With homelessness at record levels and Australia suffering a housing crisis, Canberra community organisations and the ACT government are worried that the Commonwealth will cut funding for homelessness services by $65.5 million nationwide – an estimated $2 million in the ACT – from July. They predict the result could be devastating for Canberra.

“ACT homelessness services report the highest rates in the country of persistent homelessness for their clients, and we cannot afford for the situation to get worse, or for key supports to be ripped away when people need them most,” Dr Gemma Killen, interim CEO of the ACT Council of Social Service (ACTCOSS), said.

“The federal government must commit to continuing funding for homelessness services.”

Funding arrangements under the National Housing and Homelessness Agreement (NHHA) are due to expire on 30 June. This includes supplementation funding to cover increased wage costs arising from the Equal Remuneration Order (ERO), created by the Fair Work Commission in 2012 to ensure minimum weekly rates and address gender-based inequality in wages.

The Albanese Federal Government intends to extend the NHHA, while it transitions to a new housing agenda, Julie Collins MP, Minister for Housing and Homelessness, said.

However, agencies are concerned that the NHHA will be ‘rolled over’ (extended) without the supplementation payment. In 2020, ACOSS found that a loss of supplementation payments would affect community organisations’ financial status, staffing, and capacity to deliver services.

The NHHA provides about $1.6 billion each year to states and territories to fund homelessness services and housing.

Under the current arrangements, Ms Collins said, the federal government does not directly fund wages, and jurisdictions have flexibility to use the funding as they need.

ACTCOSS joined national agencies – Homelessness Australia, the Community Housing Industry Association, National Shelter, and ACOSS – in calling on the federal government to maintain the ERO.

In the 2022 Budget, they noted, the federal government committed $560 million to Commonwealth-funded community services to meet the ongoing costs of the ERO; the agencies seek equity in treatment for homelessness services funded through the NHHA.

In a joint letter to Ms Collins and Treasurer Jim Chalmers, the agencies protested that ending the ERO would result in the loss of 650 homelessness workers across Australia, and more people turned away from homelessness services, when record rent increases and low vacancy rates already put homelessness services under immense pressure. In 2020–21, they stated, services were unable to assist 288 people per day, of whom two-thirds were women and children, many fleeing domestic and family violence.

“In the ACT, the discontinuation of ERO funding will mean a $2 million cut to the wages of frontline workers and significant cuts to the services that organisations are able to provide to people doing it tough,” Dr Killen said.

“People may also lose their jobs, putting their own homes at risk and further worsening the housing crisis.”

The ACT government urged the federal government not to pass the funding shortfall to the ACT, aid Rebecca Vassarotti, Greens MLA and ACT Minister for Homelessness and Housing Services.

Ms Vassarotti said: “Homelessness will remain a major issue in the ACT if the federal government refuses to adequately fund services or present a federal plan to actually address the housing crisis.

“The ACT Greens will continue to advocate for our fair share of federal homelessness services funding here in the ACT, and strongly encourage the federal government to negotiate with the federal Greens to improve their housing policy – which, in its current form, does nothing for renters, cuts housing funding every year, and will see the shortage of social and affordable housing grow, making the housing crisis worse in the ACT and across the country.”

The ACT government, Ms Vassarotti noted, was committed to ensuring the homelessness sector received enough funds to meet the community’s needs; it would invest a further $18 million this term to expand the sector’s capacity.

Federal government response

“The government is currently seeking an extension of the National Housing and Homelessness Agreement with states and territories to support the transition to a new housing agenda,” Ms Collins said.

“The government will continue to consult on this transition. The government has an ambitious reform agenda to help address Australia’s housing challenges.”

According to the incumbent government, their Coalition predecessors did not extend social and community services ERO funding beyond June in its Budget, nor did it meet with the states to discuss the agreement once in their last five years.

However, the Coalition government extended ERO Supplementation funding for the homelessness sector, which would have expired in June 2021.

Ms Collins has met her state and territory counterparts several times, and re-established the Housing and Homelessness Ministerial Council.

Earlier this month, Ms Collins introduced legislation to establish the $10 billion Housing Australia Future Fund, which will fund 30,000 new social and affordable homes in the fund’s first five years. This includes 20,000 social housing properties, including 4,000 properties for women and children fleeing domestic and family violence, and older women on low incomes who are at risk of homelessness.

In its first five years, the fund will also provide $100 million for crisis and transitional housing options for women and children fleeing domestic and family violence, older women at risk of homelessness, and $30 million to build more homes for veterans experiencing or at risk of homelessness.

Expressions of interest are now open for public contributions to the National Housing and Homelessness Plan. The federal government will work closely with state and territory governments – as well as not-for-profit organisations, local government, industry bodies, superannuation funds, and other experts in housing, finance, and urban development – as the plan is developed.

But Ms Vassarotti does not think this is enough.

“We need more than what is currently being proposed through Labor’s ‘Housing Australia Future Fund’ Bill which will cap spending on housing at just $500 million a year, which means accounting for inflation, there will be yearly cuts in the already tiny amount of spending,” she said.

“There is a housing crisis, here and across the country – and it will get worse without urgent action. Adequate funding to homelessness services is one part of an urgent response that is needed. We also need to reverse the decline in federal funding for social housing, see Commonwealth Rent Assistance doubled so it goes somewhere to meet actual rental costs, and put rent caps on the agenda.”