The defunding of three peak bodies just days before Christmas has been described as "vindictive" and "a kick in the teeth" by Greens Senator Scott Ludlam after hearing from a formerly homeless Canberra man on Wednesday.
During a senate committee into affordable housing, the three organisations described the decision to cut $825,000 – up to 90 per cent of their funding – as a debilitating blow that could lead to their closure.
Community Housing Federation of Australia executive director Carol Croce said her organisation would lose $350,000 of funding, which would lead to job losses in Canberra and a complete restructure.
"Our organisation had a contract with the government until June of 2016 but our funding has been cut and our contract will now end in June this year," she said.
"The organisation is looking to continue in a much more limited capacity and we're struggling to figure out that process.
"We punched well above our weight, especially when you consider the number of research projects we put out each year compared to the amount of money a consultancy like KPMG would provide."
National Shelter chief executive Adrian Pisarski said it was likely his organisation would lose the majority of its staff as a result of the cuts.
"Beyond June 30 we face a future with no money and the organisation is considering a strategy to see how we might be able to cobble together some alternative sources of funding."
Nathan Cornell, who was homeless for eight years in Canberra before being housed by a Homelessness Australia program, told the inquiry cuts would make things worse for those on the streets.
"My personal experience is if they did cut the funding it's going to be a lot harder for people to get back in [accommodation] if they really want to get back off the street," he said.
He said he was concerned the closure of the organisations could lead to an increase in crime by those desperate to survive on the streets.
"In the long run that's what you end up resorting to survive and that's not the way we should be living," he said.
Senator Ludlam said it was a shock to hear the organisations with the greatest expertise in housing affordability were facing obscurity due to the budget cuts.
"The best policy work being done in this country on housing affordability has been done by the same groups who've just got a kick in the teeth," he said.
"They are the ones who really hold a huge amount of the expertise around homeless policy and housing affordability more broadly."
Mr Ludlam said he hoped the inquiry would lead to an acknowledgment that there was a housing crisis in Australia, that people do lose their lives due to homelessness and there was plenty the government could do.
'We want to see the funding cuts reconsidered well before the May budget as these people are losing staff," he said.
The hearing came after more than 50 community organisations called on Minister for Social Services Scott Morrison to end the uncertainty surrounding the National Partnership Agreement on Homelessness, which will expire on June 30.
Homelessness Australia chief executive Glenda Stevens said the uncertainty meant organisations were limited in their impact and called for a return of the four-year cycle.
"As well as the tens of thousands of clients affected, thousands of homelessness workers are in limbo whilst they await the outcome of the NPAH funding," she said.