Housing assistance and employment in Australia

Changing public housing rent settings unlikely to boost employment among tenants

A recommendation to move public housing tenants to market rents, while allowing them to receive Commonwealth Rent Assistance (CRA), has been made repeatedly over the past two decades. In Housing Assistance and Employment in Australia, the Productivity Commission finds that this policy change would be unlikely to improve employment rates among public housing tenants.

In a flagship research report released today, the Commission used large administrative datasets at both Commonwealth and State level to examine the links between housing assistance and participation in employment. Rent setting arrangements in public housing have long been thought to discourage participation in employment - prompting calls for policy change.

The Commission's research found that employment rates among income support recipients in public housing are likely to remain very low - at about ten per cent of the working age population - even if tenants are moved to market rents and CRA, if no other efforts are made to address directly the disadvantages of tenants.

'Productivity Commission research has found that it is the characteristics of individuals, and not the characteristics of the housing assistance that they receive, that matter to participation in employment', explained the Chairman of the Commission, Peter Harris.

Simply shifting tenants to market rents and CRA is likely to leave many tenants financially worse off, yet without any greater ability to access employment. CRA recipients are no more likely than public housing tenants to find employment, after accounting for the characteristics of individuals.

Many existing policies provide assistance to public housing tenants seeking employment, but employment rates have not changed much over the period examined in this project (2003 to 2013). Nevertheless, said Harris, 'Joint Commonwealth/State trials addressed directly to the circumstances of public housing tenants, and applying innovation by not-for-profit groups may well be beneficial'.

The Commission's research also found no evidence that the potential problem of applicants avoiding employment while waiting for public housing in order to remain eligible represents a major concern in South Australia and Western Australia.

This flagship project demonstrates the value of improving poorly-developed major administrative datasets in Australia. It drew on large administrative datasets - from the Commonwealth Departments of Human Services and Employment and the state housing authorities of South Australia and Western Australia. Administrative datasets represent a rich source of information, but are not generally available for research and evaluation in Australia, unlike in several other developed nations. Improved private and public researcher access to data of this type is likely to shed light on many other policy questions.