Public Housing May 1984 – One from the Vault

18 February 2014 | Posted In: 120 – Autumn 2014, From the Vault, Housing Types and Issues, Inner Sydney Voice – ISRCSD, Public Housing, Public Housing – History, | Author: Inner Voice

This report from May 1984 on The Housing Commission’s finances below reminds us that 30 years ago public housing made a surplus.

Public housing included full rent payers and people that these days would be targeted for affordable and social housing. Before privatisation, state governments also had government enterprises, like GIO, that they could get to lend money to or enter into joint ventures with the Housing Commission.

Back then there was still a sizable waiting list and not enough housing to meet demand, but at least public housing was not being sold off to fund the operations of the housing system and to cover the funding black hole.

Thirty years ago there was a viable mix in public housing, but to keep it working it needed a lot more housing stock. In its absence they stopped taking the people that paid the bills, leaving only those with higher and higher needs – the rest as they say is history!

PUBLIC HOUSING —The Story So Far

First published May 1984 Inner Voice

With 126,000 applicants on public housing waiting lists around Australia and 52,000 of these in NSW, funds for housing has been the major issue of concern to the community housing sector.

The recent State election had NSW Housing Minister, Frank Walker proclaiming 1984 as ‘The Year of Housing’. Unless there are a few surprises in the State Housing Budget in September Mr Walker’s declaration cannot hold true for public housing.

For a long time assumptions about housing funding have been based on critiques of the level of Federal funds. While this was a real and continuing concern during the Fraser years the recent performance of the Federal Government has improved.

Although Treasurer Paul Keating is still to be convinced on the fun-ding issue the recent negotiations for a new Commonwealth State Housing Agreement have won a great deal of support from many Federal politicians including the Federal Minister for Housing, Chris Hurford.

In the lead up to the State Bud-get, housing activists are taking a more critical look at the then Government’s performance on public housing. They argue that as housing is a joint responsibility the State should examine its funding capacity with a view to increasing contributions.

The following statistics have been taken from official Housing Com-mission sources:

1981 – 82 1982 – 83 1983 – 84
State Grants 1,080,000 1,080,000 1,080,000
Loans 29,500 22,745,700 21,000,000
Joint Venture 20,000,000 16,000,000
Deferred Payments 50,000,000
Internal Funds (surplus) 19,667,000 27,310,000 27,600,000
Semi-Government Borrowings 1,200,000 1,500,000 1,800,000
Total Commonwealth & State Funds 71,857,000 151,691,000 279,745,000

From the table a number of facts require comment:

  • The only grant monies made available by the State Government has been the $1.08m in each of the three years.
  • The surplus made by the Com-mission is counted as State contributions.
  • The jump in loan monies to the Commission in 1982/83 reflects a change in Commonwealth policy. From that year States could nominate part of their Loans Council funds for housing. These nominated funds attracted a Commonwealth subsidy bringing down interest rates from around 14% to 4.5%.
  • Joint venture monies are funds raised by loans from the GIO (at 14% interest rate) and the Rental Bond Board (5%).
  • Semi-government borrowings are from the GIO.
  • The deferred payment funds are made available at market interest rates which vary daily but which are at the moment around 14%.

The crunch on funding for public housing by the State came earlier this year when Premier Wran announced in a blaze of publicity that the Commission would get $60m of “extra” funds. These funds turned out to be unexpended loans of deferred payment money which were originally to go to Elcom.

State contributions made in this way are difficult to justify given the State’s ability to nominate Loans Council funds for housing and attract concessional interest rates. At present it appears that the Housing Commission will have to repay these loans and that the debt bur-den will force it to cut construction/ acquisition targets in a few years’ time. The gain of 1,000 new houses this year appears to be a poor substitute for the 2,500 or so houses which may be lost in three years’ time due to this “extra” funding.

The most startling fact to come out of an examination of State contributions is the proportion of funds made available in the form of grants. Although the Commonwealth has improved its performance from a low of 3% of funds as grants in 1975/76 to 71% in 1983/84 State grants remain abysmally low.

Less than 1% of State contributions were grants in 1983/84 (although this figure is the much more respectable 24.4% if you include the Commission’s surplus).

It all sounds a far cry from the performance we might have expected from a State Government which calls 1984 the “Year of Housing” – unless of course you discount the most important issue, funding. Without adequate funding the changes made to public housing policy will be essentially cosmetic, evading the real issue of how to house people who have been waiting for public housing for periods of up to eight years.

Inner Voice – May 1984 – reproduced in Inner Sydney Voice Issue 119 Autumn 2014.

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