Published: 13 June 2018

Housing Tasmania is forced to pay off millions to Federal Government, writes Ruth Forrest

ONE of the essentials of life is shelter. If a person or a family does not have safe, secure and suitable shelter their chances of good health and of gaining an educational outcome that will assist them into employment and reduce reliance on social support is extremely high.

Even without inclement weather, a roof over your head and a place to call home is a basic need. If we are to see progress in education and health for Tasmanians, addressing the need for shelter is vital. Access to shelter, both emergency and longer term, is predominantly the responsibility of a caring community where government must take a lead. This does not mean all social housing should be provided by government through the public sector. However the government needs to determine the policy settings that encourage non-government organisations and private enterprise to participate in the provision of safe, secure and suitable housing to all Tasmanians.

The relatively recent growth in the sharing economy and emergence of platforms such as Airbnb have added to the challenge. The State Government has acknowledged this impact and offered incentives to property owners to convert Airbnb properties to long-term rental.

This is not enough. Clearly more needs to be done. Sustainable solutions will require bold and long term thinking. It will require financial investment by government and leadership from the minister. 

We are often reminded the Tasmanian government is debt free. This is true, but the definition of debt conveniently overlooks $8 billion in unfunded superannuation. Whilst it’s a liability the rules deem it’s not a debt. When past governments paid off debt they did so using government deposit accounts and trust funds. In the main it was sensible to use these idle funds for this purpose, the biggest downside being trying to find funds from current income when the deposits are needed for their intended purpose. 

There was one debt however that wasn’t repaid, the housing debt owing to the Australian Government. Again, nothing wrong with that. The interest and repayment terms were favourable so why pay off the debt early?

The problem is that the $15 million annual costs of the loan, currently about $165 million, make a big hole in the government’s housing budget at the very time we have a housing crisis. Surely this $15 million a year could be put to better use and provide roofs over Tasmanians heads.

Could this be achieved without the debt being forgiven by the Commonwealth?

As this option appears to have been ruled out a number of times we need to consider alternatives.

Because the housing loan was left unpaid when the rest of government borrowings were restructured, shouldn’t the current cost of the housing loan be borne by the whole government?

After all, despite promising at the 2014 elections to stop subsidising Forestry Tasmania, the Government took over $113 million of its unfunded superannuation liability to help it become sustainable. The liability disappeared from the balance sheet of Forestry Tasmania and was assumed by the whole of government.

Surely the least the Government can do is to spread the annual costs of the housing loan across the whole government instead of attributing it all to the housing budget? If it can be done to assist Forestry Tasmania I would suggest it can be done to assist those in need to safe, secure affordable housing.

The benefits of providing shelter will flow back to government through less drain on other areas of social support, health services and the justice system and increase the likelihood of these Tasmanians accessing education and employment, further stimulating the economy. A benefit to all.

The additional money in the housing budget could be used to create a range of affordable housing options.

Government has been leasing inner city offices, many of which have been vacated with workers moving to other accommodation, including the new Salamanca building. These buildings may have secured more office tenants but many may be vacant or not fully occupied. Incentives could be provided to private property owners in the CBDs of cities and towns to repurpose parts of these buildings to provide housing, including affordable and social housing. The same applies for second and higher floor spaces above retail spaces.

High density, inner city accommodation is close to services including transport,education, employment opportunities and health services. Ownership of a vehicle becomes less important and can create increased disposable income for the tenant. Planning schemes and legislation generally provide for such use therefore additional incentives should be considered to encourage private property owners to consider housing as a viable option. If legislative change is required then make this a priority.

In regional areas the problems are different, but the solutions are easy. In my home town of Wynyard, Spencer Park Incorporated, a community-owned association providing 54 units to low income retirees, needs only $50,000 per unit for another eight units to clear its waiting list and make the association a self-sustainable business capable of updating and replacing its stock of housing.

The beneficiaries of rising house prices need to share some of their gains. A broader based land tax would be much fairer, would dampen house price rises, would shift a little revenue to state governments and would enable the windfall effects of the housing boom to be spread a little wider. A multi-pronged solution is required. Rocket science isn’t required. The major stumbling blocks are greed, self-interest and a predisposition to play political games rather than solve problems. None of these is insurmountable.

Mercury 13 June 2018

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