Anti-Poverty Week 2017: A perfect storm of housing (un)affordability and welfare cuts


Poverty in Australia is being driven by a perfect storm of housing (un)affordability & welfare… Click To Tweet

The housing affordability crisis and a gradual decline in social security benefits is inextricably linked to rising homelessness and the cycle of poverty.

People in severe housing stress (a formula applied to people in the lowest 40% of income brackets who are paying more than 30% of their income on housing) are so often living on the knife-edge of homelessness.  When you’re paying more than you can afford for housing, you can’t save money let alone pay for basics. Ordinary life events, such as a car breaking down, medical costs, or having your casual shifts cut, can be the tipping point into homelessness.

The 2017 Economic and Social Impact survey, conducted by the Salvation Army provides crystal clear examples of the ways that housing stress is forcing more low-income earning Australians to make impossible choices between life’s essentials and trapping them in cycles of poverty, 

The survey found that many respondents were being forced to choose between paying for meals and utilities and that housing and homelessness were critical issues facing many. 

Image source: ESIS, 2017

It found that:

  • Respondents faced increasing financial pressures due to rising accommodation and housing costs.
  • Homeowners and private renters spent $200 per week on accommodation expenses, more than 56% of their equivalised disposable income per week for housing and accommodation expenses; nearly double the standard benchmark in Australia.

It also found that after paying for housing, “recipients of income support were left with approximately $120 a week of equivalised disposable income or $17.14 per day8 to live on. Single parents with children were the worst affected; they were left with only $14.35 per day9 to live on, which is well below the poverty line.”

The housing and rental markets being as they are, inadequate income support payments prove particularly challenging for singles.  The most recent data from the Department of Health and Human Services’ rental report makes it abundantly clear how difficult it is for a single person household on Newstart.  

It found only four of every 1000 Melbourne rental properties the June 2017 quarter were affordable ($150 or less per week) for a single person on Newstart (a weekly income of $268).

 

 

The report also revealed that the median weekly rent in Melbourne has increased by 4.2 percent over a year to reach $400 in June 2017.

 

There was a time when the value of welfare and its role in protecting the most vulnerable was recognised.  But the past decade has seen the slashing of many different benefits.  

Peter Martin in the Sydney Morning Herald, summed up the gradual stripping away as such: 

“In recent years outcomes have slipped. ACOSS believes there are 3 million Australians in poverty, 731,000 of them children. The number of children in poverty has climbed 2 percent in the past 10 years.

In 2009, the Rudd government clipped the higher rate of Family Tax Benefit for families at risk of poverty by indexing it to prices rather than wages. In 2013, the Gillard government moved 80,000 single parents onto Newstart, cutting their income by $85 per week. In its 2017 budget, the Turnbull government froze Family Tax Benefits for two years.

Legislation at present before the parliament would cut payments to single parents undertaking study or training and extend the waiting period for families needing to claim income support.”

The Australian Council of Social Services has called the proposed legislation an attack on welfare recipients and has launched a petition opposing further cuts.  

There is no shortage of evidence to show that the housing system is broken and that a lack of affordable accommodation is contributing to people’s poverty. More cuts to income support payments will only make a bad situation worse.  

We continue to call on both the State and Federal Government to take action to fix the broken housing system and to protect welfare benefits so that people aren’t forced to live in poverty just to put a roof over their head.

At the Federal level, we want to see:

  • A national housing affordability strategy which lays out a plan for tackling the housing crisis, and eliminating homelessness
  • Tax reform, including winding back negative gearing and capital gains concessions 
  • The expansion of affordable rental programs such as the National Rental Affordability Scheme
  • Newstart and Youth Allowance payments increased so that people aren’t forced to live in poverty

At the State level, we want to see:

  • A boost in the supply of affordable and social housing for low-income earners
  • The introduction of Inclusionary Zoning, whereby all new housing developments over 10 units, must include a minimum 10% social housing
  • Greater incentives for developers to invest in social housing e.g. tax concessions, density bonuses
  • Better use of vacant Government land for social housing