Wednesday, June 26, 2013

Taxing times for public housing tenants

This morning the Minister for Families and Community Services announced NSW's own version of a 'bedroom tax' for public housing tenants.
We'll look more closely at the proposed policy changes when they become available. For now, we just have a few observations on what we do know.
First, a little perspective. 17000 public housing dwellings have spare bedrooms, the media release states. It is not clear how this number is reached- the ABS put the number in 2011 closer to 11000. We've written about this before, but note that the ABS also shows there were at least 375000 vacant bedrooms in owner-occupied dwellings (ABS: 2011 Census of Population and Housing). Perhaps revenue could be raised by placing a $20 per week charge on each of those bedrooms- that $390m a year could build a lot of houses for the people on the waiting list!
Speaking of the waiting list, Housing NSW updated the social housing waiting list timeframes one year ago- we're not sure where the figures stand now, but at the time even the waiting list for bedsits and 1 bedrooms in the 'targeted areas' were very long indeed. Liverpool (2-5 years for bedsits, 5-10 for one bedrooms), Shellharbour (no bedsits in the area, 10+ years for one bedrooms) and Mt Druitt (2-5years for both bedsits and one bedrooms). We're not sure where these smaller properties that people are to be moved to is going to come from- we certainly hope that there aren't families squished into bedsits who will be able to move out!
We are also concerned about the rate of the tax. The pensioner who uses the spare room for when the daughter and her grandkids come to stay now faces an effective rent hike of 20%- catapulting them past the housing stress line of 30%, to now spend over 35% of their income on housing costs. This pensioner will now be left with almost the same amount to live on per day (about $36) that a person on the Newstart Allowance currently has.
As for people actually on Newstart - they will be left with just $21 a day to pay for food, transport, medical bills, etc.
The final impact is on the people who fall into rent arrears due to the added stress of the bedroom tax. If a person is terminated due to the arrears they may find themselves ineligible for public housing again until they pay off the debt- not an easy thing for someone already doing it tough, and now doing it from a position of homelessness.
It's unavoidable to draw comparisons to the recent introduction of a very similar bedroom tax in the UK- the lack of 'smaller properties', the negative impact on the ability to afford to live with losing $20 per week are all ringing true. We hope that the NSW government will learn from the UK's experience
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