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Mr MIKE BAIRD (Manly) [4.55 p.m.]: The object of the Housing Amendment (Community Housing Providers) Bill 2009 is to transfer the ownership of social housing, funded by the Federal Government, to not-for-profit community housing providers. The Opposition supports the intent of the bill, which is to deliver more housing for people in need by giving those providers an asset base on which to secure funding to create more community housing. Later I will allude to the fiscal benefits that that will provide. I note that the decade-long waiting list for public housing in communities across New South Wales is a by-product of a government that has failed to invest in the infrastructure of today and tomorrow. Whether that be in transport, health, energy or, in this instance, housing, the Government cannot escape its responsibility for the current situation. There is no doubt that whether in terms of maintenance or capital in the provision of physical dwellings public housing in this State is in crisis. I note that the object of the bill is to amend the Housing Act 2001:
(a) to enable the Governor to vest land owned by the New South Wales Land and Housing Corporation (the Corporation) in a registered community housing provider that is also a company registered under the Corporations Act 2001 of the Commonwealth, and
(b) to provide for the registration by the Corporation of an interest in certain land such as land that has been so vested or the purchase of which was funded by the Corporation, and
(c) to prevent certain dealings with land in which the Corporation has an interest without the consent of the Corporation, and—
in other words, the Government—
(d) to provide other measures for the protection of the Corporation's interest in certain land.
The New South Wales community housing section currently consists of about 17,500 properties. The Federal Government's recent stimulus investment will help fill the current housing gap in this State. Certainly the $1.9 billion allocated, which is expected to provide 6,000 homes, is the first tenet of this bill, but I note the Government's goal and expectation is that there will be 30,000 additional homes by 2016. The Opposition supports the involvement of the community housing sector as an alternative to government ownership of public housing. It allows leverage of ownership of assets as community housing groups can borrow against the properties to provide additional accommodation.
In many instances community housing groups have provided accommodation services and additional support services more efficiently and more seamlessly than government. However, that sector must be supported by government to ensure that there are the required staff and resources. Certainly, when I refer to a few examples of what has happened in the United Kingdom I will ask the Minister to answer some very real questions concerning the way this program will be rolled out and some of the structures and protections that will be put in place. The Opposition recognises that the tenants of public and community housing are often the most vulnerable members in our community. The Liberal Party and The Nationals support them and the provision of public housing. Elderly people without family and young people without parents need government support. Under this State Labor Government that support has been sadly lacking. I am sure that members of this House could relate many stories of returning home from their electorate offices feeling unbelievably distressed by the personal circumstances in which people find themselves.
A tenant in a Government-owned housing block in Sydney Road, Fairlight, came into my office late last year. He was devastated, as he had been told the provider was changing and that as of June he no longer had a home. He had waited many years to secure a place to live and since then had developed companions in the block whom he did not want to lose. He had signed up for a course at Brookvale TAFE. His was a story of someone emerging from very difficult circumstances. He was very anxious about where he was going to go. Again, it is an example of people suffering as a consequence of there not being enough housing stock, particularly quality housing stock, in this State.
More recently a 19-year-old woman came to my office to ask for help. She was about to become a mum and had nowhere to live. Her application for housing had been knocked back as she was not considered a high enough priority. It is hard to imagine a young woman, pregnant and living on the street, not being considered a high enough priority. I acknowledge the work of the office of the Minister for Housing and his staff in helping me to address that situation. That young woman has since been provided with temporary accommodation, albeit well away from the community in which she spent most of her years. It is an example of the social context that we must consider when debating the bill. The provision of housing is not just an economic decision. We are providing something that supports a group of people whose circumstances we cannot begin to describe. Where a gap exists and people cannot provide accommodation for themselves there is an onus and responsibility on the Government to do so. Public housing plays a critical part in that situation.
With regard to the fiscal constraints and their impact on the backlog, I note the Auditor-General referred to it and Clayton Utz published a paper on it. The Auditor-General noted last year that the public housing maintenance backlog is in the vicinity of $650 million. The Minister may be able to give an update on that during this debate. Of the 130,000 public housing properties in New South Wales, almost 80 per cent were built more than 20 years ago. There is the maintenance side and the capital side of public housing. Whether it be the new dwellings required or the upgrading of old stock, the capital expenditure required is in the billions of dollars. There is no doubt that there is a fiscal drag on the State in that regard. There is a desperate need for the Government to provide accommodation for the people at the coalface, but it is unable to do so because of the constraints on the balance sheet.
I certainly understand that but this Labor Government's failure to invest in upgrading some of these properties and building new properties has added to the backlog. It has also added to the age of the existing stock. There are questions to be answered as to why we have not addressed this issue earlier. Certainly the stimulus money from Canberra has provided a start and we endorse it as a strategy to deal with fiscal constraint and the options for managing it going forward. However, when we look at what has happened in the United Kingdom we have to ask why we have not moved this way earlier. The Opposition supports providing the best facilities and acknowledges that there must be priority. We also understand the parameters of the triple-A rating, the demand for services and the requirements on any budget to deliver across a range of services. However, I cannot stress enough that public housing must be central to the provision of accommodation. The current approach of looking at community housing as an alternative and providing title has worked around the world and is certainly a system that we endorse.
The bill provides safeguards to protect the right of tenants to receive a good service and to protect the Government's investment. That makes sense; they are critical inclusions in the bill. A system implemented in May means that community housing providers will have to register and comply with a regulatory code. This is to ensure the properties are well maintained and well managed. The bill also enables the Government to register an ongoing interest in the land title of properties that are transferred to community housing providers. Importantly, this interest will prevent the properties being sold or mortgaged without the reasonable consent of the Government. Again, that is an important measure. We do not want these properties being sold for profit or used as a vehicle to provide an economic windfall for parties or groups. I know that is not the intent in any way, shape or form. It is a sensible inclusion.
In the event of a provider failing to comply with the requirements of the code, the bill provides additional measures to enable the Government to intervene. It is important that tenants have security in their housing arrangements that will not be jeopardised should the provider fail in its management of the service or find itself in financial difficulty. These powers will allow the independent registrar to appoint an adviser to assist the provider in lifting its service to the standards required by the code. If the service is not improved, it is appropriate that the registration be cancelled. In this instance the Government can instruct the provider to transfer the properties to another registered provider or to the New South Wales Land and Housing Corporation.
All those provisions are in the bill but there are aspects of the bill that are decidedly vague and I will be looking to the Minister to provide some explanation. I want to look at what has happened in the United Kingdom, which is a good model. I am sure the department will have looked at the United Kingdom situation because there are some very close similarities to what is being proposed in the bill. Again, it is a timing issue, and I referred earlier to fiscal constraint. In the late 1980s the United Kingdom started to move this way. Indeed, housing Acts in 1985 and 1988 empowered local authorities to transfer some or all of their housing stock to housing associations, which are commonly referred to in the United Kingdom as registered social landlords, by way of large-scale voluntary transfer. In essence, this is pretty similar to what is proposed in the bill. The 1988 Act also introduced private finance into social housing.
Historically in the United Kingdom local authorities controlled the majority of dwellings in the social housing sector, which again is similar to what happens here. However, in the United Kingdom this sector is huge. The total number of dwellings in the United Kingdom is approximately 20.7 million and 21 per cent, or 4.3 million homes, could be regarded as social housing. Local authorities own and manage 73 per cent, or about 3.1 million, of those homes and the remaining 27 per cent, or 1.2 million homes, are owned and managed by registered social landlords. Since the Act was introduced in 1988, local authority housing ownership has continued to decline and community sector ownership has increased. The main reason for the decline is the transfer of properties through the large-scale voluntary transfer system. Those transfers are undertaken by local authorities that are unable to maintain their housing stock to meet modern standards due to the continued reduction in council budgets payable by the United Kingdom Treasury. Obviously there was a fiscal imperative that the United Kingdom Government started to attack in the late 1980s.
I ask the Minister to pay attention to the mechanism involved in this system and provide us with some insights into what will happen in the process in New South Wales. When a local authority in the United Kingdom decides, after considering all options, to transfer its housing stock, it is achieved through the Government's annual transfer program. The transfer cannot take place unless the tenants vote in favour of it. Having read the bill, I am not sure whether that is the case here or whether letting tenants have a say in the outcomes is being considered. That system has worked in the United Kingdom and certainly I do not think we should dismiss the idea of tenants voting in favour of the options put before them. I encourage the Minister to look at that mechanism and whether it can be incorporated in our legislation, if indeed it is not there already.
The United Kingdom Government approves a defined limit on the number of houses to be transferred in any given year. Obviously the volume in the United Kingdom is more significant; it is currently 200,000 per annum. The numbers are much smaller here. Has the Government considered bunching these properties and the valuation impact this could have on the demand for private finance? Obviously we have just gone through the global financial crisis and there is significant demand for private finance. There is no doubt that banks have tightened their lending regimes and the amount of capital available. The question is one of tiering this process and making the capital available. Has the Government looked at bunching to make sure we do not restrict the amount of capital available?
The transfer program in the United Kingdom has extended the time for complex transactions. Obviously some transfers will be much more complex than others. The time frames in which this is expected to take place under the bill are not clear. I cannot see detailed in the bill the time frames that will enable this sort of transfer to go through. If we are to go through this lengthy transfer process there must be some structure to it and people must be held to account for its time frame. I refer to the stock transfer process, which is interesting. Once the transfer process has been decided it would then be submitted to the Deputy Prime Minister—in this case I think it goes back to the director general—but there is a mechanism to send the process back to the Government. The application would then be considered and the authorities that were approved for inclusion would be announced—an important part of a rigorous process. Obviously the tenants would have been listened to, the financial capabilities of the provider would have been determined, and a purchase price would then be agreed.
The last point I leave with the Minister is that the purchase price appears to be silent. How will we determine the transfer price of this property? We all want to facilitate this process, but at same time there must be transparency and a clear understanding of the asset transfer price. We do not want to be in a position where we favour one provider over another, or where the valuation of individual stock is not transparent to everyone in New South Wales. It will be interesting to establish how that will be determined. The model that is used in the United Kingdom is a 30-year discounted cash flow model, which is transparent and easy to determine. If the Government has not implemented such a model I encourage it to advise all members—in debate or through the provision of supplementary information—whether it will do so. If title is transferred a value should be ascribed to such a transfer and we need to know what it is.
We need transparency in all these areas. I look forward to hearing what the Minister has to say. What are the implications and what opportunities will be available when one is operating with fiscal restraints? Since the late 1980s about $40 billion—a huge capital injection—has been lent to this sector in the United Kingdom. I desperately hope that this strategy, which I endorse, will provide relief to those who come to my electorate office seeking to upgrade the roofs of their homes, let alone requiring assistance for other maintenance. We all want to hear fewer stories about those who do not have a home and to hear that our public sector is providing homes to those who are vulnerable and who are living in difficult circumstances. When transferring community title the Government should use operators who have proven expertise and who have a desire to make it happen. I believe this is a positive step for the State. I endorse the Minister's strategy and raise the concerns to which I referred earlier after considering the experience in the United Kingdom. I ask the Minister to address those concerns when he replies to debate on this bill.
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