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.