Kristy Muir is a professor of social policy and CEO of the Centre for Social Impact at UNSW Business School. An active researcher, Muir has worked for more than two decades with for-purpose organisations to help understand, measure and find solutions to complex social problems. She spoke to Julian Lorkin for BusinessThink.

An edited transcript of the conversation follows.

BusinessThink: Low income, unemployment and homelessness seem inextricably linked – a wicked problem that many have tried to address. But it's still with us and the numbers of those affected are large.

Muir: It is a big problem.  One, the problem is entrenched, and two, the numbers are high. On any given night in Australia, we know that one in 200 Australians are homeless.

For our young people it's twice as high – so, one in 100 young people are homeless on any given night. And there are particular groups who have higher levels of homelessness. For example, our Indigenous Australians are eight times the level of non-Indigenous Australians.

BusinessThink: There seems to be a route by which people become homeless, via an accidental event in their lives. Is there something that government should be doing to prevent people from sliding into homelessness accidentally?

Muir: Prevention and early intervention is key, and it's really important. And there are numerous evidence-based interventions and policy supports that we know can work in supporting people in terms of preventing them falling into homelessness. But once they get there, we also need policies and programs to be reactive and pick people up to make sure that homelessness doesn't become entrenched.

We need to have policies so that if people do fall into homelessness it's for very short periods of time, and we can get them back out. So there should be no exits from different types of social security systems. Let me give you a couple of examples. One, what happens if you land up in hospital with, say, a mental health problem and you have nowhere to exit in terms of a home? You can land in transitional accommodation. We need to make sure that there's then pathways out of places like hospitals into temporary accommodation, but what's the stability housing going forward?

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Another example is for young people who fall out of out-of-home care. At the moment we have a system where if you're in foster care, when you turn 18 you're no longer wards of the state. But we know if you are living with a middle-class family, or in most family situations, young people don't leave home now until they're about 24. That's the average age. So why is it that we would expect that a young person who's grown up in foster care for their entire life can be self-sufficient, independent and able to be stably housed on their own at 18 years of age?

We need to address the holes and the gaps where people fall down, where we know that they exit certain supports, to make sure that they have a future where they have safe, affordable, stable housing.

And then we have the other end of the spectrum that we need to address, which is really around increasing our supply of affordable housing. Because if we're going to seriously address this, people need houses to live in. 

BusinessThink: People certainly do, but many people might naively assume that those networks are there already, that people have already got some sort of support network if they do become unemployed. If you go down to the Centrelink office – fine, you can start claiming benefits. Why is what we've got at the moment not working?

Muir: From a social perspective, we know that around one in five people across this country don't have very strong social supports. So there's one problem there. Two, we know that housing affordability is a really serious issue in this country, and that issue exists across the spectrum, across the income spectrum. We know that over the past decade that wages and the increase in wages have not kept up with the increases in rental payments or mortgage repayments, which means that those that are at the lower income ends are particularly vulnerable in terms of their ability to stay or find affordable housing.

'Education is really critically important, and I'll always support that, but we need to think about what the structures look like around individuals'

KRISTY MUIR

We know that housing stress has increased across the country, so what that means is that more people are spending 30% or more of their income on housing costs and payments. At the same time, we've seen rises in utility rates, we've seen an increase in costs of living. And particularly if you're in, let's say, the [bottom] two income brackets, even if you're working it's incredibly hard to keep pace with the costs of living.

BusinessThink: There's also a problem with people who are homeless in that they're financially excluded – they don't have access to a bank account. I know you've researched this. What's been your conclusion?

Muir: Financial exclusion is a problem across Australia, particularly for our lower-income Australians. We've been working with the National Australia Bank for the past six years on financial exclusion, and also financial resilience.

It becomes a particular problem in the homeless group you're talking about because, like you say, if you don't have an address you won't be eligible for financial products and services, and so we need alternative options. So, for example, there are things like no-interest loans, but how do we scale those up? But also, if you don't have an address, it becomes really hard to navigate things such as Centrelink. How do you get access to social security payments? How do you turn up and get the supports that you actually need?

BusinessThink: It seems that once people are excluded, it's very hard for them to get back on the road and also to understand what they should be doing, and how. Is it a question of them being locked out of this, or do they need to be educated as to how to [lift themselves] out of it?

Muir: I think we need to move away from thinking about the deficits of the individual in a way. Education is really critically important, and I'll always support that, but we need to think about what the structures look like around individuals. So if, for example, you're homeless, but there's a 200,000 [person] wait-list for social housing in this country, one in three of those people are already considered to be in the greatest need. So if you have no housing but you understand – you have the education to understand how to navigate the system – you still can't get access to social housing.

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It doesn't matter how much I educate you, you don't have any more money to fill that gap. So the question that I ask is what structures do we need in society to make sure someone fills that gap? And we had in this country a scheme called the National Rental Affordability Scheme, which has recently been discontinued by the government.

If we're actually going to fix affordable housing, and if we're going to scale up supply of affordable housing, and we want to partner with, say, investors and other sources of finance and capital to do that, then there still needs to be other policies in place. [Such as] being able to fill those gaps – in terms of that rental payment – by government, along with other types of policy supports that need to be in place, such as assistance if you, for example, have a significant mental health problem – what kind of tenancy supports do you need to maintain a stable tenancy?

BusinessThink: Quite a lot of the social housing I've seen has been built and then just almost left there. Is there an issue of us having this attitude of fine, we've fixed the problem, we've built it – but we're not maintaining any of this infrastructure?

Muir: Maintaining housing is really important, and anyone that owns their own home, or anyone that's in a rental property and sees how houses quickly depreciate and need improvements, will know how regularly that needs to happen. I mean, we do have an issue with the housing stock in Australia not being maintained. So not only have we seen a fall in the supply of that housing, but actually much of that housing is no longer considered to be very fit for purpose, which means that it needs big investments in terms of modifications. We need to make sure that it fits today's demographics.

So what happens, for example, when we have an ageing population? What does that housing need to look like in regard to our current family structures? And how do we make sure that we maintain it? One of the mechanisms that government has picked up has been to transfer stock to community housing providers so that government doesn't actually have to pay for that modification and upkeep. And I think that's one mechanism that's been used in the past. The thing we need to think about is how do we help support the community housing providers to have effective business models, to ensure that they can pick up that load?

'If we don't have adequate support systems in place, and we don't have an adequate supply of affordable housing, what happens if you lose your job?'

KRISTY MUIR

BusinessThink: It certainly is a problem, and it seems that if we could get a lot more social housing then we might be on the road to a solution. But that's going to cost a lot of money. Who's going to pay for it?

Muir: That's a very big and contemporary question. There are various discussions going on around how we come up with innovative finance solutions, and the finance gap is a very big one in regard to affordable housing. One possible option that is being explored at the moment by Treasury, but also at different state and territory levels, and also by investors – so in the private sector – is social impact investing. And there's more research that needs to be done on this. Actually, the Centre for Social Impact is releasing a report on this that's been funded by AHURI [the Australian Housing and Urban Research Institute] in June this year where we've looked at what the opportunities of social impact investment are for both affordable housing policy and also homelessness in Australia. And that's a really comprehensive look – a deep dive – into this issue. But from a high level perspective, let me just explain what that means.

It basically means that we're coming up with a different model of finance, and we have a market that would include the investors, housing providers and an intermediary that falls between those. The housing providers are both people who might build the actual property assets, but can also be providers of tenancy support, for example, or other things that will help improve the outcomes for people living in affordable or social or community housing.

So what that would look like is that it wouldn't just be reliant on government on its own to fund affordable housing but rather, [considering] how you bring in an investment market to make sure you have both a financial return, but very importantly a social return. And it means that we need to come up with an opportunity to have different layers of finance models. So if you're an investor who has a strong social conscience, if you're an investment fund or an institution that wants to diversify your investments and have some of those having a social benefit, you might want to make a decision to invest in social or affordable housing. And maybe as a result of that, you might decide that you're willing to take a slightly lower percentage in terms of your financial return than you otherwise would if you were just doing a finance first investment.

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BusinessThink: And finally, many people may think that this doesn't really apply to them because after all, they may be graduates, they've got a nice job. And yet, with the gig economy, so many people are working in short-term employment from one job to another and it may be so easy for them to not get a job and fall into unemployment.

Muir: It is a real risk, the shifting employment status of many Australians. This is particularly an issue for young people, who might have less of a capital base, for example. But we also saw with the global financial crisis how easy it was for people who had very established and high incomes to fall into serious financial stress as a result of employment changes.

I mean, not only are we seeing more precarious employment – the shorter-term contracts – we're also seeing more underemployment. And what that means is basically people want to work more hours but they're being employed for less. So you're available, and you want to work, and we see this particularly for young people, which makes it actually much harder then to raise your income level to be able to meet the demands of how you pay the rent. And how do you meet the costs of living?

If we don't have adequate support systems in place, and we don't have an adequate supply of affordable housing, what happens if you lose your job? What happens if you lose your stable income support? What happens if you're like one in six Australians who don't have $2000 in an emergency?