Fed government considers rent assistance

The federal government is considering assistance for people struggling with the rising cost of renting homes, Prime Minister John Howard said today.

"I am conscious that rents have got up, in different parts of the country, " Mr Howard told journalists in Perth.

"I am aware of that, and I know there is some additional pressure because of the very strong economic conditions.

"Other people have put views to me about rental assistance ... we are considering those things, I am not going to say any more."

Some observers have blamed changes to superannuation for turning investors away from property, causing a rental shortage.

But Mr Howard said the slow release of land around the country had contributed to the housing shortage that was pushing up rents.

"In some parts of the country state governments have been far too slow at releasing land and that has contributed to the shortages.

"The other thing that governments generally around Australia have got to do is to make sure the level of land releases is adequate."

Mr Howard said rising rental prices underlined the "folly" of people who advocated the abolition of negative gearing for housing investors.

The announcement came after WA Housing and Works Minister Michelle Roberts accused Mr Howard of making hollow promises to people in need of government assistance.

"Nearly a quarter of WA households live in rental accommodation and they face rents which have skyrocketed and continue to rise," she said.

"Instead of keeping pace with the market, the Federal Government has in fact decreased rent assistance."

Opposition Leader Kevin Rudd said there was no silver bullet for the rental crisis.

But he said the federal government should be looking at ways to take financial pressures off families, including providing affordable, adequate child care.

"You've got to look at a whole-of-family budget challenge here, and I look at some of the challenges people are facing with child care at the moment - it worries me, it worries me greatly," he told Southern Cross Broadcasting in Perth.

"There is no silver bullet for this. But we've got to begin by recognising there is a problem."

The full text of Mrs Roberts' announcement is pasted below

Housing and Works Minister Michelle Roberts today called on the Howard Government to increase the paltry levels of Commonwealth Rent Assistance for struggling Western Australian families.

Mrs Roberts said the Howard Government had a complete lack of understanding, compassion and support for the real housing needs of Western Australians.

"John Howard likes to 'talk the talk' but when it comes to delivering, he is just full of hollow promises," she said.

"The paltry levels of Commonwealth Rent Assistance and their shameful effects are being felt throughout the State."

Since June 2001, the median rent has increase by 60 per cent. In comparison, between 2000-01 and 2005-06 Commonwealth Rent Assistance has lagged behind and increased by just 4.6 per cent.

"That insulting amount is evidence of the lack of understanding and compassion shown by Mr Howard for the people of WA," the Minister said.

" Nearly a quarter of WA households live in rental accommodation and they face rents which have skyrocketed and continue to rise.

"Instead of keeping pace with the market, the Federal Government has in fact decreased rent assistance."

In 2001, a WA family living in Ballajura and paying $160 a week in rent would have received Commonwealth Rent Assistance of $51.52 per week, which is 32.2 per cent or just over a third of their rent. By the end of last year (2006), the same family would have paid $260 per week in rent and only received Commonwealth Rent Assistance of $60.62 per week - 23.3 per cent or just under a quarter of their rent, a reduction of 10 per cent.

Mrs Roberts said the situation was even worse in the North-West of the State, where the Federal Government was happily reaping millions of dollars in royalties from WA's resources boom. In Port Hedland, families faced median weekly rents of $452, where the Howard Government's rent assistance had plunged to just 13.4 per cent.

"Unlike the Federal Government, our Government offers WA families meaningful assistance through our Bond Assistance Scheme," the Minister said.

"The scheme helps eligible people get into private rental accommodation, and in the last 14 months, we have increased bond loan levels by 27 per cent. Unlike the Howard Government, the State Government also recognises how expensive it is to live in some of the State's North-West towns and has provided a 40 per cent loading on those bond levels."

Mrs Roberts said the Howard Government's failure to provide meaningful levels of Commonwealth Rent Assistance was plunging more WA families into ever increasing debt.