Good Shepherd Microfinance welcomes the release of the Working together for better housing and sustainable communities discussion paper and commends the Queensland Government for the long term and consultative approach that is being taken to set the strategic direction for housing policy in Queensland.
Good Shepherd Microfinance is Australia’s largest microfinance organisation and has successfully delivered a growing range of microfinance products and services for 35 years. We offer a suite of people-centred, affordable financial programs for people on low incomes at different financial stages of their lives. Our aim is to enable clients to realise their own economic wellbeing, as they define it themselves, through appropriate financial programs. We work with 263 accredited community organisations in 670 locations across Australia. Our programs are designed to fill a market gap and serve the needs of the three million people in Australia who are financially excluded.
In Queensland, we work with 55 partner organisations in 136 locations, including six partner organisations operating in remote locations of Queensland. As a result, there are over 350 microfinance workers (paid & volunteer) operating in Queensland. The network will expand in 2017 with the establishment of a Good Money store in Cairns and the Gold Coast with the support of the Queensland Government and National Australia Bank (NAB). In Queensland in 2014, 45 per cent of our clients were tenants in public housing, and 33 per cent of our clients were Aboriginal and Torres Strait Islander people (compared to a national average of 24 per cent).
Our long history in working with people on low incomes and delivering financial programs nationally can play a critical role in informing and implementing initiatives to create a housing system in Queensland that is better placed to meet the needs of people and build sustainable communities.
Our submission highlights a number of opportunities to enable people to define and then realise social and economic wellbeing:
- Leveraging existing networks and alignment between financial and housing services: Good Shepherd Microfinance sees a significant opportunity to leverage and expand the financial capability conversations and associated education delivered by our microfinance network to support people on low incomes to move along the financial inclusion continuum and associated housing continuum. The Queensland network of 55 accredited microfinance providers at 136 locations, coordinated by Good Shepherd Microfinance, provides financial programs to people on low incomes. We are uniquely positioned to enable the achievement of housing-related outcomes for people on low incomes in Queensland by capitalising on the existing relationships with the Good Shepherd Microfinance provider network and our clients. The microfinance network and the existing Queensland Government Housing Service Centres and RentConnect sites can complement each other and refer clients to expand the reach of both financial and housing services. In many instances, there is a direct link between the financial needs of our clients and their housing sustainability. Both social and economic wellbeing can be enhanced by putting people at the centre of one holistic conversation about their needs and aspirations.
- Taking action on private rental sustainment: The private rental market is vital to meeting the demand for housing and achieving better housing outcomes for the people of Queensland. Low income households can face difficulties sustaining their rental payments, particularly when unexpected expenses arise. These unexpected expenses increase financial stress and can jeopardise the tenancy of the household, putting them at increased risk of homelessness. A pilot Rent Assist program can support low income households in the private rental market who require a small loan to meet expenses that have the potential to jeopardise their ability to sustain their private rental payments. The existing No Interest Loan Scheme (NILS) and the NILS Queensland network could be a mechanism to deliver this program. Seed investment would be required to develop and deliver the pilot. Good Shepherd Microfinance submitted a project proposal outlining this concept and delivery approach to the Queensland Government Department of Housing and Public Works in 2015.
- Taking action on home ownership: People on low incomes have the ability to service debt, grow their financial assets and move away from crisis and hardship towards financial stability if they have access to the right resources and are protected from exploitative lending arrangements. For those people who have an aspiration to own their own home and can service a mortgage, we recommend that the Queensland Government invests in a pilot home ownership program (in partnership with Good Shepherd Microfinance and a bank). Good Shepherd Microfinance would welcome the opportunity to further develop this program as a client-focused affordable housing initiative. Seed investment would be required to develop the concept and deliver the pilot.
- Whole of system support: Financial Inclusion Action Plans (FIAPs) can support the objectives outlined in the discussion paper to work together across all sectors of the community and to put people at the centre of solutions. FIAPs provide an opportunity for signatory organisations to take coordinated action to improve financial resilience for the large numbers of people experiencing financial exclusion and hardship, factors that also influence people’s housing stability. The Queensland Government launched their FIAP Statement of Commitment in May this year, becoming one of 11 trailblazer organisations committing to the development of a FIAP in 2016. We are also committed to expanding the network of FIAP trailblazers and would encourage other relevant stakeholders in the housing context in Queensland to join the program. This would include real estate agents, property developers, landlords, housing associations and related property services, to commit and develop their own FIAPs to encourage a holistic and collaborative approach to the challenges involved in housing stability and hardship, in line with the objectives outlined in the discussion paper.
- Mitigate the impacts of the rising cost of energy: Our microfinance workers are assisting an increasing number of clients who are experiencing financial hardship due to unaffordable energy bills. Addressing the rising cost of energy, and the impact of this on the financial and housing stability of people on low incomes, has the potential to deliver economic, social and environmental outcomes. Energy bills can be reduced through access to affordable energy efficient appliances such as the products offered through our Good2GoNow program in partnership with The Good Guys, or through a program similar to the former Home Energy Saver Scheme. Other options include supporting vulnerable households to take simple energy saving actions and use power efficiently, and encouraging and incentivising developers and landlords to improve the energy efficiency of properties.
- Improving access to and flexibility of home loan products: The suite of financial products currently available from mainstream banks for the purchase of a homes are not meeting the needs of people on low incomes. There is a critical role for the mainstream banking sector to improve access to and flexibility of financial products to enable people on low incomes to purchase their own home.
Good Shepherd Microfinance is keen to continue to work with the Queensland Government, our existing network and partners, and other stakeholders on the further development of initiatives to achieve better housing outcomes.
 Connolly C, Measuring Financial Exclusion in Australia, Centre for Social Impact (CSI) – University of New South Wales, 2014, for National Australia Bank.