Wednesday, March 12, 2014

NSW tenants – you're billionaires!

Congratulations, tenants of New South Wales – you're billionaires!


According to the annual report of the NSW Rental Bond Board, at some point last year the total value of tenants' bonds lodged with the rental bond board ticked over $1 billion for the first time. At 30 June 2013, the total stood at $1 043 000 000.

All of it tenants' money.

That billion dollars earned interest: a handy $58 million for the year. Most of that interest was divvied up and paid out for various purposes.

All up about $38 million – almost two thirds of the interest earned – went to the NSW State Government. The largest part – a bit over $24 million – went to the NSW Department of Finance and Services for 'administrative services' rendered to the Bond Board.

Another $13.5 million went to the Consumer, Trader and Tenancy Tribunal, as a contribution to the cost of its operations (a similar contribution will be made to NCAT). It's true that tenancy is a big part of the Tribunal's business: across its three tenancy-related divisions (Tenancy, Social Housing and Residential Parks) it received more than 51 000 applications. Of these, 83 per cent were made by landlords.  

And another $500 000 went to NSW Fair Trading, as a contribution to the cost of its telephone information service, which gives tenancy information to tenants and landlords alike.

Out of the remaining third, $7.5 million went to the Tenants Advice and Advocacy Program: in other words, your TAASs, which provide information, advice and advocacy to tenants – never landlords. Tenants advocates like the work, so thank you tenants; we also reckon tenants get a very valuable service for their money.

A little over $3 million went to not-for-profit financial counselling services, a little over $2 million went to the No-Interest Loans Scheme, and a little over $400 000 went to The Aged Care Rights Service. These are valuable services too, and we encourage you to use them if you need them.

And $2.5 million went in grants to affordable housing schemes – in particular, as the NSW State Government's contribution to NRAS projects

Last – and least – $132 000 went to individual tenants, in interest payments on bonds paid out at the end of tenancies.

That leaves a bit over $3 million of interest not paid out over the year. This was added to the pile of surplus monies from previous years where, in total, a little more than $62 million has now accumulated.

So, tenants have some valuable services to show for their billion dollars – but we think they should have more. Between the surplus and the payments to government – particularly the payment to the Tribunal, which really should be funded by the whole of the community, not in such a large part by tenants – more monies should be directed to the TAASs, which are still funded as if they are serving the rental market circa 2002, and more should go to tenants individually.

2 comments:

  1. My mother paid a bond of about $420 28yrs ago on her house, she is in hospital and will not be going home, does she get interest on that bond, and if so how is it calculated?

    ReplyDelete
    Replies
    1. Hi Anonymous,

      The interest on a bond that is actually paid to a tenant is set by the Residential Tenancies Regulation 2010 (under the Residential Tenancies Act 2010). It is currently set at 0.01%.

      The government retains the bulk of the interest and distributes it to various services for tenants, as outlined in the post above.

      Cheers,
      N.C.

      Delete

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