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Ending homelessness starts with affordable housing

8 June 2016

By Angela Merriam, Sacred Heart Mission's Public Policy and Advocacy Advisor

Back in the 1990s Darryl Kerrigan gave us the Aussie mantra “a man’s home is his castle”. For a long time, home ownership has been part of the Australian dream.

In the lead-up to the 2 July federal election, it’s promising to see some of our politicians offering real solutions to the housing problem through a platform to reform the tax treatment of rental property.

But will the plans on offer help the most vulnerable members of our society?

John Daley, CEO of the Grattan Institute, has argued many times that our tax system distorts investment decisions, making home ownership difficult, and sometimes impossible, for low-income and young people.

Affordable home ownership ought to be on the national agenda. Housing is a human right.

But the everyday reality of our clients is not the struggle to own a home. (Tell him he’s dreaming!)

The harsher reality that our clients face every day is that even private rental can sometimes be a pipedream.

It costs 49% of the minimum wage just to rent a one-bedroom flat in Melbourne. This leaves only around $45 a day for all other expenses. For a single person that’s not much to cover food, transportation, and very little for savings. A single parent may barely scrape by.

High rents in the private sector mean more people need to live in social housing.

But right now there are 200,000 people on Australia’s social housing wait-lists.

Last year 250,000 people across the country were at risk of, or already, homeless.

Reforming negative gearing and capital gains tax will eliminate a subsidy to property investors and eliminate a major distortion in the market.

But we’re not sure how much it will help our clients -- people who struggle just to rent a home, sometimes just to survive. And the Coalition argues that reforming these tax arrangements may actually increase the price of rental housing.

Instead, the key determinant of whether policy changes will help society’s most vulnerable people is what we do with the money saved.

Labor’s gradual plan to reform negative gearing is estimated to save the budget $565 million over the forward estimates to 2018-9, and $32.1 billion over the decade.

For example, if we spent all of this money on building social housing, we could house over 6,500 people.

Economic research on our Journey to Social Inclusion (J2SI) program is based on the proposition that has demonstrated that ending homelessness is not only the right thing to do. The research shows that ending homelessness also saves money for government and society.

Stay tuned over the next few weeks for a discussion on innovative strategies to end long-term homelessness and a detailed breakdown of how much this saves for government and society.

We want to ensure that in this election, our government pledges to supporting society’s most vulnerable members.

Join us now and Vote to Put Homelessness to Bed here.

 

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Sacred Heart Mission acknowledges the traditional Aboriginal owners of country throughout Victoria and pays respects to them, their culture and their elders past, present and emerging.

 

Sacred Heart Mission believes that the diversity of abilities, genders, sexualities, relationship identities, bodies and cultures in our community enriches us all and should be celebrated. Everyone is welcome at our table.