Social housing and its bold new future

Today the NSW Liberal Government has announced a new 10 year social housing strategy, Future Directions for Social Housing. The Sydney Morning Herald has called it "an historic decision to privatise public housing in New South Wales". We call it an incentive to fix the Residential Tenancies Act 2010.

It's true that one of the main thrusts of the strategy will be the redevelopment of estates, with all the uncertainty and anxiety that brings for tenants who start to wonder whose homes will be next to go... But it will also place an ambitious degree of faith in the private rental market to more or less "rescue" tenants from social housing.

Like the discussion paper that came before it, the strategy is based around three key pillars -

• More social housing
• More opportunities, support and incentives to avoid and/or leave social housing
• A better social housing experience

Under each of these, the Land & Housing Corporation and FACS Housing will be given a series of tasks.

More social housing means:

• the Land & Housing Corporation will increase their estate renewal and redevelopment activities. This will be "in partnership with the private sector" through the Communities Plus program. We'll be keeping our ear to the ground for details as each new development is announced, and making notes on our Clearing House blog. The strategy says "FACS will work closely with communities to avoid unnecessary disruption to tenants' lives". We certainly hope so.
• ownership or management of more properties will be transferred to community housing landlords. The strategy aims to increase the proportion of social housing owned or managed by the non-government sector to 35%, and will require community housing landlords to assist with the Land & Housing Corporation's relocation needs when redeveloping estates. They'll also be required to report on tenant outcomes according to a set of targets - we'll be keeping an eye out for those.
• the Government will be relying on proposed new funding models, such as the Social and Affordable Housing Fund and Social Impact Bonds - which means attempting to bring private finance into the construction of new and renewed social housing.
• further attempts at tackling "under-occupancy".

More opportunities, support and incentives to avoid and/or leave social housing means:

• Family and Community Services will "remove work disincentives" for public housing tenants. This includes revising policies that create work disincentives, and reviewing the rent setting model and eligibility criteria. This is really the good news.
• trying to improve educational and employment opportunities for social housing tenants. They'll do this through the allocations system - providing houses for people who can work or study in areas with better access to jobs and schools. It sounds like a good idea, but it's just as likely to create further residualisation and stigma for those who miss out. They'll also try to create new employment opportunities for social housing tenants through new repairs and maintenance contracts.
• introducing "Personal Support Plans" - where a "client" agrees to "realistic goals" in exchange for tailored supports and services. The architects of the Housing First model must be scratching their heads in wonder, and we're concerned about how these plans will interact with a residential tenancy agreement. What will happen to tenants who fail to achieve their goals? Will they lose their housing, as well as their tailored supports and services?
• increasing the budget for Private Rental Assistance products, to try and convince more tenants to try and survive in the expensive and chronically insecure private rental market (which the government considers a form of "independence") where they will not need to rely on social housing assistance.
• collaboration across the Whole of Government to better coordinate assistance. The problem is, FACS have forgotten to include NSW Fair Trading in the list of agencies they'd like to work with - even though they are in the midst of a review of the Residential Tenancies Act 2010 and could work towards giving tenants greater stability, liveability and affordability in the private rental market.

A better social housing experience means:

• improving customer service and using more methods of communicating with tenants.
• implementing new repairs and maintenance contracts.
• mandatory evictions for tenants who get caught up in criminal activity.

It's a big plan - it reflects a high degree of ambition, for better or worse. It will present new opportunities as well as risk - particularly for public housing tenants, who will start to wonder just how secure their current tenancy is. But unless changes are made to the Residential Tenancies Act to give greater stability to tenants in the private rental market, the answer remains "comparatively so". Decamping to the private rental market should remain an option of last resort.

Most of all, this new strategy comes with a great big list of things to do. We'll be keeping a close eye on how FACS and the Land & Housing Corporation begin to work through its implementation, and how it progresses from here.

On this day in history - reshaping public housing

According to the internet, 17th century German mathematician and astronomer Johannes Kepler calculated that the universe was created on this day in the year 4977 BC. It turns out Kepler was a little off the mark, with later theories putting its origins at closer to 14 billion BC. Of course, we have no scientists here at the Institute of Tenancy Cultural Studies, so we'll leave that particular discussion to others.

Johannes Kepler of Stuttgart.

His grandfather was a landlord.

But this day bears significance for us, too, and we can't let it pass without a note.

Ten years ago on this day, as many of us were marvelling at the invention of YouTube, contemplating the maiden flight of the impossibly large Airbus A380, or waiting with bated breath for the next instalment of the Star Wars movies (The Revenge of the Sith) and Harry Potter books (The Half Blood Prince), the Carr Government's then Minister for Housing, Joe Tripodi, announced the Reshaping Public Housing reforms.

These reforms sought to do a number of things with the intention of making the public housing system fairer. In particular, they sought to "end the policy of public housing for life" by offering fixed-term tenancies with a review of eligibility at the end of the term; and "allocate all public housing on the principle of strongest housing need" by focusing eligibility rules to assist tenants and households whose need go beyond mere questions of affordability. In addition, the reforms changed the way public housing rents are calculated, ensuring that tenants on 'moderate incomes' would pay 30% of income in rent, instead of the 25% paid by tenants on lower incomes.

But like Johannes Kepler's apparent attempts to date the origins of the universe, these reforms have fallen well wide of the mark. The combined effect of fixed-term tenancies with reviews of eligibility, and reduced disposable incomes for tenants on slightly higher incomes, has been to ensure tenants' make tough choices about how and when to take on work. Extra earnings could result in less money in the short-term, and a loss of housing in the medium-term. In the result, there are fewer people leaving public housing of their own accord, and this puts immense pressure on the portfolio.

The principle of housing on the grounds of strongest need has lead to an increase of residualised disadvantage within public housing. Combined with reduced options for sensitive allocations across the portfolio, because of the decrease in the number of housing 'exits', the pursuit of this principle is perhaps responsible for the rise of 'anti-social behaviour' and complex neighbourhood disputes within public housing communities - which is now seen as one of the key policy challenges by some in the social housing sector.

It also combines with the State's over-stretched health and support services to the extent that while a person's housing needs are being met, other significant needs may not be. This often exacerbates the problems that have lead a household into public housing in the first place - placing tenancies at risk from the outset, and making issues caused by this residualisation all the more acute.

The impact of these reforms, and their failure to achieve the stated aims, has been well documented. We've drawn attention to them in our research, and pointed them out on our blog. More recently they've started to turn up in important discussions such as the Auditor-General's report into making the best use of public housing, and even, as we understand it, a number of responses to the Department of Family and Community Services' Social Housing in NSW discussion paper.

This is positive news, because ten years of these terrible policies is ten years too long... It's well and truly time to reshape the reforms.

Tools for Success (and eviction)

Women living in social housing can apply for a $5 000 scholarship to help them train for a trade, under the Tools for Success program announced this week by the NSW Department of Family and Community Services.

This is a great opportunity for social housing tenants, and a great initiative by NSW FACS.

Not so great is the fact that if a public housing tenant actually takes up the opportunity and gets a job paying more than a certain amount, Housing NSW will terminate her tenancy at the end of its fixed term.  

And even if she's not near the threshold, she might think twice about doing any overtime, because Housing NSW will take up to 55 cents in each additional dollar she earns, because of its higher rent rates for 'moderate income' earners.

The State Government is to be commended for initiatives like Tools for Success, but it hobbles these initiatives, and the efforts and aspirations of public housing tenants themselves, with policies – reviews as to continuing eligibility, and moderate income rent rates – that discourage work.

To make a success of Tools for Success, Housing NSW should abolish those policies and make it so that public housing tenants have nothing to lose from training and working.

Welfare reform = rent reform?

The release of an Interim Report as part the Governmnent's Review of Australia's Welfare System has everyone talking about welfare reform today. There are some things that warrant a mention here on the Brown Couch, too.

The Report spends some time looking at Rent Assistance payments, showing that rates of Rent Assistance have not kept pace with the growth in rents. Rent Assistance recipients are paying a higher proportion of their incomes towards the rent, as the rent-specific benefit is eroded by housing costs that have risen more rapidly than general inflation.

The Report concludes that "there is a need to redesign Rent Assistance to assist people in private rental who have the highest needs". As to what that 'redesign' might involve, the report is not prescriptive. But it does make reference to some earlier suggestions - such as those in the Henry Review - that would see Rent Assistance indexed to something other than the Consumer Price Index. Linking Rent Assistance to actual housing costs might have an interesting effect on Treasury's interest in the stability of market rents - but we'll leave that as an aside for now.

The Report has a go at further entrenching the idea of moving away from income related rents in social housing, too. This is also something we've seen before in the Henry Review, as well as the recent Commission of Audit. On this, the Interim Report is also a bit non-prescriptive, with a mere suggestion that "consideration could be given to moving away from the current system of income based rents towards the use of Rent Assistance as the preferred rent subsidy scheme across both private and public tenures."

But its stated rationale for this suggestion is worth a look: the apparent 'perversity' of people on low incomes 'preferring' to live in public housing, rather than the private rental market, on account of its affordability! According to the report, people might pass up the opportunity for paid work in order to maintain their position in public housing, or even on the waiting list.

(This has an eerily familiar ring to it. Of course, rather than changing the way rents are calculated, governments could instead choose to invest in more public housing. Or they could do both - but perhaps we should just stick to the issues at hand... after all, there's another Government Inquiry for all that, right?)

We'd go so far as to suggest there is another reason to prefer a social housing tenancy to one in the private market - and that's the relative security of tenure. You're far less likely to be turfed out of a social housing tenancy at the whim of the landlord, and certainly not without a reason... The Report seems to have missed this point entirely.

There's another important thing that's been overlooked here - and that's Henry's suggestion that there might be an additional payment for 'high needs' clients in social housing. This is consistent with the Commission of Audit's report - it was overlooked there as well...

***

Interested parties have been invited to comment or make a submission on the Interim Report by August 8th 2014.

Bidwill: stigma and pride

The ABC has produced a couple of reports on the public housing estate at Bidwill: read here and here, and watch here.

The following quotes caught our eye. Housing NSW Executive Director, Paul Vevers, says of Bidwill:

There aren't role models for young people here.

A 16 or 17-year-old girl or boy if they leave school, the rite of passage for them is that the parents would take them down to Centrelink.

No role models in Bidwill?

What about Samantha Russell, interviewed by the ABC, who's doing year 11 at the local high school, busting down gender stereotypes in the metalwork class, working part-time and looking forward to a career in journalism, and praising her time at school as 'challenging [but] awesome'?

Or Samantha's parents, both of whom are studying at TAFE, with a plan for university and careers after that?

Or the Bidwill residents who have volunteered their labour in the Bidwill Community Garden, or with Habitat for Humanity, or in the weekly community breakfast and other activities organised by Bidwill Uniting, or in any of the other community activities – playgroups, youth groups, parents groups – that try, in difficult circumstances, to make life a bit better in Bidwill?

To say that 'there are no role models for young people' in Bidwill is wrong, and an unwarranted slight on all these good people.

And we have never seen anyone apply to Centrelink for income support as some sort of 'right of passage'.

*

We asked Mr Vevers if he was quoted correctly. He confirmed that those were his words. He further said:

The point I made is one which Housing NSW and others such as the Auditor General have made many times before, which is that the vast majority of tenants of working age are on Centrelink benefits, with only 5% of all tenants having wages as their main income.  In many families that has been the case for a couple of generations, so young people in those households have never seen a parent or grandparent go to work....

That of course does not mean that there are not other people who stand out and it does not mean that there are not younger people in public housing who are seeking to change that for themselves.

A person out of work can be a role model, in the way they deal with that and the way they go about things at home and in their community. They, and the public housing tenants who do work – despite all the discouragement given by Housing NSW's policies for hiking rents and kicking out wage earners – shouldn't be forgotten when Housing NSW is in the media making points.

Public housing 'moderate income' rent rates clarified... with maths!

Brown Couch reader and mathematician, 'H', issues a quiet 'ahem' following our recent discussion of Housing NSW's 'moderate income' rent rates and their punishing marginal effect. (Just in time for today, the feast day of St Hubertus of Liege, patron saint of mathematics).

(St Hubertus ponders public housing rent policies) 

We said that the moderate income rates (25-30 per cent, on a sliding scale, applied to all income) could be expressed as a marginal rent rate of 50 per cent; that is, 50 cents in each additional dollar earned in the moderate income range goes to Housing NSW in additional rent. Says H:

It's true to say that the average marginal rent rate over the moderate income range is 50 per cent. But there's not a constant marginal rent rate for all the range; the marginal rate varies by up to five per cent either side of the average. The marginal rate at the bottom of the 'moderate income' range is 45 per cent; at the top, it's 55 per cent.

H presents his proof in four pages of graphs and algebra, including a bit of differential calculus. He explains:

Below the moderate income range, the rent you pay increases as a function of the amount of your income increasing, and nothing more; on a graph, this a straightforward straightline function with a constant gradient (in other words, a constant marginal rate of increase). But in the moderate income range, the rent you pay increases as a function of both the amount of income increasing, and the rent rate increasing. That's two orders of increase; so the function is a quadratic, with no constant gradient.

Quite so! It is proven: the marginal rent rate in the moderate income range varies between 45 per cent and 55 percent, the average marginal rent rate being 50 per cent.

Adds H:

It might be nice if public housing rent rates could be presented as constant marginal rates, like the ATO's income tax rates. It would be nice because it would be clearer for everyone; but on the other hand, a system of marginal rates starting at 25 per cent, jumping up to 50 per cent, then down to 30 per cent is something that no policy maker in their right mind would purposely come up with.

Thank you, H, and happy St Hubertus's Day, one and all.

Anti-Poverty Week 2013

It's Anti-Poverty Week.

(Encore!)

At the Brown Couch we see poverty in the context of the housing system, which enriches some while it impoverishes others. Our anti-poverty wish is for the housing system to be governed by a housing policy – we don't currently have one, either at Federal or State levels of government – with the objective of housing all citizens affordably, securely and to appropriate standards, and with housing tenure made a matter of genuine individual choice.

As it is, the kindest thing that can be said is that our housing system is governed instead by retirement incomes policy – and it is a pretty shabby sort of policy, being about transferring wealth to older households who already own property and are approaching retirement looking for a quick super fix.

It's hard on younger property-buying households, from whom wealth is being transferred, because of the debts they'll shoulder longer into their lives, without the assurance of rising asset values – or indeed, rising incomes – in an economy hollowed out of productive capacity because too much of our capital and credit has been sucked up the housing wealth/retirement spending transfer tube.

And it is hard on those households – young and old, but particularly the older households – who don't own property, and who won't in retirement have access to the transfer mechanism that retirement incomes policy is counting on.

That's big picture stuff, and there's lots to do to address it and effect a genuine housing policy. But there are a couple of particular things governments could do now to reduce housing-related poverty:

• First, the Federal Government could lift the caps on the maximum amounts of Rent Assistance. (ACOSS recommends a $15 per week increase – total cost $500 million.) This is a targeted reform – not an across-the-board increase, but rather an increase for those at the pointiest end of the rental affordability crisis.
• Second, the NSW State Government could repeal Housing NSW's policies for moderate income rental rates, and reviews as to continuing eligibility, which stop public housing tenants from seeking work, on pain of confiscation of half their earnings and eviction.   

'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.

Auditor-General reports on public housing

The NSW Audit Office has today released the Auditor-General's report 'Making the best use of public housing'.

(Auditor-General Peter Achterstraat)

There's a lot in the report – more than we can cover this afternoon – but its essential message to the State Government is something low-income households and the people who work with them have known for years: there's just not enough social housing, particularly public housing. As the Auditor-General puts it:

The constraints in the current portfolio and funding arrangements do not enable HNSW [Housing NSW] and LAHC [Land and Housing Corporation] to meet the changing public housing need. 

Public housing is ageing and increasingly not fit for purpose. It is declining as a proportion of overall New South Wales housing. 

There is an increasing shortfall between the supply of and demand for public housing.

This is the essential problem from which so many other problems in public housing follow – and compound that essential problem. Not enough public housing means targeting allocations to the most poor and crisis-afflicted applicants. This in turn means higher costs to Housing NSW, and less rental revenue. This in turn means yet fewer funds for new stock, and for maintenance. This means greater resort to asset sales, to avoid maintenance liabilities of the stock that's sold, and to pay for some maintenance on the stock that's left. This means fewer dwellings, and a further increase in the shortfall between supply or and demand for public housing. It's a vicious circle, and it's unsustainable.

Appropriately, the Auditor-General locates the problem of 'under-occupancy' of public housing within this context. To the extent to which it is a problem – and as we've previously noted, under-occupancy is less common in public housing than private rental or owner-occupation, where it is not seen as a problem at all – under-occupancy happens largely because the old public housing stock profile does not match the new public housing clientele profile, and Housing NSW's ability to do anything about it is constrained by the pressures of not enough dwellings and too many poor and crisis-afflicted applicants.

It would be a mistake, and a serious injustice to all the households whose needs are not being met by our diminished public housing system, if the State Government was to merely tweak Housing NSW's policies around the allocation of bedrooms and transfers, and not face up to the essential challenge of growing public housing. Tweaking allocations and transfers really is just shifting the deckchairs.

That's not to say that there are no changes that can be made at the operational policy level to address the vicious circle of public housing's decline. Housing NSW could change now its wretched policy of offering fixed term tenancies and reviewing eligibility to remain in public housing. According to the Auditor-General, this policy has 'had little impact on people moving on from public housing'. We'd go further: we suspect it has induced tenants to stay sick and stay poor in order to stay housed, where otherwise they might have taken work opportunities that lead, eventually, to their moving on from public housing. The declining number of exits from public housing, illustrated in the report, is consistent with our view. 

Likewise Housing NSW's 'moderate income' rents policy, under which Housing NSW takes 50 cents in each additional dollar earned by tenants foolhardy enough to get a job that pays a 'moderate income' – with the Centrelink and the Tax Office getting most or all of the other 50 cents. Scrap this policy and see if the increased incentive to work doesn't eventually free up some space in public housing too.

The Auditor-General makes a number of recommendations for higher-level work by Housing NSW and the Land and Housing Corporation, in terms of strategy and planning. But these mustn't be strategies or plans merely for managing the decline of the social housing sector. Social housing must grow to meet community needs.

Changes to public housing 'succession'

This is not a pleasant thought, but think for a moment if the person you live with died, or suddenly up and left you.

If you live in public housing, and the other person was the tenant on the lease, you have to deal not just with the loss of a significant person from your life – you'll also have to deal with the prospect of losing your home too.

Under current Housing NSW policy, you may be able to remain in your home and take on the lease yourself if you satisfy certain conditions. Spouses of tenants get to stay on; otherwise, you generally have to show that you're eligible for social housing and have lived in the property for at least two years.

Now the NSW State Government has announced that it will change this. The conditions for taking on a tenancy ('succession') will be even tighter. If you're aged under 55 years – regardless of whether you're a spouse, or some other relation – you'll have to show that you satisfy the test for priority housing, a much tougher test. If you don't, you'll get a six month tenancy – a small mercy – then be made to leave.

Says Family and Community Services Minister Prue Goward:

This new approach will encourage household members to find housing in the private rental market and discourage their dependence on tax-payer funded housing.

True, it is difficult to see how some of the criteria for priority housing – especially those relating to 'urgent housing need', which are all about people being in very bad housing situations that they need to get out of – will be satisfied by someone seeking succession (that is, trying to stay in the housing they're in).

But we expect that people will do their hardest to pass the test.

If you're in your 50s, suddenly single and don't own your own home, what does the New South Wales private rental market look like to you? It's not an appealling prospect; in fact, it's pretty horrifying.

And if what it takes to stay in your home, and stay in the system, is to knock back work, get sick, and convince Housing NSW and yourself that you're wretchedly, hopelessly unable to cope out there, you might well do it.

Discouraging dependence? On the contrary.

* 

A further point, about the way this change in policy was announced.

Now imagine again that you've lost an important person from your life, and you may lose your home – and into the bargain the Daily Telegraph calls you a 'houso rorter' and 'freeloader', and the Family and Community Services Minister calls you a 'queue-jumper'.

People living in public housing have come to know they have to grow a thick skin, but this sort of disparagement would catch even the sturdiest person off-guard. Please: knock it off. 

Social Housing Month

It's September, which means it's Social Housing Month at the Brown Couch!

In each of our two previous Social Housing Months, we've focused public housing, as provided by Housing NSW, the Grandpa Munster of the New South Wales social housing system. This year we'll share the attention around to our other forms of social housing: warm and fuzzy community housing –



– sexy, but hard-to-get Affordable Housing –



– and 'deadlier than Dracula' Aboriginal Housing.



But first, we return to one of the issues that kicked off Social Housing Month in the first place: social housing rent increases – and in particular, the fate of that $30 per week increase in pensions granted by the Commonwealth Government back in 2009.

Brown Couch readers will remember that the Commonwealth had declared the increase would be, for one year, off-limits to social housing landlords when they calculated tenants' income-related rents... and that when the year was up, Housing NSW figured the increase was fair game. The indignation of fiesty pensioners, however, scared Housing NSW off, for another year.

Now that extra year's grace is about to expire. What will become of the increase? I guess we'll see in next week's State Budget.

There may be another issue like this on the horizon too. The Commonwealth Government's carbon price package, Clean Energy Future, includes increases to Centrelink payments and Family Tax Benefit payments, and a Low Income Supplement, to offset increased energy prices. And the Commonwealth states:

Assistance is not intended to be included in state government public housing rent setting calculations so that public housing residents get the full benefit of assistance.

Worth making a note of that.

And as always, it is worth sparing a thought for the more than 800 000 low-income households who rent privately in Australia, and what may become of their assistance.

But, to be honest, there is a larger problem in social housing rent setting than that of Housing NSW clutching at small supplements to people's incomes. This is the problem of what happens when a social housing tenant earns additional income through work.

For each additional dollar earned by a social housing tenant, 25 cents is clawed away by their landlord – and if they're a public housing tenant, and they earn enough to put them into the 'moderate income' range, Housing NSW clutches away almost 50 cents in each additional dollar.

And if they're so foolhardy to earn more than that moderate income range, they face losing their house altogether. But virtually no public housing tenants are so foolhardy.

This is the truly enervating effect of social housing rents.

Want to stay housed? Stay poor.

In the 1930s, when the conservative NSW State Government of Premier B S B 'Bertie' Stevens was considering what to do about housing policy, it looked to Britain. Premier Bertie dispatched himself on a study tour of 'Housing, Slum Clearance and Abatement of Overcrowding in England' (1937), and returned to establish the shortlived Housing Improvement Board, which built the happily much longer-lived Erskineville public housing estate.

Now, a conservative British Government is considering making reforms to social housing tenancies there, including allowing British social landlords to adopt a policy familiar to public housing tenants here in New South Wales: fixed term tenancies, with reviews as to the tenant's continuing eligibility.

And the TU has appeared in the thinking Briton's newspaper, the Guardian, to warn why this is a terrible idea.


Fixed terms subject to reviews as to eligibility have been part of New South Wales public housing policy since 2005, when they were introduced along with increased rent rates for so-called moderate income earners. Both discourage public housing tenants from working.

We've discussed the work disincentive effect of public housing rent policies a couple of times previously (and see the TU's paper, too). This effect is particularly acute in the 'moderate income' band (the dollar amounts that define the band vary according to household type), because over the band the rent rate slides up from 25 per cent of household income to 30 per cent – and, in marginal terms, that means about 50 cents in every additional dollar earned in the band goes to Housing NSW in rent. And then there's income tax, reduced Centrelink benefits, and so on.

The reviews as to eligibility also refer to the moderate income band. If at the end of the fixed term of your tenancy (two years, five years or 10 years, depending on your circumstances) your household income is above the higher end of the moderate income band, you are ineligible to continue in public housing, and you can expect to receive a termination notice on that ground. You don't just lose so much of your earnings – you lose your house altogether.

The work disincentive effect of losing eligibility cannot be measured so readily as that of the rent rates in terms of effective marginal tax rates. But we can measure it in terms of actual results – and the actual result is that just about no-one in public housing in New South Wales earns so much as to lose eligibility. In the first 10 months of conducting reviews in 2007-08 (these are the only figures available), Housing NSW reviewed 3 514 tenancies – and just 28 were found to be ineligible. That's less than one per cent.

The whole point of this policy was to move moderate income earners out of public housing, so as to move people in from the waiting list. But in fact there's barely been any movement, and negligible benefit to the people on the waiting list. One might speculate whether more people might have moved out under their own steam, and more from the waiting list moved in, if tenants were not discouraged from working by high effective marginal tax rates and the prospect of losing their home at a time not of their choosing .

And tenants' decisions about work aren't the only decisions affected by this policy: it also bears on decisions about whether one's young adult children stay at home or must move out, or whether one's girlfriend or boyfriend takes the next step and moves in as a partner (because if your grown up kids or partner earns too much money, you'll lose your home). This is an odious interference in what should be personal decisions.

It should be said that there is another explanation for the failure of the policy to generate any movement of tenants and applicants: that is, that just about everyone comes in the higher end of the moderate income band because it has been set too high. But this explanation does not stack up. Housing NSW's 'moderate incomes' are quite modest. You can get a sense of this from the following tables, which show for various household types on incomes just above the respective moderate income band whether median rents for appropriately-sized private rental premises across Sydney of appropriate are affordable (ie less than 30 per cent of income), unaffordable (ie more than 30 per cent – the benchmark for 'housing stress') or very unaffordable (more than 50 per cent – 'housing crisis').

These tables update the tables in the TU's paper, linked above, with median rents data for the March 2011 quarter, and Housing NSW's current moderate income thresholds. ('Andy', 'Beth' and 'Cass' appear in the paper as typical households.)

(Inner ring Sydney LGAs)

(Middle ring Sydney LGAs)

(Outer ring Sydney LGAs)

As well as indicating the modesty of a 'moderate income', these tables also give a sense of how the policy bears on decisions about work. You can see how a public housing tenant who is giving thought to working and earning more might take a look at what they'd pay in the private market if they became ineligible... and in the inner and middle rings, just about nowhere are median rents affordable, and even median rents in most outer ring LGAs are unaffordable too. And you can see why they might take pains to stay right where they are.

We understand that British social housing landlords are to be given a choice as to whether they adopt this policy. Let's hope they choose not to, and instead try to ensure that social housing is a place where people are not afraid of enjoying the stability it gives them to get educated, and get employed. And let's hope the NSW State Government does the same for public housing tenants and applicants here.

The Henry Review reviewed: part 3

The Henry Review was more than a review about Australia's tax system: it was a review about Australia's tax and transfer system, so as well as looking at the money the Government takes in, it also looked at the payments, subsidies and other forms of financial assistance that the Government pays out to individuals.

We'll consider what Henry says about housing transfers – in particular, Rent Assistance and public housing – below.

(Ken Henry contemplates the effective marginal tax rates associated with public housing rent rebate policies)

But first, a final word on what Henry says about tax.

We've noted in the previous two parts of our review that the taxation of income from savings (which, on Henry's definitions, includes property speculation) is a focus of the Henry Review, and in his recommendations Henry develops the theme of treating different means of savings more consistently, particularly by taxing most forms of savings income at a 40 per cent discount to the saver's other income.

As always, the question arises: if you tax savings incomes less heavily than labour incomes, who benefits? Virtually by definition, the wealthy benefit.

Henry gives an indication of just how skewed is this benefit in the preliminary discussion paper to the Review, which shows just how skewed is the distribution of wealth – and hence, the distribution of labour incomes and capital incomes (ie what we've been calling savings incomes: interest, net capital gains, net rent, dividends and trust incomes).

In 2005-06, the bottom 50 per cent of Australian taxpayers received 17.6 per cent of total labour incomes, and 15.8 per cent of total capital incomes. On the other hand, the top 10 percent (keep in mind, this is a much smaller group) received 28 per cent of labour incomes, and 53 per cent of capital incomes.

To really make the point, an even smaller group – the top one per cent of tax payers – received 5.3 per cent of labour incomes, and 28.5 per cent of capital incomes.

In other words, the better off you are, the stronger the mix in your income of capital income to labour income. And Henry would generally tax capital incomes lightly, and labour incomes relatively heavily.

Henry doesn't give a strong justification of of this basic bias in the tax regime he proposes. He does, however, make a suggestion that would go a little way towards mitigating it: a bequest tax. The tax Henry has in mind would apply only to inheritances above a 'substantial threshold', so as to fall on the wealthiest 10 per cent of households, and then apply simply as a low flat rate.

'You mean "death duties"!' gasp the decadent bourgeoisie. That appellation is fine by us here at the Brown Couch, though a bequest tax could probably be even more accurately called an 'unearned wealth tax'.

It should be noted that the Henry Review does not go so far as to positively recommend a bequest tax – it just spells out the benefits of one, then invites a community discussion of the issue. Good luck with that.

*

On to housing transfers.

First up, Henry gives a strong statement – albeit in the peculiar language of economists – of support for housing assistance:

A key function of national government is the prevention of capability deprivation — that is, the absence of fundamental capabilities that enable people to participate fully in society. Income support is a major mechanism for achieving this end. It provides people with resources to maintain an adequate standard of living and supports their participation in the community, including the workforce.... There is a further need for specific housing assistance in recognition of the special role it plays in supporting wellbeing.

And in similar terms, Henry states his general principle for the provision of housing assistance:

Housing assistance should be provided in a way that is equitable, does minimum harm to participation incentives and gives recipients choice in the housing they occupy.

Now we turn to the actual lie of the land. In Australia, Henry observes, 'there are two major forms of housing assistance available to low-income earners: Rent Assistance and public housing. A person can access only one or the other.'

The implication is that there is a great divide in Australian housing assistance policy. There is, but with respect, Henry doesn't quite define the divide exactly right. Rather than 'public housing' he really ought to have referred to 'social housing', which is a larger category that also includes community housing organisations. True, it's only a slightly larger category: in 2008, there were about 30 000 community housing tenancies, compared with 330 000 public housing tenancies (and, for the record, about 940 000 Rent Assistance recipients). Still, I don't think this is nit-picking, and we'll return to the complicating factor of the community housing organisations further below. Henry notes their existence, but otherwise he refers to public housing.

So how does that general principle of housing assistance go, either side of the great divide?

Rent Assistance
Rent Assistance is paid by Centrelink to recipients of other Centrelink payments (eg Age Pension, Disability Support Pension, Newstart), and recipients of Family Tax Benefit Part A (where paid at more than the base rate), where the recipient pays more than a certain threshold amount of rent. These thresholds vary according to the recipient's household type (ie single or couple, and number of kids). The amount of Rent Assistance paid is 75 cents for every dollar of rent above the threshold, subject to a maximum amount, or cap. These caps also vary according to household type.

Generally speaking, Henry likes Rent Assistance. For Henry, it's equitable, in that it is well-targeted to need (the thresholds rule out about 40 per cent of Centrelink recipients, who pay no or low rents). It's okay in terms of work participation, because the amount paid is independent of the amount of the recipient's other Centrelink payment. This means, for example, that the recipient who does some work and earns a bit of money might have their Newstart payment reduced, but not their Rent Assistance – which is less of a discouragement to working than if both the Newstart and the Rent Assistance were hit at once. It also means that the rate at which income support is withdrawn is the same for renters and owner-occupiers – which is important in terms of equity.

And, in terms of choice, Rent Assistance recipients can choose which houses to apply for, and when to move. Henry also observes that because Rent Assistance works as a 'co-payment' - that is, you and the Government go 25/75 in paying the rent above the threshold amount – there is an incentive for receipients to economise and choose lower cost rental housing (about 30 per cent of Rent Assistance recipients receive less than the maximum amount).

For Henry, the main problem with Rent Assistance is one we've discussed before on the Brown Couch: the amounts at which it's capped are too low. Henry's solution is the same as we discussed: lift the caps. In particular, Henry would set the cap for each of the various household types at the 25th percentile rent for a dwelling of suitable size. (In other words, take all rental dwellings of the same size, rank them according to the amount of rent: the 25th percentile is more expensive than 25 per cent of dwellings, and cheaper than 75 per cent.) And looking ahead, Henry recommends that the caps should rise in line with rents, rather than the CPI, as is currently the case.

As we discussed previously, one possible objection to increasing the maximum amounts of Rent Assistance is that this may cause rents to rise – that is, landlords will simply eat up the increase. Henry doubts this would be a problem, noting that Rent Assistance recipients comprise a minority of the market... and anyway, would it be such a bad thing if the rents paid by Rent Assistance recipients increased? This would be (in economist-speak), 'a market signal to suppliers of rental housing to shift toward provision of the type of housing demanded by Rent Assistance recipients. Suppressing price signals is not conducive to promoting increasing supply over the long term.'

That's how much Henry likes Rent Assistance. What about public housing?

Public housing

Says Henry:

Public housing is a significant mechanism for providing housing to disadvantaged groups. It has become the primary source of housing for people who cannot access appropriate or adequate housing in the private market such as people with a mental illness and Indigenous Australians who still too often face discrimination in the housing market. Social housing (public housing and community housing) provides a valuable stock of houses in the context of Australia's housing supply difficulties, and in some areas such as remote Indigenous communities is the only viable source of housing.

(You can feel a 'however' coming, can't you?)

However, there are a number of areas where social housing is not adequately supporting the Australian households that rely upon it for adequate housing.

Thereinafter, Henry conducts a thorough demolition of the way public housing delivers housing assistance – particularly the way it delivers rebated rents (in most cases, rebated to 25 per cent of household income) to tenants of certain publicly-owned dwellings.

This is, Henry says, inequitable. Public housing rent rebates deliver a much greater level of assistance to public housing tenants than Rent Assistance delivers to tenants of like means in private rental. And within the public housing system, the level of assistance is inequitable because it is the same, regardless of the relative amenity of the particular dwelling with which it comes (that is, person pays the same rent, whether they're in a roomy house by the beach, or a pokey bedsit in the sticks), and regardless of any other costs (transport, etc) that go with that. It is also inequitable because it is the same for those in greatest need (eg those who were previously homeless, those whose health is at risk) as for those who are not but who are on a low income. Rather, public housing differentiates between these levels of need by giving preferential placement to those in greatest need on its waiting list.

Which leads us to work disincentives. The waiting list is the site of a major discouragement to work, because to stay on the list you've got to stay poor. Henry refers to research that reports that rates of unemployment are 11 per cent higher for men, and 5 per cent higher for women, when they are on the public housing waiting list, compared to when they are in public housing.

But when in public housing, these persons face another round of work disincentives. As Henry points out, public housing's income-related rents mean that if you do some work and earn a little money, your rent goes up, while your Centrelink payment goes down. In terms of effective marginal tax rates, public housing's 25-per-cent-of-income-rents straightforwardly add 25 per centage points on top of the effective marginal tax rates ordinarily associated with increasing work and incomes.

This too is something we've discussed on the Brown Couch before, and illustrated in the following charts. Each gives the effective marginal tax rates faced by one of three typical public housing households, based on their Centrelink payments and Family Tax Benefits being withdrawn, and their rent, income tax and Medicare levy being increased, as their income from employment increases. (The data is from 2008, but the general shape of things will be similar today).

(Click on each for a better view)

Our focus then was on the effect of a variation on income-related rents that's peculiar to New South Wales: the moderate income rates, which slide your rent up to 30 per cent of household income and stack on even higher effective marginal tax rates. Henry doesn't mention this particular policy: for him the underlying policy of 25 per cent income-related rents is bad enough.

As for choice: public housing tenants don't really get a choice about their housing. Receipt of a public housing rent rebate is tied to occupation of a public housing dwelling, and they get the dwelling that's offered to them – and they better take it lest they spend even longer on the waiting list or, worse, get kicked off the list. Once in public housing, a person can move around and take their assistance with them, but here too public housing's systems make a mess of persons' choices.

For one thing, public housing authorities place restrictions on moving around (eg you have to be eligible, as if you're on the waiting list). Another thing: because the rent is the same regardless of amenity and location, tenants have, as Henry puts it, 'an incentive to maximise their "in-kind subsidy" — that is, they try to stay in larger and better houses than they would normally occupy if they had to pay directly for their housing.' And public housing landlords lose the benefit of receiving 'effective price signals' about what sort of housing stock tenants would really prefer to occupy, and so labour with a public housing stock that is poorly matched to public housing households.

It is, as I said, a demolition job. There are a couple of points at which Henry probably overdoes it. The fact that unemployment is higher on the waiting list than in public housing may be attributed, as Henry does, to the work disincentive effect of having to maintain eligibility, but you could also make the case that unemployment is lower in public housing because the relative stability and security of the tenure helps get people work-ready and back into employment. (The authors of the research cited by Henry suggest both factors are at work).

Henry also suggests that income-related rents may contribute to 'intergenerational poverty' in public housing, because they assume a contribution from children's incomes. He does not, however, consider that the children of tenants in private rental housing might also make such contributions, and in larger amounts, considering the generally lower level of assistance that Rent Assistance provides. If there's a problem of intergenerational poverty in public housing, it is not so directly the result of including children's incomes in the calculation of income-related rents.

Still, even if you're a committed defender of public housing and income-related rents, Henry's is a critique that you'll have to come to grips with.

So how would Henry cure the ills of public housing? Firstly, with the benefits of Rent Assistance. Henry proposes that public housing tenants should receive Rent Assistance and pay market rents to their public housing landlords:

As recipients of social housing would receive Rent Assistance, the amount they pay to their landlord should reflect the market rent of a dwelling. A dwelling's rent reflects the range of benefits it provides, such as the building's size and quality and the location's proximity to employment, services or nearby amenities. Charging market rents would allow recipients to make trade-offs between these aspects of housing and other elements of their consumption. It would also provide signals to social housing providers about the housing that is valued by their clients. In combination, Rent Assistance based on market rents should encourage the provision of social housing that is of value to tenants.

Henry allows a couple of qualifications on this. First, there would have to be 'carefully targeted transition arrangements, to prevent households from being forced into housing stress or pulling up roots and moving away from support networks. Secondly, there are some locations – particularly remote Indigenous communities – where there really is no housing 'market' and hence no 'market rents', and yet other locations – particularly mining towns – where even a reformed Rent Assistance (ie with higher caps) won't get low-income households anywhere near an affordable rent. In these locations, some limiting of public housing rents with reference to tenant incomes would be okay.

Secondly, in respect of 'high needs' clients, Henry recommends that there should be a new additional payment, made by the Commonwealth Government, reflecting the higher costs of housing such persons, which would go to their public housing landlord – or indeed, if they were to move, to another social housing landlord. (Henry specifies 'social housing', because that's where so many of the 'high needs' tenants are, but expressly leaves open the prospect of the additional payment being made available to private landlords.)

You'll notice that the term 'social housing', as distinct from 'public housing', has crept into the account; it does so in the Henry Review's recommendations, too. Let's turn briefly now to those other social housing landlords, the community housing organisations, and the way they complicate the picture of housing assistance in Australia.

Community housing

Let's be clear: the way it currently works places community housing, in very large part, on the same side as public housing in the great housing assistance divide. Most community housing tenants pay income-related rents, at a rate of 25 per cent of their household income, on very similar terms to public housing tenants, with all the implications for inequity, work disincentives and interference with choice that go with that.

However, by a peculiar dispensation of the Government, community housing tenants do receive Rent Assistance. They do so, however, on terms that avail them of none of the benefits that Henry identifies in Rent Assistance.

Here's how Rent Assistance works in community housing. The community housing organisation effectively says to a tenant: we do income-related rents, so give us 25 per cent of your income, not including Rent Assistance. Now, if that was your rent, you'd get so much Rent Assistance (according to Centrelink's usual thresholds). Let's count that Rent Assistance as income for our income-related rent purposes. This additional income means the rent will go up (by a small amount), and as your rent has gone up, so has your entitlement to Rent Assistance (by an even smaller amount). Repeat until the increasingly tiny increases approach their mathematical limit. Now give us all of the Rent Assistance.'*

So, the community housing organisation maximises and captures all of the tenant's Rent Assistance. The tenant has no incentive (or opportunity) to economise on their housing costs, and the community housing landlord receives no 'market signals' about their housing stock. Rent Assistance is becomes just another an operating subsidy to community housing orgainsation, albeit one that is directed through the bank ccounts of individual tenants, who bears all the risks associated with making sure Centrelink pays it in the amount expected by their landlord.

That's not the only potential problem with this odd arrangement. Community housing is the only growing part of the social housing sector, and this growth is increasingly being achieved through private financing – particularly debt financing. Community housing organisations are relying on those Rent Assistance payments to pay mortgages.

And they're involved in other financial innovations, too, such as the National Rental Affordability Scheme, which has created partnerships between community housing organisations and private investors that are supposed to turn a profit, within the strictures of a requirement that tenants pay not more than 80 per cent of the market rent. This too, raises questions about revenues, rent setting and housing assistance.

All of this is to say that housing assistance policy as we know it is under challenge on a number of fronts. The Henry Review indicates a number of them:

• efficacy – in particular, Rent Assistance as it is currently capped is often not effective in producing affordability;
• equity – in particular, income-related rents in social housing deliver to similar persons a higher level of assistance than Rent Assistance, and without regard to differences in need or the amenity of the dwelling also provided;
• work participation – in particular, the waiting list for social housing creates a work disincentive, and so do income-related rents and the high effective marginal tax rates to which they contribute.

And we've identified another: the financing of social housing – in particular, the new private debt and equity arrangements into which community housing organisations are getting, and the implications of these for reveues, rent setting and housing assistance.

These four fronts of pressure will change the shape of housing assistance policy. Henry's own vision of the new shape is an enhanced Rent Assistance, extended to social housing tenants, and supplemented by a new housing payment for persons with high needs. What do tenants and their advocates in the community sector think?

Next: a summing up of the Henry Review, and the Government's response.

____________________________________________________

* For the mathematically inclined, this iterative process can be reduced to a fairly simple formula.

RC = 4TC-3LT

where:
RC is rent charged to the tenant - that is, what they are actually expected to pay;
TC is the 'tenant's contribution' - that is, 25 per cent of the tenant's household income, excluding Rent Assistance;
LT is the lower Rent Assistance threshold.

Work disincentives in public housing

September turned out to be Social Housing Month here at the Brown Couch, but there was nary a chart nor graph to be seen. This cannot be allowed to stand, so here are a few about the rent rebate system in public housing, and how Housing NSW's policy for charging rent at a higher rate for so-called 'moderate income' tenants contributes to massive work disincentives.

A couple of explanations first. Work disincentives are costs or conditions that discourage persons from increasing their incomes through work – in other words, where you would keep so little of your increased income for yourself that it is not really worth the effort of increasing it. There's rather a lot of talk about work disincentives generated by the tax and social security systems, but they are generated by housing assistance too, particularly public housing, because public housing's income-related rents mean that if you were to increase your income, a bit of that increase would go to Housing NSW in rent.

One way of measuring work disincentives is to think of them in terms of effective marginal tax rates (EMTRs). EMTRs express, for a person on any given income, how much of an additional dollar of income would go to tax, social security withdrawal and, in public housing, rent and water charges. EMTRs of more than 60 per cent are considered high. It's worth remembering too that the top marginal income tax rate in Australia is 45 per cent.

As for the moderate income rents policy: as Brown Couch readers know, most public housing tenants pay rents that are rebated to 25 per cent of their household incomes. In 2005, Housing NSW introduced higher rates for tenants whose household income fell between two threshold amounts - Housing NSW set the amounts, and called the band between them 'moderate incomes'. These higher rates ranged, on a sliding scale, from a titch over 25 per cent at the bottom of the band, to 30 per cent at the top of the band (so, if your income was in the middle of the band, your rent rate would be 27.5 per cent).

That might not sound like a big deal, but those moderate income rent rates are not marginal rates, like the ATO's income tax rates: they apply not just to that portion of your income in the moderate income band, but to the whole of your income. If you expressed the moderate income rent rates as a marginal rate – ie how much of the portion of your income that falls in the moderate income band goes in rent – it is about 50 per cent. In other words, 50 cents in every additional dollar of income in the moderate income band goes to Housing NSW in rent.

Now the graphs, which show the combined effect of income tax, social security payment withdrawal, the Medicare levy and public housing rents and water charges in terms of EMTRs for three typical public housing households. (But, before we do, a qualification: these graphs are based on numbers crunched by the TU this time last year, and since then the tax and social security elements will have changed a bit. The general picture provided, though, is still about right.)

First, let's consider a single person in public housing (let's call him Andy) who has a disability and who works part-time (ie Andy's income is the Disability Support Pension plus wages). Here are the EMTRs Andy faces if he should increases his income through additional work. We're really interested in what happens in the moderate income band: here EMTRs range between 85 and 109 per cent. If it were not for the moderate income rents policy, he'd face lower EMTRs of 56 to 76 per cent.

(Click on the image for a better view)

We can make this clearer by embellishing Andy's story a little. Say Andy works 3 days per week as a caseworker in a community centre. At award rates these wages, plus his (reduced) DSP, will put him just below the moderate income band. The community centre offers Andy more hours and hence more wages, but this will put him in the moderate income band. If he does an additional 14 hours, he'd be paid an additional $320, but the additional tax, social security withdrawal and rent add up to an EMTR of 85-86 per cent on each of his additional dollars. (If he did even more hours, he'd hit an EMTR of 91 per cent, rising up to 109 per cent near the top of the moderate income range.) So Andy would get to keep about $48.50 for two days work. Thanks, but no thanks.

Next, the EMTRs for a single parent (Beth) with two kids. She faces EMTRs ranging from 81 to 103 per cent over the moderate income range. But for the moderate income rents policy, she would face EMTRs of 57 to 74 per cent.

(Click on the image for a better view)

To embellish again: say Beth receives Parenting Payment (Single), plus Family Tax Benefit A and B, plus wages from working casually three days per week in the local library. This income would place her in the middle of the moderate income band. Now say she's asked to work another day a week. At casual award rates, the additional wages are subject to EMTRs of 92-103 per cent. If she works the additional day, she'd end up being about one dollar worse off - and that's before you consider the cost of child care. Beth politely declines.

Finally, let's consider a young worker (Cass) in a household of multiple adults (mum, dad and brother). She faces EMTRs that bounce around between 43 per cent and 78 per cent – generally lower rates than our other two cases, but note that they cut in at much lower incomes than in the other cases. But for the moderate income rents policy, her EMTRs would be between 16 and 60 per cent.

(Click on the image for a better view)

To embellish: Cass has just left school, and works Thursday nights and Saturdays in a shop, while mum and dad care for her disabled brother. Cass's fortnightly wage is just $277 but, with her (reduced) Youth Allowance, and two lots of Carer Payment and Carer Allowance and the DSP, the family's household income is just under the moderate income band. Cass's boss wants someone to do another shift each week. If she picks them up, Cass proposes to pay the increased rent (strictly speaking, under the moderate income rents policy a young person's share of the rent continues to be calculated according to a concessional rate, and it is the other adults in the household who cop the higher rates, even though their own incomes have not changed. Cass is doing the decent thing here). This means she'll face EMTRs of 71-78 per cent on her additional earnings. This works out to an hourly rate of pay between $2.44 and $3.21. Cass decides not to ask for the additional shifts.

Two conclusions from all this. One is straightforward: the moderate income rents policy should be scrapped because of the way it contributes to some extraordinarily high work disincentives.

The second is more tentative: what are the implications of a work disincentive analysis for income-related rents generally? The usual 25 per cent rent rebate rate contributes to EMTRs too, but on the other hand, there is something fair about the proposition that those who earn more should pay more. Dr Henry has flagged that this is something he's thinking about in his review into the future of Australia's tax and transfers system - and those of us who are interested in the future of social housing should be thinking about it too.