Part 2: Payments for Specific Purposes
Affordable housing
Payments to support affordable housing
In 2009‑10, the States will receive $6.8 billion in payments from the Commonwealth for state housing services, compared with the $3.0 billion the States will receive in 2008‑09.
The additional funding to the States includes around $1.7 billion over five years for state housing services as part of the COAG reform package agreed on 29 November 2008. This includes:
- $46 million over five years from 2008‑09 to the States for housing investment under the National Affordable Housing SPP;
- $400 million over four years from 2009‑10 to the States as part of the National Partnership Agreement on Homelessness;
- $400 million over 2008‑09 and 2009‑10 to the States to increase the supply of new social housing as part of the National Partnership Agreement on Social Housing; and
- $834.6 million over five years from 2008‑09 to the States for the National Partnership Agreement on Remote Indigenous Housing to improve housing outcomes for Indigenous Australians, which is critical to meeting the COAG‑agreed Closing the Gap targets of improved Indigenous health, life expectancy and educational attainment.
In addition, the Government has provided up to $6.4 billion over four years to meet priority social housing needs as part of the Nation Building and Jobs Plan announced by the Australian Government on 3 February 2009.
Policy decisions included in this Budget that will be implemented through National Partnership payments include the cashing out of the Social Housing Subsidy Program.
Further information on these policy decisions is included in Budget Paper No. 2, Budget Measures 2009‑10.
From 1 January 2009, the Government has provided a financial contribution to support state housing services under the new National Affordable Housing SPP. This new National Affordable Housing SPP incorporates the following existing payments:
- $777 million in 2008‑09 under the existing Commonwealth‑State Housing Agreement (block assistance/base funding);
- $69 million in 2008‑09 to develop community housing which provides appropriate and affordable rental accommodation for low‑ to middle‑income earners;
- $42 million in 2008‑09 to assist people who are homeless and in crisis;
- $97 million in 2008‑09 to assist Indigenous people on low‑ to moderate‑incomes to access rental housing; and
- $189 million in 2008‑09 for the acquisition of accommodation for use under the Supported Accommodation Assistance Program.
Some payments under the former federal financial relations arrangements continue to be paid as National Partnership project payments.
Table 2.82 provides information on all the payments to support state affordable housing services.
Table 2.82: Payments to the States to support affordable housing services
National Affordable Housing SPP
The Commonwealth will provide $5.5 billion over five years from 2008‑09 to the States under the National Affordable Housing SPP as a financial contribution to support state services in the housing sector. This represents an additional $46.4 million in funding from 2008‑09 over the five years.
This funding will be used to support a range of measures including social housing, assistance to people in the private rental market, support and accommodation for people who are homeless or at risk of homelessness, and home purchase assistance.
Table 2.83: National Affordable Housing SPP
Growth factor
The Intergovernmental Agreement outlines the agreed growth factor for the National Affordable Housing SPP. The growth factor is the Wage Cost Index 1, comprising a safety net wage adjustment weighted by 75 per cent and the all groups Consumer Price Index weighted by 25 per cent.
In November 2008, the growth factor was estimated at 2.1 per cent. The growth factor is estimated to be 1.9 per cent in 2010‑11. This compares to around 1.6 per cent under the previous agreement.
National Partnership on Remote Indigenous Housing
The National Partnership Agreement on Remote Indigenous Housing aims to facilitate significant reform in the provision of housing for Indigenous people in remote communities and to address overcrowding, homelessness, poor housing conditions and severe housing shortages in remote Indigenous communities.
Table 2.84: Estimated payments to the States for the National Partnership on
Remote Indigenous Housing
National Partnership on Social Housing
The Commonwealth will provide $400 million over two years under the National Partnership Agreement on Social Housing. The National Partnership provides for the establishment of a Social Housing Growth Fund which will provide capital funding to support a range of projects to increase the supply of social housing and enable more disadvantaged households to access safe and secure housing that meets their needs. Funding is offered to the States on a per capita basis, subject to each State submitting suitable proposals.
Proposals for funding under the Social Housing Growth Fund must involve:
- the construction of new social housing dwellings;
- add to the supply of social housing dwellings within a jurisdiction;
- be completed and ready for occupation within two years of funding being allocated; and
- provide an appropriate response to an area of unmet need for social housing within the jurisdiction.
Table 2.85: Estimated payments to the States for the National Partnership on
Social Housing
National Partnership on Homelessness
The Commonwealth will provide $400 million over four years under the National Partnership Agreement on Homelessness. The National Partnership provides funding for the States to support homelessness initiatives consistent with the priorities identified in the Australian Government's White Paper on Homelessness: The Road Home, with a focus on prevention, early intervention and breaking the cycle of homelessness through a better connected service system.
Table 2.86: Estimated payments to the States for the National Partnership on
Homelessness
Other National Partnership payments for state housing services
A number of National Partnership payments will continue to be paid under the new federal financial arrangements. A description of each of the payments for state housing services to be made in 2009‑10 is provided below.
First Home Owners Boost
The Commonwealth will provide $734 million to the States in 2009‑10 for the First Home Owners Boost as part of the Economic Security Strategy. More information on the First Home Owners Boost can be found in Box 1.3 of this Budget Paper.
Table 2.87: Estimated payments to the States for the First Home Owners
Boost
Social Housing Subsidy Program
The Commonwealth has committed to provide around $2 million each year to New South Wales until 30 June 2016, to expand housing options for low- to moderate‑income earners as part of the social housing subsidy program. The Commonwealth will meet its future payment commitments to New South Wales under this program by providing a single payment in 2009‑10 and ceasing future annual payments.
The program subsidises recurrent costs of financing rental accommodation in the private and non government sectors for low- to moderate-income earners.
Table 2.88: Estimated payments to New South Wales for the Social Housing
Subsidy Program
Nation Building and Jobs Plan — social housing
The Commonwealth will provide $4.1 billion to the States in 2009‑10 to invest in additional public and community housing to meet priority social housing needs, including reducing homelessness. This includes $200 million in 2009‑10 for repairs to existing public housing stock.
Table 2.89: Estimated payments to the States for the Nation Building and
Jobs Plan — social housing
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