Is a 15 per cent increase in Rent Assistance enough?

Productivity Commission proposes 15 per cent increase in rent assistance.

Is a 15 per cent increase in Rent Assistance enough?

The June 2017 Productivity Commission Report has declared that Australia’s social housing is broken and in desperate need of repair and has suggested a bold proposal to help solve the problem.

The draft report into reforms to Human Services, which is up open for consultation until July 14, suggests that a 15 per cent increase in Rent Assistance would help vulnerable Australians cope with rising rental prices.

But the Australia Council of Social Service (ACOSS) says the proposal still doesn’t go far enough in addressing the real issues behind our housing affordability crisis.

The Productivity Commissioner Stephen King believes that a 15 per cent increase in Rent Assistance would also help to relieve the burden on social housing by providing Australians with assistance to enter private housing markets and higher cost areas. These high-cost areas typically offer more jobs, higher pay, better schools and other services.

Currently, the maximum Rent Assistance that can be paid is $175.42 per fortnight ($132.20 if you do not have dependant children). This amount is in addition to any other benefits paid. Around 1.3 million households currently receive r Rent Assistance at a yearly cost to the Government of $4.4 billion.

Dr Cassandra Goldie said the proposed increase won’t cover the cost of rent for many Australians and may only fuel further demand for existing rental properties.

"To move to a housing system where everyone including people on the very lowest incomes is competing in the open rental market would be a dangerous move," said Dr Goldie.

"The proposed 15 per cent increase in [Rent Assistance] would go nowhere near what would be needed to ensure people have adequate income to compete, hence our recommendation for a minimum 30 per cent, plus a serious increase in funding towards social and affordable housing.

"The draft proposals may do nothing other than fuel the demand side of the rental market putting upwards pressure on prices, risking even greater poverty and homelessness amongst people already in serious housing stress."

The draft report also made recommendations about end-of-life care, health care, social and community services, with the hope of improving the effectiveness of human services across Australia.

Opinion: Rent assistance is a bandaid over a bullet wound

Providing Australians with increased Rent Assistance will be a welcome shot in the arm, but it will also contribute to increased competition in an already slim – and hideously overpriced – rental market. If the Government was to increase Rent Assistance by 15 per cent it would add another $660,000,000 to the bottom line. Wouldn’t that money be better spent on social housing?

It would help to reduce the pressure on the private rental market, which may drive rent prices down. It will also help age pensioners and low-income families to stay closer to major cities, where the jobs, health services and amenities are located.

In the 1970s, the proportion of total houses built by the public sector was over 16 per cent. Nowadays, it is a paltry 1.2 per cent. If 30 per cent of Australian households are renters, then surely increasing their access to affordable housing will help their, and the Government’s, bottom line.

As YourLifeChoices has reported time and again, prospects of a comfortable retirement improve dramatically for those who own their home. Renters, on the other hand, face a grim future.

YourLifeChoices’ Retirement Affordability Index 2017 shows just how high a proportion of retirement income is paid on rent. Cash-strapped Couples (couples who rent on an Age Pension) spend 22 per cent of their income on rent, while Cash-strapped Singles (singles on an Age Pension who pay rent) pay 29 per cent of their income.

And although social housing is just one suggestion for improving our current housing affordability crisis, there are other suggestions that may help in future, but all have their pros and cons. These include:

Allow access to superannuation for house deposits

Pros: will provide first-home buyers with money to compete with investors

Cons: will raise house prices, defeats the purpose of super

Cut stamp duty

Pros: will reduce upfront costs for first-home buyers

Cons: provides sellers with incentive to charge more for houses, removes incentives for selling, thus reducing the supply of homes

Cut negative gearing and capital gains tax

Pros: will deter investors from buying properties so they can claim a loss and use it to reduce their taxable income

Cons: the myth that it will push up rent prices, cause a drop in the building of new houses

Provide equity financing

Pros: allows a limited number of first home-buyers to partner up with the Government (most likely state) and buyers will only have to pay 75 per cent of the value of the property, with the 25 per cent payable upon sale of the house

Cons: not many – will have to be tightly means tested

Increase taxes for foreign investors

Pros: may reduce the demand for high-density housing in city areas, deter foreign investors who drive up property prices

Cons: could be a segue to racism, foreign ownership only accounts for a small portion of the total property ownership market (although most likely inner city, close to CBD)

The Government’s plan to introduce a foreign investor ‘ghost house tax’ of up to $5000 for every property left vacant is a smart move, but it too may not go far enough.

So as much as an extra 15 per cent will help renters, especially age pensioners, more is needed to fix the problem. It may be too late for current older Australians, but the Government has time to improve the system for the retirees of the future.

Do you think 15 per cent is enough to help solve the housing affordability problem? Should the Government be looking at other ways to fix the problem? Which of the aforementioned methods do you think would help? Do you have any other suggestions?

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    COMMENTS

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    debs
    6th Jun 2017
    11:23am
    I don't know where Leon got his figures. I am a single female on a disability pension. Because I have a dog (an absolute necessity for my sanity and well being) and because of safety and mental issues i am unable to live in shared accommodation. Although I am classified as high need I'm told i will probably die of old age (I'm 61) before i get housing.
    I actually pay 55% of my pension in rent NOT 29%!!! (it would be more but my unit is not rented through an agent , so is 10% less than i would otherwise pay)
    MICK
    6th Jun 2017
    11:26am
    Maybe get rid of the dog debs and/or move to a cheaper area to live in.
    People receiving benefits should not be complaining and making unreasonable demands on those who are paying taxes to sustain them.
    Sorry but perspective is different depending on the observer.
    leonYLC
    6th Jun 2017
    11:46am
    Wow debs!
    As noted I have taken my figures from the Retirement Affordability Index which consists of thousands of responses from retirees all over the country. 55 per cent of your total income is a lot to pay for rent, and your situation is one of the many that should be addressed by more than an increase in Rent Assistance (although I'm sure it will help a little bit).
    debs
    6th Jun 2017
    11:56am
    Easy for you to say Mick.
    I paid taxes until a brain aneurysm forced me to give up my 30 year profession. I would still work to supplement my DSP, but no-one will employ me with no training other than my profession and the brain damage makes it impossible to work more than 2 x 3hr shifts a week
    The dog is the only thing that gets me out of bed some days and my savings were lost in GAP payments because I had private health insurance.I f i had used the public system i would have had it all free AND got re-hab and better treatment.
    And i DID move to a cheaper area. Can't go further as all my medical and social support is here
    MICK
    6th Jun 2017
    12:53pm
    Sorry debs. I guess I did seem to be having a go at you.
    I do have sympathy for anybody who has had a misfortune, and plenty on this website have, but I have an aversion to the growing number of people in our country who have the hand out all the time and keep asking for more.
    I hope that we never have a misfortune but if it hits then we will have to make the best of it. If moving to Tassie because that is all we can afford is what we had to do then so be it. I do see the medical support issue though.
    Hope you can see it from the other side too. All the best.
    Foxy
    6th Jun 2017
    2:48pm
    Pensioners who do not have to live in the Private Rental Market in 2017 - would possibly have very little (or "no idea whatsoever) regarding rental prices - especially in Melbourne and Sydney!

    I feel for you debs - I know heaps of people paying minimum 50% or higher of their monthly Age Pension on rent alone - just to keep a roof over their heads! - They get help (where they can) from family members or charities (for food or expenses in general!)

    A substantial increase in Rent Assistance is long overdue as "Assistance" for the "renter" - it has not kept up with the highly increasing rental market!

    debs - if you don't already know - there are some amazing Grant Schemes by the Govt. (especially utility wise) for pensioners whose "monthly" rent is more than 30% of their "monthly" Pension - which would probably be the majority!!??

    What a lot of people do not realise - is that anyone receiving Rental Assistance has to prove to Centrelink on a regular basis : their address - copy of lease (or letter from Real Estate Agent) - any rental increases by landlord etc. However - once the paltry and extremely outdated threshold of Rent Assistance has been reached ....that's it - you are on your own!!

    Not much help really to know there are thousands (like yourself) - barely surviving ..... try to keep smilin' :-)
    MICK
    6th Jun 2017
    3:09pm
    I know full well what the rents are like in Sydney but there are options and many regional centres have excellent medical facilities but do not suit people who want to choose where they live.
    You are telling the narrative of what people want as opposed to what they can afford Foxy. The safety net is designed to help people survive, not to provide a superior standard of living in a place they cannot afford to live.
    Whilst this view may not be welcome it is factual and Australians need to be grateful they are not in a third world country where you get nothing. We are doing pretty good but still there are some of us who are aggrieved..............ahhhhhhhhh, I am beginning to sound like a liberal.
    Foxy
    6th Jun 2017
    5:48pm
    To assume Mick is to be an "ass" - but I will be that - if it suits you! You are obviously not in the position of an "Aged Pensioner - Rental Person" so - hey "superior standard of living" in rental? You are in freakin' LA LA LAND!!!

    You are a joke - a joke!

    So - a pensioner "Mum/Dad" - are expected to live in Regional Areas - for cheap rent???? - Away from their families - 2 - 3 hours or more - drive away???? You are a cold hearted person! Horrible!

    Get some compassion in your life for heavens sakes!

    Karma is a wonderful thing!
    Foxy
    6th Jun 2017
    5:57pm
    Mick - I have seen you on here for years! Years! Mostly I do not reply to your disgustingly pompous replies to really really nice people!!

    Obviously you have no "life" because day/night you are on here? Sad actually ......take care ...................
    MICK
    6th Jun 2017
    6:22pm
    I have been called many things Foxy but "disgustingly pompous" has never been one of them. That is not me even if you choose to take my posts that way.
    Yeah...I do spend a lot of time online. Thanks for the next serve.
    Today has been a bender but I have a pretty good life at other times. For what it is worth I blog in between doing other things. Day and night? Sometimes.
    Its sad you have taken offense but taxpayers don't take kindly to those who rort, constantly have the hand out and complain about their hard lot which is often self inflicted. This is not what our generation is about but maybe things have changed over time. Don't know.

    Demanding to live in a city you cannot afford is just gobbledegook. When you do not own a house you live where you can afford and many on this website do exactly that without complaining. I probably have a lot more assets than many people on this website and I thank the Lord for giving me the grit, perseverance and health to achieve this small milestone in my life. It wasn't easy and having gotten here I don't value it as much as I probably should.
    FYI when people who do not own a house were kicking their heels up in younger life I was hard at it and missed some 30 years of my life. The rest was luck but we probably have a income not too different to the pension but can easily get by and do things many can only dream about.
    I guess I am wasting my time because your spiel appears to be the normal disadvantage bit and anybody who states the facts is rude, pompous and whatever else. Your current dilema is not of my doing and my assessment is just stating the obvious, facts you do not want to confront.
    Hope things improve for you but please do not shoot the messenger. Cheers.
    Foxy
    6th Jun 2017
    6:46pm
    ....lol ol lol - "to assume is to be an ass" so the saying goes!

    My "current dilemma"??? You have no idea whom you talking to!??

    I never said I lived In "Private Rental" did I????? Where did I say that Mick? You have no idea whatsoever where I live and in what luxury home? However - contrary to you - I help people!! (People that do not have to listen and to be downtrodden by jerks like you!)

    So you "hope things improve for me"? Really? You serious??? lol lol lol .........

    You are IMO a nasty spiteful person towards people who you deem do not have as "much" as you do in life?? - whatever that may be??????? You could be "trailer park trash" for all we know on here?????? lol lol lol

    I will not bother you again! Enjoy ya "trailer' ........ :-)
    grounded
    6th Jun 2017
    6:52pm
    @ MICK Total out side observation, as to the nuts and bolts of this discussion...what I did find baffling was your statement as to your growing aversion to people in this country who always have their hand out.

    You really threw me....given I have always gleaned from your comments that you are so righteous in your support of those not so well off....then to give commentator Deb a judgmental critique on how you now view the less fortunate.

    I have long since championed the disclosure of gimme, gimme bludgers on benefits....but do not think for a second that Deb...or the narrative she relates, is not genuine.

    I am sure that you Mick would be the type who would throw the baby with the wash water....not one bit genuine.....Using this site for some obscure political reason.
    Foxy
    6th Jun 2017
    8:12pm
    .. nice comment "grounded" ... nah .. Mick would not throw the baby out with the "wash water" lol - just under the "bus" - like he would like all poor pensioners who are in "Private Rental" to be! lol
    buby
    11th Jun 2017
    8:32am
    Well Debs is very lucky she's allow to have a dog, i'm not allowed too!
    i pay reasonable rent but gee i've been here 12yrs, and the Pollution i have to put up with is unbelievable. The Property Developers, and council call it Progress Its good they got strong lungs. But Now i got diabeties and i need to walk I can't? and i can't move either, cause i got torn ligaments, and i can't do much like cleaning either.
    And WHO Cares!! NOt the Government thats for sure. I been on the waiting list for housing for donkey's years, It seems they only make dog boxes for ppl now, or you can get high rise. I personally don't even want to stay in the city. I"m doomed. SO why did I work and pay my taxes?? I was told I'd be looked after!!! Sheez i hate it when they change the rules to suit themselves. And they doing that in nearly everything they do these days i think. They should be all shafted, and made to live where i live. They would die in an early grave i'm sure. Which i'm sure thats why they do what they have done. So much for the oldies that made Australia Great?? and worked so hard! and for what?? Hopefully
    buby
    11th Jun 2017
    8:42am
    Yes we all have a story to tell. But its a pity the Government is trying to push Many Under the Bus. Following the american system.
    OUr health system shot, ITs all gone to pot!!
    some of us luckier than others, some of us may have been taught how to make, others were left to their own devices and aren't coping as well.
    Governments making Us Mentally Ill.
    Ted Wards
    6th Jun 2017
    11:23am
    There is also an issue about false claims. Many live in share accommodation, and many other different circumstances where they claim rent assistance, but are not entitled to the full amount. However, we only need politicians to stop false claims for their perks and this would not be an issue. The real issue is where tax payers money goes and that wastage of the government, plus big business and religion not paying their taxes. Its not rocket science!
    MICK
    6th Jun 2017
    11:28am
    Not sure how much of that there is but cheating seems to be a way of life and nobody cheats like business people do.
    'Dob in in cheat' could be a great way to level what you highlight Ted but will governments act when the big end of town is caught out as well? Unlikely!
    TREBOR
    6th Jun 2017
    11:35am
    Don't forget that everyone is a taxpayer.... let's not forget reality in the midst of hyperbole.
    TREBOR
    6th Jun 2017
    11:38am
    Oh? So in the interests of 'net taxpayer' you would prefer that a kid on Youth Allowance should contribute more back into the tax cycle than he/she receives? Don't make me laugh...

    If that is the desire, make a minimum wage payable to everyone that will permit them to be 'net taxpayers' - then you may argue that nonsense.

    (just getting in early on that furphy)...
    buby
    11th Jun 2017
    8:47am
    Don't forget Mick there are also NOT so many Jobs around anymore either.
    Where will the kids get a job now, when nearly most are going off shore.
    and whose to blame for that happening! and what is their ploy .
    When companies come back? Yeh something shifty is going on?
    and the kids on Allowances could be made to do so much more to help the elderly, this in turn may also teach them to show respect, which many do not in this day and age.
    Life is getting to be a bit of a joke all right and the Jokes ON us it seems!
    MICK
    6th Jun 2017
    11:24am
    When I saw the title I thought 'another genY demand'. Having read the article I agree with the problem but dispute the calls from social security spruikers like Goldie for 'more money'. There has to be a stage where this continual demand ends.
    There are a few issues playing out here:

    1. retirees are being hit because apparently there are too many of us and not enough workers to pay our pensions. If this assertion is even half true then there will be a flood of homes come on the market in the years ahead as we pass on. No housing shortage then and the large supple will drive down prices. Of course we have to stop importing people because this only exacerbates the supply problem let alone the cost of infrastructure upgrades needed where somebody has to pay. Us!
    2. Governments bailed out of social housing years ago because they did not want to spend a few dollars in this area so now they have gotten what they wanted: private landlords trying to make a few bucks out of rental properties. Here lies the real problem. Sold out by governments and investors piling into residential rental accommodation.
    This is pretty easy to fix. Just build more houses, remove negative gearing for all NEW investors and do what Norway does for some properties: peg the sale price of the property to cost + CPI. Done.

    Unfortunately the top end of town is the greatest beneficiary of negative gearing benefits and it will not allow the current government to change the rules. With some mum and dad investors also involved you can see why it is so hard to fix this broken model.

    As I keep saying GOVERNMENT is the problem because politicians are focused on re-election and will not do what is required to fix glaring issues.
    buby
    11th Jun 2017
    8:55am
    .No housing shortage then and the large supple will drive down prices. Of course we have to stop importing people because this only exacerbates the supply problem let alone the cost of infrastructure upgrades needed where somebody has to pay. Us!
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>and yes that has happened especially where i live. Lots of homes. But the Problem is I am ONE, im NOT in a family. And many ppl that have downgrade now LIVE in dumps, in pathetic circumstances. ITs a shocker, and Private landlord don't fix their properties, they don't care.
    there seems to be too many private landlords who are very callous indeed, we becoming another America, and the slums are growing!
    get out of your box, and take a look!
    TREBOR
    6th Jun 2017
    11:41am
    Ban ghost houses, double the rate for investment loans for property, steadily reduce negative gearing and concessional gains tax over a period of five years, and generate more new development.

    If you ghost a house you pay the going rate for rent as a tax to the government since it allows the current investment profile... pity it has to go to government first - they sure know how to waste it.
    TREBOR
    6th Jun 2017
    11:43am
    (just a thought bubble on the move there.. matching government policy bubbles)...
    MICK
    6th Jun 2017
    11:58am
    Fully agree with your post on ghost houses. There should be a significant tax on houses that are intentionally not used. Not sure if the going rent is fair though as sometimes houses are advertised at a market rent rate and take a while to rent. You have to be careful you do not catch unintended investors as well.

    The thing with negative gearing is that it needs to be tightened up significantly if you want to end taxpayer subsidies....which negative gearing essentially is. Given that we need investors to stop buying residential houses this would seem like a sensible thing to do and Labor appears to have it right when stating that NEW loans should not be allowed to borrow and negatively gear whilst leaving existing properties as they are. That is fair....but not to the big end of town.

    It has also not gone unnoticed that some weekenders are being rented out for perhaps 2 weeks a year so that they can be claimed as a tax deduction. That should be stopped as well.
    TREBOR
    6th Jun 2017
    12:34pm
    'going rent' is an ambent claim - we start high and negotiate low... er.... slug 'em with the fear of 100% rent as tax, and we'll settle for 30%....

    You know how it works....
    TREBOR
    6th Jun 2017
    12:37pm
    Oh - it's not an 'investment property' if you keep it as a holiday home, either... it's a second home... no deductions.

    A very real issue is that the Chinese government- owned banks will loan out money to investors at paltry rates..... as long as they are Chinese..... in order to capture the market...

    A cunning business move that government and people here should be well in front of.. I recommend a surcharge or surtax on offshore investment, equal to the difference between local and offshore rates...

    At heat, most such cunning business strategies are as clear as a pane of well cleaned glass... you just need to look.
    Chris B T
    6th Jun 2017
    12:01pm
    How is it just the pensioner renter problem. Yes rents go up the renter couple is allowed $200k more in assets plus the rental assisttance of $175/fortnight which works out around $170k per year using deeming rules for financal assets.
    The home owner missed out on this extra gift but home ownership costs are rising too.
    So could you please tell me why this discriminatory benefit exists.
    As homeownership was at great expense to the owner relative to the time of purchase.
    Council rates are going up house insurance goes up more when bad weather events, fire happens all pay additional funds even when not in those areas.
    Home maintenance costs.
    If on age pension only this is a struggle.
    So why is there two benefits for renters, there are plenty of places outside Sydney and Melbourne to rent or buy with this extra benefits and close to medical help.
    MICK
    6th Jun 2017
    1:00pm
    I can relate to the ongoing costs of owning a house Chris. Renters never see these and so they do not exist for them.
    We are paying rates of almost $3000 pa and get little more than a garbage for that. Insurance costs us over $2000 pa. Maintenance is never much under the same figure and the work one has to do personally on the house and the garden would have renters exclaiming 'that is the landlord's job'.
    I am not all that sure renter pensioners do all that badly when you add in all of the other benefits they can access which the rest of us have to pay for. Never a mention of those.
    Life's a bugger and Australians are starting to demand more handouts all the time. What have we become?
    Annie
    6th Jun 2017
    1:41pm
    Totally agree with these sentiments. There are a lot of costs involved in owning, even a small home. Add to the above list, water and sewerage rates, emergency levies, repairs etc.
    Anonymous
    6th Jun 2017
    2:39pm
    I'm heartily tired of the stupid inconsistent gripes and failure to address the real facts. I know retirees who are paying $480 a week to live in their own home when you consider pension losses, rates, insurance, maintenance, etc., yet those who spent up big instead of sacrificing for 30+ years to pay off a mortgage get huge handouts.

    Yes, there are some who genuinely need rental assistance - and deserve help. But why punish those who battled for decades to pay off a home, while handing out more and more to people who didn't bother?

    I can point to folk getting rent assistance and far higher pensions while paying only $300 a week rent, while their homeowner counterparts pay $3800+ in rates and water charges, $2000 in insurance, and $5000+ in maintenance per year, and then lose a massive chunk of their aged pension as well. Why are ONLY the renters deserving of our concern and sympathy, regardless of their real circumstances?
    MICK
    6th Jun 2017
    3:17pm
    Welcome to humanity Rainey.
    As you know I battle for average Australians. You can't win though and renters mostly think they should get an ever increasing amount of handouts.
    I always thought a fair go was important but what I hear often leaves me speechless.
    Maybe I am getting too old and need to move to Tassie with no TV or internet connection.
    Chris B T
    6th Jun 2017
    4:28pm
    No one can explain to me why a coupled renter's has an allowance of $200k in assets over homeowners.
    Yes some may need the rental allowance, but not both.
    There are plenty of properties around and below the $200k mark,
    maybe not Sydney or Melbourne.
    Make better use of the extra $200k assets.
    Everyone is talking about homeowners downsizing, what about selling up and spending to reach the same point as renters.( extra $200k assets and rental assisttance)
    I bet the blowout in benefits would be unmanageable, would this be expectable behaviour.
    Some made a choice years ago to buy things or to buy a property so why now are they discriminated against for doing that.
    MICK
    6th Jun 2017
    5:06pm
    The short answer Chris is that average people with an asset are easy targets.
    Chris B T
    6th Jun 2017
    8:25pm
    That doesn't explain why renters are allowed an extra $200k in assets over coupled homeowners.
    Give them rental assistance or extra assets. If your renting what extra assets would you need to make your place more homely then homeowners.
    The extra assets would have to be luxuries so why can't homeowners have these as well.
    That is what I can't understand.
    Nothing to do about targeting just equal between two groups as one already has the additional allowance.
    buby
    11th Jun 2017
    9:01am
    the only ones that get a good hand out when they come to this country is the forengers, when they come here, the rest of us have to learn to get by.
    Even where i live, it looks grand, but its a dump to live in.
    its a complex where NObody wants to wash, and pass around the bedbugs freely. ITs hell!
    OH did i mention i don't sleep either, scratching head, so how am i lucky?
    buby
    11th Jun 2017
    9:01am
    the only ones that get a good hand out when they come to this country is the forengers, when they come here, the rest of us have to learn to get by.
    Even where i live, it looks grand, but its a dump to live in.
    its a complex where NObody wants to wash, and pass around the bedbugs freely. ITs hell!
    OH did i mention i don't sleep either, scratching head, so how am i lucky?
    Charlie
    6th Jun 2017
    12:17pm
    I have looked at social housing and also the quality of housing in relation to the extreem climate where I live (North Queensland) and there doesn't seem to be much on offer that provides comfortable living in the way one would expect to live post 2001. (eg) heat insulation. Without heat insulation the electricity for air conditioning becomes way too expensive.

    If I went to social housing? (chop) there goes my rental assistance. Also I would be at the mercy of a system that says I am a live alone pensioner so therefore, I can only apply for a one bedroom flat.

    At the moment I am living in a two bedroom flat with rental assistance. It is old, concrete and tile but at least I have space to own my own bed, tv, computer and printer, desk and office chairs, mirror, hat racks and more. Things that would never fit into the a one bedroom flat permitted by social housing, furthermore this is a two bedroom flat that is cheaper than many one bedroom flats. I also have a carport.

    When I look around the streets I see many apparently homeless aboriginal people, If these are the people I must compete against for social housing how are aged pensioners going to be properly housed.

    The idea of a rental assistance increase leaves out one thing. Most rental properties require a bond plus a certain number of weeks rent in advance, therefore the tenant must have over $1000 in the bank to get started.
    MICK
    6th Jun 2017
    1:05pm
    Not sure how your current situation arose Charlie but you might want to take a trip to India or another third world country where ordinary people have only the shirts on their backs.
    Whilst your situation does not sound very pleasant by any stretch of the imagination you have a roof over your head, food on the table and access to free medical care. Thank the Lord for that. It could be a heck of a lot worse.
    Rae
    6th Jun 2017
    3:19pm
    Post 2001 was exactly when the trouble started Charlie. The post 2001 economy is a fake living on borrowed money and time.

    Goldie is dreaming if she expects the dwindling number of worker's to keep paying up. She needs to get out into the real world away from the clover and ivory towers. We are not the endless money pit she thinks we are.

    Rents are falling fast in Brisbane so I suspect you could ask for a discount to stay there soon. Perth and Darwin are dropping fast as well.

    When those thousands of apartments come off line it won't be pretty. A lot of contractors are not being paid with borrowing getting harder.

    Yes MICK it does appear our governments and organisations feeding off the cream are dragging us towards third world conditions. It is still good here but we need to be very careful. Too many mistakes are being made using assumptions and good hearted but unsustainable plans.
    debs
    6th Jun 2017
    3:22pm
    PLUS, in private rentals. often you have to move every 6 or 12 months. Sooooo very expensive and traumatic
    MICK
    6th Jun 2017
    5:09pm
    Landlords normally value good tenants and only terminate a lease when it is finished because they can get a higher rent or want to sell.
    You have of course highlighted one of the disadvantages of renting. No fun if you get caught on that treadmill and that is one of the reasons people buy a house.
    TREBOR
    6th Jun 2017
    6:56pm
    So what's wrong with using the floor boards to stay warm with a nice fire? I ask you.....
    Charlie
    7th Jun 2017
    8:11am
    Mick how would I take a trip to India, when I am genuinely living on age pension. My super is gone due to illness that caused early retirement.
    Charlie
    7th Jun 2017
    8:25am
    Debs, yes estate agents are always trying to get rid of pensioners or prevent the entry of low income people to suburbs where the property value and rental is on the rise.

    There was a government operated cheap rental scheme a couple of years back run in association with the estate agents, where a discount was given to registered people living in poverty, but it had to be scrapped, most likely due to estate agents jacking up the price first then giving the discount, which did nothing to provide low cost accommodation.
    Such schemes need back up legislation to make them tamper proof.
    Charlie
    7th Jun 2017
    8:47am
    Above all there seems to be a perception that I am expecting too much. The age pensioner can no longer do it on a packet of roll your own cigarettes and a black and white TV.

    The standard has been raised and pensioners need more facilities to live in the world that has sprung up around them. Things like internet access and properly insulated flats for people like myself with chronic pain. This is not a big ask and not a big ask for the standard of the building industry either, if Australia is to remain competitive.

    I read about silly things like the pension age being raised because people are living longer.
    Don't they realize that having the medical treatment to make people live longer, does not mean they will be healthy and fit for longer. Generations coming up are over weight and unfit so it is quite likely many will be on the new disability insurance scheme before 65. I was a write-off myself at 57yo and that was 2006.
    thommo
    6th Jun 2017
    1:34pm
    The only way fix up the housing problem, especially for first home buyers, is to get rid of negative gearing...but of course the politicians won't do that, because most of them us it to buy investment properties, all at the expense of first home buyers, whom they are supposed to looking after as one of the very important duties of governing.
    MICK
    6th Jun 2017
    1:39pm
    You might mean that the top end of town which use it for real estate, shares and other business ventures use it. Can't end a good lurk can we.
    Old Man
    6th Jun 2017
    3:07pm
    Is there a parity with the rental allowance and the amount charged for rental in state owned housing? I'm sure there must be some sort of formula for this. The rental market for low income earners is a disgrace with some people obviously in need being made to wait for years for accommodation. At the risk of being labelled, why is it that refugees are housed by government yet those born in Australia are being dropped down a very long queue. I understand that Australia has an obligation to take genuine refugees and to do this there must be provided food and shelter.

    Federal governments make the decisions to keep bringing in refugees and it seems that the states are required to stump up with some of the housing. It's about time that the federal governments shoulder more of the costs of their refugee program and start building homes on federal government land. If some of that land is national park, push the greenies aside and start bulldozing. Whilst it's alright for politicians to make "feel good" statements about their role in the refugee program, it's more important to look after their long term citizens first.
    debs
    6th Jun 2017
    3:20pm
    As I understand it government rent is never more than 25% of your pension.
    I guess I could always hop on a boat and then be put up in a hotel...
    MICK
    6th Jun 2017
    3:29pm
    It is estimated there are 60 million 'refugees' in the world today, whatever that word means these days. WE CANNOT TAKE THEM ALL and nor should we because many of these people have come from countries where their lack of involvement in their own politics has resulted in the regimes which have evolved. Why allow those who have created their own misery in their own countries to migrate to prosperous countries(the only ones they want to come to) and then do the same again? Don't get me going....

    Public housing? That might be the answer and other countries have this. Here in Oz public housing was sold off to the private sector and everything of value has been flogged off to foreigners including many of our jobs. Now the poo is hitting the fan.

    If governments again building public housing they will need to do something they are incapable of: thinking about how to do this properly. We do not need squatters who destroy one house after another.

    I agree with you about locals needing first bite at housing and it is so unfair to push our own aside and cater for people who are uninvited but come anyway.
    MICK
    6th Jun 2017
    3:31pm
    Tell me your income and what sort of medical services you need debs and I'll try and find you something in rural Australia.
    TREBOR
    6th Jun 2017
    6:57pm
    With so many to choose from, why are we selecting the Brighton Bricks and the Mad Man Monis of this world to re-settle here?
    Old Man
    6th Jun 2017
    7:43pm
    TREBOR, I wonder what sort of facade they put up when they are asking for asylum. What concerns me more than how did they get here is why does the AAT continually overturn the Minister for Immigration's decision to deport those who have committed crimes.
    TREBOR
    6th Jun 2017
    9:19pm
    We could surely accept educated or educationable (good word), civilised, and reasonable people who will work and integrate to some extent, while retaining their ethnic identity in peace (as long as they give others the same right)....

    I mean - this nation accepted them all with open arms, and offered them a safe place without persecution to live and prosper, and all we asked was that they contribute in some positive way and not interfere with anyone else's right to do the same.

    It seems some are never going to accept that live and let live attitude.

    I know it pulls the heart strings when someone says they are a refo from Sudan where people are being killed etc... funny - I thought the problem with Sudan was the Muslims killing the Christians and so we have a Brighton Brick who is a Muslim in a shoot-out with cops?
    Old Man
    6th Jun 2017
    3:17pm
    I can't see that any of the suggested solutions for housing will change the market. Making it easier to buy a home will cause the market to keep rising. It's all about supply and demand, if something is in short supply, the demand is greater. More land releases are needed to try and flood the market thereby increasing supply. There is a problem with this suggestion in that there aren't enough tradespeople to construct the new homes quickly enough. I fear we have gone past the tipping point in this area. Maybe issue more 457 visas until the housing market is stabilised.
    MICK
    6th Jun 2017
    3:35pm
    All about supply and demand. High rents is the direct result of importing people without any thoughts about the implications.
    Now we have unaffordable rents, infrastructure which has fallen behind needs, non existent jobs to keep newcomers and subdivisions which do not have proper services around them.

    Well done to the bleeding hearts. Feel good about yourselves.
    Anonymous
    6th Jun 2017
    4:37pm
    THis is not the Mick I know not even blaming the big end of town I think you have changed sides or seen the light we will never be the same?
    MICK
    6th Jun 2017
    5:48pm
    I call 'em like I see 'em without favour. The facts are the facts Roby and logic should never be replaced with political dogma.

    I understand some of the challenges of the nation as well as why there is not enough money for what we all need....and can afford. Don't get me started. It's been a long day.
    TREBOR
    6th Jun 2017
    9:20pm
    Damn - I'm almost ready to sell up and go rent and let the Guv pay some of it for me..... sounds like a good deal from all the perks the renters get....
    TREBOR
    6th Jun 2017
    9:22pm
    Oh - lowering the costs of living by abandoning and then turning back 'privatisation' and the sell-out of this nation and its resources (sic) to offshore interests for a song would go a long way towards making ends meet for this nation.

    Sinn Fein, Brothers an' Sisters... We Stand Alone Together.
    Jim
    6th Jun 2017
    4:59pm
    A lot of these issues have been raised on this forum before today, and I recall asking a question about negative gearing previously I can't remember getting a response, so here it is again, how is negative gearing any different to other forms of investment/buisness, isn't negative gearing just claiming the cost of an investment against the outlay of said investment or of running a buisness, I have never been in a position to negatively gear anything so I have no idea how it works, but I do know of buisnesses that make a loss and claim that loss the following year and are therefore dependent on the taxation system to get a refund, Is this not the same as negative gearing a property, or is there something obvious that I am missing, this is a genuine query?
    MICK
    6th Jun 2017
    5:58pm
    Sort of correct.
    Negative gearing lets you deduct the interest on borrowed money. Normal business deductions let you claim the running of the business.

    The issue is if interest repayments on borrowed money should be an allowable deduction. Speculators will say yes. Many tax payer will say no. In the end we have to decide if interest repayments are really 'business' or speculation. Remember that if you have inflation then you get capital growth, so 20 years down the track when you have paid off you investment and it has maybe doubled in price, or better, you have an asset you can sell and make a profit.

    Of course what they fail to tell people is that with inflation the price you get may only have the same buying power it did when you bought the property. And then the ATO wants you to pay a capital gains tax (tax on half of the nominal gain).

    It's a difficult argument. Personally I'd like to see capital gains tax go and see a return of indexation so that a purchase price is recalculated and the inflation factor added on. That is fair but the government would prefer to leave things as they are because it does quite nicely out of the deal, fair or not.

    Welcome to politics! It's a perverse game where the bastards always want more, never less. Hope that helps.
    Rosret
    7th Jun 2017
    9:48am
    Actually Dim, I have another question - off the rental market topic.
    People who flip homes.
    When I looked at buying an investment I was told I needed to pay $$ stamp duty, $$ GST, $$ curb and gutter etc.
    Then when selling the improved renovated house($$) I then have Capital gains tax $$ as well??
    So when people mention negative gearing as some sort of bonus I really just see it as an offset for some very inflationary producing taxes on Investors and Developers.
    Rae
    7th Jun 2017
    9:55am
    Without negative gearing there would be little investment using borrowed funds. The returns just wouldn't be there even at the lowest cost of money ever. It's cheaper now to use debt than at any time in history. Bubbles looking for a pin was mentioned lately and that's a fact.

    That is what has caused the price increases. Excessive world debt of $US 220 trillion. Gosh in Europe they even charge you to buy bonds rather than pay a yield. Madness.

    325% of world GDP. Check out 1929 or 1890 or any other time the world went crazy. Tulip bulbs at $3000 golden guilders anyone?
    Rosret
    6th Jun 2017
    7:52pm
    None of the ideas listed in your article will work. As soon as the government offers any sort of government financial assistance the landlord/developer/seller etc., just say thank you and raise the rent/ house price by that same amount. It has spiraled out of control and I feel as though people have lost their social conscience.
    Apartments has become smaller than the housing commission homes of the 1950s when the nation was in post war recovery.
    There is only one way out of this and that is to provide public government housing at a rational price.
    They need to provide enough housing for the homeless and pensioners to pull a very selfish community back into reality.
    We have created a generational disaster.
    TREBOR
    7th Jun 2017
    12:35am
    ... starting with the current generation..................

    (all fixed for ya - first fix free.. all future fixes incur a deposit of 10% and payment at consultation rates within seven days)....
    Rae
    7th Jun 2017
    10:00am
    Except rents are falling everywhere except for Sydney or Melbourne and I'm not sure about them either. Incomes have been falling for a few years now, the savings are gone and the propensity to borrow evaporating fast.

    ACOSS and the government appear to have little idea of that is happening in the rental markets unless this is about an ideology that states everyone should be able to live in their preferred areas and taxpayers can support just the welfare crowd to do so.
    Rosret
    7th Jun 2017
    11:54am
    Rae - someone has money. The homes in my country town are massive and expensive to boot. No one in our town can buy a home on a normal average income. A humble 3 bedroom house with garage in a town 160 km from Sydney is $700 p.w. They aren't going down here!
    What I fear is that the rates will go up to match and a lot of long term residents will have to relocate.

    6th Jun 2017
    8:47pm
    great to see our siamese twins, m & t are still joined together, one boasting about his/her profits of a house investor such as his/her travels, lately about the 3 months in the south of france, he/her is now bragging of spending 3 or more months in Italy next season, see last saturdays ylc edition yet got the cheek to state the rents are not high enough, typical of an investor, his advice get rid of your pet, live in a cheaper area, go to the country etc etc. as for t. his suggestions, double the rate of taxing the investors, anybody with brains so sadly missing by m & t, would know the rent would increase, generate more development, who pays for that? going ambent, sorry to rectify you, ambient, claim, it just show the intelligence, more the lack of it by these two holding hands on the one stomach related to their self interest, me, me and only me attitude which is now overtaking what was once the help your neighbour attitude which made Australia the place everybody wanted to live,
    TREBOR
    6th Jun 2017
    9:25pm
    Not that you'd know or that anyone places any value on your opinion. Don't you have school homework to do?

    We're trying to salvage a nation here.. take a shovel and start working or step aside......

    How would the rent increase if you taxed 'ghost' investors double or triple? They're not renting out the property - hence the name 'ghost'..
    Rae
    7th Jun 2017
    10:09am
    Rents are falling. Check it out. Ring anywhere bar the very desirable areas and ask about vacancy rates and rentals. You can't put up rents when people have falling incomes. The two are fundamentally related.

    Increasing government subsidy of rentals may help a bit but it is not going to stop the corrections going on. The government is foolish to waste money until the dust has settled after the corrections. They may even get a very good deal from a bank holding an apartment development that has been bankrupted by lack of the next debt instalment and the renege of the overseas deposit holder. Try chasing them down. Public housing in the cities at discount prices.

    The wage cuts next month will possibly force many to relocate unless rents drop faster and that is quite possible.
    Joy Anne
    7th Jun 2017
    8:55am
    I am the same, I don't know where Leon gets his figures from. The highest in Rental assistance you can get is $132.50 ? As I get that on my pension. Don't know anyone getting $175. That would be nice but rents are going up all the time. I am a Pensioner and pay 60% of my pension in rent. NO cheaper around. I exactly know what Debs is saying. I tried to apply 5 years ago for housing and was told 10-15 years and was talked out of applying. Why Mick should people move to a cheaper area when there is none now. All rents are expensive. Lucky Debs she has a private landlord like me. They are extremely hard to get. I also have all my medical and social, aged care in this area.
    Rosret
    7th Jun 2017
    9:25am
    Yes - things have truly gone belly up. I wondered what would happen with the massive increase in real estate prices 10 years ago.
    It was OK until people in the newly purchased homes wanted a viable return on their investment.
    The impact must be rippling through the business world as well.
    So many people think spiraling increased property values are a good thing. They are not. Its an artificial economy - like sand castles - washed away in the first storm.
    Rae
    7th Jun 2017
    10:31am
    Yes Rosret and fuelled by insanely low interest rates and excessive debt creation.

    The problem really is one of living on debt and tax cuts and welfare rather than sharing out the profits and productivity wisely.

    It must be very tough on a low income to pay the rents over the $300 mark. That includes those receiving welfare and those with low incomes from falling investment returns, business incomes or low and falling wages and hours.

    Surely those on this site have seen this a time or two. Never so excessive but my Nan told me about the Depression.

    Our first loan was pulled after the first instalment when we'd built just to the slab stage and needed the money for the framework.
    Credit crisis of 1973.

    I've studied economic history and the causes of recessions ever since and it's a cycle.

    Debt will dry up and cost more and a lot of people will lose a lot of money.

    Fortunately for renters it will be their turn to be choosy if they can afford it. The rise of the old fashioned boarding house is coming.

    I'm considering a boarder right now myself as things tend to get quite hairy around the turning of investment cycles.

    Not just for a just price that helps us both but for the added protection. I've had boarders before. Likely young beginning nurses, teachers etc with a professional contract.

    Yes legally with taxes paid and insurance sorted.

    The government has no idea what to do and I don't blame them. There is no way of stopping the cycle short of massive amounts of government spending on infrastructure or helicopter money like Swan used. Even building stupid mine infrastructure looks good to them.

    Giving extra money for living costs to low income earners is a good move providing that money goes into the economy and not into the wealthy classes coffers and tax havens or off shore.

    If the government needs to borrow foreign funds to pay for any of this then it will bankrupt the Nation.
    Rosret
    7th Jun 2017
    11:46am
    You have been watching this astutely too, Rae.
    Just as soon as Australian Government (either party) stop looking at the USA as a role model and go back to the sound rock solid structure of the British business model will will start to improve.
    The USA is wealthy but many of its people are not. The British Empire was wealthy but they didn't lose their wealth on shaky business deals or Bond like corporate sell offs - they lost it fighting the war to end all wars.
    They had assets and they weren't share holder decision driven.
    Governments can soften boom and bust economies because they have learnt their lessons - I hope.
    Ayuda
    7th Jun 2017
    12:02pm
    I haven’t read all the posts and the subject may have been covered, so excuse if I’ve repeated. I feel that some of the housing issues can be alleviated if the gov includes the work bonus into renting out rooms. I have a large home of 4 bedrooms and been in the dilemma over the past 12 months on downsizing........to what??? Affordable smaller homes are getting snapped up by young families and rightly so, or they need major renovation......I’m passed that now at 65, or distance away from services. I live in regional NSW. Retirement villages wasn’t an option due to mum having to move out when dad died and not affordable anymore......not to mention the amount of money she lost in transition to a lifestyle park where her small transportable home was an ice box in the winter. Though still having a small mortgage on my home, I would prefer to stay put, despite it being too large for one person.
    The idea of taking in a mature age boarder appealed to me, but would it be feasible to do without jeopardising loss in the oh so needed pension. I live on a very tight budget to cover outgoings associated with home ownership, not to mention the upkeep and a boarder would reduce some of the burden. House sharing is not for everyone and in debs case not an option, but when I read about the suicide rate in older folk it would certainly lesson the degree of poverty, loneliness and isolation many find themselves enduring.
    It’s my understanding that pensioners can only earn $162 a f/n, unless have part time employment to qualify for the work bonus of $250 a f/n before deductions in pension (correct me if I’m wrong). At present, renting out rooms in your home is not counted as employment, unless you are a registered boarding house. $80 a week board didn’t quite cut the mustard with me, even though several items i.e power etc can offset the amount asking.
    I’ve had several enquiries from individuals at places I volunteer and would love to help them out with a place to live. I’m not into rescuing people, nor into racking and stacking but in turn helps me out financially and gives a sense of purpose that many of us lose as we get older. I’m interested to hear from others who have rented rooms and what to watch out for concerning the pension.
    BTW: The person who said debs should get rid of her dog needs to understand mental health issues and the importance of having the dog in her life.
    Rae
    7th Jun 2017
    1:33pm
    The old fashioned boarding house was a good deal for boarders and the mainly women who ran them until the government got involved.

    Same with childcare at affordable rates and flexible arrangements.

    Many disadvantaged managed by renting out rooms or minding another child with their own without government involvement at all.

    This would be a good solution but I doubt the government can figure out how a crony can make money out of it.
    julias
    7th Jun 2017
    2:58pm
    The waiting list in my area for public housing is 10-15 years. Meanwhile, my rent has been increased by $5 per week, $10 per fortnight. May not sound much, but it is gradually creeping up towards $300 per week. At the moment is $278 per week - $576 per fortnight.

    8th Jun 2017
    6:24am
    While there are doubtless countless thousands in desperate need of social housing, it appears NSW has given many a ''lifetime'' entitlement to government housing regardless of changes in circumstances. I know of one who is exploiting this, actually living with her boyfriend, spending much of a $600,000+ inheritance on a luxury water-view block of land (on which she plans to build a luxury mansion if and when she wins a Family Provisions Claim against another relative's will) and retaining her government home unit on which she pays minimal rent as her ''official but unused address''. Meanwhile, she is hiding money overseas while claiming an unfair level of ''disability'' pension, while having no disability at all but being an accomplished lifetime faking bludger. No wonder the government struggles to provide for those in GENUINE need.

    8th Jun 2017
    6:36am
    Maybe stop punishing those who struggle for decades to pay off a mortgage and provide more encouragement, education and support for people to BUY homes, rather than hitting out at retirees who commit what is apparently the SIN of owning a home or having some savings? While I fully support efforts to help the genuine ''have nots'', I worry that the majority of those collecting rent assistance are people who just didn't bother to help themselves when they had the opportunity, or are just plain cheats and manipulating bludgers. If our welfare system was designed to help and encourage instead of to keep people down, we'd do far better. But the rich can't have that, can they? People rising above their station - denying the privileged their birth right of superiority. We are seeing an exercise in social engineering - devising methods of keeping people in their place. Sadly, rent assistance is just another means of achieving this end. I wish I could conceive better ways of assisting the genuinely needy, but for overall social improvement I think the priority should be encouraging, rewarding and supporting the responsible and educating people to understand that MOST of us CAN achieve financial security and home ownership, and should take responsibility for doing so. If only the genuinely needy were putting their hands out for support, there would be no problem catering to their needs. But we need to overhaul the system to recognize and reward responsible lifestyle choices and planning and to deliver security to those who have reached the point of needing and deserving it.
    Nomad
    12th Jun 2017
    5:49pm
    Even pensioners pay tax in the form of GST
    Christine
    15th Sep 2017
    6:02pm
    I was one of the women on the SBS Insight show, Women on the Edge. I was disturbed by the lack of discussion on solutions so started a Facebook group to look at solutions. From that we have developed two main working parties, one to put up an information website for those at housing risk, and another to put together a viable proposal for privately funded affordable housing developments. If you are either homeless or confronting homelessness, come and join us at https://www.facebook.com/groups/HousingAlternativesAustralia/


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