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Legislative Assembly for the ACT: 1997 Week 7 Hansard (25 June) . . Page.. 2134 ..

MS REILLY (continuing):

The other part of the financial statements that is interesting is the amount of money that is allocated to loss through sales. In the March financial statements, it was $3.7m. The March statement said that there was a deterioration of the housing budget of up to $14m - these will be the losses in this year at that point - mainly due to assets write-down. One of the extraordinary parts of the 1996-97 budget was the fact that there was going to be a quite considerable number of housing sales. In fact, they were going to sell 180 to 200 housing units to replace the money that was lost through the Chief Minister's generosity in giving the money back to Costello. They have continued to sell off houses in this year. We have a buyer's market; but what does the ACT Housing Minister do in this buyer's market, at a time when people are picking up bargains, when there is a waiting list of more than 5,000? He continues to sell houses. At the beginning of June, he had sold 203 houses - more than he was going to sell, according to the budget.

I would have thought that, in any sort of estate management, at a time when you can pick up bargains in housing - this is just from looking through the real estate pages on any Saturday or Wednesday - with the Housing Trust thinking, "We need houses for our tenants and people on the list", they would be out there buying houses. But, no; they are actually selling. I am sure that the Minister is going to tell us how many he bought. You still wonder about the sense in selling so many houses in this year. They are going to rectify the problems they have with the losses they have made in the house sales.

I think this is one of the most fascinating parts of the budget papers. At the end of 1996, they had assets worth $1.4 billion, but they had problems with the sales of the houses. In Budget Paper No. 4, volume 2, at page 425, it says:

Other Expenses - no losses are anticipated on the sale of government dwellings in 1997-98, following a revaluation of stock. Losses in 1996-97 reflect current property values in comparison to book values. All sales are settled at reserve price or above.

So, they are doing a revaluation, which I have asked for but which is not completed yet, I understand. (Extension of time granted) I am happy to wait for that revaluation to be done. We have to look at the book value of the houses, because that is the ACT asset. I am sure that the Minister is going to jump up and say, "No valuations. It is all going to be all right". But, if you look at the book value, you see losses on these sales of between $7,000 and $37,000 in some cases. Some houses were sold with a loss of only about $6,000 or $7,000, but quite a number were sold with book losses of $37,000. So, you have the Housing Minister almost giving away houses. Of course, this affects the prices in some areas. In Kambah, there were complaints about the houses that were being sold, some of which went for prices as low as $73,000 - which I think the Minister did not know about. You have a situation where they are selling houses at a considerable loss on their book value.

It is important, because this was listed as a Territory asset at $1.4 billion last year; but we are going to revalue it because we have made such heavy losses on our sales program. This may be a new process that they are going to introduce in 1997-98. On page 425, it says that all sales are settled at reserve price or above. If you look at some of the prices here, you will find, in fact, that they were not. I have a list of the houses that were sold this year, and I have one listed here for which the book value is $195,000. They had it

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