Submission to the Senate Select Committee on Cost of Living
1. Introduction
The Joint Cost of Living Submission begins by emphasizing the urgent need to address the rapid rise in housing costs and its central role as a key driver of the broader Cost of Living pressures faced by households across Australia. The authors — Homelessness Australia, the Community Housing Industry Association (CHIA), and National Shelter — present a coordinated perspective on how housing costs are now the largest component of household budgets and increasingly outpacing incomes.
The introduction sets the stage by showing that median rents have reached record highs, rising far faster than wages, contributing significantly to domestic cost burdens. The submission makes clear that these pressures must be considered an essential part of any governmental inquiry into the Cost of Living crisis.
2. Organizations and Their Roles
2.1 Homelessness Australia
Homelessness Australia represents the national voice for homelessness prevention and response. It works with a large network of service providers and advocates for systemic policy changes to prevent homelessness, especially where it intersects with rising housing costs and overall Cost of Living pressures.
2.2 Community Housing Industry Association (CHIA)
The CHIA represents nonprofit community housing organizations. These organizations provide affordable rental homes and reinvest surplus into expanding social and affordable housing. The CHIA’s involvement underscores the importance of nonprofit housing supply in mitigating the Cost of Living burdens faced by low-income households.
2.3 National Shelter
National Shelter works to improve housing access and security. Its expertise feeds into policy proposals aimed at addressing housing affordability — a core component of broader Cost of Living stress.
3. The Impact of Rising Housing Costs
3.1 Housing Costs and Poverty
The submission notes that housing costs have become a major cause of financial strain for many Australians, especially renters. More than half of low-income renters were spending over 30% of their income on rent — a share that makes it difficult to cover other essential living expenses, such as food, electricity, medicines, transportation, and education. These strains significantly exacerbate the Cost of Living pressures.
3.2 Homelessness and Housing Stress
High housing costs have also driven more people toward homelessness. The rate of people seeking support due to financial stress has surged significantly, reflecting how unaffordable housing is pushing families and individuals past their financial limits. This demonstrates that without effective reforms to reduce housing costs, the Cost of Living crisis will continue to worsen.
3.3 Population Groups Disproportionately Impacted
The submission stresses that certain groups, including Indigenous Australians, young people, low-income earners, and people reliant on social support payments, face even steeper housing costs relative to income. These disproportionately affected groups experience amplified Cost of Living pressures due to their limited financial flexibility.
4. Why Housing Costs Have Risen
4.1 Market Dynamics
The document attributes much of the rise in housing costs — particularly rent — to supply shortages and low vacancy rates. With more people seeking rental homes and fewer affordable units available, competition has intensified, driving rents higher. This rapid increase is a core driver of the Cost of Living issues confronting many households.
4.2 Supply Shortages
Low levels of social and community housing supply mean that many households must turn to the private rental market, where supply constraints push up costs even further. The inability of private markets to deliver affordable rentals has been highlighted as a central cause of rising living expenses.
4.3 Inadequate Income Support
The submission highlights that social support payments — including Job Seeker, Youth Allowance, and other benefits — are often inadequate relative to rent and other living costs, compounding the Cost of Living stress for those most vulnerable.
5. Broader Economic Consequences
5.1 Household Budget Prioritization
As housing costs consume a large share of household income, families are forced to cut back on other essentials. This has knock-on effects such as reduced food consumption quality, medical care delays, and education compromises — all manifestations of the broader Cost of Living pressures that ripple through daily life.
5.2 Long-Term Societal Impact
Continued high housing costs impact workforce participation, mental wellness, child development, and social cohesion. For example, families that spend a disproportionate amount of their income on rent have less to invest in children’s education or savings, perpetuating socio-economic inequalities tied to the Cost of Living crisis.
6. Policy Recommendations
To address the housing and Cost of Living crisis, the submission makes several significant recommendations, which can be grouped into broad policy areas:
6.1 Increase Affordable and Social Housing Supply
The report calls for a substantial pipeline of new social housing units — estimates suggest building at least 25,000 new social and affordable homes each year. This would reduce competition in the rental market, thereby easing pressure on rental prices and alleviating some of the most painful Cost of Living impacts.
6.2 Strengthen Income Supports
Another key recommendation is to increase social support payments and index them to the actual cost of living, ensuring support keeps pace with essential expenses like rent and utilities. Increased payments would help cushion households from spikes in living expenses and their related financial stress.
6.3 Reform Rental Assistance Programs
The submission suggests expanding the eligibility and amount of rental assistance to more households and aligning it with median rents. This would make rent more affordable and reduce the share of income spent on housing — a direct and practical way to ease Cost of Living burdens.
6.4 Regulate Rent Increases
Rent regulation reforms, such as limiting the frequency and scale of rental increases, are recommended to protect renters from sudden spikes in housing costs. This would add stability to household budgets and prevent renters from facing unexpected hikes that drive broader Cost of Living pressures.
6.5 Improve Data for Better Policy
A strong theme of the submission is that better, more up-to-date data on household expenditures and specific cost-of-living patterns is critical for effective policy. Current data gaps make it difficult to fully understand how Cost of Living pressures vary by region and household type. Improving this evidence base would enable more targeted and effective reforms.
7. The Role of Cost of Living Indices
While traditional economic indicators like the Consumer Price Index (CPI) measure inflation, they do not fully capture lived reality. The submission argues for greater use of Cost of Living indices that reflect real expenditures on essentials like rent, utilities, and food, particularly for low-income households. This approach would give policymakers a more nuanced understanding of how living expenses impact families’ financial wellbeing.
8. Differential Impacts of Cost of Living
The submission stresses that not all households experience the Cost of Living crisis equally:
8.1 Renters vs. Homeowners
Renters, especially those without stable long-term leases, are at highest risk of financial pressure due to rapidly rising rents. Homeowners may face interest rate pressures, but they often have more control over their housing costs than renters.
8.2 Regional and Remote Communities
Many cost-of-living analyses overlook differences between urban, regional, and remote households. The submission highlights that poorer data on regional cost patterns makes it harder to design policies that address localized cost pressures effectively.
9. Conclusion
The Joint Cost of Living Submission concludes by reiterating that high housing costs are central to today’s Cost of Living pressures. Rising rents and insufficient affordable housing supply have broad impacts — not only on housing security but on overall household financial stability and wellbeing. Addressing housing affordability must be a cornerstone of any comprehensive response to high living expenses.
The coordinated recommendations provided by Homelessness Australia, CHIA, and National Shelter offer a multifaceted strategy that includes social housing expansion, rental reforms, income support increases, better data tracking, and targeted policy reforms aimed at easing financial burdens for the most vulnerable populations. Fully implementing these measures would reduce critical stress on household budgets and help stabilize the Cost of Living, especially for low-income renters and marginalized groups.