Page 2680 - Week 07 - Thursday, 3 July 2008
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We should be learning from the mistakes that have been made in other jurisdictions. I would expect that, where ACT public finances support any capital injection, there will be scrutiny of the sustainability of investment decisions made by those who are managing the relevant capital fund. For instance, prudent management would ensure that revenue flows from capital injections are not prone to significant fluctuations. If the managers of a housing provider were to approve a stream of poor returns, this will weaken their balance sheet and lay the ground for future calls for renewed budget funding. This is a risk that is not demonstratively tackled under this legislation. These are not issues that are anticipated in this legislation or guarded against under the regulatory regime.
The issues outlined in clause 25K as matters that may be covered by the commissioner’s monitoring guidelines are extremely vague. This legislation gives us no confidence that this government has got its head around what the areas of risk are and how they can best be controlled.
As I outlined, my third area of concern is that the regulatory regime could be very bureaucratic and may not have regard to the practicalities of running a non-government organisation. There are several tiers of rules that will apply to affordable housing providers, including risk tests and monitoring guidelines. The community housing providers will also be subject to the monitoring guidelines, but in addition they will be subject to a layer of standards and may also, under clause 25M, be subject to other standards prescribed by regulation.
I would have thought the government would be interested in encouraging non-government organisations to become registered under the act. Many NGO providers, such as benevolent organisations that are supported by churches, have multiple charitable functions besides the provision of housing. These organisations may also be engaged in the delivery of in-house meals, meals on wheels, clothing, emergency loans, counselling and a host of other charitable activities. In the case of an affordable housing provider, they may also have other functions such as that of an infrastructure provider.
The regulatory regime in this legislation empowers the commissioner to monitor and intrude in all activities of a funded organisation, regardless of the extent to which those activities are relevant to the housing function. The explanatory statement says:
Regulatory processes will monitor the activities of housing providers on a whole of organisation basis.
For instance, let us consider the reach of the commissioner’s power to veto changes to the constitution or rules of a provider. There is an exception which says the commissioner’s approval is not needed for minor rule changes, and I welcome that, even though this exception is not clearly defined. But there is no constraint on the commissioner’s veto where the constitutional changes relate to aspects of an organisation’s operations which are unrelated to the function of housing operations.
For example, we may have the commissioner vetoing rule changes within a charitable organisation which put greater emphasis on counselling as a core activity, because the
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