The federal government has been urged to begin ambitious long-term housing affordability reforms in next month’s budget, including setting new social housing targets, establishing a UK-style bond aggregator, boosting commonwealth rent assistance and giving funding certainty to homelessness services.

The Coalition is expected to announce some form of housing affordability package in next month’s budget, but has already ruled out changes to negative gearing.

The National Shelter and Australian Council of Social Service have proposed a six-point plan to reduce homelessness and improve affordability for low and modest income Australians.

They have stressed that boosting the supply of low-income social housing – public and community housing, where rent is determined by income – must be a priority.

“We have a whole group of people who are just trying to survive, and that would have to be at the core of the government’s package, to address those people who just cannot afford to enter the rental market,” the Acoss chief executive, Cassandra Goldie, said.



“The social impact on people who are in really marginal housing situations, living in really poor run-down properties, waiting on never-reducing public housing waiting lists ... the impact of that instability is really corrosive,” she said.



Prioritising social housing would require new supply targets, investment incentives and new resourcing commitments from the federal and state governments.



The groups have called for the creation of a cabinet-level federal housing minister, who would lead the development of a national affordable housing plan and reformulate the often-criticised National Affordable Housing Agreement (Naha), which is expected to be dumped in the budget.

New targets to reduce and eventually eliminate homelessness are also proposed to address rising rates of homeless in Australia. Homelessness has risen from 90,000 in 2006 to more than 105,000 in 2011, a 17.3% increase, despite a target reduction of 7%.



The National Shelter chief executive, Adrian Pisarski, said those on social security or modest wages were increasingly being pushed out of the housing market.

He estimated half a million extra affordable homes were needed to address demand.



Pisarski said tax breaks that had encouraged speculative investment – negative gearing and capital gains concessions – should be adjusted to slow the growth in home prices and rents.

The groups want to see the savings then redirected to affordable and social housing.

“It will take more than a decade to repair the damage done by the last decade of unrestrained home price speculation,” Pisarski said. “A long-term housing affordability plan led by a commonwealth housing minister and backed by the states is vital,” he said.

The plan also proposes new options to provide low-cost finance for investment in social housing, including the establishment of a bond aggregator.



Bond aggregators source large amounts of capital from the bond market, and use it to provide low interest, long-term loans to not-for-profit community housing providers.

The treasurer, Scott Morrison, visited the United Kingdom’s aggregator, the Housing Finance Corporation, earlier this year.

The National Shelter and Acoss have also called on the government to guarantee homelessness funding over five years, and boost the commonwealth rent assistance scheme for those facing severe housing stress.



Goldie said the federal government must not shirk its responsibility on housing affordability in next month’s budget.

“It would be an extraordinary result of the extensive work that has been done … for this budget to fall flat and the federal government to then go back to the old rhetoric of ‘this is not our responsibility, it’s a matter for the states’,” she said.

In a separate release on Wednesday, the Property Council of Australia, the peak group for the industry, unveiled a 10-point blueprint for the budget that included reducing construction costs, boosting supply with institutional investment in “build to rent” housing, and removing barriers to downsizing.

It cautioned against pursuing changes to negative gearing or any other measures that purport to help with affordability but instead “act as a tax” on investment and supply. The council said 1.2 million rental properties are negatively geared and argued the tax breaks underpin the market.

“Retention of negative gearing - and carefully canvassing any changes to the capital gains discount - are essential to the continual supply of rental accommodation,” it said in its report.

Ken Morrison, the council’s chief executive, said: “This affordability cauldron has taken years to develop and it will take concerted effort over many years to unwind.”

Australian Associated Press contributed to this report

