Page 2679 - Week 07 - Thursday, 3 July 2008
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investment in affordable housing and community housing then the regulatory regime should place most focus on the areas of greatest potential risk. I remain to be persuaded that this legislation hits all of those marks.
I note there have been concerns—particularly in other states—regarding very poor management by some providers of state-subsidised houses. There are notorious problems like damage to properties and underinvestment on maintenance of properties. The former commonwealth community housing and infrastructure program was subject to a very critical review, and that is why that program was rebadged as the ARIA program.
Housing policy is an area where a lot of mistakes can be made and have been made. The ACT does not need to learn its lessons the tough way; it should do more to look to the experience and mistakes of other jurisdictions.
What are the age-old problems that we ought to try and avoid in the future? Affordable housing is often built around a one-size-fits-all model which means that housing is often unsuitable or there are limits on how the housing may be modified to meet the changing needs of the tenants. There need to be safeguards against nepotism and favouritism. Inadequate rent collection can mean that there is insufficient funding for maintenance. Likewise, weak enforcement of tenant obligations can contribute to damage to and deterioration of subsidised housing.
Money can be wasted through administrative costs and top-heavy governance—something that I see as a specific risk under this legislation. Public-funded housing programs do sometimes fail to leverage the available investment to encourage the transition to private ownership.
These are not issues that are dealt with in this legislation, the EM or the minister’s tabling speech. Moreover, the legislation fails to distinguish between the risks that can apply to funds that are provided as capital injection versus those that are given as recurrent grants or project-specific grants. I think that this distinction is important in the context of the government’s more recent decisions to give Community Housing Canberra a $3 million capital injection, title over $40 million of dwellings, access to a $50 million revolving finance facility, direct grants of land and transitional payments. Community Housing Canberra is a classic example of an organisation that has been given a capital endowment and, as such, is now expected to achieve some degree of return on that investment.
It is instructive to look at the experience of other governments when they have established capital legacies for housing organisations. The clearest example is the commonwealth government’s arrangement for the Indigenous land account. The budget funding for the land account was due to cease 10 years after its inception because it was expected that future activities of the ILC should be funded from the realised return of the land account. It was not envisaged that ongoing funding would be required after 10 years; nor was it consistent with the mandate for the land account that there be successive losses over a number of years, least of all at a time of strong performance in the financial markets. Real questions did arise at the commonwealth level as to whether the land acquisition program was well adjusted to the pattern of returns from the land account.
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