The Federal Government needs to fund growth in social housing, not put current national funding at risk

The Treasury Laws Amendment (National Housing and Homelessness Agreement) Bill 2017 was introduced into Parliament in late October. The Bill aims to enact the Government's commitment to roll the National Affordable Housing Agreement (NAHA) and National Partnership Agreement on Homelessness (NPAH) together, but creates a risk of funding cuts to housing and homelessness services.


How does the current funding work?

The funding being rolled into the National Housing and Homelessness Agreement (NHHA) will combine two major sources of housing and homelessness funding: the National Affordable Housing Agreement (NAHA) worth $1.4 billion per year, and the National Partnership Agreement on Homelessness (NPAH) worth $117 million per year. 

The much larger NAHA is funded under the Federal Financial Relations Act 2009, which means that the $1.4 billion each year for social housing and homelessness services is guaranteed. The smaller NPAH, which funds homelessness services is to date a time limited agreement, which is set to expire in June 2018. This funding and has often been subject to last minute renewals and a lack of indexation, and funding in perpetuity has been promised by the Federal Government.

How is the proposed funding arrangement different?

The proposed new arrangement, the NHHA, would roll the two current funding agreements together. There are positive aspects to this: it would mean that the (smaller) NPAH funding would be made ongoing, and that it would be indexed to help meet rising costs.

But the proposed new NHHA would also be made conditional - with conditions to be based on a federal assessment of the credibility of state housing plans, and on any ‘other matters’ as included in the final agreements. This creates a mechanism which could be used by a Federal Government to impose unrealistic targets in bilateral agreements and to withhold funding if targets aren’t achieved. 

This is particularly worrying as in the previous agreements the outcome measures have been very poorly designed - for example, the NPAH required that fewer people would experience homelessness; while we know that against the backdrop of Australia's housing affordability crisis, more people became homeless than before.

Also troubling is the decision to cancel the existing funding before new funding agreements have been reached with the states and territories. This means that if the states don't sign up to new agreements with the Federal Government before July 2018 they will lose the hundreds of millions of dollars they currently receive for housing and homelessness. This would be a disaster for those experiencing homelessness. We hope that instead it can be agreed that this funding will be guaranteed for the duration of the negotiations if take longer than the Federal Government currently expects.

What else is different?

The Federal Government have made it clear that while the amount of money in the new agreement won't change, where it goes will. In particular, they have said that unlike the current agreements, this funding will not all go to social housing and homelessness organisations, but will instead have to be used for broader "housing affordability" outcomes.

Since there is no new money on offer, in practice this will require cuts to the funding currently being received by homelessness and housing organisations so that the money can be spent for example on affordable housing for people who are not at risk of homelessness. 

In conclusion

Should funding be cut from the existing agreements, the 394,000 Australian households who currently reside in social housing would be put at risk of homelessness, and services to the 288,000 Australians who access specialist homelessness support in a year would be reduced.

Despite holding most of the policy levers driving homelessness and the housing crisis – social security, rent assistance, taxation, and federal funding of social housing – the Federal Government is seeking new powers which would allow it to cut funding if the states and territories don’t meet federal demands to reduce homelessness.

This could result in a Government spending less on an urgent social problem, instead of finding a solution.

We're calling for new funding, and a national plan to end homelessness.