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Australian and NSW Governments must prioritise housing and homelessness services in next budget

In recent years, both Commonwealth and NSW Governments have failed to increase funding for homelessness services at levels commensurate to increasing costs and growing needs.  

Currently, one in two people seeking support in NSW have to be turned away because homelessness services do not have the resources necessary to meet people’s urgent accommodation needs. At the same time, the costs of delivering homelessness services have increased, due to factors such as cost of living and wages growth.  

As such, without an increase in funding from Commonwealth and NSW Governments, we will have to turn away MORE people from accessing the services they need. No funding increase will mean we see a real reduction in the services our sector is able to provide.  

Funding for housing and homelessness services comes from both the Australian (Commonwealth) Government and NSW State Government via the National Housing and Homelessness Agreement. Each government has a different method for calculating the rate of indexation to be applied to homelessness services funding – in theory, this is designed to keep pace with increases in the costs of delivering services. To date, indexation rates have been woefully inadequate in covering the real costs of delivering services and, as such, we have essentially seen a decrease in the funding available to deliver services – we are being required to do more with less.  

What needs to happen? 

The Australian Government needs to DOUBLE the amount of funding allocated to housing and homelessness services as part of the National Housing and Homelessness Agreement.

Housing insecurity and homelessness are crises being faced across the country, and the Commonwealth Government has a duty to support the sector with the funding it desperately needs to ensure we can deliver lifesaving services to people in need.  

In NSW specifically, a recent analysis by Homelessness NSW showed that the demand for specialist homelessness services has risen across 58 of the state’s 128 local government areas in the past year alone. This doesn’t even factor in the many people who don’t seek help (it’s estimated that about 67% of people who are homeless don’t seek assistance).  

The NSW Government must reprioritise their funding allocation for housing and homelessness in the 2024-25 State Budget.  

In the 2023-24 NSW Government budget, $72.3 billion was allocated to transport infrastructure, in comparison to the meagre $224 million allocated to the Essential Housing Package, which will barely scratch the surface of the state’s housing and homelessness crisis.  

In the forthcoming 2024-25 budget, Commonwealth and NSW Governments must step up to provide urgent relief for people struggling to keep, or find, a safe and secure home. Governments must meaningfully invest in assistance to renters, social housing, and funding for already overstretched homelessness services.  

Access to safe housing is a fundamental human right, and we need Commonwealth and NSW Governments to each invest $1 billion per year over the next ten years, to increase social housing properties by 5,000 homes per year.  

Indexation and the Equal Renumeration Order 

As part of this urgent call for more funding, we’re continuing to advocate that both the Commonwealth Government and NSW State Government urgently increase the rate of indexation on homelessness services funding contracts to 6.2%. For the 2023/24 financial year the Commonwealth Government indexed at only 3.25% and NSW Government at 5.75%. Ultimately, service providers bore the burden of higher costs of service provision. 

What is indexation? 

Indexation is a mechanism for adjusting funding to align with higher costs of delivering homelessness services.  It’s important to remember that it’s not a funding increase – it’s about covering higher costs. The Commonwealth Government uses the Wage Cost Index-1 to calculate indexation, which doesn’t sufficiently account for the broad range of factors that influence the costs of delivering services.  

The Commonwealth Government must significantly increase its rate of indexation, and the NSW Government must be prepared to cover any shortfalls in the rates of indexation so that the costs of higher service delivery do not fall to service providers.  

Equal Renumeration Order (ERO) 

Between 2012 and 2020, the wages of people working in social and community services increased. This was due to an ERO put in place by the Fair Work Commission, to improve pay equity for a predominantly female workforce. A supplementation fund was attached to the National Housing and Homelessness Agreement (NAHA) to contribute to the higher costs associated with the increase in wages.  

The Commonwealth Government has indicated that the funding previously earmarked for ERO will be permanently embedded in the funding calculations for homelessness services. This is welcome news, but does not negate the need for overall increases to funding the real costs of service delivery and to making sure that no person is turned away from getting the support they need.  

You can learn more about indexation and EROS in the explain on the Homelessness NSW Resources page 

 

We need a holistic solution from both the Australian and NSW Governments when it comes to dealing with the homelessness and housing crisis in a mature, proper and truly impactful way. Everyone deserves a safe, stable and secure home, and the only way to achieve this is to ensure that funding keeps pace with the real costs of homelessness service delivery. 

if you’d like to join us in the fight again homelessness, consider becoming a Homelessness NSW member.

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