RMIT - Royal Melbourne Institute of Technology

05/15/2024 | Press release | Distributed by Public on 05/15/2024 00:59

Has the Federal Budget done enough for housing affordability? RMIT expert comments

Following the Federal Budget, an RMIT expert is available to comment on social and affordable housing in Australia and how the short-term measures will not be enough to address the current rental crisis.

Dr Liam Davies, social and affordable housing

"Yesterday's budget recognises that housing affordability has become a national concern.

"Around one third of Australian households rent, and they have been placed under increasing strain from rising rents in recent years.

"Vacancy rates have dropped from 3% to below 1% nationwide. At the same time, rental prices have increased significantly.

"In response to this affordability crisis, the Government is proposing to increase Commonwealth Rent Assistance for the second time in as many years. This will see Commonwealth Rent Assistance grow to $6.2 billion in the coming year, up 40% from 2022.

"This increase averages about $10 per week per household, which pales in comparison to rent increases of around $50 per week over the last year.

"Around one million households receive the benefit, and for them it is certainly needed, but this is not a long-term fix.

"Commonwealth Rent Assistance will help households pay rent, but will do nothing to create affordable housing.

"This is in sharp contrast to social housing, where rents are linked to income, meaning it is always affordable.

"But we have a critical shortage in social housing after three decades of decline, with less than 4% of dwellings being social.

"While the budget boasts measures which will deliver 55,000 dwellings over the next five years, this is not enough to reverse this decline. We need over 160,000 social housing dwellings just to get back to where we were in the early 1990s.

"We need a long-term solution, which requires difficult choices and reforms.

"This should include reforming tax arrangements so that investors need to meet affordability and security requirements to claim negative gearing and capital gains tax, as well as the use of revenue to rebuild our once strong social housing system.

"This would increase affordability, while also increasing certainty and security, and move Australia away from a blunt and costly rent assistance system."

Dr Liam Davies is a Lecturer in RMIT's Centre for Urban Research and an expert in social housing policy and urban planning. His research looks at state and commonwealth government policies that affect affordable housing in Victoria, Australia.


Media enquiries: RMIT External Affairs and Media, 0439 704 077 or [email protected]