Page 458 - Week 03 - Tuesday, 13 March 2007
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To demonstrate the benefits of joint ventures, it is useful to look at the Kingston site. If we were to sell this site on the open market, it is anticipated that it would return $14 million, enough to purchase or build some 42 units. This is about 40 per cent of the units that are currently on the site. With the ACT participating in the project, the anticipated return is $21.5 million, the equivalent of 65 units, with the potential for a higher return flowing from improved outcomes for the joint venture.
Some other benefits of entering into joint ventures are as follows. There is the leveraging of additional resources into the social housing system. There is the sharing of risk between the ACT and the developer, with the risk for the government limited to the land; the developer takes the development and construction risk. There is the staging of the development of the land, and hence the release of dwellings into the market in response to demand, providing a greater degree of flexibility and responsiveness and sending a strong signal to the development industry that the government is committed to leveraging assets in the context of a commercial focus and outlook.
We also need to be more innovative and flexible in addressing the housing needs of those in high price housing markets. The effectiveness of commonwealth rent assistance has been steadily diminishing over recent years by failing to keep pace with private rental increases; that is, the maximum assistance payable has not increased. In the ACT, a greater proportion of recipients of CRA are receiving the maximum rate. Thus it is no surprise that in 2006 some 46.7 per cent of CRA recipients paid more than 30 per cent of their income on rent. In other words, the commonwealth government has left them in housing stress. This is clearly an area in which the commonwealth government must lift its game.
We will hear how the Stanhope government intends to tackle the issue of housing affordability when the Affordable Housing Taskforce releases its findings in the coming weeks.
MR SPEAKER: Do you have a supplementary question, Ms MacDonald?
MS MacDONALD: Yes, thank you. Minister, did your presentation outline any of the current initiatives the ACT government has introduced to assist those most in housing need, particularly where there are compounding factors?
MR HARGREAVES: Thanks very much, Ms MacDonald. Mr Speaker, there is an increasing demand for social housing. I would like to reiterate how the ACT government is managing competing priorities and responding to the diversity of community need. I should mention in this context that the viability of the social housing system across Australia is under threat. Funding provided by the commonwealth under the commonwealth-state housing agreement has declined in real terms over the past few years. Even with the introduction of indexation in the 2003 agreement, real funding decreased further with the need to meet a one per cent efficiency dividend.
Of course, this places further pressure on the ability of housing authorities to maintain and grow their portfolios and to ensure that housing assistance is appropriately
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