, very easily frankly, our ambition for 75 per cent of those new dwellings to be managed by community housing organisations. Many of the States and Territories are telling us they’ll not only meet that target of 75% but they’ll exceed it. Your Chair talked about the increase in asset base that your members have been able to experience over recent years. A lot of that is through our ambition to ensure that three quarters of that went to the community housing sector.

That operates against a backdrop of course of the Housing Ministers agreeing some years ago now to aim for 35 per cent of the social housing stock to be owned by the community housing sector by the middle of next year. That has been a more mixed picture although we’ve seen some really encouraging indications particularly from the New South Wales Government recently about stock transfers which involve some of your members as well.

I think the Queensland Government’s announcements stand in some contrast to the New South Wales Government which is talking about a genuine stock transfer. Whereas it seems, although we need to read this a little bit more closely, that the Queensland Government is talking a bit more about retaining the asset while outsourcing the management of that asset, which really doesn’t give the sort of leveraging opportunities that we had in mind when we came to that agreement some years ago.

But, where we’re at is still far short of that 35 per cent figure. When that decision was taken, less than 10 per cent of the social housing stock was owned by the community housing sector. We’re now up to around 16 per cent, which as you will see, is well short of 35 per cent. However, it is heading in the right direction and I think the more encouragement we can give to governments like New South Wales, who I think are doing the right thing, the better for all of us.

The last area of partnership I quickly wanted to talk about, which is a little bit topical at the moment, is NRAS – the National Rental Affordability Scheme. As you know, the community housing sector has been very active in this area in terms of this program. One of the great things I’ve been able to see is the innovation coming from a lot of your members to develop mixed use arrangements that connect some of the social housing capital with some of the NRAS capital, and really think innovatively about how you could do this with mixed tenancy, sometimes also including some private for purchase arrangements in the same setting. NRAS obviously meets a particular challenge that we have in the private rental market, but it is again adding value to what we’re doing more directly than the social housing space, to allow innovation and to allow your organisations to expand your portfolios.

As you know we’ve got a couple of things now open. The shovel-ready round that I announced a few weeks ago after the Ministerial Council is still open. A thousand incentives are out in the market to be delivered by middle of next year, which is pretty ambitious. But there’s been a very significant level of interest there from governments, from the housing industry, and also from community housing providers.

Partly, in the broader market sense partly because some parts of Australia, for example in my own state of South Australia, are experiencing softness in housing construction. Yesterday, Haven, one of your member organisations, was good enough to host me down in Geelong officially to open Round 5 yesterday which, as you know, is open for about three months in August. The arrangements for those applications are on the website. We’ve been working pretty hard to streamline some of those arrangements to allow them to be done electronically rather than through paper. There has been an extraordinary amount of interest, having read the property press over the last several weeks, an extraordinary level of interest from some quite different areas which have been a bit tentative about NRAS in the past but are now quite interested in the scheme. We suspect this Round will be significantly oversubscribed as Round 4 was.

Can I say in closing just a couple of things about the sector in general? One of the real strengths of community housing is its diversity. You’ve got 750 organisations that are in control of a little more than 60,000 dwellings, and the sector is about as diverse as you can imagine. As you know there are very small organisations, and there are very large organisations, many of them represented in this room.

There are very local organisations that really just work in a part of a capital city, or in a particular region, and there are national organisations, again many of them represented in this room. Being able to continue to support that diversity is a real strength, and something I think the Government would like to see continue.

There is no question that this organisation is incredibly important. The collective of this organisation, in a domestic sense, is incredibly important from the Government’s point of view. Your 27 organisations which hold, as your Chair said, more than half of the total stock held by 750 organisations, provide real ballast – provide real critical mass in this area to be able to innovate, to be able to expand, to be able to work across the country rather than just in one small part of the country.

I want to congratulate the people who drove the idea of bringing together an organisation like PowerHousing. I also want to congratulate you in developing the international relationships that you have, because there are some good ideas overseas as well that we can learn from.

As your Chair said, that balance, that capacity for innovation, that capacity to leverage new ideas and new capital means that you really have been at the forefront of the expansion in community housing. Your assets have increased by almost 60 per cent – just in your 27 member organisations, in the last couple of years. I think that gives you a fantastic platform to be able to continue to respond to some of the challenges I’ve tried to outline; such as the complexity, the rising demand, the continual decline in the supply in the traditional Public Housing Commission.

I really hope that over the next couple of days you get the opportunity to talk about some of those things that you’re doing well, learn from other organisations and be able to show off a bit of what you’re doing very well as well. It’s been a great pleasure to open your conference.

Thank you very much.