Page 2909 - Week 08 - Wednesday, 24 June 2009
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processes. As a matter of course these processes resulted in the legal and risk teams from national offices within the institutions raising questions seeking to clarify the operation of the scheme. Some of these questions were simply clarifying issues relating to the general principles of the leasehold system. Others were more detailed questions about the operation of the scheme itself.
Now, although the due diligence process took longer than we would have liked, general feedback from the banks remained positive. However, the advent of the global financial crisis impacted on these discussions. The crisis severely constrained the amount of money available for lending and caused financial institutions to tighten their lending margins on their existing products. The lenders became reluctant to consider new products as a consequence of the crisis. Let us remember that this is the environment before the Australian government said it would guarantee all the borrowings of all banks and financial institutions.
Despite the setback of the global financial crisis, the government continued to pursue discussions with lenders with a view to making sure that a lending product for land rent would be available. We are pleased that Community CPS Australia has announced that it will be offering a lending product for the land rent scheme and that it was not affected by the global crisis in the same way as some of its competitors. Combined with its commitment to providing affordable housing to the community, this has meant that Community CPS Australia has been more open to consideration of this innovative and exciting scheme, and we hope that with the adoption by Community CPS of this new product other lending institutions will pay similar attention.
The government continues to be overwhelmed by the community support for this scheme and by the number of people who have kept the faith and kept land rent blocks on hold. This is a good scheme and the Assembly should give it a go. Anything that delivers savings of $600 or $700 a month in mortgage payments is worth a go to give lower income earners the opportunity to own their own home. The government does not support Mr Seselja’s motion today.
MS BRESNAN (Brindabella) (5.51): The land rent scheme has been a particularly political project. It is one that has never been supported by the Liberal Party. I suspect that is why the Labor Party has been consequently so resistant to any advice on the matter. I have no doubt that there are instances of slight elasticity on the truth of events relating to the matter, including the reasons why it has been hard to find a financial institution to provide credit.
I have no doubt that the Liberal Party has ended up in a position wanting this scheme to fail. It has invested too much in its probable failure to be prepared to welcome yesterday’s turnaround even if it does benefit those customers who have wanted to buy into it, the same constituents that the Liberal Party has been concerned to represent.
That is what is so annoying about this whole debate. I do not know if the land rent scheme will work, but I would like to give it a chance. Now that there is a credit provider it would make sense just to step back and let that happen. I know the
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