12 October 2016
2nd Reading Speech
The Hon. ADAM SEARLE ( 15:38 ): I lead on behalf of the Opposition in debate on the Social and Affordable Housing NSW Fund Bill 2016. The Opposition does not oppose the legislation. I acknowledge the work done by my colleagues in the other place, the shadow Treasurer, Ryan Park, and the shadow Minister for Social Housing, Tania Mihailuk, for the work they have done in debate for the party and for the Opposition on this matter. Currently social housing faces a funding gap between the rental stream that is received from tenants plus the subsidies provided by taxpayers and the revenue that is required to sustain a commercially viable project. The Social and Affordable Housing NSW Fund is said to be designed to address that gap to ensure that the waiting list for social housing, which is growing daily, is reduced. It aims to do this by providing the capital for community housing providers to build, own and maintain their own properties. The government agency will not own any of the stock built under the fund.
Only phase one of the program is currently underway, which was launched in January this year with calls for expressions of interest. The Government has only now introduced a bill to provide for the establishment of the fund, which is somewhat tardy on the part of the Government. Following the closure of the expressions of interest phase, nine consortia were shortlisted and issued with a request for proposal. Following the evaluation of those proposals, the Government says it intends to award successful consortia 25-year service agreement contracts. It is expected that those agreements will be awarded soon and we look forward to that happening.
The fund is said to be aimed at providing a long-term revenue stream to plug the gap and encourage non‑government organisations to collaborate and develop housing projects. I acknowledge that the Leader of the Opposition in the other place made the issue of social housing a key plank of his budget reply speech. He understands, like all of us on this side of the House, that this is a major issue from not only a social perspective but also an economic and budgetary perspective. Social housing impacts on the budget and we want to ensure that as a community we can provide housing to those who are unable to enter the market on their own. The fund will be established with $1.1 billion in seed capital from the Government to provide investment to the sector. The investment arm of the Government, TCorp, will invest the $1.1 billion and the returns will go to social and affordable housing projects in the form of a 25-year income stream.
While this is welcome, it should be understood that this equates to about $44 million a year each year for the 25 years. So while the announcement of a $1.1 billion investment sounds significant—and it is better than nothing—boiled down to an annual figure it is, in fact, quite modest when we look at the scale of need we face. The aim is to deliver approximately 3,000 additional social and affordable homes. The Opposition has concerns that, given the structure of the fund, that number may not be met and that there will be a substantial shortfall between that aspirational figure and what is actually delivered, although we hope we are wrong about that.
Again, while 3,000 new homes are certainly better than no homes, it will barely touch the sides in terms of the quantum of additional housing stock needed in this State. For example, the NSW Federation of Housing Associations believes that approximately 100,000 new social and affordable houses are needed over the next 20 years, which is close to 5,000 new homes per year, just to prevent the social housing waiting list from blowing out even further. Over the 25 years, this fund will build less social and affordable housing per year than is already needed just this year.
Given that the Social and Affordable NSW Fund will be established as an investment fund seeking returns in the market, there is a question about whether the returns will be substantial enough to generate the funding required to deliver the 3,000 homes per year over a 25-year period. I ask the Government to outline some more details about its investment strategy, particularly, how it is going to establish a safety net to ensure that what it is aspiring to deliver is, in fact, delivered. I note the commitment given by the Treasurer in her second reading speech that should the fund outperform over the long term, additional earnings will go towards further programs that share the aims of the fund. That is laudable, but I ask the Government in this place: Should the fund underperform, either in the short or over the longer term, does the Government intend to step in with additional revenue to support the objects of the fund to ensure that the 3,000 homes are delivered, or will the quantum of houses to be built be reduced?
Turning to the bill, clause 5 sets out the purpose of the fund, which includes setting aside funds to create new social and affordable housing stock and the delivery of associated services and social outcomes for tenants. Clause 13 deals with delegation. The Minister may delegate the exercise of any function of the Minister under the Act to the secretary of the Treasury, or to any person employed in the Treasury, or to any person employed in a public service agency prescribed by the regulations. Importantly, there will be a review of the Act, as outlined in clause 16. The Minister is to review the Act to determine whether the policy objectives of the legislation remain valid and whether the terms of the Act remain appropriate for securing the objectives. The review is to be undertaken as soon as possible after the period of five years from the commencement of the legislation, and a report on the outcome of the review is to be tabled in each House of Parliament within 12 months of the end of that review.
In its various second reading speeches the Government has spoken about the engagement of the NSW Council of Social Services [NCOSS] and Infrastructure Partnerships Australia, and we acknowledge the work of those stakeholders. The challenge for all of us is not only the construction of social and affordable housing but the maintenance of that stock. We are faced with real challenges to ensure that the current regime of maintenance of public housing stock is delivered more efficiently and more effectively. I remember when this Government took office, the former finance Minister, the Hon. Greg Pearce, would regularly lecture those of us on this side of the House about the alleged $300 million maintenance backlog for social and affordable housing in government hands. I have kept abreast of that issue each year and it is noteworthy that that figure has not decreased; in fact, this year I believe there is a $330 million maintenance backlog.
The Hon. Greg Pearce: I should have stayed, shouldn’t I?
The Hon. ADAM SEARLE: I acknowledge that interjection. This Government could have done much worse than to have the services of the Hon. Greg Pearce in the ministry. But the point is that this Government has failed, according to its own objectives. The Hon. Greg Pearce was right to point out that a $300 million maintenance backlog was inadequate for government, and under the Government’s watch it has got worse—it certainly has not diminished. So I would like the Government to also outline its plans to bring that backlog to a much more manageable level. All members in this place and in the other place can tell some horrific stories about the lack of maintenance in the public housing sector across the State and, given the booming property market and the revenues that are flowing to government coffers on the back of stamp duty, it would be incumbent on the Government to ensure that a sufficient amount of that goes to providing housing to the most vulnerable in our society that remains fit for purpose.
I know that my colleague the member for Bankstown feels very strongly about this issue not only because of her firsthand experience in her electorate but also because of her commitment to social justice—a commitment shared by all of us on this side of the House. We support the legislation before the House, but this Government still has many challenges to meet, not the least of which is to hold itself to the standards that it sought to apply to its predecessor.