Analysis showed of those eligible to receive rent assistance, those aged 24 years and younger were more likely to be in “rental stress” — spending more than 30 per cent of their income on rent. Photo: iStock/eranicle.

Almost half of those renting in Australia’s private sector were in low income households in 2015-16, and 52.9% of these households experienced rental stress, a new report reveals.

Australia’s Productivity Commission is investigating spending on government services and has today released its first findings, which focus on housing, homelessness and community services.

More data on spending will be released in the coming fortnight. The commission will also review what programs actually work over the next 12 months.

Social housing and homelessness

The report showed that governments spend about $4.7 billion on social housing and homelessness services. This makes up about 2.1% of the spending covered by the Productivity Commission report.

As of 30 June 2017, there were 395,691 public housing households and 417,736 social housing dwellings across the country.

Of that $4.7 billion, social housing made up $3.9 billion and homelessness services took $800 million. The Australian Government share of this expenditure was $1.7 billion in 2016-17.

This total, however, does not include spending on the Government Rent Assistance program, which was $4.4 billion in 2016-17.

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Rent assistance

The report showed of those eligible to receive rent assistance, those aged 24 years and younger were more likely to be in ‘rental stress‘.

Rental stress indicates the individual spends more than 30% of their income on rent – regardless of whether they were receiving the rent assistance payment or not.

The Commission’s report indicated that almost half of those renting in Australia’s private sector came from low-income households in 2015-16.

Of these households, 52.9% experienced rental stress.

Where rental stress is being felt

At 30 June 2017, the majority of all households in social housing were low income households. Of those in:

  • Public housing – 97.5% were low income households, of which 0.5% were in rental stress;
  • SOMIH – 94.4% were low income households, of which 2.4% were in rental stress
  • Community housing – 94.2% were low income households, of which 7.2% were in rental stress.

Rental stress is mitigated through rental subsidies provided to eligible low income social housing households by State and Territory governments.

Where our tax dollars go

The figures released in the Productivity Commission’s report are line with those revealed by Treasury in 2017 in response to a question asked by Liberal senator Eric Abetz.

Treasury estimated a person earning an average income of $60,000, paying about $11,500 tax, would contribute about $4,326 towards welfare in 2016-17.

This total includes $1,822 on aged care, $1,062 families, $902 on disability, $326 on unemployed and $214 on other services.

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