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Labor’s rental strategy could save $11 billion and reduce homelessness

The Australian Labor Party’s National Rental Affordability Scheme (NRAS) plan announced late last year has the potential to fix the affordable housing problem while creating 49,000 jobs, addressing homelessness in Australia and saving Government nearly $11 billion, according to research institute The McKell Institute.

The scheme could tackle the rising number of elderly Australians, over the age of 50, who are homeless and put them in affordable rental housing or crisis housing. [Source: Shutterstock].
The scheme could tackle the rising number of elderly Australians, over the age of 50, who are homeless and put them in affordable rental housing or crisis housing. [Source: Shutterstock].

Dedicated to providing practical and innovative solutions to contemporary policy challenges, the organisation believes the plan will create more crisis accommodation and public housing that will be available to those “at risk of falling through the gap”.

This includes at risk elderly Australians that have become one of the highest homelessness demographics, from the age 50 and over, in the nation.

Labor will increase affordable rentals through building investment in 250,000 new homes over 10 years.

The program will also provide incentives, $8,500 per year for 15 years, to newly constructed properties owned/managed by registered community housing providers who provide housing 20 percent below market rent for those on low or middle incomes.

The plan’s potential to create 46,000 jobs for ten years could also address the rising number of older Australians who are living on Newstart and aren’t being hired due to their age.

People aged 55 and over are the biggest group of Australians receiving Newstart income support and for longer than any other group.

The McKell Institute projects the affordable housing rental scheme to save Government money in the long run as well as add more money to the economy.

“A lack of affordable and secure housing not only has a number of negative social impacts but it also makes individuals less financially independent,” says The McKell Institute.

“This means there is a greater reliance on government services. Empirical evidence repeatedly demonstrates that people in crisis or in unstable accommodation are over-represented as users of government services.

“Based on this analysis, we project that moving a person from crisis accommodation to the new dwellings reduces government costs, on average, by $11,935.49 dollars [per year] per person from reduced interaction with services.”

The Labor rental affordability policy would cost $6.6 billion to implement and save $11 billion for the government, however, it would also stimulate the economy with $40 billion GDP (gross domestic product).

This breakdown by The McKell Institute follows Anglicare’s release of a rental market snapshot last week which showed many homes in Australia were not affordable to a single person or a couple on the age pension in Australia.

“The primary benefit and aim of the policy is a social one – providing up to 250,000 low-income renters with an affordable, secure housing option, leading to improved health and employment outcomes, a greater sense of safety, independence and social connectedness,” says The McKell Institute.

“However, the economic co-benefit of the investment is sizeable. As this modelling demonstrates, the policy has the capacity to deliver strong economic returns for the economy.”

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