Ms O’CONNOR – Thanks, Chair. Minister, I just go back to evidence that was given by Mr Fazakali at the legislative council short enquiry process hearings some months ago and from the Hansard to that conversation that we had. Mr Fazakali said the Estimates which were inherent in the Budget papers, which were the Budget papers, which you can see, show that there’s a cumulative debt commencement with a $230 million in 2026-27.
That relates to a cumulative debt at that point of $457 million, so nearly half a billion dollars in cumulative debt for Homes Tasmania in 2026-27. But the Budget papers talk about interest bearing liabilities that are expected to increase from $230 million to $728 million in 2028. Are you able to explain how over the course of four years an extra half a billion dollars is added to the interest-bearing liability of Homes Tasmania, and how it’s jumped so apparently significantly since we had that conversation.
Mr ELLIS – Yes. It’s ultimately about delivering more homes. So that’s across a range of different areas. The good debt that we take on to build our housing portfolio and put roofs over the heads of more Tasmanians, I think will be well understood by everyday Tasmanians who borrow to build their house or buy a house, because a property like that, you know, is typically good debt to hold and in a government sense as well it’s intergenerational infrastructure that helps provide housing for people across a range of different areas and across the spectrum. For example it’s things like building more social homes for Tasmanians, but it’s also things like our MyHome Program that has a shared equity component that is provided by Homes Tas, and so –
Ms O’CONNOR – I don’t think that’s got a lot though to do with the MyHomes program – doesn’t have much to do with the debt that’s carried by Homes Tas.
Mr ELLIS – Well, look I’ll pass over to the team from Homes Tas to talk through some of the borrowings and maybe as well a little bit more detail around the previous evidence that was provided.
Ms MORGAN-THOMAS – Thanks, minister. When Homes Tasmania was set up my understanding is that the forward Estimates were put there as placeholders without really knowing what the capital program was likely to be. Since then we’ve worked with treasury and the minister and DPAC on what our forward projects are likely to be knowing what our locally built is in order to meet the target of 10,000 social and affordable housing. We were looking at what the debt requirements were going to be. That’s a more accurate forecast of what we’re likely to need than the previous year. Which then reflects the work that we’ve been doing as we work on our program.
With respect to MyHome the government’s share of MyHome when Homes Tasmania enters into a purchase agreement as a co-owner – our proportion of that is funded through the Tascorp debt. If we purchase a MyHome property and we spend $300,000 on that, we draw down on the debt facility to fund that, knowing that at some time in the future that will be repaid.
Ms O’CONNOR – Okay, and back to the question. So that’s a nearly $300 million lift in debt from the last time that we spoke. What will the debt project in the year – do we have numbers for 2029-30? Are we going to be nudging a billion dollars?
Mr ELLIS – Look, so I mean obviously the budget goes out to 30 June 2028, and we expect over the period borrowings of up to $454 million. We’re looking to continue to grow that. You know, we’ve obviously got quite an ambitious build program, and we want to be delivering more homes for Tasmanians. Ultimately that means that we’re going to continue to utilise that opportunity that’s available under the new model to invest in, you know, good assets so that we can continue to provide those services. It’s kind of a key part of why we set up Homes Tasmania in the structure that it has in that we’re actually able to borrow to build things like homes, which Tasmanians would understand to be good assets to be investing in.
Ms O’CONNOR – Well I’m not sure if you recall but the Commonwealth state housing debt, which was an albatross around the neck of Housing Tasmania for more than a generation; I think when the agreement was struck with the Commonwealth to eradicate the debt it was sitting at about $150 or $160 million which was costing the state $20 million a year. We had a debt of maybe $150 million and interest-free payments of maybe 17 million a year, or payments to the Commonwealth. Within a few years we’ll have a debt of nearly a billion dollars and an annual borrowing cost of, according to the budget papers close to $40 million. Do you really think that’s a sustainable model?
Mr ELLIS – Well, I mean every home that we purchase – that’s not an expanse. That’s an asset. As we borrow, we have an asset on the other side of the ledger. I mean, obviously the Green’s policy is to borrow a billion dollars –
CHAIR – Minister, we talked about this earlier today. We’re not going to get into the politics.
Mr ELLIS – Thank you, Chair. But I will note that there are other policies out there to borrow a billion dollars over the forward Estimates rather than the $450 million and –
Ms O’CONNOR – Well, you’re borrowing more than that.
Mr ELLIS – Well the forward Estimate’s $450 million in terms of borrowing in those four years. There’re other proposals to borrow a billion dollars in those four years. I think it’s both coming from a similar place which is that we need to build more homes and that under a new model – which is why it’s important, I think, the Commonwealth debt that you talked about quite rightly you mentioned it was for Housing Tasmania. Quite a different model being in the department. Homes Tasmania has the ability to leverage its balance sheet to drive a return to government as well on the different areas that they operate in.
We’ve mentioned MyHome before. If someone buys out of a MyHome contract and they’ve had equity growth like most Tasmanians would’ve seen on their homes over the last few years, that return then comes back to government if we develop more land and say different housing loan supply orders that we have around our state and sell those to people looking to build an affordable home, then that helps us to deliver an income for Tasmania.
Ms O’CONNOR – Can I confirm that Homes Tasmania will need equity injections from the general government sector in order to meet its interest repayments?
Mr ELLIS – Yes. The model was set up so that the budget, effectively, funds the interest costs. Noting that, you know, we don’t want to push Homes Tasmania to be a fully commercial operation because obviously –
Ms O’CONNOR – Thank goodness, because that’s not what parliament wanted either.
Mr ELLIS – And that’s right. There’re obviously really important services that Homes Tasmania provide to the community that are not going to drive a commercial return. That’s social housing and things like that. But where we can take action across the whole housing spectrum and usefully drive an income out of part of that, then that’s a good opportunity. It’s one that we should take and by funding the interest servicing cost that’s a way that we can help Homes Tasmania to continue their amazing work with Tasmanians who are doing it tough as well as leveraging their capacity to borrow. But look I’ll pass over to the team from Homes Tas if there’s anything further to add.
Ms MORGAN-THOMAS – No, nothing that is, to add on that.
Ms O’CONNOR – Can I just ask a question about the Homes Faster partnership, medium high density development grant, which is in the Budget Paper, State Growth chapter, page 314. It talks about the initiative delivering a new density incentive grant program for developers. Paying private developers $10,000 a unit to build brand new infill medium or high-density developments. Minister, have you made any suggestions or requests to Homes Tasmania that that development grant should be fairly broadly applied and potentially to subdivision developments?
Mr ELLIS – Look, I’ll double-check in terms of any requests in the sense that –
Ms O’CONNOR – No. I’m asking if the request came from you.
Mr ELLIS – That’s what I’m saying. I’m just double-checking whether I made a specific request around that.
Ms O’CONNOR – I would’ve thought that was something you’d remember.
Mr ELLIS – That’s okay. We’ll take it on notice in terms of any specific instruments that have been.
Ms O’CONNOR – No, I don’t think it’s
Mr ELLIS – This can be a little bit of confusion in the housing space. Some of the grants are actually administered by state growth. They’re matters that we can follow up for you in terms of getting an answer –
Ms O’CONNOR – Well, thank you, but I –
Mr ELLIS – See whether a minister has provided that direction, if that’s helpful.
Ms O’CONNOR – Thank you. That would be helpful. Are you confirming it wasn’t you who’d asked that these developer grants for medium density and high density developments might go to subdivision developers?
Mr ELLIS – We’ll follow up with the responsible minister’s office on that. Certainly nothing that I’ve signed, but I –
Ms O’CONNOR – Or said?
Mr ELLIS – I don’t want to –
Ms O’CONNOR – Have you said anything?
Mr ELLIS – As I say, Ms O’Connor, I’ll take it on notice. We’ll follow up with you and we’ll provide the answer.
Ms O’CONNOR – Can I just –
Mr ELLIS – There are, say for example, a range of different payments that are provided through state growth and treasury that don’t actually line up with the housing portfolio. They might be in relation to payments for particular assets, but they may not line up with us.
Ms O’CONNOR – No, this is a specific program, and I have an understanding that you may have involved yourself as Housing Minister to try to see if some of those funds could be allocated towards subdivision developers who, let’s face it, aren’t building medium or high density.
Mr ELLIS – Ms O’Connor, I’ll take you on notice and follow up.
Ms O’CONNOR – It sounds a bit like you might have.
Ms WEBB – Should be able to answer the question, surely.
Ms O’CONNOR – Hasn’t answered the question, can’t remember that conversation.
Ms WEBB – You should be able to say yes or no to that.
Mr ELLIS – Well, as I said, I’m taking it on notice.
Ms O’CONNOR – You’ll take it on notice.
Ms WEBB – For no answer.
Ms O’CONNOR – What, have you got to go and check your hard drive or?
Mr ELLIS – Ms O’Connor, as I said, I’m going to take it on notice and we’ll follow up.
Ms O’CONNOR – Can I just ask as a matter of principle, do you think that public funds which are allocated to lift the number of medium and high density properties should be allocated towards subdivisions which are the antithesis of that objective?
Mr ELLIS – Ms O’Connor, I said I’d follow it up in terms of giving you a sense of the answer to your question. I’m happy to do that and we’ll get back to you.
Ms O’CONNOR – I think you’re being a bit evasive.
Ms WEBB – What information will you seek to come back with an answer?
Mr ELLIS – Around any directions. And I might just look to Matt. Is there anything further to provide an update here?
Mr HEALEY – No. As the minister said, this is a program administered by the Department of State Growth, so unfortunately we just don’t have the details and the briefings for the background to that program here.
Ms O’CONNOR – Thank you, Mr Healey. I think the minister has had a memory fail, which is a bit surprising given how direct the question was, but anyway. You’ve had no involvement with the Minister for State Growth in relation to the Homes Faster Partnership medium/high density development grant?
Mr ELLIS – Yes, I’m happy to follow it up, Ms O’Connor. I just want to double check, are we on the same page – are you thinking maybe the residential land rebate program?
Ms O’CONNOR – No, no, no. I’m looking at the page 314, Homes Faster Partnership, new density incentive grant program. I just think taxpayers would be really concerned if they were funding and uplifting medium and high density housing and a minister was trying to get private developers funded to build more subdivisions which is really the last thing we need.
Mr ELLIS – Ms O’Connor, just to double check because there are a few different programs in the Homes Faster Partnership. So there’s the medium to high density developer grant. There’s also the –
Ms O’CONNOR – That’s the one.
Mr ELLIS – There’s also the Homes Faster Partnership residential land rebate.
Ms O’CONNOR – Yes, and the headworks charges one.
Mr ELLIS – And the no interest charges for headworks.
Ms O’CONNOR – No, I’m not talking about either of them.
Mr ELLIS – So some of those relate to subdivisions and some relate to medium density.
Ms O’CONNOR – Yes, that’s right.
Mr ELLIS – So I don’t know whether there’s maybe some –
Ms O’CONNOR – I’ve been very specific.
Mr ELLIS – Maybe some confusion about the subdivision element as part of the program.
Ms O’CONNOR – I don’t think there is any confusion in the information I had. But anyway, I’ll put it on notice and you can get back to us.
Mr ELLIS – Yes. Happy to follow up.
Ms O’CONNOR – Thank you, Chair. Minister, I’m just trying to get to the bottom of the money again. When this committee sat and had a conversation with you, and Mr Fazakali said $457 million would be the cumulative debt in 26‑27. Two and a half months later, it’s not at $728 million in 2028. Where did that extra $271 million come from? Am I looking at two sets of numbers that are foreign to each other?
Mr ELLIS – So I think we have – and Mr Fazakali noted this, and we mentioned it just before as well. So those early Budgets effectively was a placeholder because we’re talking about a new model that really was growing into that space. So as we’ve continued the quite assertive bild program that we’re working through, that of course means further borrowings. But you know, as I mentioned, I think, you know by virtue of your party’s policy, our party’s policy, that we want to be seeing more borrowings that deliver more homes for Tasmanians, so as we continue that work, on the other side of that ledger is more homes.
Ms O’CONNOR – Yes.
Mr ELLIS – I’ll pass over the team just to double‑check the accuracy of that and anything further.
Ms O’CONNOR – It might be germane to this question, we had a question about Commonwealth funding that Homes Tasmania was relying on and hadn’t heard yet about the Commonwealth funding. Is that an element of this? I mean, it’s a big difference in two months and I’m trying to –
Mr ELLIS – No, so we do have an update in terms of the Housing Australia future fund, but that’s only happened in the last couple of weeks. So that didn’t relate to the Budget at all, but yes. Look, I’ll pass over to the team from Homes Tas.
Ms MORGAN-THOMAS – So when we appeared last time, that was before the State Budget. While we may have had an inkling of what was going to happen, it wasn’t until the Budget came out that the forecast appeared. Mr Fazakali was telling you about what was actually already in the public domain.
Ms O’CONNOR – That had been, as I understand it, was there from the commencement of Homes Tasmania, that set of numbers potentially.
Ms MORGAN-THOMAS – Yes.
Ms O’CONNOR – Okay. That explains that.
Ms MORGAN-THOMAS – Yes.
Ms O’CONNOR – Then we were asking questions about – and then there’s the HAFF monies, but wasn’t there a Commonwealth process before that –
Mr ELLIS – You’re thinking social housing accelerator, maybe. Is that right?
Ms O’CONNOR – That’s right. So just an update on where those funds are, whether they’ve arrived, been approved. Is the Commonwealth lifting its weight?
Mr ELLIS – So social housing –
Ms MORGAN-THOMAS – Yes.
Mr ELLIS – We’ll go social housing accelerator first, maybe, and then the HAFF.
Ms O’CONNOR – Yes.
Mr ELLIS – Yes.
Ms MORGAN-THOMAS – The accelerator funds was a very rapid process from the Commonwealth. They arrived in Tasmania. I think they announced it the first week of June, and they arrived before or by the end of June or something.
Ms O’CONNOR – True to their name, then.
Ms MORGAN-THOMAS – Yes. It was very accelerated. Those funds in the nature of Commonwealth state relations go to finance or for treasury, and then treasury makes progress payments to us as we are delivering. All of those projects have commenced or had some progress. One of them, the Argyle Street property you spoke about earlier is one of those accelerator programs.
Ms O’CONNOR – Okay. What was the quantum of funds that arrived in the social housing accelerator program at the end of June, and what are we expecting through the HAFF?
Ms MORGAN-THOMAS – The accelerator was $50 million. That was what the Commonwealth promised, and then our job was to go back to them and say this is what we’re going to spend it on.
Ms O’CONNOR – And what are we going to spend it on?
Mr ELLIS – Block of 15 units in the Chigwell, where we were at with the –
Ms MORGAN-THOMAS – Yes, a lot of –
Ms O’CONNOR – Medium densities?
Ms MORGAN-THOMAS – Yes. It’s not in here. Do you have it with you?
Mr GILMOUR – Yes, I do.
Ms MORGAN-THOMAS – Thank you.
Mr GILMOUR – So we’ve got seven projects funded in total. Sixty-seven units. We’ve got six units in New Street, Latrobe. Twenty-three units in Taree Street, Chigwell. Thirteen units in Boa Vista Road, New Town. This is sort of accelerated.
Ms MORGAN-THOMAS – So 108 –
Ms O’CONNOR – Are they new or are they purchases?
Mr GILMOUR – Okay.
Ms MORGAN-THOMAS – They’re all builds. We have co‑funded some of them, so the split between the Commonwealth and us, it’s majority Commonwealth but a bit of ours as well.
Ms O’CONNOR – Yes.
Mr GILMOUR – Ten units in Barr Street, James Street, and Munro Place in Whitemark. Fifteen units at Teering Road, Berriedale. Thirty-eight units in Argyle Street. So that’s the St Vincent de Paul project. Twenty-three units in Percival Street, Latrobe. They’re the only ones I’ve got in this report.
Ms O’CONNOR – No, that’s really helpful just to give me an indication of the kind of properties that are being funded. Minister, I’m –
Mr ELLIS – In terms of HAFF, so Tasmania was successful, and we’ve exceeded our population share in terms of the homes that were granted to Tasmania. Now, Homes Tasmania was not as successful as part of that, and there are some nondisclosure agreements, so I think we’re still having to work through the Commonwealth around successful elements of what we’ve done, but Homes Tasmania was not successful in any projects that we are the sole deliverer of. So that’s –
Ms O’CONNOR – Annoying.
Mr ELLIS – It is, but also, you know, we need to take ownership of that fact. We need to work with the Commonwealth around what exactly that they were prioritising as part of their process. We think that there has been a strong focus on things that are shovel ready or already under construction, so that timeframe and things like that might be – even partnerships with community housing providers seems to be an area that they have valued. For us, we have made submissions to round 1, and we will obviously work with the Commonwealth around round 2.
We will also need to have those kinds of frank and honest discussions with ourselves about how we want, what we can do better, because HAFF is important. That’s a large amount of money, and it will help deliver homes for Tasmanians. That is absolutely right. But in terms of our ability to unlock some of that funding, it’s been disappointing for us, and we need to work through how we can do better next time.
Ms O’CONNOR – Okay, thank you for that. Minister, a lot of people in and around Hobart, and I feel like you would share this frustration of just deeply frustrated and disappointed at the council’s decision to knockback the Vinnie’s development in Argyle Street.
Mr ELLIS – Absolutely.
Ms O’CONNOR – How do we get around that, and how do we make sure that we’re able to build these places? And this is not a Dorothy Dixer.
Mr ELLIS – No, no, that’s all right. Yes.
Ms O’CONNOR – It’s a challenge at times for Homes Tas to get the medium density housing up, or to support its development. What sort of plans do you have to get around that?
Mr ELLIS – So this is a St Vincent de Paul project, and you’re right, deeply disappointed. I think a lot of people scratched their heads because not only was it knocked back, you know, units for over 55 women at risk of homelessness. You know, some of the most vulnerable people in our society. But it was also actually recommended for approval by the council’s own expert planning staff. This really had me scratching my head. There’s a process that they’re going through now and the team might be able to provide an update of where the actual appeal is if there’s some of that information available at the table.
To be honest, I know that there’s different views around this in this place, but, genuinely, taking some of the politics out of local planning is, in our view, the way that we do that. So development assessment panels – it’s going to be a difficult thing to work through with some of, say for example, the Greens’ traditional supporters but –
Ms O’CONNOR – I don’t think you can box our traditional supporters like that –
Ms WEBB – Most of them value democracy though, so there probably will be opposed to it.
Ms O’CONNOR – A very diverse group.
Mr ELLIS – Yes. Basically, what we’re hoping to do through the development assessment panel process is set up a process whereby people looking to do things like this will be able to have their proposal judged on its merits as it stands with the Tasmanian Planning Scheme, and have an expert review so that there’s a bit more certainty, a bit more of a clear framework for those kind of proposals.
Ms O’CONNOR – We can get into that in Planning, though –
Mr ELLIS – Yes, and we’ll work through that –
Ms O’CONNOR – because there’s other questions at the table, I’m sure.
Mr ELLIS – but to be honest that is one of the ways forward. This was approved by expert planners and knocked backed by local councillors. I’ll pass to the team if there’s any update in terms of Argyle Street that we have happen to have to hand.
Mr GILMOUR – It’s been green-lighted. So they were able to negotiate an outcome. Yes. So it occurred last month. I don’t think there has been a significant amount of media but there certainly been some stories on it.
Ms O’CONNOR – I certainly didn’t see it.
Ms WEBB – The process played out. Democracy worked.
Mr ELLIS – But it does get delayed and that’s part of the frustration with some of these processed where they then have to go to court. Then they have to spend more money and all that sort of stuff.
Ms WEBB – Sometimes communities get to have a say, which is a good thing in building their communities, and things can often be negotiated. That’s often what happens when things go to appeal, actually, and things end up being built and everyone’s happier in the end. We didn’t cause division.
