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Despite the 10 per cent increase to Commonwealth Rent Assistance (CRA) in the recent budget, renters remain “worse off compared to two decades ago”.
The Real Estate Institute of Australia (REIA) has released new modelling of the impact of the federal government’s 10 per cent boost to CRA.
“Despite the increase, which tops ups the increase in December last year, eligible families [and] individuals are only marginally better off,” said REIA president Leanne Pilkington.
“This is because the payments have not kept pace with movements in market rents,” she explained.
Currently, CRA covers 19.9 per cent of weekly rent for the average Australian. For those living in Sydney, it covers just 17.1 per cent of median rent, while those in Brisbane see the greatest proportion of rent covered, at 22.5 per cent.
In contrast, in 2002 CRA “was 24.9 per cent of the weighted average Australian rent, varying from 20.8 per cent in Canberra to 30.3 per cent in Perth”, said Pilkington.
“Over two decades we have seen the proportion of rent payments covered by CRA slip by 5 percentage points of the weighted average Australian rent and an alarming 10.4 percentage points in Perth and 8.3 percentage points in Hobart.”
The REIA expressed frustration that its pre-budget submission recommendations had not been carried out.
“In its pre-budget submission, REIA called for the CRA payment to be pegged to market rental rates at 25 per cent,” said Pilkington.
She noted that raising CRA payments may have had positive repercussions on the broader economy.
“If CRA payments had been higher, not only would have eligible families and individuals benefited, but the CPI would have been lower,” Pilkington said.
“A lower CPI would have arguably led to interest rates being lower too. With lower interest rates, we would have seen a supply response from builders addressing the imbalance between housing demand and supply.”
