In a country where 116,000 people sleep rough each night, according to the 2016 census (up 14 per cent from 2011), the Australian government must accept that the market alone cannot take care of low-income earners, and must provide higher levels of affordable housing, says Chair of Homelessness Australia Jenny Smith.

Addressing the National Homelessness Conference in Melbourne this week, Smith describes Australia's homeless crisis, driven by a population boom and a mammoth housing shortage, as "dire". 

It will only get worse unless the government fronts the situation head-on, she says. 

"It's very difficult to see that this figure won't keep increasing, because we just don't have the national leadership that we need in relation to the supply of housing that's affordable to people on low incomes," she told AAP.

The Turnbull government included a number of housing affordability measures in its 2017 budget, including increasing the capital gains tax discount for affordable housing and allowing first-home buyers to use tax benefits of superannuation to save a deposit. 

But they've been widely criticised as inadequate.

Smith believes Australia's crisis is unforgivable when governments in other countries like Finland have shown how intervention can help. She hopes this week's conference will provide evidence of best practice.

Finland has invested in social housing, which now makes up 20 per cent of total housing stock (in Australia it's 4.7 per cent). Many temporary shelters have now become permanent housing with on-site personnel to provide support.

Professor Juha Kaakinen, CEO of Y-Foundations in Finland, which supports young people at risk of homelessness, says Australia's housing crisis is "alarming".

"There are big problems in housing policy here, where the big issue is a lack of affordable social housing, which must be dealt with," he says. 

"Housing is a foundation for living, it's not something you have to earn."

Smith believes it's this difference in philosophy that's at the root of the problem. 

"In Finland housing is seen as the foundation for getting your life on track, a basic human right. Here it's seen as a reward, a commodity."

"Finland had to make the effort to realise that people were dying because they had taken their foot off the pedal in relation to social housing and the support some people need to sustain that housing," he says. 

"But we haven't even got our foot anywhere near the accelerator as yet."

As well as providing higher levels of subsidised housing, Smith urges the federal government to tweak taxation settings in relation to negative gearing and capital gains tax that only inflate the housing market, and restrict negative-gearing to new builds.

At the state level, she urges governments to ensure all new developments contain affordable social housing.

Australian Associated Press