A government scheme gone wrong: who would believe it?

What’s a cool $3.5 billion gone to waste?  Who cares that the spivvy property developers were able to game this scheme for all its worth, on-selling the rights to build apartments under the National Rental Affordablity Scheme without building anything (pause for laughter here)?  And what were ‘ethical’ university administrators doing helping themselves to taxpayer money to subsidise the accomodation of foreign students (and some well-heeled local ones, too)?

I guess it was all in a day’s work for the Labor government.

But doesn’t it strike you as passing strange that the responsible minister, Tanya Plibersek, has never taken any blame and her hagiographic supporters in the Press Gallery never mention this BLOT (a blot the size of Australia) on her CV?

As we await the guffy, boastful and pointless Innovation Statement, just remember the key conclusion: government programs run by Canberra don’t work and are a colossal waste of taxpayer money.

Half of the units built by universities under the Rudd government’s flagship social housing scheme were let to foreign students to the detriment of the low-income workers the scheme was supposed to help, a damning audit has revealed.

 The data confirms a series of revelations in The Australian that universities had systematically exploited the National Rental ­Affordability Scheme to build units for wealthy foreign students. The Australian National Audit Office report reveals that universities had secured more than 10 per cent of the $10,000-a-year incentives available under the NRAS and largely used the cash to house fee-paying foreign students.

“Tenancy demographic data captured by the department indicates that of the 3652 active allocations held by universities, 1812, or 50 per cent, were occupied by non-resident students during 2013-14,’’ commonwealth auditor-general Grant Hehir’s report found. “While approving NRAS ­eligible dwellings for student ­accommodation may relieve pressure on affordable rental ­accommodation in areas in and around universities, it can also ­reduce the total number of incentives available for other accommodation types.”

Among the universities to tap the millions of dollars in government subsidies to build units for foreign students were the Australian National University, the University of Canberra and ­Monash University.

The $3.5 billion NRAS scheme was developed by former prime minister Kevin Rudd and Labor frontbencher Tanya Plibersek. It was cited as an innovative solution for childcare workers, police, teachers and others facing rental stress. Commonwealth auditors found no assessment was ever done on what impact the policy actually had had on housing ­affordability.

“No processes have been put in place to monitor or evaluate whether the scheme has encouraged large-scale investment in affordable housing, the innovative design of affordable housing and/or whether NRAS has had any flow-on effect in the housing market,’’ the audit found.

While not-for-profit organisations have used it develop more than 15,000 units for the genuinely needy, The Australian has revealed the program has been plagued by maladministration, the ruthless exploitation of the rules by elite universities and lax regulation that saw an illicit trade in NRAS incentives develop among unscrupulous developers.

Under the scheme, owners of approved NRAS units are paid $10,000 per year in exchange for letting their dwelling to an eligible tenant for 20 per cent or more under the market rent.

While the original target was 50,000 dwellings, the ANAO also found that uptake of the scheme had been too slow.

“From the commencement of NRAS in 2008 the delivery of eligible dwellings has been slower than anticipated. If the revised target of around 38,000 dwellings is to be achieved by 30 June 2016, a significant acceleration in the construction of eligible dwellings is required,’’ Mr Hehir wrote.

The target was revised down by the Coalition government, which also cancelled the final round of the NRAS and made changes to prevent the incentives being traded illicitly or used for student accommodation.

The audit found that in each round of the scheme more than 4000 dwellings were delivered more than a year later than scheduled and there was an “average delay of in excess of two years for proposed dwellings”.

“Only limited consideration was given to the risk that approved participants would not be able to deliver dwellings into the scheme,” Mr Hehir found.

“Due to the poor quality of the records retained over the life of the scheme, there is no complete record of dwellings as originally approved and/or subsequent approved changes.”

Mr Hehir also found that poor regulation and administration had seen developers stockpile and trade incentives, sometimes charging a bounty of up to $30,000 per dwelling to on-sell the incentive to a competitor.

“Lengthy and successive extensions to the available-for-rent date for dwellings also created an environment where the trading of reserved allocations, also referred to the trading of incentives, became a viable commercial activity for approved participants,” Mr Hehir said.

“Anecdotal evidence gathered by the department suggests that the fees charged for access to reserved allocations ranged from $1500-$30,000.

Social Services Minister Christian Porter said through a spokeswoman NRAS was a Labor scheme “and from the beginning, it was poorly designed”. “The scheme has simply failed to deliver for low and moderate-income Australians,” the spokeswoman said.

 

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31 Responses to A government scheme gone wrong: who would believe it?

  1. Rabz

    Sorry, but this is very old news.

    And it is being put out there purely as a distraction from the Waffler’s latest piece of indescribable idiocy, that being the need for some sort of accommodation of the head hackers.

  2. Rabz

    Oh – and nothing will come of it anyway.

    No one will be arrested, no one will lose their jerbs and the foreign ‘students’ will continue to remain in the accommodation. Needless to say not a cent of all the taxpayers’ money wasted on this stupid scheme will be recovered, either.

  3. Combine Dave

    Public housing…. is there any bigger waste of public funds than the welfare system itself?

  4. Pyrmonter

    Why assume all foreign students are “wealthy”? What data is this assertion based on? Surely there are some; my experience was there were also a lot from middlingly-well off families keen to get their kids a decent English language education: there is an air of the “everyone at Wesley/PAC/Newington is a rich knob” nonsense about this.

    (All of which said, the NRAS is another pointless, counter-productive Canberra program demonstrating why our leaders should stop treating Utopia as a training film)

  5. It was cited as an innovative solution for childcare workers, police, teachers and others facing rental stress.

    Handing over taxpayer money to landlords is “innovative”? FMD.
    Housing Affordability my arse, it was a rent subsidy scheme, nothing to do with purchasing and to pile on more taxpayer misery it was rorted sideways and as Rabz correctly points out nothing will happen to the perpetrators.

    The target was revised down by the Coalition government, which also cancelled the final round of the NRAS and made changes to prevent the incentives being traded illicitly or used for student accommodation.

    Surprise, surprise. Instead of shutting it down and running that vile anti-semitic hag through a damning enquiry then dragging her carcass around the walls of Parliament House for 3 days the Chamberlain Party give it a paper cut (and then probably cowered as the usual suspects screamed “Unfair! Attacking da poor”)

    Social Services Minister Christian Porter said through a spokeswoman

    Yep, too chickenshit / can’t be bothered to go on the offensive so calls in a wymmins to do it in case the Drug Dealers Wife screams at him for looking at his watch.

    Abolish stamp duty, release land, remove the power from green infected local councils to block proposals. Start with that for innovation you clots.

  6. .

    I can’t understand how this bizarre programme got up in the first place.

    My brother commenters understand what solutions will work.

  7. What we need is a law that no Government can spend more than 1 billion on a new program / scheme / project without first taking it to an election, fully costed with any blowouts capped at 5%. Enshrine it in the Constitution if necessary.

  8. Pyrmonter

    … Serjeant Dot elevated to the bench of the Common Pleas Division.

  9. Entropy

    Don’t for a second think the current government is any better. I suspect a damn good hard look at some of the grant programs under the Northern Australia white paper would need some checking to see if they actually have a chance to deliver too.

  10. Entropy

    Wasn’t everyone’s favourite Western Sydney deputy mayor involved in this program? The one with the conspicuous spending lifestyle.

  11. Sydney Boy

    It was cited as an innovative solution for childcare workers, police, teachers and others facing rental stress

    Rubb and Plibersek obviously have no idea how well police are paid.

  12. Tim Neilson

    “No processes have been put in place to monitor or evaluate whether the scheme has encouraged large-scale investment in affordable housing, the innovative design of affordable housing and/or whether NRAS has had any flow-on effect in the housing market,’’ the audit found.
    There is no such thing as “affordable housing”. There’s housing paid for by the people who live there, and there’s housing paid for by other people (almost invariably unwillingly through the tax system). If we had anything remotely approaching a free market, market forces would make housing as “affordable” as it could be.
    Does anyone know how I can get a job in the illegal tobacco industry, where I can do some real good for an “affordable” life for the impoverished and not get robbed blind on my earnings from it?

  13. Rabz

    an innovative solution for childcare workers, police, teachers*

    Ah yes, those legendary “frontline wukkas” that leftists start screeching about whenever someone has the temerity to suggest slashing the huge numbers of pen pushing, paper shuffling, compliance and regulation enforcing imbeciles in the bureaucracy.

    *nurses and ambos as well.

  14. Snoopy

    Anna Bligh’s government did implement the scheme in the manner it was intended.

  15. Econocrat

    Judith, missed by the audit were the following issues:
    • the issuing of this “prospectus” by the muppets Swan and Plibersek was a breach of the Corporations Act 2001, for which they should be prosecuted;
    • the prospectus actually advised people on tax schemes that where, in fact, illegal (meaning that Swan and Plibersek possibly fell into the “tax scheme promoter” provisions of the tax laws);
    • the transfer of the tax credits between investors was actually, and known at the time to be, illegal under the tax laws; and
    • Treasury was well aware of all of this, but rather than referring this information to the ATO for investigation and prosecution, Treasury merely enacted amendments to validate what would otherwise be called tax evasion.
    I think the ANAO just went and kicked the poor suckers at the line agency left holding the bag on this, rather than the people who created and presided over it.

  16. James

    Kevin Andrews the former former Social Services Minister already shut it down well before the first budget. Why is this wheeled out now? There is nothing new in it.

  17. notafan

    Ah yes, those legendary “frontline wukkas” that leftists start screeching about whenever someone has the temerity to suggest slashing the huge numbers of pen pushing, paper shuffling, compliance and regulation enforcing imbeciles in the bureaucracy.

    *nurses and ambos as well

    You left out artists.

  18. Des Deskperson

    ‘It was cited as an innovative solution for childcare workers, police, teachers and others facing rental stress’

    FMD, teachers??

    In 2014 the average annual wage in the education and training occupational category was $71,848 p.a.

    In the ACT public system, a starting out teacher, a ‘new educator’, gets $69,865 p.a.!!

  19. .

    notafan
    #1860887, posted on November 19, 2015 at 11:17 am

    City of Sydney live work spaces for artists

    FMD.

  20. goatjam

    In the ACT public system, a starting out teacher, a ‘new educator’, gets $69,865 p.a.!!

    Teachers are the most insular, sheltered whiners to ever grace this Earth. The work short hours, have extreme holidays, are highly paid considering their generally deplorable skill levels and they never shut up about how hard things are for them. They believe that everybody in the private sector have the lifestyle of James Packer.

  21. Ant

    So easy to piss money away when it’s not yours and there’s practically no consequences for those guilty of this criminal waste. And I wonder how much of it got purely rorted.

    Is there a bigger justification for thinking that big government is diabolical and evil?

  22. HI Judith Sloan,
    Tanya Plibersek has messed up in multiple realms. You wrote on one as below Catalaxy link.

    It is my dream that I be given enough healthy, lucid days to even be able to dream of listing the conga line of catastrophists of RUDD – GILLARD – RUDD
    But the tragedy is that i have too many other interests: does anyone contemplate a book on SOCIALIST TWIRPERY OF THE LEFT?

    Indeed – I wrote as below to [email protected]
    Sent: Monday, July 15, 2013 3:19 PM

    Hello Mr Frey
    I think you should investigate how many times Tanya Plibersek – our wonderful non – Patent medicine negotiator has claimed what a wonderful deal she ‘’NEGOTIATED’’ for Australia – when NZ has
    plainly managed it all at half – price or whatever compared with OZ!!! TP has claimed this on Q & A – probable link below
    Initially I saw an article in The Australian – I STILL HAVE NOT FOUND IT – showing how, like her girlie – friend Julia – she is such a ‘wonderful negotiator’’ Even when ALL the cards were in her / their hand!!!
    Sarcasm intended!
    SO – I suggest you find the article?
    And find her guilty of willful lies? Simply because she must have known the magnitude of the humbug – which she frequently. guilelessly repeats .
    So there is more research to find these repetitions.
    So there are a few things for you to do – even if I have given this to you on a proverbial plate.
    Regards
    Geoff Seidner
    These other links may also enlighten:
    http://catallaxyfiles.com/2014/03/13/plibersek-gets-caught-out/

    http://socialistdystopia.blogspot.com.au/2013/07/the-denouement-re-tanyas-repeated-frauds.html

  23. Austin Mangosteen

    goatjam
    #1860970, posted on November 19, 2015 at 12:25 pm
    In the ACT public system, a starting out teacher, a ‘new educator’, gets $69,865 p.a.!!

    Teachers are the most insular, sheltered whiners to ever grace this Earth. The work short hours, have extreme holidays, are highly paid considering their generally deplorable skill levels and they never shut up about how hard things are for them. They believe that everybody in the private sector have the lifestyle of James Packer.

    Reminds me of a woman from India who possessed a masters degree and had come to Australia in the 1980s with her husband but could not obtain employment. She had an interest in graphic design and decided to to do a typesetting course. After twelve months “educayshun” she secured a position with an advertising company in the art room on a computerized typesetter. For her second week, she was sent to a one week course on how to operate the system. After the first day, she exclaimed, I have learn more in one day on this course than what I have learnt in twelve months at college.

  24. Jim

    The property development sector has been the high priest of the dark art of gaming Government largesse programs for decades (questionable planning approvals, cash giveaways, free widgets, tax incentives, shifting costs, shifting risk etc.). So this should be no surprise to anyone.

    There will be calls for politicians to resign over this, but the politicians could claim to be professionally out of their depth when it comes to detailed policy design. But I don’t think the public servants can make the same claim (or should be able to).

    Either: 1) the public servants are incompetant; 2) the public servants were professionally negligent (possibly to please their political masters); or 3), the politicians knowingly ignored the advice of the public service. I’m sure it was probably a mix of the three, but if the public service were held to the same standards for professionalism (including liability) as their private sector counterparts, I’m sure the likelihood of this sort of thing happening would be reduced significantly.

  25. So easy to piss money away when it’s not yours and there’s practically no consequences for those guilty of this criminal waste. And I wonder how much of it got purely rorted.

    You also have to consider whether many of these schemes are set up to be rorted on purpose. So the Government announces a scheme (BER, Pink Batts etc.) then lets it be known via their various channels established throughout their “careers” that it would be a good idea for their maaaaates to setup companies / bid for contracts as it will be easy $$$ for them and no repercussions when it blows out or is rorted because the public is too busy / ignorant to care.
    Just how much money ended back up in the ALP from donations via Unions and maaaates rorting schemes setup by the ALP?
    You know it is going on because if you follow the old adage that you listen to what your enemies are accusing you of to find out what they are up to then it all fits perfectly. The left love to accuse the right of doing favours for the “big end of town” and rigging the system in their favour.

    [Awaits a Hanlon’s Razor explanation post.]

  26. Grigory M

    • the transfer of the tax credits between investors was actually, and known at the time to be, illegal under the tax laws; and
    • Treasury was well aware of all of this, but rather than referring this information to the ATO for investigation and prosecution, Treasury merely enacted amendments to validate what would otherwise be called tax evasion.

    How did Treasury do this?

  27. Econocrat

    • the transfer of the tax credits between investors was actually, and known at the time to be, illegal under the tax laws; and
    • Treasury was well aware of all of this, but rather than referring this information to the ATO for investigation and prosecution, Treasury merely enacted amendments to validate what would otherwise be called tax evasion.

    How did Treasury do this?

    Via the Tax Laws Amendment (2011 Measures No. 5) Bill 2011

  28. Andrew

    It was cited as an innovative solution for childcare workers, police, teachers and others facing rental stress

    FMD – Teacherspolicenurses again! Why does anybody care about teachers?

  29. Entropy

    Either: 1) the public servants are incompetant; 2) the public servants were professionally negligent (possibly to please their political masters); or 3), the politicians knowingly ignored the advice of the public service. I’m sure it was probably a mix of the three, but if the public service were held to the same standards for professionalism (including liability) as their private sector counterparts, I’m sure the likelihood of this sort of thing happening would be reduced significantly.

    Another very likely scenario is the program made no or insufficient allowance for admin costs. A grant program is always expensive to administer because it needs rigorous oversight. Without it the scheme always ends up getting gamed. But hey, the pollies had their announcement.

  30. Barry

    The arts, welfare, public housing, grants for renewable energy projects, the medical research fund, university academics using their grants to fund overseas ‘study tours’ and attendance at ‘conferences’ – and then let’s look at jobs for mates, corrupt local government, politicians spending and borrowing to buy popularity, knowing that they’ll be living on their generous taxpayer funded superannuation when future generations have to repay the money they wasted. And people are stupid enough to keep voting for this scum. Socialist Australia – what a dump.

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