Making sense of social housing in NSW

Social housing operates within a complex glob of morphing policies and procedures, prodded by occasional shifts in public policy at both a state and federal level that draw various laws, instruments and agreements into contact with one another in a range of ways. A sound working knowledge of the sector in its entirety can take years to develop, and once established could fall apart within an instant should one glance away at precisely the wrong moment.

A case in point is last year's announcement that the management of large swathes of tenanted public housing properties will be transferred to community housing landlords in New South Wales, in keeping with the Council of Australian Governments' (COAG) National Affordable Housing Agreement (NAHA), which was negotiated during the early days of the Rudd-Gillard-Rudd Government era. The announcement of the Management Transfer Program sparked some discussion here on the Brown Couch, and across the broader sector, about just who these community housing landlords are. How do they come to be in the business of housing people from the public housing waiting list since they're not run by the Government of NSW?

The plot thickens, as the results of the Program's tendering process have now been announced. Over the next couple of years, management of around 14,000 tenanted public housing properties across six different regions is to be handed to nine community housing landlords who are already operating in other parts of the state. So... now is a good time to take a look at what it means to be a "social housing" landlord in New South Wales.

Given we've already mentioned the NAHA, we should note it is the intergovernmental agreement that determines who takes responsibility for what within our housing systems across Australia. As an agreement among the Commonwealth, state and territory governments it is a static document, although it is intended to be renegotiated and updated from time to time. It has been altered quite a bit since its series of predecessors first took form: established in the 1940's as the "Commonwealth State Housing Agreements" as something of a post-war nation building scheme; and it is currently being renegotiated as a "National Housing and Homelessness Agreement".

Regardless of form, or name, these agreements have generally all set out to achieve the same objective: to set the conditions under which the Commonwealth would give funding to the states to run their public housing schemes. These agreements have been broad enough to allow each state and territory to run their housing programs as they see fit, as indeed they do. A strong focus of the current agreement has been to shift the delivery of housing assistance and services away from government to the not-for-profit sector, and successive NSW Governments have responded - indeed contributed - by attempting to consolidate and build our community housing sector. Notably, this included the regulation of the sector in 2010, with a state based scheme that has since been replaced by the National Regulatory System for Community Housing. It also included the establishment of a single waiting list for housing assistance, accessible through a portal known as Housing Pathways, under which any participating landlord could both process applications for and make offers of subsidised rental housing to eligible households.

In this context our language and legislation has come to reflect the idea of "social housing". With this term we could be referencing either or both of its constituent parts: "public housing" or "community housing"; and for practical purposes the only difference is whether the landlord is the government or a not-for-profit agency who has been contracted by government to provide the same essential service. Of course, things become more complicated when we consider the public policy implications of this rhetorical shift, as it gives our still predominantly neoliberal governments easy cover to withdraw from the direct provision of public housing proper, and focus entirely on the setting of policy instead. They do this on the grounds that "community housing landlords are well placed and can do it better", although this is far from an established truth. While we can have no objection to the growth of this community housing sector, the fact that it only ever seems to happen at the expense of our established public housing provider is a simple reflection of the State's entrenched reluctance to pay for and provide social housing. Given the sector has spent the better part of a decade trying to attract private finance to its cause, it reflects a certain level of disinterest in housing-as-shelter from the profit-driven private sector as well - as an aside, it will be interesting to watch how the emerging "build-to-rent" discussion proceeds from here.

Right - so while all of that is going on at the higher level, there is a somewhat consistent legal framework setting the scene in the meantime for social housing landlords and tenants across New South Wales. Although with the right political will the statutes under which social housing policies are determined can be changed - as we have seen throughout the last couple of years with mandatory evictions for social housing tenants and the introduction of concurrent leasing by the Land & Housing Corporation to enable the current Management Transfer Program - keeping tabs on the legislative framework can be a useful way to maintain one's bearings while trying to make sense of social housing.

The Residential Tenancies Act 2010 devotes an entire Part to social housing tenancy agreements, a discrete form of residential tenancy agreement to which a number of additional provisions apply. This Act defines a social housing tenancy agreement as "a residential tenancy agreement where the landlord is a social housing provider", and then defines a social housing provider as:

• the New South Wales Land & Housing Corporation
• the Aboriginal Housing Office
• a registered community housing provider within the meaning of the Community Housing Providers National Law (NSW)
• an organisation for the time being registered under Part 5 of the Aboriginal Housing Act 1998
• an organisation or a member of a class of organisation prescribed by the regulations

This immediately brings a number of other statutes into play. There's the Housing Act 2001, under which the Land & Housing Corporation is established as the legal entity that enters into residential tenancy agreements and other related dealings in residential property on behalf of the government; and under which the income based rental subsidy scheme is established. This is the legislation that gives us public housing, and it is amendments to this legislation that has enabled the emergence and establishment of community housing over many years.

There's the Community Housing Providers (Adoption of National Law) Act 2012, under which regulation of the community housing sector is provided by adoption of the Community Housing Providers National Law. This Act brings New South Wales into the National Regulatory System for Community Housing and, in some circumstances, allows the government to conditionally transfer title from the Land & Housing Corporation to a registered community housing provider. Note this has fallen out of fashion as concurrent leasing has come into play, having been made available by amendment to the Housing Act in 2016. For the time being property is being transferred to the community housing sector using this form of head-lease, but transfer of title under the Community Housing Providers (Adoption of National Law) Act remains an option.

Finally there's the Aboriginal Housing Act 1998, under which the Aboriginal Housing Office is established along similar lines to the Land & Housing Corporation, but with a specific remit to develop policy and deliver subsidised housing for Aboriginal households who rent. This Act also allows regulation of a broader Aboriginal Community Housing sector, for whom the National Regulatory Scheme for Community Housing is also being brought into play. By association, we must mention the Aboriginal Land Rights Act 1983, under which Local Aboriginal Land Councils who provide rental housing to their members may register with the Aboriginal Housing Office or the National Regulatory Scheme for Community Housing in order to have the requirements for approval to run a community benefits scheme that includes the provision of residential accommodation to their members waived by the NSW Aboriginal Lands Council.

The policy framework in which social housing operates is likely to keep changing, and where required legislative changes will sometimes follow. But for now, the above provides an overview of social housing in New South Wales. We'll keep an eye on the development of the National Housing and Homelessness Agreement, and take further note of any impact it might make.

In the meantime we'll do our best to answer any questions left in the comments, or sent through to us via the usual channels.

Hit the pause button

Front page of The Sydney Morning Herald, 26 July 2017

A fortnight ago ABC News reported that Australia looks almost certain to win a seat on the United Nations Human Rights Council. However, do we deserve a seat?

In recent years Australia's human rights record has become very blemished ... not just in the area of treatment of asylum seekers and refugees. Back in August 2014 Ms Kim Boettcher, solicitor for Seniors Rights Service addressed the United Nations' Open-Ended Working Group on Ageing (5th session), and drew attention to the plight of tenants of social housing at Millers Point and The Rocks. She told the Working Group how one of the elderly residents said to relocate her away from her community is ‘one step short of putting you up against a wall and shooting you because it’s saying you are of no value to society. You are worthless.’ You may read her full address here. Indeed, last year The Millers Point Community Working Party and Tenants Union of NSW made submissions to the Australian Law Reform Commission on 'Protecting the Rights of Older Australians from Abuse', arguing that the actions of the NSW Government in Millers Point constitute systemic elder abuse.

The NSW Government's sale of public housing in Millers Point continues. As at 11 July 2017, there have been 151 sales, some of multiple properties. Altogether the sale of 200 properties at Millers Point has raised $422.77 million (with a further $22.09 million being generated in Stamp Duty!). You may check the NSW Government's dedicated website for their figures at the end of June 2017 here.

But at what cost? At the time of the Minister's announcement to sell all social housing stock in Millers Point, there were 579 residents in 399 tenancies in the portfolio.

At 19 July 2017, 16 residents in 10 tenancies remain. So, altogether 563 tenant and household members in 389 tenancies have either vacated or are committed to moving. There are 2 tenants remaining in the Sirius Building. We have previous reported extensively on the impact of forced relocation on the residents.

So when is enough, enough? This once proud and historic community indeed, the only community to have bestowed upon it the status of 'A Living Heritage', has been decimated by the cruel edict in March 2014 to remove all social housing tenants from their community and sell off their homes, resulting in great pain and suffering! The last few surviving elderly, vulnerable tenants ask the NSW Premier, Gladys Berejiklian, to end this abuse of their basic human rights and allow the few to stay, and 'age-in-place'.

A new development gives our Premier the opportunity to redress this great injustice. On Tuesday of this week, the NSW Land and Environment Court made a ruling that the NSW Government's decision not to put the iconic Sirius Building on the heritage list was invalid. This gained wide media coverage on the ABC News , The Sydney Morning Herald and The Guardian . Shaun Carter, Save Our Sirius chairperson, said it was a good day for the building, the local community and the whole of NSW. He urged the Premier to hit pause on the demolition and and sale of Sirius. He said let's talk about the heritage listing of Sirius and how the building could be used for social housing again. He added: 'We are desperately short of social and affordable housing, let's now use it for what it was intended.'

Last two remaining Sirius residents Myra Demetriou and Cherie Johnson
and Save our Sirius chairperson Shaun Carter. (ABC News)

So the question becomes: Will the NSW Government show compassion and allow Myra and Cherie (and the other older residents of Millers Point) to age-in-place in their homes? Yes, stop the evictions, with more residents facing hearings at the NSW Civil and Administrative Tribunal. Yes, seize the opportunity which the Land and Environment Court has provided and let's talk again about the importance of retaining social housing in Millers Point. You have received oodles of cash from the sales to date and you also announced a billion dollar windfall in revenue from stamp duty in this year's State Budget. If you still insist on selling the homes which are not in the Sirius building, then defer this and do so when these few remaining residents don't require them. 

Over to you, Premier! Show the nations of the world that our great state, New South Wales, has a government that leads the way by being fair and compassionate when it comes to its citizens, no matter of age, race or creed! Let's make a seat on the United Nations Human Rights Council more than mere words.

The authors of this post are Barney Gardner, member of the Millers Point Community Working Party, and Robert Mowbray, Project Officer - Older Tenants with the Tenants' Union of NSW.

Ever the forgotten people

It's been some time since we marked an anniversary on the Brown Couch, and clearly this won't do. We can remedy this today, as it is the seventy-fifth anniversary of Sir Robert Menzies' delivery of the Forgotten People speech. On 22 May 1942 Robert Menzies broadcast his speech over the wireless, as part of a series of "fireside chats".

The speech remains an important touchstone for Australia's political and cultural narrative, because of the role it played in establishing the dominance of the two major parties in our parliamentary system. It preceded the formation of the Liberal Party of Australia that Menzies himself would lead, and it summarised the political philosophy that has more or less captured the centre of Australian politics ever since. At its heart was a forgotten middle class - "those people who are constantly in danger of being ground between the upper and the nether millstones of the false [class] war; the middle class who, properly regarded represent the backbone of this country."

Menzies' and the Liberal Party would go on to win government in 1949. He remained the Prime Minister of Australia until 1966, making him the country's longest serving leader. Those who seek to reach similar heights within the Liberal Party often pay tribute to his rhetoric, as Joe Hockey did when he referenced "lifters and leaners" in the 2014 Federal Budget; or his legacy, as Julie Bishop did when she joined Prime Minister Turnbull in challenging Tony Abbott for the party's leadership in 2015. But perhaps more importantly Menzies' rhetoric of the "forgotten middle class" continues to set the tone for politicians, journalists and commentators who wish to occupy and define the politically fertile middle ground. "John Howard's battlers" and even "Tony's tradies" come straight out of the Forgotten Peoples' playbook, while the Australian Labor Party puts its focus on "values" and the dignity of work, rather than its origins in late nineteenth century class consciousness and historical links to organised labour, as it strives for middle-ground appeal.

The Brown Couch took an in-depth look at the Forgotten People speech back in 2012. We discussed how the text of the speech - particularly as it concerns the notion of "home" - might be interpreted through a housing policy lens. We saw how Menzies' conception of "homes material" was a precursor to the 1956 Commonwealth State Housing Agreement, under which fewer public housing dwellings would be built or retained and more funds were provided to building societies and state banks to aide "the habits of frugality and saving "for a home of our own."" In this way, the post-war experiment of public housing for Australia's returned soldiers and working families began its drawn-out end. Australian homes would no longer be built by governments but by the forgotten middle class.

We explored Menzies' notion of "homes human", in which the home is construed not by its four walls and hollow rooms but by the people and relationships emerging from within. Noting that Menzies seems to have excluded renter households from his ideal here, we examined the history of Australian home-ownership, and the policies and economic conditions that have supported it over a number of generations. In particular we saw how the continuing political interest in supporting home-ownership gradually morphed into support for homeowners. We might now say this has shifted further still to support home values, given so much of the nation's economic wellbeing is tied up in our homes' worth as financial assets. Whether or not they are owned by the people who make them their home should now seem immaterial to this idea.

Finally, we looked in on Menzies' "homes spiritual", where one's sacrifice, frugality and saving to make a home is the very expression of a "fierce independence of spirit". Here we noted that, as far as housing is concerned, saving and frugality had long since given way to borrowing with the expectation of accelerated capital gains. We might now also say that drawing on said gains to fund high levels of consumption not only ensures a home-owner's independence is spiritually rewarding, but financially so as well. And not just for the individual - it could prop up an entire economy if everything else falls apart.

All the more concerning, then, is the exclusion of long-term renters in Menzies' conception of the middle class - those forgotten people he implores us still to forget. The steady decline of first home-buyers and the rise of second, third, fourth and fifth home-buyers must be eroding the very soul of this nation of once fiercely independent folk. More concerning still, from an economic point of view, is the likely concentration of wealth into fewer and fewer sets of hands, and the loss of a key driver of confidence and consumption, if current housing trends continue.

When we looked at the Forgotten People speech five years ago, the Australian property market was going through something of a wobble. It appeared at the time that house prices might have started to peak, and a correction about to begin, so we questioned the very idea that purchasing homes for capital gains amounted to savings. We all know how that turned out. But in our conclusion, we proposed that those with the best claim to live in Menzies' "home spiritual" of responsibility, savings and frugality are tenants. Capital gains in housing may not since have fallen away, but we're inclined to stand by this conclusion. For tenants, that fierce independence of spirit comes from scrimping and saving each week to make the rent, from constructing the best possible home even though it could all come to an end with a simple notice in the mail. From living a full life while making do, staying under the radar to keep that roof over one's head, and moving on with good grace when the time sadly does come.

Whether or not you're in a well paid job - or any job at all - there is deep satisfaction in knowing your home is something you work hard for. Homeowners must feel this, too. No doubt they feel it even as they pass the point where their home's value starts spitting out two or three times more than what goes into it each week, or as prices start to gain more in a year than one can earn doing most ordinary jobs. Sure, there's risk in borrowing against the family home, but as long as you can service the debt and the property's value keeps going up it will more pay for itself in the end. Who wouldn't be satisfied by that?

But taking some of that hard-earned free money and investing it in more housing, where it can work towards the accumulation of more free money? That's not hard work. That's just skimming off someone else's hard work, which is why we don't think Menzies had landlords in mind any more than he did tenants when making his point about "homes spiritual".

Here we might stop to mark some other important anniversaries. It is precisely 219 days since Bernard Salt had a short article published in the Weekend Australian, in which he lamented that young people are eating too much smashed avocado on toast in expensive cafes when they should be putting their money towards home loan deposits instead. And it is now eight days since Tim Gurton said on 60 Minutes that he didn't turn his inheritance into a rich property portfolio by spending $40 a day on smashed avocados and coffee, and not working.

As we have seen, the idea that a home is built on sacrifice is a theme that runs deep throughout Australia, but the reaction to this characterisation of stupid and improvident youngsters not doing enough to get on the housing ladder suggests that, at least in its current form, its time might soon be up. Menzies' forgotten people could put nice things on hold in order to save and acquire a first home; so too their children and many of their grandchildren. Millenials suspect that when it comes to housing they've already missed out. Their future already sacrificed, they're having nice things instead. They needn't give up on "homes spiritual" or "homes human" in the meantime.

Far from spurring the hapless youngsters of Australia on, comments like Salt's and Gurton's may be just what's needed to galvanise another emerging class - that of the long-term renter. This takes us right back to the opening passages of Menzies' speech, and the idea of a forgotten middle class that occupies a space between opponents in a fictional class war. Perhaps its time this middle class was redefined, its challenges reassessed? As we reflect upon this anniversary of the Forgotten People who continue to influence our nation, it's worth asking - who among our political leaders would be brave enough to do that today?

NAHA is dead? Long live public housing!

Alarming reports have emerged today that the National Affordable Housing Agreement (NAHA) could be axed in the next federal budget.

The NAHA is the current iteration of a long running agreement between the federal and state & territory governments about the provision of public and social housing in Australia. The first iteration was the 1945 Commonwealth State Housing Agreement, and while public housing has copped a few knocks in the meantime, the scrapping of NAHA could mean the death of public housing as we know it.

From news.com:

The National Housing Affordability Agreement, which has cost the Federal Government almost $9 billion since it was launched in 2009 by the Rudd Government, will be axed in the May budget, The Australian reports. 

Instead of the public housing stock rising since the agreement was launched, figures released in the 2017 Report on Government Services last month show the supply has actually gone backwards by 16,000 homes. 

And 20 per cent of the existing housing stock was now considered in an unacceptable state, while 8 per cent was uninhabitable.

None of this will come as news to those who keep an eye on such things - in fact, we've been making noise about both of these issues for what seems like an eternity (see here and here, for example). But axing the agreement is not the way to fix these problems - getting a better agreement is.

A key problem for the NAHA is that it altered the way federal and state & territory governments share responsibilities for funding the supply and maintenance of public and social housing. Times were those costs were shared - specifically, state & territory governments were required to match federal funds dollar for dollar. But the NAHA let the states and territories off the hook, on the basis that the emerging not-for-profit landlords - the Community Housing sector - could take on a greater role in delivering these services while tapping other sources of revenue.

For the record: we've always agreed that they could, but not at the expense of continued investment in social and affordable housing by all levels of government. It stands to reason, then, that our support of any new "bond aggregator" model that is currently being considered by the Turnbull Government would be similarly qualified.

National Shelter has issued the following media release, along similar lines:

National Affordable Housing Agreement Essential 

Reports to axe the National Affordable Housing Agreement (NAHA) reported in news.com and the Australian today have been met with shocked disbelief by National Shelter the peak affordable housing body. 

“If true this will be an act of vandalism by the commonwealth against a vital essential funding program which supports the most vulnerable including funding two thirds of all the homelessness services in Australia.” 

“The NAHA wasn’t well conceived and has not been well managed but axing the only funding for public housing and homelessness services without discussion, consultation or any alternative plan amounts to vandalism against many of the most vulnerable in our community”, said Adrian Pisarski National Shelter Executive Officer. 

The NAHA funds the maintenance of our social housing system as well as homelessness services provision and this looks like the Commonwealth is abandoning the field by removing essential funding for social housing and homelessness services. 

“At a time when rough sleeping is rampant in our cities and housing affordability a daily headline this is not the time for the Commonwealth to cut and run.” Mr Pisarski said. 

“National Shelter has been critical of the performance of the NAHA and plead with the Commonwealth and States to address issues of, sufficiency, transparency, accountability and performance but ditching it is not the answer”, Mr Pisarski added. 

“We need a national plan which supports social housing, homelessness and addresses housing affordability more generally thru attracting private and public investment and broader reforms of planning, taxation and tenant rights at state levels. This is not an either or situation, we need every tool at our disposal, including a reformed NAHA.” 

The Commonwealth needs to negotiate these reforms with State Governments and the community sector not abandon the field. National Shelter remains available to advise all parties on reforms to housing and homelessness.

Why all politicians should support tenants' rights

Yesterday the Australian Senate passed a motion seeking the implementation of a national minimum standard of tenancy rights. Senators Lee Rhiannon of the Greens, and Doug Cameron of the ALP introduced the motion, and Senator Rhiannon tweeted about it after it passed.

The full text reads that the Senate:

a) Notes that: 

i) The proportion of Australians leasing in the private rental housing market is the highest in over 50 years; 

ii) Long-run structural changes in Australia' s housing system are leading to increasing numbers of households choosing to rent on a long-term and in some cases, a permanent basis; 

iii) Comparative international studies, including a 2011 study by the Australian Housing and Urban Research Institute, show that tenancy laws administered by the Australian States and Territories perform poorly in the provision of tenant protections against arbitrary eviction, excessive rent increases and allowing tenants the full enjoyment of their home; 

iv) In the absence of affordable owner-occupied housing, life-long renting is now a prospect for many people; 

v) Australian tenancy laws may no longer be fit for purpose; and

b) Calls on the government to: 

i) Work with the States, Territories and relevant non-government organisations to set national minimum tenancy standards to ensure that tenants' rights are protected in relation to matters including fairer processes around lease terminations and evictions, fair standards to govern the amounts by which rents can be increased and provide for long-term residential leases that enable households the full enjoyment of a secure home.

This is a welcome development - while the states and territories administer their own tenancy laws, the cultural conceptions and attitudes towards renting are fairly common throughout the country. Each of the laws reflect this. No state in Australia has banned "no grounds" evictions as a way of promoting long-term residential leases, though the ACT and Tasmania have come the closest. No state in Australia effectively protects tenants against excessive rent increases, though again the ACT comes the closest.

What this motion really tells us is that the changing profile of households renting their home is beginning to make a difference in electoral politics. In the last NSW election, we saw the seat of Newtown won by the Greens' Jenny Leong who, among other things, ran on a tenants' rights platform. As the number of people affected by poor renting laws grows, the conversation of how we as a community value the safety and stability of a rented home will only grow as an electoral issue. It will especially grow away from the inner city.

Indeed politicians of all parties should take note as the profile of whole electorates will change with the growth of the tenant population. We noted before the previous Federal Election, some particular marginal seats and their renting populations. It will be interesting to do the same again in April with new Census figures and the current parliament. The increasing inaccessibility of property ownership through ever rising prices means the pool of landlords may also begin to shrink. Already some are reporting an increase in the size of individual landlords' portfolios, and this is something we've noted ourselves before, too.

More people staying in the rental market for longer - particularly those whose upbringing might have delivered an expectation of home-ownership at some stage in life - means an increasing range of political views and allegiances will start to converge on the question of tenants' rights. Voters from across the spectrum will inevitably begin to question why the law allows them to be removed from their homes when they have done nothing wrong. While it can be easy to point people further and further from the city in search of affordable home ownership as their means of achieving some security of tenure, this will not last long as a solution.

Perhaps they will even question why it is that investors appear to be living quite so large on the public purse - through tax breaks that cost the national budget literally billions of dollars each year - without ever having to justify the results. And while many will retain the aspiration and appetite to invest in property, if they are not lucky enough to come from a property owning family the barriers to entry will continue to grow faster than they can keep up. This will leave some wondering whether their vote is worth leaving with any political parties who may continue to have a tin ear to their plight.

Some politicians are starting to cotton onto this, and that's a good sign for those of us working for better tenancy laws across the country. Let's keep it up!

Competition, contestability and informed user choice in social housing

The Productivity Commission's Preliminary Findings Report on introducing competition and informed user choice into human services makes for interesting reading, not least because social housing has topped the list of "services identified as best suited for reform".

The Commission has been asked "to examine the application of competition and consumer choice to services within the human services sector and develop policy options to improve outcomes". This preliminary report identifies six types of human service it considers might benefit from reform - social housing, public hospital services, specialist palliative care, public dental services, human services in remote indigenous communities, and grant-based family and community services. It invites public comment before further investigation and final recommendations will be made.

Before it gets into the guts of it, the Commission's report explores a couple of key issues. First, it considers the role of government in the provision of human services, acknowledging that there are several levels of government delivering and funding a range of complex services in a multitude of different ways. It acknowledges that people who use human services are diverse in their needs, and suggests there are varying degrees of capability around exercising informed choice for consumers. It falls short of discovering that informed choice is just as often limited by a lack of opportunity than by diminished capacity.

It then delves into what it describes as governments' "stewardship role" - identifying policy priorities and intended outcomes, designing models of service provision, and ensuring services meet standards of quality, accessibility and suitability for users. Somewhat ironically, given the later attention it pays to social housing and grant based family and community services, the report asserts that government involvement in the provision of human services comes with a community expectation that services should meet a minimum standard. "If governments do not adequately discharge their stewardship function," it says, "the effects can be damaging to service users, providers and governments".

Evidently a range of successive governments have missed that particular memo, especially when it comes to services that might be considered as some form of "welfare". The report cites vocational education and training reforms to demonstrate its point, but we suggest social housing and income support could each have made a more impressive case study. Governments who take this "stewardship role" to heart should have no trouble justifying the associated costs of welfare, instead of taking every opportunity to rationalise while looking for alternative "solutions".

Finally, the report considers just what "competition, contestability and informed user choice" might even actually mean. Competition involves services striving against one another to attract users, by reducing the price they charge, improving the quality of their service, innovating, or otherwise tailoring services to meet the needs of users. In a human services context, this usually means a voucher system, where users are able to choose from a range of providers based on their preferences. In the absence of any discernible range of human service providers, competition devolves to the point where service providers compete for government contracts, and services users simply take whatever they can get.

Contestability means ensuring that service providers do not get too comfortable, by placing upon them a "credible threat of replacement if they underperform". The report outlines several criteria for beneficial contestability: ongoing performance monitoring of providers, alternative providers or management teams that pose a credible threat of replacing an incumbent, and a mechanism to replace underperformers. At its very worst, this amounts to micromanagement, which simply distracts service providers from the provision of all but the most measurable of service. They must focus instead on securing their continued funding, and when combined with the kind of competition that comes from scarcity this helps to explain why service users are so rarely able to find a range of services from which to choose.

Which brings us to "informed user choice". That's all about ensuring consumers are empowered to be actively involved in decisions about the services they use - placing users at the heart of human services delivery. Of course, we'd say the same should go for service design and determining policy objectives as well. But achieving such things is all but impossible without strong, funded commitments to the provision of service in the first place.

Taking into account all the filters and complexities through which informed user choice sometimes needs to exist (capacity, agency, identifying needs, etc), the report suggests that "governments may need to facilitate the flow of information about services to the user and provide support to users to help them act on that information". With respect, they may also need to get their heads around competition and contestability properly first.

Then, with all of that behind it, the report looks at the scope for reform of its six identified human services. At the top of the list is social housing. It concludes:

Introducing greater competition, contestability and user choice could improve the effectiveness of the social housing system in meeting tenants' needs.

• There is substantial room for improvement in the current social housing system. There are long waiting lists, poorly maintained and underutilised properties, and a lack of information available to allow governments to select and monitor the performance of service providers.

• Four out of five social housing properties are managed by government entities, yet there are a large number of housing providers - both not-for-profit and for-profit - that could perform this service. Community housing providers outperform public providers on some indicators, including tenant satisfaction and property maintenance.

• There are currently not enough social housing properties to meet demand, limiting the housing choices available to social housing tenants. Nonetheless, approaches implemented internationally allow social housing tenants greater choice of home. Reform options could be explored in Australia to address supply constraints and increase the housing options available for prospective social housing tenants.

There's a lot to unpack in there, and we'll come back for a closer look as soon as we can. In the meantime, you can download the report here. If you'd like to lodge a submission in response to the preliminary report, you can do that here. Submissions are due by October 27th 2016.

And the new Minister for Housing is...

It's taken awhile for the dust to settle, but after the coalition's re-election to government our Prime Minister has now announced his new federal Cabinet. And the new Minister for Housing is....

Well, this is awkward. It turns out there isn't one. Again.

Instead we'll have to settle for a Minister for Social Services who'll continue to carry responsibility for housing related welfare policies, delivered through our social housing systems and homelessness services. We expect this will include, at some point, the introduction of a compulsory rent deduction scheme for social housing tenancies, which will replace the current voluntary scheme.

So, congratulations to the Member for Pearce, the Hon. Christian Porter, who will continue as Minister for Social Services.

The Hon. Christian Porter MP, Minister for Social Services

Congratulations also to ACT Senator Zed Seselja, who will take on duties as the Assistant Minister for Social Services.

Senator Zeb Seselja, Assistant Minister for Social Services

But, alas, there's still no Minister for Housing. Given that social housing tenancies make up about 5% or less of Australia's total housing "consumption", and that the high cost of housing in the private market is the biggest contributing factor to Australia's chronic conditions of housing stress and homelessness, we're always on the lookout for a Ministerial portfolio that will steer the nation towards an overall housing strategy to improve affordability. Our custom is to consider the Prime Minister and Treasurer as our de facto Ministers for Housing, so congratulations to the Members for Wentworth and Cook, the Hon. Malcolm Turnbull and the Hon. Scott Morrison, respectively.

You might recall the coalition's flagship policy this election was all about investment in small business owners. You might also recall the Brown Couch is full of admiration for those who have weighed up  the value of their borrowing power, realised that unaffordable home-ownership is not the be-all-and-end-all of existence, and decided to fund the development of a big idea into a business that actually produces something new and valuable instead. Of course, one of the best things that could happen for small business owners across Australia is for their housing to become affordable, and their tenancies to become stable and secure.

With this in mind, we'd like to offer our congratulations to the new Minister for Small Business, Member for Riverina the Hon Michael McCormack, too.

The Hon Michael McCormack MP, Minister for Small Business

Congratulations, Ministers. We look forward to working with you.

Housing, tax and growth

The long road to sensible tax reform has taken an awkward turn today, with Federal Treasurer Scott Morrison holding out a much maligned and now discredited report as evidence that Labor's proposed changes to negative gearing (and capital gains tax exemptions) would take a wrecking ball to Australian housing. Aside from Labor leaping to its own defense, the BIS Shrapnel report - commissioned by a mysterious "private client" - has prompted a couple of good responses. See, for instance, this piece by representatives of the Grattan Institute, and the joint statement from ACOSS, National Shelter, the Australian Youth Affairs Coalition and the National Association of Tenancy Organisations (of which TUNSW is a member).

Much has been said about negative gearing since Opposition Leader Bill Shorten announced Labor's proposal in mid-February. We've kept relatively quiet on the matter, because we've been waiting to see whether the Government will come up with their own vision for reform. Recent indications suggest they may pass, although Scott Morrison has not yet made this official.

We'll get onto it, though, because even throughout all the furore not much has been written about what Labor's proposals will mean for tenants - other than the usual guff about rents going berserk and landlords burning down houses before suffering any loss without generous taxpayer funded subsidies. Well, okay, maybe we made that last bit up, but with some of the commentary going on out there, you'd be forgiven for thinking such civil disobedience is truly on the cards.

Of course, there have been exceptions. Some very well considered articles have been produced over the last three weeks - one such being a piece in The Conversation penned by Professor Gavin Wood. Wood took a look at the short- and long-term implications of Labor's plan, should it become a reality, and suggested that we might expect a bit of a step backwards before things start to improve. That's a reasonable assumption given the housing market - and indeed the whole Australian economy which relies so heavily upon house price speculation - will have to adjust. It's this adjustment we should be focusing on, rather than whether or not landlords will try to pass on the "costs" of losing their tax breaks by trying to increase rents en masse - some will, others wont, everyone will have to adjust.

Wood's article concludes:

Many believe that repayment and investment risks carried by heavily indebted home buyers played a central role in precipitating the global financial crisis. Tax concessions that favour taking on debt exacerbate those risks. If Labor’s proposals succeed in attracting attention to these and other structural problems that plague Australian housing markets, they will have a much wider significance.

Meanwhile, the Australian Bureau of Statistics has just released a report showing that economic growth for the December quarter was higher than expected - coming in at 3% against a forecast of 2.4%. One of the key drivers of this growth was household consumption - ordinary people spending ordinary money on ordinary things like food, fuel and shelter. There's a problem, though, because incomes are on the decline as higher-paid jobs in the mining sector are replaced by lower-paid jobs in services and retail. Which means, for the last few months at least, our economy was driven by consumers tapping their savings, or - and this is far more likely - the equity in their property holdings. In other words, taking on more debt to spend on consumption, while hoping that further house price rises will pay for it in the long-run.

This is an unsustainable way of achieving growth, but it is also grossly inequitable. It's not hard to see who the losers are in such an economy, even while the good times last for those in the winners' circle. Perhaps it's time we did make some of those adjustments.

313,000 people MPs should listen to instead of the Property Council of Australia

This week we saw a not-at-all veiled threat from the Property Council of Australia to Members of Parliament in marginal seats. That threat was very simple: don’t touch negative gearing, or we will do you in the next election.

Pearl from the Property Council wants to get paid.

“That’s enough voters to swing all of these seats eight and half times over, a big political risk to take with people with a lot at stake.”

“Australians already pay $72 billion a year in property taxes – and property owners don’t want government’s hands reaching even deeper into their pockets.”

-Property Council Chief Executive Ken Morrison

We’d like to provide those MPs with some other people who might easily sway an election, though they’ll win their vote with kindness and good public policy. We've some suggestions on our policy platform for social housing, and affordable housing across NSW and the nation.

(Note - we give no guarantee as to the accuracy of the Property Council's data on votes needed, but the bits we've added have come from the 2011 Census records...)

Social housing tenants- easily more than enough to change these results.

Private Renters- unsurpisingly, many more private renters than negatively geared investors!

In just these 20 seats there are 312,978 people the government could listen to instead of the Property Council of Australia when deciding housing policy. We'd also point to our own affordable housing recommendations and those of National Shelter.

In the media release and subsequent articles we also saw a couple of tired tropes trotted out – first:

"There are 840,000 Australians with taxable incomes below $80,000 a year who are negatively geared."

That may well be true, but it's meaningless. We’ll refer the Council back to this excellent piece from Michael Janda, who examines the claim that it is Australians with taxable incomes below $80,000 a year who mostly benefit from negatively gearing - essentially, they're able to reduce their taxable incomes by claiming a whole bunch of tax deductions, through schemes like negative gearing!

The AFR article also suggests the Property Council will argue negative gearing “keeps a lid on rental costs and house prices” - which is interesting, given that in our 5 year report on the Residential Tenancies Act 2010 we found that rents have risen much faster than landlords' costs (where negative gearing is most likely to have an impact). Perhaps the Council could pass the message along to its constituents that they are supposed to be holding back on rent increases? It appears to have been lost in the mail.

The Philosopher, the Economist, and the Prime Minister's Dogbox

While catching up on your weekend reading you might have come across this curious little article from the New Philosopher magazine - The Philosopher's Dogbox - offering a thoughtful discourse on the virtues of renting a home.

Its author, Damon Young, observes the nature of tenant-hood:

A child of the depression, one of my grandmother's favourite slurs is "bludger": a shirker, and idler. It echoes the property equivalent: renter. To lease a home, in this universe, is to be capricious, lazy, and vulnerable. And the last is like a cosmic punishment, to be pushed around by landlords is the penalty for sloth. Those who lose the housing game often end up in flats or apartments, what my grandmother calls a 'dogbox'.

... amid the changing shape of the private rental market:

Many cannot afford mortgages at all - including, to my grandmother's alarm, my wife and myself. Part of a generational trend of falling home ownership, we will never be that couple on the bank advertisements, beaming after bidding. We rent, and we keep shifting as high turnover and prices force us from house to unit, suburb to suburb. And we are now competing with wealthier renters, whose accounts are fat enough for leasing but not for buying. Even with discipline and austerity, virtues my grandmother rightly lauds, we will not be rewarded with her three bedrooms, red bricks, and hydrangea borders. We live well, but our two bedrooms and tiny courtyard are that bestial symbol of failure: the dogbox. (A kennel that costs almost half our household earnings, after tax.) My grandmother's mantra - work hard, save cannily and own early - is sadly anachronistic.

Young then takes us on a tangential journey: through Martha Nussbaum's, Fragility of Goodness, where "no amount of data or prudence can guarantee freedom from suffering - in fact, sometimes this very susceptibility gives existence its preciousness"; to a contemplation of Karl Marx's musings on private property, that "has made us so stupid and one-sided that an object is only ours when we have it..." - allowing us to wonder if perhaps "we no longer identify as owners - successful or failed, canny or imprudent - we are one step away from this emphasis on having."

For the Philosopher, consignment to the dogbox is not without solace, but there is a palpable discomfort in his story. Enter the Economist, who is only too happy to explain. A second article might also have caught your attention over the weekend - Bloomberg's The Threat Coming By Land. It begins with a proposition:

... One of the most pressing economic dangers of the future is getting short shrift: Landlords are eating the world.

Because of course, it is our landlords who are winning the housing game. It is landlords - indeed our mums and dads, and not our Philosopher's grandmother - who have consigned us to the dogbox.

The article continues:

There is a growing concern that wealth inequality has skyrocketed, and that capital income accounts for a growing share of the economic pie. This was the theme of Thomas Picketty's "Capital in the Twenty-First Century." But although we usually think of "capitalists" as they were defined by Karl Marx ... we forget that land also is a form of capital, which means landlords (and homeowners) are capitalists, too. ... It is land, not corporate capital, that has been responsible for the the lion's share of the increase in capital's share of income.

The article goes on to argue that land taxes make good economic sense because they promote productive use of land, and stabilise its value so that its cost does not draw money away from its productivity. (If this sounds familiar - it should: the Brown Couch has long said that land tax is the fairest tax on earth). But its reference to landlords as capitalists is what interests us today.

Quite aside from his casual reference to Marx that draws us promptly back to the Philosopher's critique, in acknowledging property as capital the Economist reminds us of a key foundation on which modern housing policy is built: the idea that ownership is akin to permanence, and permanence means stability. In the face of the raging battles between capital and labour that marked the opening decades of the 20th century, "every spadeful of manure dug in, every fruit tree planted, converted a potential revolutionary into a citizen" (Neville Chamberlain, 1920).

Patrick Troy explores the implications of this for Australia in his 2012 book Accommodating Australians, where he discusses the development of the first Commonwealth State Housing Agreement (at pages 90-92). It's worth extracting here at length as, aside from the substantive point it serves to highlight, it provides some useful background for the state of housing policy today:

The initial reaction of the Opposition to the Commonwealth State Housing Agreement was almost apathetic. Little was said in criticism of the agreement, the Opposition aiming its fire at the issue of industrial unrest in the building industry. The Leader of the Opposition, Robert Menzies, was at his most perfunctory in his comments on the Bill. Certainly, there was little political point in assailing a national housing project at a time of demonstrable need, but strangely the Opposition did not try to exploit the controversial aspects of the Commonwealth Housing Commission report, particularly nationalisation of land. The Commonwealth State Housing Agreement would have cleared the Parliament with largely bipartisan agreement but for one extraordinary political misjudgement. 

The notion that by some mystical process home ownership transformed a working man into a 'little capitalist' was not new. A real estate agent, Richard Stanton, had expressed the rudiments of the concept to a housing inquiry as early as 1913: "A working man can come to us (to buy a house) and be treated just as if he were a capitalist".

The notion of 'little capitalist' had been often used by conservative politicians to deride the housing priorities of Labor governments, as in this description by a Conservative MP of the establishment of a State Housing Commission in New South Wales by a Labor government: "The Government now brings in a measure that will improve the housing system and sooner or later create a number of small capitalists". (Cater 1941)

Neither side of politics had established a monopoly on unequivocal support for home ownership. Some non-Labor politicians had supported the interests of landlord investment in rental housing and had shown a tendency to sneer at the home-owning pretentions of lower income earners. Others strongly favoured home ownership as a source of social stability. A number of Labor politicians had asserted the interests of tenants exploited by the private rental market, and advocated greater home ownership as a remedy. Others were strong supporters of low rental public housing. These were not clearly drawn ideological positions but the Commonwealth State Housing Agreement debate was to produce a marked hardening of partisan battlelines on the issue of home ownership. 

During an otherwise unexceptional speech in the Committee stages a government supporter, Dr Gaha, proposed a scheme to use child endowment payments as a means of amortising the costs of home ownership, basing his argument on well-worn themes of home ownership increasing satisfaction and stability. He went on: 

"In this way we would make the average worker a capitalist and that is our only solution to Communism in this country. If this scheme now before us has any weakness at all, it is its failure to enable the occupant to become the owner of his own home."

Replying to points made during the debate, [Minster for Postwar Reconstruction] John Dedman tried to refute Gaha's argument but his frank expression was pounced on by Mr Larry Anthony, a senior member of the Country Party and an accomplished parliamentary tactician. The critical exchange is as follows: 

DEDMAN: The Commonwealth Government is concerned to provide adequate and good housing for the workers; it is not concerned with making workers into little capitalists. 

ANTHONY: In other words, it is not concerned with making them homeowners. 

DEDMAN: If there is any criticism which may be directed against the policies of past governments supported by the present opposition; it is this: too much of their legislative program was deliberately designed to place the workers in a position in which they would have a vested interest in the continuance of capitalism. This is a policy which will not have my support at any rate."

What followed is a superb case study of the use of parliamentary forms for maximum political exploitation. Anthony moved quickly to amend the schedule of the Bill to insert a provision that would have allowed a tenant to buy a dwelling on rental purchase terms after three years of occupancy. In a series of highly effective political speeches, Anthony ... excoriated the government for discouraging home ownership. Anthony expressed the nub of the Opposition attack: 

"The minister for Postwar Reconstruction said the legislation to enable workers to own their own homes would create a lot of little capitalists and that would retard the onward march of socialism. That was a most extraordinary statement. Does it mean that the policy of the present government is to discourage home ownership?" 

This approach was in harmony with the evolving Liberal-Country Party philosophy of dismantling wartime controls and encouraging individualism and private enterprise. Opposition speakers were able to contrast socialism, controls and denial of home ownership with individualism, free enterprise and home ownership, expressed in a ringing credo by Archie Cameron: 

"I believe in private ownership of property. I believe in the freehold principle. I believe that a man is entitled to make certain things his own. I believe that persons who acquire property will take greater care of it than tenants will take care of property which they rent." 

Although the government was able to use its parliamentary majority to defeat the writing of home ownership into the legislation, and although the Opposition accepted the main thrust of the Commonwealth State Housing Agreement, the dimensions of the housing debate were changed utterly by Dedman's statement. The Opposition parties were able to paint Labor as resolute opponents of home ownership and to pledge themselves to optimum home ownership. Dedman protested feebly that he would welcome the day when every head of a family throughout Australia owned his own home, but the damage had been done.

By the time the next government - lead by Robert Menzies - came to renew the Commonwealth State Housing Agreement, Dedman and Anthony's 'little capitalists' had been usurped by a forgotten middle class. But the theme of property ownership remained, and the sale of state owned rental housing became a feature of housing policy for many years to come.

But as the Philosopher reminds us, the rate of Australian home ownership is in decline. And as the Economist would have us say, it is the landlords who make it so. To understand this, we need look no further than the path on which Menzies has taken us: the forgotten people - aka the Philosopher's grandmother - bought their homes, then grew old and comfortable within them on a modest pension. Their children bought homes for themselves, too, but they didn't want to just be comfortable as they got old... They wanted to maintain the higher standards to which they were accustomed. The pension was not enough, and to rely on such welfare was contrary to the individualism and freedom that had become our national mantra.

So they bought extra homes. Homes they didn't need; homes that would increase in value over time - allowing them to generate income through rental revenue and price appreciation. And because public housing was being sold off, and more of it was not being built, governments developed tax incentives to encourage more and more of these children of the forgotten people - our mums and dads - to invest in housing. Or, more specifically, to invest in second-home ownership, so that their children and their neighbours' children could move into cheap rentals while toiling and saving for a home of our own.

In the end, they became little capitalists. And for them, as the Economist alludes, this path was a good one. For their children, it was not so much.

Today Australia has a new Prime Minister. We congratulate the Member for Wentworth on his not-so-sudden ascension to high office - this man who once famously claimed to know what it was like to live in a rented flat. To have as our Prime Minister a person who understands the dubious self-loathing that comes with consignment to the dogbox is no small thing. But it remains to be seen what this will mean for anyone who remains so consigned.

In his victory speech Turnbull claimed his would be a "thoroughly liberal government, committed to freedom, the individual and the market". His Deputy, Julie Bishop, gave an express tip of the hat to Robert Menzies and the values he instilled within the Liberal Party. So will a government lead by Turnbull and Bishop get back to work on the dream of a home-owning Australia, and wind back the tax incentives that are producing instead this nation of landlords? Or will they continue along the path their predecessors have set, and maintain that the only thing standing between you and liberation from the dogbox is a good job that pays good money?

Only time will tell.

GST hit-ups stifle more valuable conversation

Like Stewart to Stewart, Mason to Foran, or Cherry-Evans to the Gold Coast (and back again), we were hit with a Northern Beaches 1-2 this week.

Try time

Ever the pugilist, the Prime Minister and Member for Warringah did the grunt work early. Way back in 2014, the first Abbott-Hockey budget downsized projected spending on health and education over the next decade, pushing $80 billion dollars of ‘cuts’ or ‘efficiency measures,’ depending on how you feel about that sort of thing.

His offload to NSW Premier, Member for Manly, and Liberal Party teammate Mike Baird was a while in the making. But arrive it did – the unstoppable force calling on us to save the health system by upping the GST from 10 to 15 per cent in a barnstorming Monday address.

Given Australia’s steadily low GST, it is perhaps no surprise that the debate around increasing our tax on consumption has been around for nearly as long as the tax itself. Most relevantly for our purposes, the No Land Tax party called for precisely the same rise before the recent state election, in a flurry of yellow bibs and clip art testimonials.

But both the Premier and No Land Tax pitch GST reform in artificially narrow terms – the one true path to health system deliverance, and to shifting fiscal responsibility away from landowners, respectively.

And, of course, as a regressive tax, low-income renters would feel the pinch of an increased GST more than most – even if it remains unclear precisely where the hypothetical compensation for this hypothetical rise would leave this vulnerable group.

This state would benefit from a broader discussion about tax reform than the one currently enveloping the GST alone. In particular, the Tenants’ Union is an established proponent of a broad-based tax, applying to all land in New South Wales, as a boon for renters and owners alike:

“Land tax is an important source of NSW State Government revenue. Land tax also has the potential to improve housing affordability for purchasers and renters, and economic activity generally. Our present system of land tax does not realise this potential, and should be reformed.”

There is no single path in tax reform - the PM and Premier’s fancy footwork in pushing the line notwithstanding. And we say land tax reform should play a prominent part in a much-expanded conversation.

Read more about the Tenants’ Union’s land tax reform position here