Homeless People in Australia - Case Study Example

Introduction The aim of the study is to establish as well as provide a summary of the homeless among rare people and their use of unique services. the subject of indigenous homelessness has been in the past researched in Australian institute of health an welfare. The data for the research is retrieved from Australian Bureau statistic census of population and housing and consequently, the research will focus on homelessness for an original and Torres Strait islander people that were made public in the year 2011. Indigenous people in Australia are widely represented in the homelessness population. On survey day in the year 2011, an approximated 26743 indigenous people who are homelessness in Australia with 0.28 of entire homelessness individual provided information on the status of their indigenous comprised of 3 % of the entire population. Background of the study. The study aims at reaching on the number of homeless people in Australia the research from salvation Army depict that over 100,000 Australians will be homeless each day while the statistic depict half of the amount are under the age of 24 years as well as roughly 10,000 are children. for every one out of 40 homeless children use the homeless service with huge causes of homelessness in Australia as the impact of domestic violence as well as family violence which devastatingly is due to individual living an institution into unreliable housing state. The rate of waiting list is 16% for individual at extreme risk while waiting time is 12-18 months. This is a big concern since, homelessness is disaster .to get acquainted with what you do not poses anywhere, that you do not own a home as well as there is no single one to support your needs. This is very upsetting situation a person can have. The effect is the quality of life for the entire community is reducing and thus people will strive to ensure that they own a home, which is quite hard, and those doe not survive turn into crime and other illegal business. The problem The research depict that the Australian capital central business district have 1364 population,27374 in south ales as well as 20511 population in Vitoria. Out of all this population size, the number of homeless people are 422 in every 10,000 population. the number of homeless people in southwales is 7926 and 2507 in Tasmania with a population rate of 53 for every 10,000.this volume of population living homeless is risk to the econ0omy of the country since, it will lead to rise of rime, rate as well as decline in living standards and thus an immediate research need to be undertaken to be curb this issues. The research therefore intends to study the impact and benefit of convert homeless to home as well as there appraising the impact in terms of economic point of view. Proposal objectives The project intends to ensure that the number of homeless people is drastically reduced as well as improving the living standards of the people. At present, the rate of unemployment is 60%. Which depict a huge number that might turn out to be criminal due to lack of unemployment? The proposal objective intends to focus on minimizing this huge number of the homeless people in order to ensure that their living standard is improved as well as ensuring that the economic growth is improved due to reduction in the number of idle citizen and improved per capita income. The alternatives The key alternative available is to ensure that there is minimal number of homeless people is ensuring that this group of people is built a house to call home. this can be made possible by having mutual cooperation inform of donation and charities in order to ensure that their living standards is improved as well as have their own source of income in order to survive for themselves. The objectives are summarized in the Logframe given below. Logframe: Summarizing the project on the need for reducing number of homeless Narrative Summary Measurable Indicators Means of Verification Important Assumptions objective:Improvves the the welfare of the homelss people Net present value Cost benefit analysis report Goal to Super Goal Purpose: (aim or impact) Reduced number if homeless Externality damage Improve economy End of Project Status • Reduced number of people with no home • extra 140,000 residents improves their living standards • ACTEW market price • ABS population report Purpose to Goal Meeting the need to reduce the number of homeless Outputs: (deliverables or terms of reference) • More home • improve living standards Constreuction cost and building material Terms of reference for each output • number of houses • peaceful community economy • End of project report market prices (asset) • Annual ABS report Output to Purpose • Housing per resident is constant • living standards acceptable • urban design changed. Activities: (key clusters or work breakdown structure) • Environmental Impact Statement • Construct of homes • relocating the homeless to own a home Externality mitigation: • Financial distress Inputs: (budget, people, material, time, cost) • labour, • materials • land • people with no home Project sibmited Project financial planning Mortgage market prices Activities to Output • project accepted • Technology is feasible • Construction of home standards met. • Externalities are acceptable. Conditions Precedent Government approval The Impact in terms of cost and benefit The project proportionately employs the cost of construction and operation labor cost, material, land, as well as water that are significant to the construction of new homes. there are few un-proportion effect of the venture on the environment that the converting homeless to own a home will bring to the economy, the impact entails the reduction in level unemployment and size of population who are homeless (Diana Fuguitt, 1999).The project intends to ensure that the benefit from providing people with a home is more than just the social cost satisfaction as well as ensuring that the safety of the people living around is improved. The Impact chart The external stakeholders view on the project The table of stakeholder linked to the project proposal of converting homeless people to own a home significantly contributes to the project success or failure. Comprehending the right group of stakeholder entailed in the project as well as their perception on the project proposal and objectives are significant observed in cost and benefit established in the project appraisal. The government The government is keen on ensuring that the level of homeless people is minimized as well as there is improvement in the country economy by ensuring that the per capita income is improved. which can only be achieved by ensuring that everybody is busy in contributing the economy of the country and that there is reduction in crime rate consequential from lack of job opportunities. The community The community living around would be of the opinion that the level of people with no home are assisted since, the community will be peaceful since, the rate of unemployment, and poor living standards as well as the rate of crime will be minimized. in this regards, the common it plays a key role in ensuring that there is project success and this they must be involved in the project appraisal in order to minimize resistance to change form the community as a result of building new homes for those with no place to called no home. The business The business will significantly affect the project success since, involving them in the process of minimizing the number of homeless is key since, they will contribute in the project success financially and thus they must be informed in advance and make them well acquainted with the need for building home for new people since, the business environment will be effected by the rate of unemployment, population of people with no home and thus mutual cooperation between the business and the project imitative. Planning balance sheet The impact-planning table as depicted below provides summary of the cost as well as advantage of the stakeholder caught up in the project. Establishing the key stakeholder group established is apparent that the community will have huge impact on the project success and thus involvement in the project by ensuring that they accept the new individual to be part of their community as well as building mutual corporation is key to project success. Building home for the homeless; Incidence of costs and benefits Participant group COSTS BENEFITS The Local community • Reduction in the level of crime and improved living standard. Reduction in number of homeless people The business • Improved business environment with more skilful personnel Reduction in crime rate due to improved employment rate Improved business operation and enhanced economy Ideal business environment. Government Reduction in number of unemployment and the number of homeless and guaranteeing Resources for growth of balancing communications Improved social benefit Improved economy Enhanced per capita income Discounting the project venture to ascertain the project viability in term of whether the homeless population reduction is beneficial. The process of discounting anticipated value of social benefit consequential from construction of home for the homeless to the present year commands information cornering the community social benefit appraisal using the social discounting rate as well as the time foregone in order to give up the present profits. Risk is not appropriate to the project since it is inclusive of a wide investment venture proposal of the government where the risk in numerous individual project is declined due to other benefit of reducing the number of people with no home, the effect of inflation in project appraisal such as the need to eradicate the poverty rate in Australia is considered insignificant since the data for the forecast is extracted from the past data as well as present data which is in real terms. Homeless people, by Indigenous status, 2006, and 2011 Indigenous status 2006 P.VI.F.A.10% Anticipated 2015 2011 P.VI.F.A.10% Anticipated 2020 Indigenous 25,950 0.424 11,002.800 26,743 0.424 11339.03 Non-Indigenous 57,324 0.424 24,305.376 70,060 0.424 29705.44 Not stated(c) 6,454 0.424 2,736.496 8,412 0.424 3566.688 total 89,728 0.424 38,044.672 105,215 0.424 44611.16 Detailed summary of Net present value of the project NET PRESENT VALUE OF THE PROJECT ($000) YEAR PROCEEDS WAGES NTERNAL COST ADJUSTED PROFIT TAX SHIELD ON DEPRECIATION CASHFLOW P.V.I.F 7% PRESENT VALUE 2010 0 -1,000 -2,000 -3,000 615 -2,385 1 -2,229 2011 0 -1,000 -2,000 -3,000 615 -2,385 1 -2,084 2012 0 -1,000 -2,000 -3,000 615 -2,385 1 -1,947 2013 0 -1,000 -2,000 -3,000 615 -2,385 1 -1,819 2014 10,000 -2,500 -2,000 5,500 615 6,115 1 4,360 2015 12,000 -2,500 -2,000 7,500 615 8,115 1 5,407 2016 14,000 -2,500 -2,000 9,500 615 10,115 1 6,299 2017 16,000 -2,500 -2,000 11,500 615 12,115 1 7,051 2018 18,000 -2,500 -2,000 13,500 615 14,115 1 7,677 2019 20,000 -2,500 -2,000 15,500 615 16,115 1 8,191 2020 22,000 -2,500 -2,000 17,500 615 18,115 0 8,605 2021 24,000 -2,500 -2,000 19,500 615 20,115 0 8,931 2022 26,000 -2,500 -2,000 21,500 615 22,115 0 9,176 2023 28,000 -2,500 -2,000 23,500 615 24,115 0 9,352 2024 30,000 -2,500 -2,000 25,500 615 26,115 0 9,464 2025 32,000 -2,500 -2,000 27,500 615 28,115 0 9,523 2026 34,000 -2,500 -2,000 29,500 615 30,115 0 9,531 2027 36,000 -2,500 -2,000 31,500 615 32,115 0 9,500 2028 38,000 -2,500 -2,000 33,500 615 34,115 0 9,433 2029 40,000 -2,500 -2,000 35,500 615 36,115 0 9,332 2030 400,000 44,000 -40,000 316,000 12,300 328,300 N.P.V 114,222 t.n.pv=present value-royalties+salvage value-initial capital outlay therefore t.n.p.v=114222+4000-6188-45,000=67,034 woking and abbreviations present vaue interest factor is discounted at 7% formulae P.V.I.F= 1 /(1 + r)-t t is time value of the project to completion, r is the discounting rate in percentage formulae N.P.V=Σ (total present value+residual value-initial capital outlay) t.n.p.v is the total net present value of the project is the total present value for the whole year N.P.V =($114222+4.000-6188)-45,000,0000=$67034 depreciation tax shield is at 30% of the depreciated amount therefore D.T.S 30%(45,000,000-4,000,000)/20years=$ 615,000 Per annum royalty are subjected to (5%*123,752,283)=6,187.614 Social benefit cost Analysis of the project NET PROJECTS SOCIAL BENEFIT ($000) YEAR BENEFITS EXPENSE P.V.I.F 5% S. BENEFITS 2010 600 -400 0.9523 190 2011 600 -400 0.907 181 2012 600 -400 0.8638 173 2013 600 -400 0.8227 165 2014 1,500 -1,000 0.7835 392 2015 1,500 -1,000 0.7462 373 2016 1,500 -1,000 0.7107 355 2017 1,500 -1,000 0.6768 338 2018 1,500 -1,000 0.6446 322 2019 1,500 -1,000 0.6139 307 2020 1,500 -1,000 0.5847 292 2021 1,500 -1,000 0.5568 278 2022 1,500 -1,000 0.5303 265 2023 1,500 -1,000 0.5051 253 2024 1,500 -1,000 0.481 241 2025 1,500 -1,000 0.4581 229 2026 1,500 -1,000 0.4363 218 2027 1,500 -1,000 0.4155 208 2028 1,500 -1,000 0.39577 198 2029 1,500 -1,000 0.3769 . 2030 26,400 -17,600 517 working and abbreviations present value interest factor IS discounted at 5% formulae P.V.I.F= 1 /(1 + r)-t net present value(N.P.V) is arrived at social cost= (40% 0f labour) Considering the size of the indigenous populace, it can be depicted that one for every 20 indigenous people is deem homeless as per the above data analysis on the 2011 census. In making the forecast for the 2015 and 2020 projection, the size of people displaced as homeless will be 44611.14 depict a drastic decline in the number of homeless people. the economic implication is that the level of [per capita income will improve due to reduction in the level of homelessness since, when people have home, the rate of unemployment reduces and thus the crime rate reduces hence making more citizen industry in building the economy. The percentage of the above analysis depict that 75% of indigenous people are homeless and are living in harsh crowded places (a place that require extra 3 or more bedroom to accommodate the people living around). It can be observed form the data analysis that between 2006 and 2011 the approximated number of indigenous people with no home increased by 3% from 25950 to 26743.Neverthelses, where the growth in totality of indigenous people is between twice the point is considered and consequently there is reduction by 14%.the financial forecast depict that the number of indigenous homeless people by 2020 will reduce drastically from 105215 to 46611 which depict Decision criteria The Cost Benefit Analysis appraise the impact of cost and benefit of the venture proposal of reducing the number of people with no home in economic point of view by assessing the impact of building home for the homeless and its impact on the government. These values are summed using the discounting rate that depicts societal trade off between the existing and anticipated size of indigenous people who are homeless. the impact of the discounted is then compared by employing the decision criteria. there key approach employed in cost benefit analysis. The present value of the project is considered and thus where the project a positive net present value, the venture should be undertaken. The internal rate of return is another significant ratio which is the discount rate that equates the present values if cost and benefit. Sensitivity analysis In undertaking the sensitivity ratio in the research, the benefit and cost of building more for the homeless is considered and therefore, the analysis entails a comprehensive analysis is relevant in order to ensure that informed decision is made since, the project is sensitive to changing conditions. Some of the effect that leads to sensitivity analysis is effect of errors in the hypothesis. of the rate of homelessness In Australia, the cost of constructing home for the homeless, the growth of the economy population and its effect as well as the impact of reducing the number of homeless on the general economy of the country as well as the living standards of individual.. In performing the sensitivity analysis, the lowest ad highest values between different years is considered and test for sensitivity prior to concluding on the need for new homes. Costs Benefits Net benefits Costs plus 10% New net benefits 6000 0 -6000 6060 -$6,060.00 6000 0 -6000 6060 -$6,060.00 6000 0 -6000 6060 -$6,060.00 10000 10000 $10,000.00 10000 10000 $10,000.00 10000 10000 $10,000.00 r NPV IRR 0.1 $3,762.98 19% $3,613.76 18% 2015 2020 total benefits PV 38,044.672 44611.16 Total cost PV $16653 8750 Benefit Cost Ratio 2.28 5.09 IRR n/a n/a NPV 21391 35861 The above sensitivity analysis depict that the viability of the project in terms of benefit is that project for the year end 2015 has a positive net present value while the projection by 2020 will as well depict a much higher present value which implies (3586-21391/21391)*100%}=67.6%.this a robust decline in the rate of homeless people in Australia .this is ideal since it implies that the country’s economy is going to improve drastically due to improved living standards and the per capital income. Conclusion It can therefore be conclude that cost benefit analysis is key tool for appraising venture proposal since it gives an insight as to the extent of which the project should executed in terms of the benefit that new project of building will bring to the society and the government at large. the CBA for the research project is depict that the rate of homelessness is decline and thus the forecast provides that venture must be executed for the benefit of the people without home and the people living around. the sensitive analysis point out that the there is forecast is sufficient and reliable since, it depict that the community will benefit more in terms of reduction in crime rate ,improved living standards while the government will enjoy the advantage of improved economy consequential from improved per capita income of individual. References Brent, R.J., 2004. Cost-benefit Analysis and Health Care Evaluations. Brent, R.J., 2007. Applied Cost-benefit Analysis, Second Edition:. Chawla, K., 1987. Social Cost Benefit Analysis. Diana Fuguitt, ‎.J.W., 1999. Cost-benefit Analysis for Public Sector Decision Makers. Harry F. Campbell, ‎.P.C.B., 2003. Benefit-Cost Analysis: Financial and Economic Appraisal. Matthew Adler, ‎.A., 2012. Well-Being and Fair Distribution: Beyond Cost-Benefit Analysis. Pant, G.P., 1991. Foreign Aid, Economic Growth and Social Cost-Benefit. Puttaswamaiah, K., Cost-Benefit Analysis: Environmental and Ecological. 2013. Richard Layard, ‎.G., 1994. Cost-Benefit Analysis. Rus, G.d., 2010. Introduction to Cost-Benefit Analysis: Looking for. Read More