Yet another government report - this time the "State of the Housing System 2024"

SBS News, 6 May 2024:

The median rent across the nation is $627 a week, ranging from $547 in Hobart to $770 in Sydney, according to property data provider CoreLogic.

The regional median was $540, driven by rises in house rents in regional Queensland and Tasmania.

Rents are going up faster in areas between 30 and 40km from city centres, CoreLogic head of research Eliza Owen reported.

"Part of the reason for the re-acceleration in rents nationally could be due to renters being forced into more affordable, peripheral housing markets as they become priced out of more desirable and central metropolitan locations," she said.

But supply and demand pressures remain high across the nation and migration levels implied there were at least 200,000 new households in Australia, while only 173,000 new dwellings were completed to September last year, Owen said....

Median rents were more than $1,000 in nine areas, with adjoining Cottesloe-Claremont suburbs in beachside Perth the only area outside Sydney to command four figures.

Rents in Pittwater, almost 25km from the CBD on Sydney's northern beaches, were the highest at $1,335 per week, coming down half a percentage point since a peak in March.

Rents were still up 8.4 per cent annually in Pittwater, in line with the 8.5 per cent national increase.

The data comes after the National Housing Supply and Affordability Council launched its inaugural report on Friday, painting a dire portrait of Australia's housing system.....

National Housing Suppply and Affordibility Council, State of the Housing System 2024, 3 May 2024:

Forward

There is no denying the housing crisis we are in. It is a longstanding crisis, fundamentally driven by the failure to deliver enough housing of all types – from social housing through to market home ownership. At its heart, this crisis is about insufficient supply, but many contributing factors are making it more acute – the resumption of migration at pace, rising interest rates, skills shortages, elevated construction company insolvencies, weak consumer confidence and cost inflation to name just a few. These all combine to create an environment in which prices and rents are growing faster than wages, rental vacancies are near all-time lows, 169,000 households are on public housing waiting lists, 122,000 people are experiencing homelessness and projected housing supply is very low.

Australia’s housing market is far from healthy. An unhealthy market has periods of rampant price growth, is unable to produce enough supply to meet demand, is overly reliant on an unsupported private market to address most of Australia’s shelter needs, creates scarcity and cannot match the rich expanse of demand with a breadth of housing choice.....

Executive Summary

Housing affordability worsened in 2023, from

already challenging levels

Housing affordability worsened in 2023. The worsening was widespread, occurring across states and territories, cities and regions, income levels, age groups and tenure types.

Housing affordability deteriorated significantly for mortgage holders. Mortgage interest rates rose by an average of 125 basis points in 2023, and the average mortgage for owner-occupiers reached $624,000. Since the first increase in the Reserve Bank of Australia cash rate in May 2022, minimum scheduled repayments for borrowers have increased by as much as 60 per cent.

Aspiring homeowners experienced a decline in their ability to purchase a home. It takes the average prospective homeowner around 10 years to save a 20 per cent deposit for an average dwelling. Even with a deposit, only 13 per cent of the homes sold in 2022–23 were affordable for a median income household.

Renters in the private market experienced a sharp rise in rents. Advertised rents increased by 8 per cent in 2023 and have increased by around 35 per cent since the start of the decade. Finding a rental property is increasingly difficult. Nationally, the rental vacancy rate is 1.6 per cent – around its lowest level on record and well below the rate considered to reflect a balanced rental market of around 3–4 per cent. In some parts of the country, including some capital cities, it is as low as 0.5 per cent.

Worsening affordability placed additional pressure on demand for non-market housing. The number of ‘greatest needs’ households on public housing waiting lists rose by 2.4 per cent in the 2022–23 financial year. Waiting lists for First Nations housing rose by 10 per cent. Service providers reported a rise in demand for homelessness services and crisis accommodation.

Many households have made difficult trade-offs in the face of rising housing costs, including reducing spending on other essential household items; living further away from places of employment, education, and social and family networks; or living in overcrowded dwellings or in housing with inadequate or expensive heating or cooling options.

Worsening affordability is particularly problematic for vulnerable groups, including low-income households, single parents, young people, single pensioners, those fleeing domestic or family violence, people with disability, and First Nations Australians. Declining rental affordability correlates with an increase in homelessness.

Worsening affordability is contributing to poorer housing outcomes for First Nations Australians. First Nations households are half as likely to own their home, 6-times more likely to live in social housing, 3-times more likely to live in overcrowded dwellings and almost 9-times more likely to experience homelessness compared to non-Indigenous Australians. These poor housing outcomes impact on health and wellbeing, access to education and employment, and connection to community. Without targeted measures, undertaken in partnership with First Nations people, housing outcomes under the National Agreement on Closing the Gap are unlikely to be met.

This report tells us that:

More than 30 per cent of Australians rent their home. The number of renters is increasing, and those who are renting are doing so for longer. Renting is the only viable tenure option for an increasing share of the population. Australia’s rental system provides only limited tenure security and other rights to renters. Australia needs regulatory frameworks that support tenants’ rights and address the need for better tenure security. More institutional investment in rental housing could provide tenants with more rental options and add to the dwelling supply.....

The evidence base indicates that Australia’s tax framework influences the housing system in ways that have implications for supply and affordability. Tax arrangements could potentially be better calibrated to support housing supply and affordability outcomes. Australia’s tax system also favours home ownership over other forms of housing tenure, which can widen inequality between those who can and cannot access homeownership. A gradual transition to a more consistent taxation system across tenure types may contribute to a more equitable housing system.

Non-market housing, such as social housing and affordable housing, is essential infrastructure. It reduces homelessness and the incidence of poverty, supports economic productivity and labour market participation, and fosters more cohesive and sustainable communities. In some remote areas of Australia, social housing is the main form of available rental accommodation. There are federal, state and territory policies that will support the delivery of more non-market housing over the National Housing Accord period. However, levels of non-market housing are forecast to remain low relative to history and in comparison to other advanced economies, and lower than demand....

Supply of social housing

Australia’s social housing supply has fallen short of demand (Van den Nouwelant, et al., 2022). From the 1940s to the 1980s, government housing agencies built large volumes of new public housing (Chart 2.12). Instead of focusing mainly on the direct provision of non-market housing, governments have shifted towards a model of providing rent assistance payments to enable more households to rent in the private market. The provision of social housing is now primarily focused on supporting people in greatest need.

The number of non-market dwellings has stagnated as a result. This has contributed to a one-third decline in social housing as a share of the housing stock, from a peak of 5.6 per cent in 1991 to 3.8 per cent in 2021 (Chart 2.13). This indicates a reduction in the availability of adequate housing for lower-income and disadvantaged households. However, recent policy measures, such as the Housing Australia Future Fund and new public housing commitments by state and territory governments, mean that a rise in the current levels of investment in non-market housing is expected in coming years....

The report also draws attention to the following:

Box 2.1: Climate-related disasters

The housing system is inflexible when responding to natural disasters. The increased frequency and severity of natural disasters are adding to the demand for new houses to be built and for repairs on existing housing, often in higher-cost locations such as regional and remote areas. Rental markets are also affected when homeowners are forced to rent accommodation while their homes are repaired. Regional New South Wales was severely affected by its worst recorded flood in February 2022. In Lismore, 89 per cent of housing stock was severely impacted and 3 per cent was destroyed (Lismore City Council, 2022). Over the quarter to March 2022, house rents in Lismore increased 22 per cent to $550 a week. This almost matched the level of Sydney house rents, which were $600 in the same quarter (Domain, 2022). The supply response following natural disasters is slow due to the time taken to process insurance claims and increases in demand for labour and materials, leaving many residents without appropriate housing, sometimes for years after the event. The rebuilding following the Kimberley floods in Western Australia was significantly delayed due to its remote location and the pre-existing statewide shortage of tradespeople, which left people living in temporary shelters months after the floods (ABC News, 2023b). The impact of natural disasters has a lasting effect on housing in affected areas; for example, in the form of lower house prices due to a heightened risk of a natural disaster re-occurring. After 2017 floods in Lismore, property values normalised in 6 months. However, by March 2023, a year after the floods in the Northern Rivers, house prices in the most affected suburbs had fallen by 22–30 per cent – more than the regional average of 19 per cent (CoreLogic, 2023). The increasing severity and frequency of natural disasters could produce larger and longer-lasting effects on the housing system. [my yellow highlighting]

At Page 151 of this report is this section: 8.1 The Council has identified 10 areas of focus for improving housing system outcomes.

Read it for the record but don't raise your hopes.

 

This comprehensive and at times overly optimistic report can be found at:

https://nhsac.gov.au/sites/nhsac.gov.au/files/2024-05/state-of-the-housing-system-2024.pdf

MEDICARE 2023: three perspectives

"Australians enjoy access to a world class health system with primary care at its centre. Our vital and valued primary care workforce includes Australia’s hard working general practitioners, allied health professionals, primary care nurses, nurse practitioners and midwives, pharmacists, Aboriginal health workers, practice managers and other practice staff. Primary care provides the foundation for universal health care, working hard to keep all Australians healthy and well in the community, and to deliver care that meets the needs of people and communities at all stages of life, no matter where they live.....

Modernising primary care

Recommendations

• Modernise My Health Record to significantly increase the health information available to individuals and their health care professionals, including by requiring ‘sharing by default’ for private and public practitioners and services, and make it easier for people and their health care teams to use at the point of care.

• Better connect health data across all parts of the health system, underpinned by robust national governance and legislative frameworks, regulation of clinical software and improved technology.

• Invest in better health data for research and evaluation of models of care and to support health system planning. This includes ensuring patients can give informed consent and withdraw it, and ensuring sensitive health information is protected from breach or misuse.

• Provide an uplift in primary care IT infrastructure, and education and support to primary care practices including comparative feedback on their practice, so that they can maximise the benefits of data and digital reforms, mitigate risks and undertake continuous quality improvement.

• Make it easier for all Australians to access, manage, understand and share their own health information and find the right care to keep them healthy for longer through strengthened digital health literacy and navigation." 

[Strengthening Medicare Taskforce Report December 2022, Introduction opening sentences, p.2 & Modernising primary care, one of four recommendation clusters, p.9]

Last week I 'phoned the GP practice I normally attend when I am unwell seeking an appointment.

Rather than the expected two to three week wait for an appointment I was given a choice of appointment dates that week.

When I entered the four-doctor practice it only had two patients sitting in the waiting room and I made a third.

The situation was almost self-explanatory when I read the signs at reception. The practice was now charging fees payable at time of visit.

A Standard Consultation is $84 (which includes a $10 medical centre facility fee). There is a federal government rebate of $39.75 for patients with a Medicare Card – payable electronically after the $84 is handed over.

The Facility Tax For Professional Services also includes as or when required – a medical centre treatment room fee of $20 and a medical centre consumables fee of $20. There may also possibly be a surcharge applied for public holidays.

There is no bulkbilling of DVA Gold Card Holders and Pension Card Holders until they are over 75 years of age.

As the The Australian Government Actuary is currently not expecting the average 67 year-old to live more than somewhere in the vicinity of another 20.1 years, it would appear that a number of GPs are now willing to lock a significant number older patients out of bulk billing for all but the last 12 years of their remaining lifespans.

So is it any wonder that everyone from the prime minister & state premiers to patients are wondering just how far this corporatisation of primary health care will go and, what workable solutions might be found to correct a dysfunctional primary care system.

An excerpt from The Sydney Morning Herald Economics Editor Ross Gittens’ perspective on the recently updated final report of the Strengthening Medicare Taskforce, 8 February 2023:

According to the doctors’ union, the AMA, the reason GPs have become so hard to find is that the federal government isn’t paying them enough. Whereas in the old days half of all medical graduates became GPs, now it’s down to about 15 per cent.

So, pay them more. Problem solved.

What the report’s saying is: sorry, not that simple. It’s true the Coalition government inherited a temporary freeze in Medicare rebates – the amount of a doctor’s bill that’s paid by the feds – in 2013, and continued it until 2018. And although the schedule of rebate payments has been increased annually since then, the increases have been much smaller than inflation.

Why? Partly because the Liberals were trying to prove they could cut taxes without damaging “essential services” such as Medicare.

But also because they knew something was wrong with the way general practice works. They needed to pay GPs differently to do different things. Rather than pay more and more the old way, they’d hold back until they – or some future government – worked up the courage to make changes.

Over the almost 40 years of Medicare, there’s been a big change in the problems people bring to their GPs. Because we’re living longer, healthier lives, much more of our problems are chronic – someone with heart trouble or diabetes has to wrestle with it for the rest of their lives – rather than acute: something that’s easily and quickly fixed.

But the present (subsidised) fee-for-service way of remunerating doctors is designed to suit acute problems, not chronic conditions. It involves waiting for problems to arise, not early diagnosis or stopping chronic conditions getting worse.

It encourages GPs to keep consultations short, avoiding long discussions of multiple problems.

A change no one wants to talk about is the way sole practitioners or partnerships of doctors are giving way to companies owning chains of practices staffed by doctors they employ.

When you separate the person delivering the care from the person watching the bottom line, you increase the likelihood doctors are pressured to keep consultations short and order many tests – a further reason to be cautious about reinforcing GPs’ dependence on fee-for-service.

The report wants to move to “blended” funding, with acute consultations continuing to be fee-for-service, but GPs paid lump sums for developing and managing “care plans” for particular patients with chronic conditions.

While it’s true fewer medical graduates are becoming GPs, it’s not the whole truth. As the Grattan Institute reveals, “Australia has more GPs per person than ever before, more GPs than most wealthy countries, and record numbers of GPs in training”.

How do other countries with good healthcare get by with fewer GPs? By making sure their GPs can’t insist on doing things that could be done by other health workers – nurses, nurse practitioners (nurses trained to do some of the more routine things doctors do), pharmacists and physios.

This is what “co-ordinated, multidisciplinary team-based care” means. Changing GPs’ surgeries into more wide-ranging “primary care clinics” is also about making it easier for patients to move between different kinds of care, with GPs taking more responsibility for the total package, and all the various doctors and paraprofessionals having access to a patient’s medical history.

There’s nothing new about this. Federal governments have been trying to improve the performance of primary care for decades – with little success. Why? Because they’ve had so little co-operation from the premiers and the GPs themselves.

The true message of the latest report is: Medicare reform must not just be about more money to do the same things the same way.

The full 10-page plus cover sheets Strengthening Medicare Taskforce Report can be found at:

https://www.health.gov.au/sites/default/files/2023-02/strengthening-medicare-taskforce-report_0.pdf

The taskforce was formed by the Albanese Labor Government and has 17 members. Its first meeting was held on 29 July 2022 and the taskforce has issued 6 communiques containing meeting minutes.

Byron Bay area's median house price was up $550,000, the largest price hike in dollar terms and topping Sydney's record $1.6 million median - up 33.1 per cent last year.

 

Australia-wide House & Unit purchase price growth December Quarter 2021

IMAGE: Domain Group, https://www.domain.com.au/group/media-releases/australias-median-house-prices-now-over-1-million/

DailyTelegraph, 28 January 2022:

House prices in pockets of regional NSW are rising at a faster rate than in Sydney, as ongoing demand from sea and tree changers pushes prices to record heights.

Prices across a string of local government areas have jumped by more than a third year-on-year, new Domain figures for the December quarter reveal.

The Snowy Monaro Regional Council area recorded the largest gain, with the median house price climbing 50.8 per cent to $585,000.

It was closely followed by the Kiama and Byron local government areas, where house prices rose about 48 per cent, to respective medians of $1.495 million and $1.7 million. The Byron area's median was up $550,000, the largest price hike in dollar terms and topping Sydney's record $1.6 million median - up 33.1 per cent last year.

Kiama's neighbouring council area of Wingecarribee, which takes in Bowral, was also among the strongest performing markets, with the median up 37.2 per cent to $1.18 million. As were the Ballina, Tweed and Lismore regions, which all saw prices rise at least 32 per cent over the year, as the rapid price gains seen in Byron rippled out across the state's north east.

Domain's chief of research and economics Nicola Powell said regional NSW price rises had picked up momentum last quarter, with house prices up 12.5 per cent to $720,000 - taking annual growth to 27.5 per cent. It marked regional NSW's strongest quarterly price rise on Domain records and was also more than double the growth seen in the previous three months.

An increase in sea and tree changers looking to leave city living behind during the pandemic, and the rise in remote working, had been driving strong demand and price growth in regional markets, Dr Powell said. As had an increase in cashed-up buyers looking to purchase holiday homes, while international travel remained off the table.

A post-lockdown spike in market activity was likely key to the record growth seen over the past quarter, Dr Powell added.

Tree and sea changers, who had been renting in regional areas, may also have opted to buy as time passed and they committed to a permanent relocation.

Increased demand has seen houses in the Snowy Monaro Regional Council area - including towns such as Jindabyne, Thredbo, Berridale and Cooma - jump $197,000 year-on-year to a median of $585,000 recorded over the six months to December. Prices there have now more than doubled over the past five years.

First National Real Estate Kosciuszko principal Gordon Jenkinson said an influx of tree changers and holiday home buyers from Sydney and Canberra had been the key driver of rapid growth. However, Snowy 2.0 and a shortage of new homes and land in Jindabyne, as developers await a new master plan for the Snowy Mountains precinct, were also playing a role.

"COVID-19 has been a huge influence ... we're getting heaps of the younger demographic, especially guys into outdoor activities, who can now work remotely," he said. "If you're really keen on a sea change there are plenty of coastal towns that offer that beachy feel but alpine and subalpine areas are few."

Mr Jenkinson said land had been selling for outrageous amounts, noting two vacant blocks in Jindabyne recently sold for more than $650,000 and had traded for between $220,000-$240,000 about two years ago. A waterfront block in East Jindabyne that traded for $650,000 18 months ago had resold for $1.455 million.

Nationals Senator Matt Canavan from Yeppoon near Rockhampton shows his distasteful and offensive political persona to the world

From 25 January 2020 when the national confirmed cases count began in Australia to 15 June 2021 (the day before the Delta Variant outbreak began) the COVID-19 pandemic had infected 30,274 individuals, At that point 910 people or 3 per cent of all those infected had died.

www.health.gov.au/sites/default/files/documents/2021/06/coronavirus-covid-19-at-a-glance-15-june-2021.pdf

New South Wales was in Day 51 of the Delta Variant Outbreak with 4,610 people having been infected between 16 June to 5 August 2021 and 22 people dead as a result, when The Financial Review published the results of sums done on the back of an envelope by former & short-lived Executive at KPMG, former & short-lived Director at Productivity Commission, former Chief of Staff to Barnaby Joyce & a current Nationals Senator for Qld, Matt Canavan (left).

In this opinion piece Canavan states that; Each life saved by the Sydney lockdown costs $330 million. It’s an unjustifiable expense that imposes large and disproportionate burdens on small business and the less well off. [my yellow highlighting]

The reason for this "Sydney lockdown" is hard to ignore. On 16 June 2021 the NSW SARS-CoV-2 Delta Variant Outbreak began with 2 daily cases of local community transmission reported. On 13 July NSW Health reported 97 daily cases of community transmission and at the end of the month that number had risen to 239 cases of community transmission reported in the last 24 hours. On 5 August there were 291 daily cases of community transmission reported and the cumulative number of confirmed locally acquired COVID-19 infections had risen by 4,610 people since the outbreak began, including 22 who had died from this variant infection. However, Canavan does his best to ignore those particular numbers. 

Leaving his dodgy costings aside, Canavan appears to firmly believe Scott Morrison’s position that the best way forward to ‘open up’ the economy and he wants us all to learn to live with the SARS-CoV-2 virus despite low vaccination rates.

Or as he expressed himself on 5 August; We should end the lockdowns and replace them with sensible social distancing requirements and testing and tracing.

All his latest opinion piece proves is that Canavan did not understand the implications of what little he actually read in The Peter Doherty Institute for Infection and Immunity modelling report.

It was made very clear that the report assigns a Transmission Potential (TP) to the Delta Variant of 3.6. It is also observed in its pages that the ability to reduce this variant’s TP to less than 1 needs both to contain community transmission in the current suppression phase (A) and to prevent cases from exceeding health sector capacity in phase B. Currently personal risk reduction behaviours and constraints on social mixing known as Public Health and Social Measures (PHSM) are the levers employed to manage TP in response to incursions and outbreaks [Doherty Modelling Report for National Cabinet 30 July 2021, pp. 7, 10].

However, the report also points out that in the four scenarios with only baseline levels of social and behavioural restrictions in place (ie minimal density/capacity restrictions), epidemic growth is still expected at the yet to be reached 50%, 60%, 70% and 80% national vaccine coverage. In these scenarios reduced effectiveness of the public health ‘test, trace, isolate, quarantine’ (TTIQ) response is anticipated due to high caseloads [Doherty Modelling Report for National Cabinet 30 July 2021, p.10].

In all four vaccination scenarios coming out of lockdown and having only baseline density/capacity restrictions operating across the population, leaves Australia still facing a predominately Delta Variant epidemic. One where the Transmission Potential is likely to be a problematic 2.0, due in part to fading of vaccine efficacy in vaccinated individuals and the need to rollout a national vaccine booster program – which on past performance will possibly be as chaotic as the original vaccine rollout.

The vacillating Morrison Government's two most favoured vaccination coverage scenarios now appear to be the 70% and 80% of all adults. These graphs show epidemic growth to 180 days given transition to Phase B leading to established community transmission:

Epidemic growth to 180 days given transition to Phase B leading to established community transmission for the threshold coverage targets of 70 and 80%, with vaccine allocation according to the ‘All adults’ strategy  [Doherty Modelling Report for National Cabinet 30 July 2021, p.14]

This is not helping Australia’s economy get back on its feet in the foreseeable future. Neither is it likely to reduce the real cost to federal and state governments or to society generally of this COVID-19 global pandemic.

The Australian Treasury has costed nationally applied Strict public health order restrictions to cost $3.2 billon a week. Mild nationally applied restrictions are costed at $2.35 billion a week, Low restrictions at $0.65 billion and Baseline at $0.1 billion a week.

Treasury’s financial analysis of the four vaccination scenarios in the Doherty Institute modelling report appears somewhat superficial  - given it refused to model the economic implications of predicted overstretched test, trace and quarantine systems in order to produce these optimistic key findings for the National Cabinet:

• Continuing to minimise the number of COVID-19 cases, by taking early and strong action in response to outbreaks of the Delta variant, is consistently more cost effective than allowing higher levels of community transmission, which ultimately requires longer and more costly lockdowns.

• As vaccination rates rise, significantly less lockdowns and other restrictions will be required to continue to minimise cases of COVID-19, reducing the economic cost of managing the virus.

• Moderate or strict lockdowns are still expected to be necessary to continue minimising outbreaks until Australia reaches 70 per cent vaccination rates for Australian adults (16+). As a result, the costs of managing COVID-19 will remain high.

• At 50 per cent vaccination rates, and based on the assumptions outlined in this paper, the direct economic cost of minimising cases is estimated to be around $570m per week. At 60 per cent, the estimated cost remains high, but falls to around $430m per week.

• Once 70 per cent of Australian adults (16+) are vaccinated, and assuming the spread of COVID-19 is minimised, it is expected that outbreaks can be contained using only low level restrictions, with lockdowns unlikely to be necessary. This will significantly reduce the expected economic cost of COVID-19 management to around $200m per week.

• At 80 per cent vaccination rates, these direct economic costs are expected to fall further still, to around $140m per week, and costs are lower under all scenarios.

• Treasury has not modelled the economic costs of a severe and widespread outbreak that breaches Australia’s health system capacity. It is expected that such a situation would carry very significant economic costs. International experience indicates that it would lead to significant behavioural changes regardless of the level of official restrictions, and longer outbreaks. [my yellow highlighting]

From 25 January 2020 to 5 August 2021 the national percentage of confirmed COVID-19 deaths was 2.63 per cent of the infected population or 927 people. During that same period the NSW percentage of confirmed COVID-19 deaths was 0.77 per cent of the infected state population or 79 people.

Senator Canavan can play with all these numbers all he likes, it doesn’t make his devaluing of potential lives saved and actual lives lost any less distasteful nor make his ‘politiking’ any less offensive.