Page 158 - Week 01 - Wednesday, 23 February 1994
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at the market value of the Housing Trust's asset when the tenant moved in and discounts improvements that the tenant has made. We think that is a fair system. If you think we should be harsher, that is interesting.
Mr Humphries: That is not what our Bill says, though. Our Bill says something different.
MR CONNOLLY: Your Bill, in that case, is introducing a much harsher provision for existing tenants. If the 10-year tenant has invested a lot of labour and, in some cases, a lot of money in the garden of the property, we currently give them some credit for that in the purchase price, which almost always means that the purchase price that we receive for the house is somewhat less than the spot price of another house in that suburb because we are basically buying the bare property in its unimproved condition. I must say, Mr Humphries, that I was unaware that it was the intention of your Bill to do away with that current method of valuing a sale, and I suspect that you may have been unaware of it yourself.
Mr Humphries: It says so there.
Mr Cornwell: The sale price is equal to the current market value.
MR CONNOLLY: That is a different criterion of valuation from the system that is currently operated, which does give the tenant some degree of credit for the improvement in the property value that has occurred, purely by their efforts. We do it by an independent valuer. We base it on the sale price, but the valuer then provides a mechanism that gives some credit for what the tenant has done. We have corresponded on that, I think, on a number of occasions, Mr Cornwell, where sometimes there is some dispute about how much that should be, and I guess that will always be the case. I was not aware that you were proposing to change that. I thought you were using, in that term, the shorthand for our current practice; but you seem to be suggesting changes. If members had no other reason for being hesitant about this Bill, they might think that that is a reason to be hesitant.
The key issue here is that, by creating statutory rights, this would tend to undermine our stock of inner city housing properties. Under the current system, which is discretionary, we have reduced the period from 10 to eight years. Under the extensive scrutiny of the Estimates Committee, by members who were present, it did not seem to be a system that was so crying out for change that legislative action was required.
MR MOORE (11.44): Madam Speaker, having listened to Mr Connolly, rather than reiterate some of the sensible points he has made, I would like to refer to a situation that I came across on a recent visit to the United States when I met somebody there responsible for dealing with inner city ghettos and problems. I described our public housing situation here and the distribution of public housing throughout the suburbs, and particularly in our inner city. When I described our inner city compared to American cities, for example, it is fair to say that he was absolutely flabbergasted. He said, "If only I had something like that to work with". That is an extreme. Nowhere in Australia fits that extreme, and I recognise that.
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