The Labor Opposition as well as several key social groups have slammed the government's decision to not provide any funding for social housing in this year's budget.
The government last night announced its 2020-21 Federal Budget, detailing, among other things, tax cuts brought forward, JobMaker credits to hire those on JobSeeker and payments to aged pensioners.
While many of the decisions in the budget were well-received, one omission from the budget that's been quite poorly received is the lack of investment in social housing.
Looking to compare low-rate, variable home loans? Below are a handful of low-rate loans in the market.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
Social housing had been one of the more talked about stimulus measures prior to the budget.
Spending on social housing was the most backed stimulus measure according to nearly 50 economists surveyed by The Conversation, while other advocates and economists had called for the funding of as many as 30,000 new social housing projects, to not only tackle homelessness but to create work in the construction industry.
While the budget does include some funding for construction, such as the extension of the First Home Loan Deposit Scheme for new home builds, Labor’s Jim Chalmers and Katy Gallagher said the current budget doesn't do enough, citing social housing as one of the reasons.
“No plan for social housing, cheaper and cleaner energy, or to address the crisis in aged care. No plan to kickstart the economy, boost productivity, increase participation, or lift the speed limit on growth," Dr Chalmers and Senator Gallagher said.
Australia needs leaders with a plan for the future.— Anthony Albanese (@AlboMP) October 6, 2020
Today Scott Morrison and Josh Frydenberg failed that test. pic.twitter.com/XA4S9M7MYH
Shadow Housing Minister Jason Clare meanwhile said yesterday that "every housing organisation in the country" had called for more social housing investment".
"The Master Builders Association, the Property Council, the Housing Industry Association, all called for more government money for social housing. These aren't organisations that are card carrying members of the Labor Party. They're not raging socialists," Mr Clare said.
"These aren't organisations that called for more money for social housing because they desperately want to end homelessness. They called for it because it would mean keeping their members in work. Building houses keeps their members working. And last night they were let down."
Mr Clare also said that for every dollar invested into social housing, three dollars are returned to the economy.
"Devastating" and "a total failure"
Several key social groups took to the media following last night's budget to express their concerns over the lack of social housing investment.
Homelessness Australia said the budget not only failed to invest in social housing but also cut $41 million from homeless services from 2021.
Homelessness Australia Chair Jenny Smith said the budget was devastating.
"In a year with huge increases in unemployment creating a surge in rental stress and homelessness, the Federal Government has chosen to slash homelessness funding," Ms Smith said.
"Without increases in social housing and with even less resources for homelessness services, many families will become stuck in homelessness for a long time.
“The Government has ignored advice from all corners: from top economists, property industry and community sector leaders, as well as popular support from the community; all calling for the Government to invest in social housing to both create thousands of new jobs each year and to deliver enormous social good."
Mission Australia CEO James Toomey meanwhile called the government's response "a shocking failure".
"It is shocking that the Federal Budget hasn’t done enough to commit to long-term investment to address the serious shortage of social homes in Australia," Mr Toomey said.
“Ensuring everyone has a safe and secure place to call home is a national responsibility that was ignored in this year’s Federal Budget.
“Investing in 30,000 social homes within the next four years is an obvious solution that will not only help to end homelessness in Australia but will also create vital jobs in the construction industry.
“Despite a significant investment in infrastructure in this year’s Federal Budget to help create jobs, we are deeply disappointed the essential social infrastructure of social housing has been ignored.
Australian Council of Social Service (ACOSS) CEO Dr Cassandra Goldie was also of the opinion that no social housing investment is disappointing, given the need for affordable housing for those on low incomes.
“The Budget misses key opportunities to generate jobs quickly by investing in social housing construction to reduce homelessness, and in energy efficiency upgrades for low-income households to reduce energy bills and climate emissions," Dr Goldie said.
“Overall, the Budget does not deliver enough investment to pull us out of the historic slump we’re in without leaving people behind. The Government will need to do more to ensure that we are all in the recovery together."
"Millions have been left stranded in this budget overnight."— News Breakfast (@BreakfastNews) October 6, 2020
ACOSS CEO @cassandragoldie says the tax breaks will favour those on higher incomes, while the changes to JobSeeker are "crushing". pic.twitter.com/o7qWRYd9gS
Before COVID-19 there were 116,000 homeless people in Australia and more than 800,000 living in rental stress, according to Everybody's home, a national campaign aiming to create a fairer housing system.
A mid-year report on rental affordability by Anglicare in September found a mere 1% of rentals across Australia are deemed "affordable" for those on the current rate of JobSeeker.
By letting JobSeeker fall back to the old '$40 a day' rate in December, just 13 properties would be affordable nationwide.
The budget made no reference to the current scheduled JobSeeker reductions being altered, although social services Minister Anne Ruston has said these will be open to further review.
Other Savings.com.au Federal Budget news:
- What's in the Budget for pensioners? $250 payments explained
- Federal Budget 2020: What changes have been made to superannuation?
- What are experts saying about the 2020 Federal Budget?
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
- No love lost: Aussies prioritise finances over romance
- Micro-investing app Raiz launches new 'custom' portfolio
- Unemployment drops as participation hits record highs
- Should you buy an investment property in 2021?
- Brisbane suburbs tipped for growth in 2021