Federalism and Affordable Housing

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Federalism and Affordable Housing

Introduction
Federalism in Australia is a means of power sharing within a divided polity. Such power sharing involves multiple actors in ongoing relationships that in specific instances may be either amicable or conflictual (Keating & Wanna 2000:126). It is known as a process by which political, economic and social issues become shared between key political players and semi-independent governments.

In Australia, and internationally, central governments are responding to the housing affordability crisis and the processes being adopted is a shift from a devolved policy framework to a more centralised or national approach (Gronda & Costello 2011:4). Affordable housing has become a major focus of Australian public policy and discourse. This essay explores the characteristics of federalism and affordable housing provision in Australia. In particular, the scope is focused on the changing dynamics of the Commonwealth and diffusion of power and how it affects or influences the level of coordination and financial relationship between all levels of government. Finally, a case study to support discussion within an evolving federal system that has recently been characterised by a national agreement on affordable housing is presented.

It should be empathised that “affordable housing” also includes, “community”, “non-profit”, “social” and “high-need” housing, which is made up of owner-occupied housing as well as rental housing that is owned by governments, non-profit organisations, corporations or individuals.

Inability to find affordable housing is a crucial problem in Australia. Kothari (2006) referred to it as a ‘serious hidden national housing crisis’. Statistics has it that in 2006 there was shortage of 298,000 affordable dwellings for low-income families (Arunachalam, Hulse, Reynolds, Wulff & Yates 2011:26). The housing system in Australia is unbalanced and individuals and families encounter problems such as lack of suitable social housing or purpose built rental stock. Wanna (2007:277) and Hollander and Patapan (2007:285) provide that public housing has been a shared responsibility; in a federal system, this often means complexity and slow reform.

In Australia, public housing is a ‘residual power’ that generally belongs to the State (Aitkin et al. 2006:36). In spite of this there was significant investment in public housing grants made by the Commonwealth post Second World War (Aitkin, Jinks, Singleton, & Warhurst 2006:31; Selway 2001:117). This shifted power from State to Commonwealth. The Commonwealth has not been consistent in its commitment to provide States with sufficient funding for public housing (Atkinson et al. 2010:1; Caulfield 2000:99). Morris (2010:33) indicates that the federal government largely ignored public housing between 1975 and 1983. The public housing sector has often been at the mercy of the variations of approach and interests by successive State and Commonwealth governments (Atkinson et al. 2010:1).

Constitutional framework and diffusion of power
The Commonwealth Constitution outlines the separation of legislative, executive and judicial powers. Australian federalism is reliant on the Constitution, High Court and the traditional concept of self-government in colonies. The Constitution allocates power between the federal and State governments, which have a full set of institutions of their own, legislative, executive and judicial. Within each polity, the institutions are related to each other in accordance with the principles of parliamentary responsible government and the common law (Saunders 2002:70). It is structured as a diffusion of law making powers held concurrently between Commonwealth and State governments. The authority and influences of both governments are broadly delineated in different areas, where none is subordinate to the other (Craven 2005).

Historically, according to the Constitution, the Commonwealth was only given limited...
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