“Canberrans generally recognise the need for public housing and do not unreasonably object to it in their street. The proposals that are opposed are invariably deficient, breaching privacy or are contrary to planning rules.” JON STANHOPE & KHALID AHMED turn their focus to the shameful state of renting and public housing in the ACT. 

The ACT government regularly attempts to adopt irrelevant and inappropriate measures of performance to deny problems outright and/or to misdirect discussion on possible solutions. 

One such example is the rather extraordinary claim on page 21 of the 2024-25 Budget Paper 3, that:

“Housing and rental affordability in the ACT remains relatively better than other jurisdictions predominately as a result of the higher household incomes.”

It is disappointing, but not surprising, that the mainstream media blindly reports such claims. The chart produced by the government as evidence in support of its assertions is based on the Real Estate Institute of Australia (REIA) rental affordability measure.

That measure reflects the proportion of median income required to pay median house rental. It is no secret that the median income in the ACT is relatively higher than in other jurisdictions, and as such, rental affordability in the ACT looks better than it is.

By definition, the measure includes the income of people who may not be in the rental market at all, ie those who are in their own homes. We acknowledge the measure may be relevant in a different context, but not when considering the affordability of rents for people living on a median income who are looking for a house to rent.

The data from the Productivity Commission’s Report on Government Services released on January 30 paints a very different picture of rental affordability in the ACT.

Chart 1 shows the proportion of low-income private rental households paying more than 30 per cent of their income on housing costs. This is the standard measure of housing stress, and the Commission’s data shows that the ACT, across all jurisdictions in Australia, has the highest level of housing costs. 

The Commission sourced the data from an unpublished ABS survey for 2019 (the latest year available). More recent data, sourced from the Department of Social Services, and published by the Commission also paints a most disturbing picture.

Chart 2 reflects the income units that are eligible for Commonwealth Rental Assistance (CRA) who were paying more than 50 per cent of their income on rent before the CRA in 2024. 

The ACT has by far the worst outcome with 43 per cent of income units in this category, compared to the national average of 33 per cent. Aboriginal people in the ACT fare worse with 37 per cent paying more than half of their income on rent.

While rental assistance from the Commonwealth partly alleviates housing stress, according to the Commission’s data the proportion of Canberrans who pay more than 50 per cent of their income, even after CRA, remains the highest in Australia.

It is not surprising that the CRA does not completely eliminate housing stress – the Commonwealth cannot be expected to undo the rental stress caused by the supply constraints and the extractive land tax and rate hikes imposed by the ACT Government that are inevitably passed on to renters.

However, it’s surprising that while Chief Minister Andrew Barr has complained about the poor quality of advice from the ACT public service, it did not occur to him as the then-treasurer, or either of the two housing ministers (Yvette Berry and Rebecca Vassarotti), when presented with the misleading picture of rental affordability that was published in the budget papers, to ask: what about those on incomes below the median who are actually renting?

Market failure for low-to-moderate income households, due in large part to the ACT government’s policies, should in principle be addressed by provision of public housing. 

We have previously written about the ACT government’s disappointing and embarrassing record on public housing despite its own lofty, but misleading claims about its commitment to public housing.

We reported, for example, that from 2015 onwards the government repeatedly claimed to have committed $700 million to public housing under its renewal program, which was not evident from the audited statements and annual reports. 

In reality, what we found was a massive raid on public housing through the sell-off of prime land with the proceeds directed towards light rail under an agreement with the then Morrison government.

Chart 3 exposes the changes in public housing stock and tenancies from 2015 to 2024.

Through the two growth and renewal programs, dwelling stock increased from 10,833 to 10,952, which is lower than the number of dwellings in 2012. The number of households in public housing actually decreased by 297 (2.8 per cent) in the ACT.

It is noteworthy that the ACT government has just announced amendments to legislation that will prevent any challenges to development applications for public housing. 

The government appears to believe Canberra residents are preventing it from delivering public housing. This is insulting and manifestly incorrect. Canberrans generally recognise the need for public housing and do not unreasonably object to it in their street. The proposals that are opposed are invariably deficient, breaching privacy or are contrary to planning rules.

A question that we expect to be explored through debate in the Legislative Assembly is whether private developments that include a small buy-back by ACT Housing will be exempt.

On a positive note, the proportion of stock in acceptable condition (as measured by at least four working facilities and no more than two structural problems) has increased from 73.4 per cent in 2021 to 76 per cent in 2023 (Chart 4).

Unfortunately, the good news ends there – this is well below the 81 per cent acceptable stock in 2016, and the ACT remains the second worst jurisdiction in this regard. The benefits of the improvements, albeit minor, do not extend to Aboriginal households or those with a disability. 

Shamefully, only 58.5 per cent of the stock occupied by Aboriginal households was deemed to be in an acceptable condition in 2023, a decrease from 60 per cent in 2021. The corresponding figures for people with disability are 60 per cent in 2023, down from 69 per cent in 2021.

The deterioration in stock and how Aboriginal households and households with a disabled member have fared through the two growth and renewal programs is evident in Chart 2. Surely this cannot be a result of objections by Canberrans to the construction of public housing in their suburb?
Jon Stanhope is a former chief minister of the ACT and Dr Khalid Ahmed a former senior ACT Treasury official.