Crackdown on abused National Rental Affordability Scheme PATRICIA KARVELAS AND RICK WALLACE THE AUSTRALIAN MARCH SOCIAL Services Minister Kevin Andrews has flagged a major shake-up of the National Rental Affordability Scheme in the wake of revelations the program has been manipulated to build student housing that is being let to wealthy foreign students. Mr Andrews has moved to close the loophole that has seen international students become key beneficiaries of the flagship $4.5 billion Rudd-era social housing scheme, which had been aimed at providing affordable housing for low-income Australians. Responding to revelations in The Australian that the scheme had been exploited by universities and developers to secure lucrative subsidies for student housing, Mr Andrews said he was planning new restrictions. The changes are likely to involve placing extra conditions on recipients of subsidies under the program, which pays the owners of units $10,350 a year if they agree to charge rent at 20 per cent below market rates. “(The) NRAS was rushed in design and implementation under Labor and includes numerous design flaws, ambiguous legal requirements and red tape,” Mr Andrews told The Australian. “I have asked my department to implement more stringent processes to test compliance under the scheme and stamp out the possibility of non-compliance. “The legislation designed by the previous Labor government does not exclude international students from occupying NRAS dwellings. Within the framework of the legislation, my department has sought to better target the scheme where possible by imposing conditions on offers such as those in relation to tenancy preferences.” The Australian can reveal that the Department of Social Services has launched an internal audit of the payments and compliance under the scheme, which has delivered more than 20,000 of a target of 50,000 units but has been criticised for its complexity and vulnerability to manipulation. The government’s figures reveal that two in five places under the NRAS have gone to students, in many cases from overseas. The Australian revealed yesterday two developers behind an 823-bed NRAS development in Sydney had tapped more than $80 million in subsidies to construct a building to be filled largely by international students. That followed revelations that universities had snapped up thousands of NRAS incentives to build large blocks of studio accommodation that is often taken up by fee-paying international students, who are the lifeblood of many universities’ finances. Figures compiled by The Australian reveal there are more than 1000 foreign students in NRAS properties. The NRAS has also led to the growth of an industry of firms operating through internet sites that solicit interest from investors in NRAS-funded units, promoting more than $100,000 in cash and tax breaks over 10 years. Former housing minister Tanya Plibersek, who oversaw the NRAS implementation from 2008, yesterday defended the scheme as “very well designed”, saying she had been advised the government could not restrict eligibility to Australians. Ms Plibersek, whose Sydney electoral office is just two blocks from the giant “NRAS-advantaged” Central Park project being marketed for international students, claimed “there would be very few international students” as tenants under the scheme. “I investigated whether we should have exclusions for particular groups like that and the problem with the administrative complexity and possible breach of laws where you are discriminating against people based on whether they are Australian citizens or permanent residents or whatever,” she said. “(That) made it a path that my department recommended against.” However, another of the architects of the scheme yesterday backed restricting eligibility to Australian residents to meet the original purpose of providing housing to low-income workers. Carol Croche, executive director of the Community Housing Federation of Australia, said although NRAS was a great scheme, it was rolled out at high speed amid the global financial crisis and some finetuning was needed. “The main target of the problem has been key workers or those who are getting killed in the private market by having to pay more than 50 per cent of their income in rent,” she said. “There’s room here to make modifications and changes and, look, some of those areas are problematic. I don’t want to see this program scrapped because of things that can be addressed by (changes to) administration.” Ms Croche said the community sector had recommended scaling the incentives to encourage development of larger units or houses. At the moment, the incentive is the same regardless of the number of rooms, which tends to favour student accommodation rather than homes for impoverished working families. Ms Croche, who was part of the reference group that helped devise the scheme, said the community housing sector had discussed the idea of limiting the percentage of student accommodation built under the scheme. Asked about the widespread allocation of NRAS units to international students, she said she supported some tightening of restrictions. “If we are talking about permanent residents, I think there is some value in looking at it. These are the kind of changes that are worth investigating,” she said. Her comments echo those of National Shelter executive officer Adrian Pisarski, who also backed changes to limit uptake by foreign students and meet the goals of the original scheme. Although 4000 student accommodation units have been built under NRAS, Ms Croche said 50 per cent of the incentives under the scheme had gone to community housing providers. The private housing construction sector echoed the community sector’s comments calling for Mr Andrews to amend the scheme but not to scrap it altogether. “What the recent criticisms of the program highlights is the need for the federal government to refine NRAS — but to scrap NRAS altogether would be throwing the baby out with the bathwater,” said Nick Proud, executive director of the Residential Development Council. “The property industry has long advocated for a review of the program to improve the outcomes and ensure it remains focused on delivering affordable housing for those that need it most.” Additional reporting: Paige Taylor.
Posted on: Tue, 11 Mar 2014 16:29:55 +0000
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