National Rental Affordability Scheme
E&OE
Presenter:
The future of the subsidised housing scheme for low income tenants in is doubt over claims it’s being manipulated to build accommodation for wealthy foreign students. The National Rental Affordability Scheme (NRAS) which was established by the Rudd Government pays landlords a $10,000 subsidy if they charge 20% below the market rent. Labor says the scheme is working as planned but the Government is reviewing its operation. The Minister responsible for the scheme is Social Services Minister, Kevin Andrews, and he’s speaking here to Marius Benson.
Marius Benson:
Kevin Andrews is the National Rental Affordability Scheme in your view being rorted now?
Minister:
Well there are clearly a series of issues with the scheme that need to be addressed. There are ones that have been highlighted in the last day or so about who is actually making use of this scheme which was aimed at providing accommodation for Australians who couldn’t afford normal rent. There is also a series of issues about the actual implementation of the scheme which we’ve been looking at for some time.
Marius Benson:
Is the evidence to you that the beneficiaries are substantially international students of wealthy circumstances?
Minister:
Well there’s certainly a group of international students who are making use of this accommodation and then there are other issues in relation to actually getting it rolled out. The implementation of the scheme is something which was very poorly designed; it had a very low take-up particularly in the early years. Then beyond that we’ve discovered there’s a trade in the licenses so much so that some of them are now being traded for about $20,000 on the market.
Marius Benson:
How does that work?
Minister:
Well people who take up the license then don’t use it and are then putting it up for sale to others who might. So what’s effectively being created is a kind of futures market in these licenses and the whole point of this was to get buildings constructed so that people who couldn’t afford normal rents would be able to get into them and that’s not happening in many instances.
Marius Benson:
If the immediate beneficiaries of the scheme turn out to be international students, does that mean in your view the scheme is failing?
Minister:
Well, one has to look at why this scheme was developed. It was developed in the first place to try and address the situation where lower paid workers particularly in major cities, but elsewhere as well, who couldn’t afford rents would be provided with lower rents because the people investing in the housing were given effectively a tax break. Now if that’s not happening then it’s not addressing the issue. The real issue in Australia is we have a large shortage of dwellings, latest reports indicate there’s about a quarter of a million dwelling shortage in Australia and that’s growing so if we’re not addressing that issue then we’re not doing the best we can for ordinary Australians.
Marius Benson:
Tanya Plibersek, the Deputy Labor leader, says it’s a well-designed scheme and it is working.
Minister:
Well if that’s what Tanya thinks is a well-designed scheme I’d hate to see one that wasn’t well-designed.
Marius Benson:
How soon will things change?
Minister:
Well as I said my department has been looking at these issues and as soon as we can get to a situation where we can make some changes to it then we would do so with any further rollout of NRAS.
Marius Benson:
So certainly a change is going to come?
Minister:
Yes it has to because it’s unacceptable the way the scheme is working at the present time.
Marius Benson:
Kevin Andrews thank you very much.