NEWS

What does the NSW budget 2024-25 mean for renters

18/06/2024

The Tenants' Union of NSW has dived into today's NSW budget announcements, looking for the key measures that will significantly impact renters. These are our initial thoughts, we will add to this page as we gather more detail. There may be errors we will rectify as they are identified.

What Government delivered

Investment in public and community housing, investment in Homes NSW 

We applaud the government’s commitment to increasing housing stock and improving repairs and maintenance for public housing through investment of $5.9bn for Homes NSW to deliver

  • $5.1bn over 4 years, of which $3.3bn is new investment for new, additional supply and $1.58bn from existing budget commitments 
  • $202.6m over four years for the Aboriginal Housing Office as additional resources on existing budget towards critical maintenance and minor repairs. 
  • $801m over four years as additional resources on existing budget towards critical maintenance and minor repairs. 

The $5.1billion will mean 6200 genuinely additional social homes, along with the replacing of 2200 existing dwellings to deliver a total of 8400 homes. We understand approximately 50-70% of these homes will be managed by Homes NSW, with the remainder managed by community housing. Planning of these projects is yet to commence in detail, and we will assess future announcements as they come.

The $1billion for critical maintenance and repairs is a much needed injection of funds, recognising Homes NSW must do better to address the disrepair and poor standards many public and community renters have had to accept. This allocation represents a new commitment of dedicated funds for critical maintenance and upgrades, that signals the continued departure (hopefully permanent) from sale of assets as a funding source for maintenance. It also represents a substantial increase on previous resourcing that was made available (we hope to provide detail on this in the near future). 

These measures are a vital first step towards ensuring public and community housing is a core part of the NSW government's strategy to deliver more diverse and genuinely affordable homes in the midst of a housing crisis. It also demonstrates recognition of the resourcing required to maintain and keep in good repair public and community housing properties, to ensure safe and healthy homes for the people who live in them.

Expenditure on public and community housing should be aimed, across all levels of government, to deliver an outcome that means at least 10% of all housing in NSW is social housing by 2036. This announcement means NSW reverses the trend of a decreasing share of homes (from 4.93% in 2023), but this effort needs to be expanded and sustained in future budgets and by all levels of government. Achieving 10% by 2036 would mean construction of around 16,000 public and community housing homes each year, and requires using a combination of federal, state and local government levers.

Separately to Homes NSW, $450million for Landcom-developed build-to-rent homes has also been planned. We encourage government to retain ownership of these properties which would demonstrate a genuine shift to a more universal approach to the provision of housing.

NSW Rental Taskforce Investment 

We said in our Pre-Budget Submission that “both the perception and actual presence of an active regulator in a sector is crucial to community trust in the success of a regulatory system. The current system in renting relies too heavily on the consumer renter to initiate and carry the risk of enforcing the law. This is because most responsibilities of service providers are expressed through contract provisions in a residential tenancy agreement.”

The announcement of $8.4 million to establish a NSW Rental Taskforce is a crucial step towards ensuring a fair and regulated rental market. An active and resourced regulator is essential, and we look forward to seeing these resources allocated effectively to better outcomes in the renting sector. 

No one knows better than renters where the frustrations in the current system lie. The Rental Taskforce must work with tenant advocates and renters to identify priority areas and publish a strategy document for stakeholders to measure and ensure the success of the taskforce. The Tenants’ Advice and Advocacy Program must also be supported with additional funding to allow engagement, referral pathways and assisting renters.

Land Tax Reform

We welcome the NSW government’s decision to freeze the land tax-free threshold and collect land tax from a broader base. 

Currently, less than 1 in 5 landlords in NSW pay land tax. We are confident this reform will not negatively impact renters. Analysis suggesting landlords may sell due to this change does not account for who the property might be sold to, thus not providing a clear impact on the rental sector. NSW renters and taxpayers have significantly contributed to the value of land through services and community investments, making it fair for the government to recoup a portion of this increased value.

The $1.5 billion expected to be collected should be directed towards addressing the housing crisis, including increasing the supply of public and community housing and purchasing existing homes from investors in financial difficulty.

 

Unfinished business

Advocacy for renters

While we’re optimistic about the investment to set up a NSW Rental Taskforce, we note the Tenants' Advice and Advocacy Program requires an additional $9 million per year to provide free expert tenancy advice and assistance to meet the growing need of our communities. Despite an ever-increasing renting population, our funding has stagnated below 2008 levels. Many renters need advocates to assist with justice and dispute resolution, and we urge the government to recognise this need. We will continue to work with the NSW government to restore this funding.

Tenant advocates prevent people falling into homelessness through advocacy before and at the Tribunal, and save government significant funding across the housing, homelessness, health and justice portfolios.

The Rental Bond Board is receiving just over 3% of the value of the more than $2bn in bonds held back from Treasury. This is clearly making it difficult for the Rental Bond Board to fund the activities of Fair Trading and the Tribunal as well as supports for community grants such as the Tenants’ Advice and Advocacy Program, financial counselling and others. Government activities accounted for 58% of the expenditure of the Bond Board in 2022-23, with community grants (excluding the Mascot Towers support which has now ended) only 34%. The new mix is not yet clear.

Treasury should restore overall funding to match actually achieved returns and allow the Rental Bond Board to fund community grants at the needed levels. Funding for the Tenants Advice and Advocacy Program should also be again drawn from the Property Services Statutory Interest Account, in line with the legislative intent in the Property and Stock Agents Act.

Strata Commissioner

Greater resourcing of the Property and Strata Commissioner is also a welcome move. Half of strata residents rent their homes, however regulation of the sector has focussed on the experience of owners. Greater attention to the experiences of renters in strata, and improved quality of property management should become a core focus for the Commissioner with their greater resourcing.

NCAT Resourcing and Review

We note the $3 million in increased resourcing to expand the NSW Civil and Administrative Tribunal (NCAT). We look forward to more detail on how this will be spent. There are two key items that should be addressed.

  • Online Registry Services
    NCAT launched in 2023 using the Courts NSW system. However the system was not designed for a high-volume, low-repeat use jurisdiction with limited legal representation. Tenant Advocates, funded by NSW Government, have been excluded from the online system and this should be rectified as a high priority.
  • NCAT Review
    This election commitment review is to focus on the processes and experience of resolving rental disputes. Timely and fair dispute resolution for renters is crucial for maintaining stable tenancies and trust in Tribunal and other available dispute resolution processes. The review should commence as soon as practical.

Funding for Community Legal Centres

We understand there is no allocation of funds in this budget to community legal centres. Community legal centres provide critical support to renters facing legal issues and need adequate resources to continue their essential work. Greater investment in the sector is needed to recognise and assure continued provision of the vital service they provide, including their role in shaping progressive law reform. 

Portable Bonds Scheme

While we understand the complexities involved, we urge the government to expedite the implementation of the portable bonds scheme. We understand procurement for delivery has begun and recommend government update the community on progress so far. This scheme will provide significant relief to renters by making the process of moving between rental properties more manageable, relieving some of the financial pressure for renting households.

Support for older people navigating the housing system

We are disappointed not to see any commitment of funding for the Homes at Last service advocated for by the Ageing on the Edge coalition. The service would provide targeted critical support and information to older people to help them better access secure, affordable and appropriate housing.

Homelessness support

The New South Wales Government has also announced $527.6 million for emergency housing and homelessness support services, intended to support vulnerable people in crisis transition into stable housing. We recognise the importance of homelessness support and prevention.

The Tenant Advocates are a key part of the homelessness prevention strategy, preventing evictions into homelessness and resolving disputes before they turn into crisis. We cannot perform this function with such a significant funding gap, and look forward to working with government to better recognise the impact tenant advocacy has on NSW's homelessness response.

Wellbeing indicators

An area of the Budget that did not get as much attention was the announcement and release of a consultation draft of wellbeing indicators for NSW. These indicators attempt to move away from purely financial measurement of how well our community is doing and is a welcome addition. There are specific housing indicators, however they are missing any indicators concerning the private rental sector. We will make some suggestions including measuring:

  • the length of tenure, seeking to move from an average of around 18months to closer to 5-6 years for renters not choosing to move.
  • the proportion of renters in the lowest 40% of incomes who do not have sufficient money left after rent to meet their household needs
  • a refined vacancy rate calculation developed and held by government as an authoritative measure
  • rates of evictions measured informally in the End of Tenancy Survey and formally through applications/orders at NCAT 
     

Comparison to our Pre-Budget Submission

Increase funding for the Tenants’ Advice and Advocacy Program (Department of Customer Service)

No commitment to additional funding of $9 million per year to the NSW Tenants' Advice and Advocacy Program to meet the growing need of our communities and bring our funding up to date, which has stagnated below 2008 levels.

Reform unfair evictions (Department of Customer Service)

  • Cost of living – cost of moving
  • Provide relief for all renters

The average cost of an eviction to a renter in NSW is $4000. Rental reforms to reduce the number of unfair and unnecessary evictions are a critical cost-of-living measure the NSW Government must prioritise.

Support regulatory activity, including provider registration (Department of Customer Service)

The announcement of $8.4 million to establish a NSW Rental Taskforce is a crucial step towards ensuring a fair and regulated rental market. We look forward to more detail on the priority focus areas for the Rental Taskforce, including whether this includes progressing plan towards provider registration.

Improve service of NSW Civil and Administrative Tribunal (Attorney-General, Department of Customer Service)

  • Review of NCAT in relation to renting
  • Online registry services

We note the $3 million in increased resourcing to expand the NSW Civil and Administrative Tribunal (NCAT). We look forward to more detail on how this will be spent. 

Invest in the creation of Homes NSW (Department of Communities and Justice)

The announced $6.6 billion for the Building Homes for NSW package is a vital first step towards ensuring public and community housing is a core part of the NSW government's strategy to deliver more diverse and genuinely affordable homes in the midst of a housing crisis. 

 

The $1billion over four years towards critical maintenance and repairs demonstrates much needed acknowledgement that Homes NSW must do better to deliver healthy, safe homes for the people living in public and community housing, and must be adequately resourced to do so.

Continue implementation of portable bonds scheme (Department of Customer Service, Homes NSW)

We note the delay in implementing the Portable Bonds Scheme and urge the  government to expedite the scheme’s implementation. 

 

END UNFAIR EVICTIONS

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