Ms CARTER - 2000-10-12
I understand the government has made some prominent changes to the HomeNorth Bond Assistance Scheme so that it is more accessible to low income Territorians. Can the minister please advise the House of these changes?
ANSWER
Mr Speaker, I thank the member for her question and I am quite sure members on this side will be very pleased with the changes the government is introducing for our Bond Assistance program.
We introduced the Bond Assistance program in June 1998 to basically help those low income families who were on our waiting list to access the private rental market. As you know, when you are transferring to accommodation it is a costly exercise. You need money for putting on essential services, you perhaps need a fridge. So any assets people had were often eaten up and swallowed up with the move. By introducing a Bond Assistance program we were able to allow tenants to give those landlords out there that bond that was required so they would have a good start.
Unfortunately, we were a little bit disappointed with the take up of this system. Last year, for instance, we only had 200 approvals, so we had to look at it and see why basically we were not getting as many people as possible taking up the Bond Assistance program. We found in our review that basically the eligibility criteria we had set was far more stringent than the eligibility criteria for those people who could access public housing, we made it too tight. So we have reviewed all this and what we have done is made the income eligibility criteria for people to access Bond Assistance in line with those people who are eligible for public housing. So we have widened the loop, more people will be able to access Bond Assistance and I am quite sure we will see a greater increase in this.
We also found with the old system that the recovery was very poor. It was basically meant to be an interest free loan for people to pay their bond and when they vacated that tenancy for that bond assistance to be repaid. But we really had no mechanism at all for that whatsoever. So in our review what we have done is we have widened the income eligibility limits so that more people will be able to take advantage of this bond assistance. We have also introduced a scheme whereby the bond assistance can be paid back automatically at $10 per fortnight, which will eventually make the scheme self-sufficient. The turnover should be that as we lend the bond and the real estate people get their bond assistance, the tenants can pay it back in a very slow way so over time it will become self-sufficient. What we anticipate and we are hoping is that we will actually get a greater increase, perhaps 400%. We think we should have about 800 people out there to access bond assistance.
Now, we all know our waiting list is still high, people are there waiting for a public house, but if they could access the private rental market then, of course, it gives them an opportunity to get into accommodation more quickly and certainly a better type of accommodation than perhaps they are in at the moment in that way. We found that interstate experience shows that a very well administered scheme will return a large proportion of the funds that we are going to loan to these eligible tenants, but also has very beneficial outcomes for landlords.
This is one of the benefits of this scheme. The private rental market out there is going to benefit from this. There are going to be a lot more people who will come to us and say, ‘Okay, rather than keep me on that waiting list let me access the private rental market’, and we will put up to four weeks rent in bond assistance. If there is an exceptional circumstance we might even have to give them a bit more. But it means that there is the opportunity for people to take advantage of the private rental market which at the moment that seems to be very flush with accommodation. So I think there is an opportunity for the real estate people to take advantage of this also.
There is still a qualifying period for Northern Territory residents for bond assistance. It remains at the current level of three months, because we are certainly not saying that anyone who walks in the Territory next week can apply for this. We really want to ensure that this bond assistance is used by people who live in the Territory, work in the Territory, are committed to the Territory and will stay here. So you do have to have a residency period of three months at least to be able to access this.
If it is fully successful we think there will be something like $600 000 per annum going out in bond assistance, that perhaps there may be up to 800 tenants. But of course it will revolve. It will be a revolving door whereby that bond assistance will be recovered. So it benefits everyone. It will benefit low income people who are out there seeking accommodation. It will certainly reduce our waiting list. It will take people off that as they can go elsewhere. It will certainly benefit the real estate industry as it opens access to a greater number of people to go into the private market. It ensures that real estate landlords will get their bond up front, they don’t have to worry about that, and of course it means that it can be self-funding.
This is another example of this government introducing initiatives for people on low incomes to make sure that they have a better quality of accommodation. We have introduced many good initiatives in this government over the last two years, and I know the people out there are very, very appreciative of what we have done. We only need to see what is happening out there. This is something that will help not just people on low incomes; it will help that private rental market. I commend it to all members.
ANSWER
Mr Speaker, I thank the member for her question and I am quite sure members on this side will be very pleased with the changes the government is introducing for our Bond Assistance program.
We introduced the Bond Assistance program in June 1998 to basically help those low income families who were on our waiting list to access the private rental market. As you know, when you are transferring to accommodation it is a costly exercise. You need money for putting on essential services, you perhaps need a fridge. So any assets people had were often eaten up and swallowed up with the move. By introducing a Bond Assistance program we were able to allow tenants to give those landlords out there that bond that was required so they would have a good start.
Unfortunately, we were a little bit disappointed with the take up of this system. Last year, for instance, we only had 200 approvals, so we had to look at it and see why basically we were not getting as many people as possible taking up the Bond Assistance program. We found in our review that basically the eligibility criteria we had set was far more stringent than the eligibility criteria for those people who could access public housing, we made it too tight. So we have reviewed all this and what we have done is made the income eligibility criteria for people to access Bond Assistance in line with those people who are eligible for public housing. So we have widened the loop, more people will be able to access Bond Assistance and I am quite sure we will see a greater increase in this.
We also found with the old system that the recovery was very poor. It was basically meant to be an interest free loan for people to pay their bond and when they vacated that tenancy for that bond assistance to be repaid. But we really had no mechanism at all for that whatsoever. So in our review what we have done is we have widened the income eligibility limits so that more people will be able to take advantage of this bond assistance. We have also introduced a scheme whereby the bond assistance can be paid back automatically at $10 per fortnight, which will eventually make the scheme self-sufficient. The turnover should be that as we lend the bond and the real estate people get their bond assistance, the tenants can pay it back in a very slow way so over time it will become self-sufficient. What we anticipate and we are hoping is that we will actually get a greater increase, perhaps 400%. We think we should have about 800 people out there to access bond assistance.
Now, we all know our waiting list is still high, people are there waiting for a public house, but if they could access the private rental market then, of course, it gives them an opportunity to get into accommodation more quickly and certainly a better type of accommodation than perhaps they are in at the moment in that way. We found that interstate experience shows that a very well administered scheme will return a large proportion of the funds that we are going to loan to these eligible tenants, but also has very beneficial outcomes for landlords.
This is one of the benefits of this scheme. The private rental market out there is going to benefit from this. There are going to be a lot more people who will come to us and say, ‘Okay, rather than keep me on that waiting list let me access the private rental market’, and we will put up to four weeks rent in bond assistance. If there is an exceptional circumstance we might even have to give them a bit more. But it means that there is the opportunity for people to take advantage of the private rental market which at the moment that seems to be very flush with accommodation. So I think there is an opportunity for the real estate people to take advantage of this also.
There is still a qualifying period for Northern Territory residents for bond assistance. It remains at the current level of three months, because we are certainly not saying that anyone who walks in the Territory next week can apply for this. We really want to ensure that this bond assistance is used by people who live in the Territory, work in the Territory, are committed to the Territory and will stay here. So you do have to have a residency period of three months at least to be able to access this.
If it is fully successful we think there will be something like $600 000 per annum going out in bond assistance, that perhaps there may be up to 800 tenants. But of course it will revolve. It will be a revolving door whereby that bond assistance will be recovered. So it benefits everyone. It will benefit low income people who are out there seeking accommodation. It will certainly reduce our waiting list. It will take people off that as they can go elsewhere. It will certainly benefit the real estate industry as it opens access to a greater number of people to go into the private market. It ensures that real estate landlords will get their bond up front, they don’t have to worry about that, and of course it means that it can be self-funding.
This is another example of this government introducing initiatives for people on low incomes to make sure that they have a better quality of accommodation. We have introduced many good initiatives in this government over the last two years, and I know the people out there are very, very appreciative of what we have done. We only need to see what is happening out there. This is something that will help not just people on low incomes; it will help that private rental market. I commend it to all members.
Last updated: 09 Aug 2016