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Up them for the rent: State's new low in how to lose friends and alienate people

Insights

The State Government could have avoided a fight with the Real Estate Institute of Queensland and Tenants Queensland just by talking to them. Was it thoughtlessness, incompetence or arrogance? asks Robert MacDonald

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Why would the Palaszczuk Government start a fight it didn’t need to have?

Thoughtlessness perhaps? Incompetence? Or a touch of arrogance from a third-term administration grown used to doing things its way?

Whatever the reason, the Government has managed the rare achievement of uniting those natural foes – renters and landlords – in opposition to a new policy proposal.

All it had to do to avoid the blow-up was consult with them, which it didn’t.

At the heart of the disagreement is the nearly $1 billion of the rental bonds paid by Queensland tenants and held in a trust account by the Government’s Rental Tenancy Authority (RTA).

The RTA is self-funded and relies on the dividend income from the trust account to run its activities.

In March this year, the Government proposed a change. It now wants to fund the RTA from consolidated revenue and transfer the bond money from the RTA’s investment account into a cash account.

It’s not technically a cash grab. The Government says it won’t be touching the money.

So why do it? It’s clearly all about burnishing the State’s accounts, by adding another billion dollars or so of cash to the Government’s balance sheet.

Presumably, the hope is this will impress the credit-rating agencies the next time they come calling.

The Government hasn’t actually admitted this. It says the move is all about providing financial stability for the RTA, whose work includes “tenancy information and support, bond management, dispute resolution, investigations and prosecutions, and education services, from consolidated revenue.”

“Under the proposed funding model, instead of relying on investment returns the RTA will receive annual grant funding to fund its operations,” Treasurer Cameron Dick told Parliament in March, when introducing the bill to make the changes.

“This will ensure funding stability and allow the RTA to continue to deliver essential services and support to the rental sector.”

And so, financial stability for the RTA and a better balance sheet for the Government. On the face of it, that sounds a reasonable outcome.

Not according to The Real Estate Institute of Queensland (REIQ), which represents the interests of landlords, and Tenants Queensland (TQ), which represents the interests of renters.

Both were outraged.

Both have their particular reasons for objecting to the change but the main beef of both is they simply weren’t consulted.

“Without notice, major and significant changes have been proposed to how (tenants’) bonds are managed,” says TQ’s submission to the Parliamentary committee reviewing the proposed new law.

“The process lacked any stakeholder consultation, and significantly, given bond money belongs to tenants, without reference to renters or their advocates.”

The REIQ think the same way.

“We are also disappointed by the absence of any stakeholder consultation prior to the Bill. The process has lacked the transparency we would expect given the nature of the proposed reform,” its submission said.

Why wouldn’t the government, even as a courtesy, consult with the two main groups most interested in how the bond money of more than 630,000 Queenslanders is being handled?

No need, according to the government.

“Consultation was not considered necessary due to the mechanical nature of the amendments,” it says in the explanatory notes to the planned changes.

That suggests several options. The first is that the creators of this idea are tin-eared or simply forget to check with the other parties with a vested interest. In other words, thoughtlessness or incompetence.

Or maybe, they couldn’t care less. We’re the government, we can do what we want, which would meet the definition of arrogance.

Both the REIQ and TQ say they would have been happy to discuss the current setup if there were an underlying problem.

“If the government has a legitimate concern about the financial stability of the RTA, it is our view that less extreme options could be explored and implemented,” the REIQ’s submission said, a view echoed by TQ.

“If the government considers the RTA’s investment management model is not ideal, TQ recommends the specific risk issues be identified and improved through stakeholder consultation before implementing such major changes.”

In the end it doesn’t matter what the REIQ and TQ think. The Parliamentary committee reviewing the proposed changes tabled its report on Friday. Government members on the committee – the majority – recommended the legislation proceed.

The three non-government members expressed opposition and scepticism.

“It is possible that this move is another way to inflate the budget figures,” they said.

“However…the exact nature of this new brand of ‘budget trickery’ is still mostly unknown at this time.”

Budget trickery or not, the Government didn’t need to get the REIQ and TQ offside. All they had to do was talk to them.

But stay in office long enough and you might start believing you already know the answer to most things.

Or not.

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