7 May 2018

Canberra at the crossroads with 35,000 in poverty, says ACTCOSS

| Ian Bushnell
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For an increasing number of people in Canberra, housing is becoming a nightmare.

There are renewed calls for Government action to support the increasing number of ACT lower income households as they head into winter and fail to keep up with cost of living pressures, particularly rents, utilities and fuel.

On the eve of the Federal Budget and with the ACT’s to follow, the latest ACTCOSS ACT Cost of Living Report, which looks at changes in the CPI and Selected Living Cost Indexes in the capital over the past year, shows that utility prices rose the most and well above the national rate.

Gas prices rose by an unprecedented 18 per cent in just one quarter, with the prices of other essential goods and services in Canberra – including housing, health, education and transport – also rising above the national rate.

The research has also re-assessed how many people are living in poverty in the ACT, reporting an estimated overall poverty rate of 9.2 per cent (34,543 people), while the estimated child poverty rate is significantly higher at 12.7 per cent (8897 children).

ACTCOSS, warning that Canberra was at the crossroads, says the Federal Government needs to lift the rate of benefits – including Newstart Allowance, Widow Allowance, Sickness Allowance, Austudy, Abstudy, and Youth Allowance, Special Benefit, and Crisis Payment – by $75/week from January 2019, and index them to wage and price movements.

It also wants it to establish an independent statutory Social Security Commission to advise on the financial needs of people requiring social security payments to afford basic essentials and improve employment services to help more people into jobs.

At a local level, ACTCOSS says the ACT Government needs to ensure more affordable housing, broaden transport and other concessions, and ensure greater digital inclusion.

It is calling on the Government to create a $100 million investment fund for community housing providers and increase the supply of public housing to keep pace with population growth.

It wants the Government to legislate minimum 5 star energy ratings as a requirement for all private rental housing, and create a Zero Emissions housing support fund that supports private rental housing owners to install energy supply and efficiency infrastructure.

On digital inclusion, ACTCOSS wants a Smart City strategy, the Government’s free public wi-fi access expanded to outer suburban areas and students in low-income households to be able to purchase data as well as devices.

ACTCOSS Director, Ms Susan Helyar said it was the fourth consecutive year that low income households’ cost of living was growing at a faster rate than higher-income households.

“Many Canberra families are in a position of having to decide between eating or turning on the heating, while over a third of low income rental households in the ACT experience rental stress. With the release of Anglicare’s 2018 Rental Affordability Snapshot just last week we saw that, yet again, there are no affordable and appropriate private rental properties for people on Newstart or Youth Allowance, or for a lone parent living on the minimum wage in the ACT,” she said.

“It is a shock to see how far income support payments such as Newstart and Youth Allowance have fallen behind the cost of living, with essential goods and services becoming less and less affordable for income support recipients. Newstart has not increased in real terms in 24 years and now more than half of the people on Newstart live below the poverty line.”

She said that for a sole parent with two children on Newstart the weekly cost of living rose by $13.40 over the past year, while payments only rose by $5.45.

The analysis found that out of 120,000 ACT households, 13,600 (9.3 per cent) could not pay electricity, gas, or telephone bills on time, and 5600 (3.8 per cent) could not meet mortgage or rent payments on time.

It found 2300 households (1.6 per cent) went without meals, 2800 (1.9 per cent) could not heat their homes, 10,300 (7.1 per cent) sought financial help from friends or family, and 3100 (2.1 per cent) sought assistance from welfare /community organisations.

Ms Hellyar said the latest gas price increase has had a huge impact and the Government needed to do something about rental housing.

“There nothing you can do about the cold but there is something you can do about the quality of the rental housing in this city so that people aren’t just having their heat go out the roof even if they can afford to turn it on,” she told ABC radio.

Ms Hellyar believed Canberra was at a crossroads and echoed comments recently by former chief minister Jon Stanhope.

“In a city that describes itself as the most livable city, as one of the most visitable cities in Australia, up and coming with innovation and diversity and strengths, we can’t have a city where 35,000 people are making these kinds of choices, that is not a credible foundation for a strong and vibrant city,” she said.

“We have had an enormous focus on investing in the city and its hard infrastructure and its renewal of its built environment. We need an investment in the social infrastructure of this city to match the level of investment in its built environment and to be a truly wonderful city to live in it has to be wonderful for everybody, not just those with double incomes and secure jobs only.”

The 2018 ACT Cost of Living Report is available on the ACTCOSS website: www.actcoss.org.au

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Many older rental properties are in inner suburbs; areas most likely to have low energy ratings, because of older housing stock. They would be very expensive to increase the rating of. If it became compulsory to have 5 star energy ratings on rental properties, I imagine many landlords will give serious consideration to selling these properties. There is the danger there will be less properties for rent, and if the renter wants a house they will be forced to rent further out in the suburbs where housing is newer and likely to have higher energy ratings. There will be less inner city housing left to rent, making higher rents likely because of scarcity. If the old house has its energy rating improved, then that will claim higher rent too. More lower income people will be pushed further out towards the margins, because of scarcity and now even higher rents in the older, inner areas.

It costs more to travel and live in outer areas away from work and services. Not to mention the inconvenience of longer travel times, and changing buses, etc. So now money is saved on heating, but more is spent on petrol and car wear and tear. In fact, the whole cost of a car might need to be factored in for living so far out, as a car is more necessary for those living away from conveniences. Those living close to the city centre need a car less; in fact they might be able to save their money and not have one at all.

What is suggested here, is likely to increase the trend of lower income people being forced to live further out; further from work and services.

Mike of Canberra7:43 pm 07 May 18

So much to work with here. If ACTCOSS is serious, perhaps it should start having a critical look at the real reasons for a number of the cost pressures to which they refer. For instance, if you’re a private landlord, you have bought a property whose price has been inflated by the high cost of blocks of land of diminishing area. The house price sets a benchmark against which to measure rental returns on the property. If the landlord is seeking a 3-5% return on the capital investment in their property, the higher initial price is an important component in driving rents higher. Add to that skyrocketing rates and land tax and you’ve probably accounted for the first $400 of any weekly rent bill. It’s within the ACT Government’s gift to do something about this situation, but I wouldn’t hold my breath.

ACTCOSS is also concerned about high gas and other power prices. The price is driven by scarcity and that scarcity is driven by the capricious actions of state governments, especially in Victoria, in banning any form of new gas exploration, mainly for ideological reasons. Then there’s the ACT Government’s own commitment to 100% renewable energy by 2020. Given the reliability risks for renewables, this is a policy almost bound to reduce reliability of supply and thus drive up prices.

Naturally, ACTCOSS wishes to expand its empire by driving up a range of Centrelink benefits. Well ACTCOSS, first show me evidence that what’s paid now isn’t being wasted on drugs, alcohol and tobacco. Show me evidence that you and the charity empires are teaching welfare recipients to manage their money better. Get on to Andrew Barr to help supplement poverty-busting Federal welfare reform through the expansions of successful initiatives such as that in Reid. Over and out.

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