Senator BARTLETT —My question is to the Minister for Family and Community Services. Does the minister agree that the proposed tax changes as they currently stand will lead to an increase in costs for state housing authorities of, at the very minimum, at least five per cent? The minister would be aware that the current round of funding under the Commonwealth-State Housing Agreement expires at the end of June. Why is the government not willing to consider providing adequate, or indeed any, extra funding to state housing authorities in the new agreement to cover the inevitable cost rises that will occur with the GST? Or does the minister agree with the statement made to the Senate Community Affairs Committee by the executive director of her department, Mr Tune, that the cost impact of the GST on public and community housing is just `the states' problem'?

Senator NEWMAN (Family and Community Services; Minister Assisting the Prime Minister for the Status of Women) —An issue which is obviously of interest to all of us is how public housing will fare into the future. One of the important things to remember is that the state governments provide a range of services, some of which, under the new tax proposals, will in fact mean a substantial reduction in their costs. In terms of public housing, there will be a small increase. I am not sure whether I have the exact figure here, but I think your figure is too high, Senator, and it will be very important to keep monitoring what is happening in this area.

I think that the states are very keen to sign on to a Commonwealth-State Housing Agreement. They wanted particularly to have long-term funding, which of course is what has been offered and accepted—the four-year term. That is very important for them in planning their future contracting arrangements. Some of the states want to sell some of their properties and exchange them for better located and newer properties. They want to have community housing take up some of the properties so that there is more of a mixture of types of housing in one area instead of the ghettos that were the fashion years ago. So the Commonwealth is very keen to work with them in that area to achieve better outcomes for people.

Some of the states have intimated that they in fact will not move to increasing rents for their tenants, as normally happens when tenants get an increase in income. Some have not made a decision on that yet. But I remind you that every payment that an income support person in public housing gets, whether it is rent assistance or whether it is the basic payment of age pension, Newstart or whatever, will go up by four per cent. People also have reduced tapers, which makes it much better; and as well families are of course getting substantial increases under the tax reform package. So people will be in a better position to meet what small cost increases there will be.

Let me say that we are talking about the transitional period here because, after the transitional period of the new tax reforms, the states will be in a substantially better financial position with a growth tax which they have never had before and which, over time, will mean billions of dollars of extra money going to them. I presume you are focusing on the transitional phase, during which, as I have pointed out to you, they will have some things that they provide as services to their people which will be reduced in cost and some, like housing, where there will be a small increase.

Senator BARTLETT —Madam President, I ask a supplementary question. I note the minister's admission that costs for state housing authorities to provide public and community housing will go up by some degree but that funding for the Commonwealth-State Housing Agreement, which deals with this area of housing, will not, and that she notes the importance of having a long-term, four-year Commonwealth-State Housing Agreement. I ask the minister: if the states and the federal government are so keen to adopt a Commonwealth-State Housing Agreement, then why are we in April with no agreement having been reached and faced with the possibility of having yet another interim one-year agreement with the resultant uncertainty and restriction which that would cause? Is it not the case that some state governments at least, including coalition state governments, want to press the issue with the federal government of providing an adequate increase in Commonwealth-State Housing Agreement funding to ensure that there is not a net decrease in the value of funds available for public and community housing?

Senator NEWMAN (Family and Community Services; Minister Assisting the Prime Minister for the Status of Women) —You asked so many questions in that, Senator, I do not think I have the time available to deal with them. Let me remind you that the housing ministers were trying to have a definitive outcome quickly from the federal government on this question and have been lobbying to have it dealt with at the housing ministers conference. That has not taken place because all of these transitional issues are being dealt with at the Premiers Conference, which is the appropriate place, because, as I pointed out to you, some of the services which states provide will reduce in cost to them and some will increase. That Premiers Conference will be held on 9 April, from memory, and I assume that the premiers, the Prime Minister and the Treasurer will come to agreements about the transitional arrangements at that time. You referred to a one-year contract. That is not in the interests of the states and I would not be endorsing it, either. (Time expired)