Policy analysis

The Australian Government spends billions of dollars each year on the private rental market—from Commonwealth Rent Assistance (CRA) direct payments ($4.438 billion in 2017–18) for low-income households needing help with rent to the indirect tax concessions of negative gearing ($3.296 billion in 2016–17)  and capital gains tax discounts for investors.

Australia's affordable housing industry, where community housing providers (CHPs) supply affordable housing to households on low incomes, has, up to now, been modest and small scale.

Retired lower income households living in the private rental sector (PRS) face rent increases and insecure tenure while being on low fixed incomes (i.e. the age pension). They also live in housing that may not be physically suitable for them and may require alterations to make the premises liveable (e.g. wider door openings to allow for wheelchairs, height adjustable kitchen benches etc.).

Between 1996 and 2011, the absolute shortfall of private rental properties that were affordable and available to Q1 households deteriorated from a deficit of 150,000 homes to 271,000 homes. Over the same time period the number of Q1 households renting in the private market rose from 221,000 households to 347,000 in 2011 (a 57% increase).

Government initiatives to promote consumer choice (individualisation) are a feature of contemporary welfare state reform. Indeed, the Productivity Commission is holding an Inquiry that will release a draft report in May 2017 and Final Report in October 2017 on how to apply increased competition, contestability and informed user choice to the delivery of human services so as to improve outcomes for users and the community as a whole.