The draft report into Australia's social housing policy recommended the government move to a single model of housing assistance across both the social and private housing markets, with increases in rent assistance to help transition people into private rentals, as well as additional housing payments for those who have a demonstrable need, such as employment, to live in a high cost area.

Productivity Commissioner Stephen King said increasing rental assistance by 15 per cent would help vulnerable Australians catch up with rental prices, helping to relieve the burden on social housing.

But CEO of ACOSS, Dr Casssndra Goldie said the draft report ignored expert advice that for the housing affordability crisis to be adequately tackled, there was an urgent need to expand social housing and the recommendations did not go far enough.

"To move to a housing system where everyone including people on the very lowest incomes is competing in the open rental market would be a dangerous move," she said.

"The proposed 15% increase in [rental assistance] would go nowhere near what would be needed to ensure people have adequate income to compete, hence our recommendation for a minimum 30%, plus a serious increase in funding towards social and affordable housing."

Dr Goldie said the proposals put forward by the Productivity Commission risked making it even harder for some people to either break into, or remain in the rental market and a more holistic approach from the government was needed.

"The report is draft and we will be carefully considering it in further detail but without serious action to increase the supply of social housing - which was missing in the federal budget - we have major doubts.

"The draft proposals may do nothing other than fuel the demand side of the rental market putting upwards pressure on prices, risking even greater poverty and homelessness amongst people already in serious housing stress."

Submissions will be accepted on the draft report until July 14. For more information, go to www.pc.gov.au.