Tuesday, October 8, 2013

'What are we doing...' Minister Goward on our 'broke' public housing system

Family and Community Services Minister Pru Goward has given The Australian a big-picture briefing on the state of public housing in New South Wales. According to the paper's precis of the Minister's comments, 'the public housing system in NSW is broke, incapable of breaking the cycle of disadvantage and an institution from which people need to be "freed".'


Minister Goward is quoted:
"What are we doing when 47 per cent of people in public housing are employable but aren't employed . . . I find that statistic to be shocking, just shocking."
Quite right that it's shocking – and worse, Housing NSW makes it so. 'What we are doing' is making it hard for public housing tenants to get and stay in work.

Two policies are especially to blame. The first is the policy of increased rent rates for tenants on 'moderate incomes'.

As we discussed recently, most public housing tenants pay a rebated rent of about 25 per cent of their household income. However, if you get a job that puts your income into the 'moderate income' range, the rate slides up to 30 percent (depending on where you are in the range). That might sound like a modest increase, but it's not, because that higher rate applies to all your income, not just the amount that's in the moderate range. Expressed as a marginal rate, the moderate income rent rate is a punishing 50 per cent – in other words, 50 cents in each additional dollar earned in the moderate income range goes to Housing NSW in rent. Then there's income tax, reduction of Centrelink payments, and other costs of working. A public housing tenant who works could easily lose more money than they earn.

The second policy is that of reviews as to continuing eligibility for public housing, which applies all public housing tenants who have since 2005 signed up to fixed term agreements. This policy means that if towards the end of your fixed term your income is found to be above the moderate income range, your tenancy will be terminated, and you'll be looking for housing in the private rental market instead, which is both less secure and more expensive than public housing.

Faced with that prospect, very few public housing tenants fail the review: to stay housed, they stay poor. Staying poor also means that fewer tenants are moving out of their own volition: since 2007-08 (the first year of the reviews), exits from public housing have declined by 25 cent.

So not only are public housing tenants missing out on jobs and incomes, people on the waiting list are missing out on public housing.

We've spoken with public housing tenants who have grappled with these work disincentives, and come down with a decision to knock back work opportunities because of it. They don't like the decision, but it is rational, even wise, in the mad context of these policies.

There's lots to be done to fix our broken public housing system, but this first repair could be done in an instant: let public housing tenants work without fear of loss.

12 comments:

  1. I was in the position of earning a bit of money, and being a public housing NSW tenant. After a while, I realised that I was actually better off by just $20 per week out of each $100 I earned after all adjustments to rent and Centrelink payments were made.. It was no incentive for me to continue working. My son obtained a position where he was also working and earning. He left home, because it was cheaper for him to share a house with other young people, rather than pay the DOH rent - his wage was reasonable, but not excessive, but he came under the 30% of gross income rule.

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  2. On top of everything else, since housing stress is defined as rent at 30% of gross income, you have to wonder why successive NSW governments both the late unlamented Labs and now this useless mob, show such unseemly haste in pushing their tenants into it. You would think they had the common decency to stop at least at 29.99%

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  3. Thanks Anon. In economist-speak, you faced an effective marginal tax rate of 80 per cent. (By contrast, someone earning $180 000 faces an EMTR of 47 per cent or so.)

    You raise a good point about kids' earnings. Under the policy, if a child of the household gets a job and their income puts the total household income into the moderate income range, other members of the household have to cop the increased rate on their share of the rent too.

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  4. I'm almost afraid to ask how Ms Goward came up with the figure of 47% of people in public housing being employable but not employed.

    Huge numbers of "people in public housing" are children under school leaving age and therefore not "employable" by any reasonable definition.

    Even if the Minister mis-spoke and was referring to the tenant named on the lease, what is her suggestion for addressing this issue. It sounds like she's victim-blaming to me and stopping just short of outright saying that the unemployed should not be entitled to social housing.

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    1. Thanks Anon. Re the 47 per cent figure: this was new to me - I hadn't heard it apart from the Minister's comments. I take it at face value.

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    2. The problem with taking it at face value is that it further entrenches the perception that a large proportion of social housing tenants are "dole bludgers" who could work but choose not to.

      Having the tabloid press demonise social housing tenants through language is one thing - it's unacceptable for the Minister responsible for social housing to do the same and when she does so I believe she should be challenged to back up her claims.

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    3. For the record, Anonymous, we have asked HNSW for an explanation of the Minister's 47% figure. We shall see if they get back to us.
      Cheers,
      N.C.

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    4. Pru Goward has done it again! Her tight-lipped response to those demolition's of public stock. She said "public housing is broke". Not enough people paying enough rent? Of course it is. they do not repair the properties, so sell them off at below land value. Never should have been the minister for housing with her attitude.

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  5. Public housing tenants should take care of their homes and get repairs done. Sick of the single mums whose children play with matches burn the place down and mum wants sympathy. Public housing is better in the outback.

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    1. Dear Anonymous,

      It's interesting that you should say that. There's been quite a bit of work by Tenants' Advocates lately, trying to help HNSW tenants do just that. Have a look at http://getitfixednsw.com/ for more information.

      As for single mums who let their houses burn down - we don't hear of all that many, to be honest. Certainly not enough to warrant a specific policy response from HNSW. Anyway, in this housing market most single mums would rather keep the roof over their heads, wouldn't they?

      Cheers,
      N.C.

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  6. Public housing should be on a lease not for life. Let the tenants get a job. Maintenance should be required to be paid as well. Windows to have decent curtains and blinds and no junk on the verandahs or washing . You can pick public housing a mile away. Drunks and Druggies and Criminals should not be in public housing let the churches take care of them.

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    1. Dear Anonymous,

      Tenants in public housing are subject to the same renting laws as anyone in the private market. It's a myth that public housing is for life. Times were that it was available for the 'duration of need', but even that basic level of security has been dramatically eroded.

      As for drunks, druggies and criminals - these generic 'types' are not unique to public housing, and public housing is not unique to them.

      Thanks for stopping by,
      N.C.

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