Page 3681 - Week 10 - Tuesday, 26 August 2008
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There is also, without a doubt, the issue of funding. This government has put the funding formulae or approach on hold until early next year. The intent is clear, however, that the costs of administering the oversight scheme, including that component of tribunals that this scheme would draw on, should be managed on a user pays basis. That issue, unresolved as it is, is the most significant factor in my decision to support this bill through the in-principle stage only and to suggest that the bill really ought to be debated once the ACT Civil and Administrative Tribunal is properly established.
The point has been made that under the Residential Tenancies Act, for instance, income accrues to the ACT from interest earned on rental bonds and that income is used, among other things, to cover the costs of the Residential Tenancies Tribunal. In fact, I have been advised that the income that accrues to the ACT from this funding, while variable, is around $1.5 million to $2 million. The total approximate cost of running the Residential Tenancies Tribunal is only $350,000 per annum. So it looks like the ACT is doing very well out of that scheme.
In that context—and this is simply a ballpark figure that may underestimate the cost, but it is indicative—we can expect annual costs of managing the unit titles regime to be around $320,000 per annum with an additional expenditure of approximately $190,000 in 2008-09 to get it up and running, and the minister will, of course, contradict that in his speech. Averaged out over all unit holders, that would be a pretty small sum—around $10 a year. I think that the ACT could sell that to owners overall with the time and the opportunity—two things it has not given itself.
Nonetheless, despite the experience of the Residential Tenancies Tribunal, I do think there are issues about having tribunals operate on a user pays basis. It is my view that a more open discussion would be the way to resolve these issues. I know a lot of matters will be sorted out down the track by regulation, but I am not really comfortable with that approach. I think that we should solve the problems around this bill, and it would be better to do so prior to passing it.
I would like to add that incorporation of this scheme into the tribunal structure has been part of the communication problem. There are many interested parties out there who imagine a stand-alone tribunal would be fairer and would echo provisions in other states. In my mind, in a small jurisdiction like the ACT the combined tribunal structure, once it is all sorted out, will probably deliver better.
Similarly, it is worth noting that the tribunal processes themselves will encourage some internal attempt to resolve disputes and some time spent in mediation prior to a full hearing. That, indeed, is the kind of process that was suggested in the discussion paper and that some of the owners who have contacted me are suggesting. I believe they can be reassured that the new system, when in place, will deliver something close to the model that they are calling for. But as the tribunal itself is not up and running it is proving hard to convince interested parties that this bill and the ACAT with which it is linked is an appropriate approach for this jurisdiction. That is a part of the unsettling nature of this process.
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