Ms O’CONNOR – Thank you, Chair. Thank you for your introduction, minister, although it was a bit lengthy. I want to take you to the Pre-Election Financial Outlook Report, noting that some of these questions may have come up in the other place in Estimates, but we haven’t had the opportunity to hear detail on your responses.
As you know, the PEFO talks about the cumulative borrowings of Homes Tasmania and this model that loads them up with debt. It will increase to $720 million by the 30 June 2028, requiring cumulative debt servicing of over $100 million across the three‑year period up to 2027‑28, and that works out at about $40 million per nnum just to cover borrowing costs. Homes Tasmania, according to your government’s Treasury Department, and according to Homes Tasmania, estimates it will require additional funding of around $10 million a year in debts to cover increasingly unavoidable property holding costs.
My first question to you is an obvious one, and people ask this question out and about. How sustainable is that model where you have turned a public housing agency into a public non‑profit financial corporation and its primary means of obtaining capital money to build homes is through debt?
Mr VINCENT – Thank you. Homes Tasmania was established as an instrument of the Crown by the Homes Tasmania Act 2022. Homes Tasmania is tasked with delivering on the state government’s housing commitment and we are aiming at delivering an additional 10,000 homes – and that’s well publicised – by 2032, but we will talk about that more. The borrowings. The 2025 Budget does present those budget estimates, and it is debt regardless of whether it’s in government or out by itself. But it is a complex thing and that’s why we are doing a a review into how the finances of Homes Tasmania operates. I haven’t received that report as yet. But I will ask the secretary to give a bit more detail on the debt. It is due, I believe, not long after Christmas or just on Christmas.
Mr LIMKIN – The financing review of Homes Tasmania is a recommendation out of the Margaret Crawford report. It was something the government already committed to. We have engaged KPMG to do the work. The report is expected to be received later this year. So next month. It could slip into early 2026 depending on where they’re going. However, our goal is to be able to complete the the review in time so that the minister and the Treasurer can be provided with actions on how they consider this in the 2026 budget. I will talk a little bit about it more in a second.
Ms O’CONNOR – Before you go into detail there, can I just ask the minister, given that there’s a Crawford report and a review underway, are you, as minister, open to changes to the model so we’re not loading up our housing provider with this burgeoning debt?
Mr VINCENT – I fully understand the intricate nature of those comments and yes, we are looking at options. It has only been 11 weeks since taking the ministry on. There’s been a fair bit to take in that time. But we know that 10,000 homes is just the target number. It is ongoing what we need to do.
Ms O’CONNOR – It is not just a target number. Sorry to interrupt minister, it’s a policy commitment of government in response to a housing crisis.
Mr VINCENT – Yes. Well, what I’m saying though is it is a number that represents a point in time. We know that’s already changed and increased dramatically. Right around Australia those numbers are increasing at what I consider to be alarming rates. We have to have a relook at this and that’s what we are presently going through in a lot of different areas. Trying to ascertain what can be done. Some of my conversations with some of the peaks that are dealing with this is more around how we can prevent some of the situation happening.
We know the cost of living is going to force more and more people into this situation. We understand that there is a changing environment of the traditional three- or four-bedroom home, now becoming more aimed at one and two bedrooms where there’s no maintenance, smaller family units. There is a lot of changing parts to this we have to readdress and recalibrate as me as the new minister coming in. But I will ask the secretary to elaborate on your original question about the debt.
Ms O’CONNOR – The repayment of the debt, well, what more can Mr Limkin add?
Mr LIMKIN – Briefly what I would add is that the review is also taking in account consideration on the delivery models, industry benchmarks and CHPS, consideration of Homes Tas’ cash and borrowing requirements and the associated impact on the state budget now and beyond 2030. One of the things we specifically asked KPMG about is the long-term sustainability of Homes Tas in that and the payment of the debt and also options to consider how it delivers on the objectives within resources, including opportunities for generating additional revenue and/or reducing costs. One of those could be how do we continue the maximise the success under the Australian Government. The review is looking at all potential options to provide options to government for consideration.
Ms O’CONNOR – Thank you. The budget paper number 1, page 154 is pretty telling. It says –
There are no specific equity contributions to Homes Tasmania included in the 2025-26 Budget and Forward Estimates.
Unlike Macquarie Point Development Corporation, for example, which had a significant equity investment. Minister, I know there’s some recurrent funding that goes to Homes Tasmania, but that comes out of their rental income, doesn’t it?
Ms MORGAN-THOMAS – Thanks, minister. Some of it comes out of rental income, but there is a grant from government that comes in that includes the debt service payments, but also for homelessness services and some operating.
Ms O’CONNOR – So what was the quantum of the grant in the past financial year? The total grant.
Ms MORGAN-THOMAS – Sorry, I don’t have that to hand.
Ms O’CONNOR – And while we’re dealing with that, can we have some understanding of the thousands of homes Homes Tasmania is the owner and tenancy manager of the rental income from that. Does it go into the public account and then gets dispersed out to Homes Tas? And when it’s dispersed, is it dispersed all or in part?
Ms MORGAN-THOMAS – It comes in as a grant. It comes in through State Growth. We don’t get an appropriation; we get a grant. It comes to Homes Tasmania. We allocate that where it’s hypothecated. If it’s got a specific purpose, like the Bethlehem House funding that was in there is in a separate line, comes in there, and we allocate it that way. All the homelessness services are about around $50 million. They go straight through, then we are looking across the whole and we determine our own budget based on what comes from government and our other revenue sources.
To pre-empt what you might be asking, there isn’t a mechanism for any surpluses to go back to government, because it comes as a grant. We retain them and we are moving increasingly away from thinking year to year in the way government particularly would and thinking more about how you would budget when you’re in more of a capital budget, how that works. We’re thinking across multiple years.
Ms O’CONNOR – Thank you. So, the rental payments come in from tenancies. Does that money go into State Growth?
Ms MORGAN-THOMAS – No, they’re Homes Tasmania’s properties.
Ms O’CONNOR – That money goes directly to Homes Tasmania?
Ms MORGAN-THOMAS – Yes.
Ms O’CONNOR – Okay. All of it?
Ms MORGAN-THOMAS – There’s no revenue source from the Housing portfolio that goes into State Growth; it’s all the other way.
Mr LIMKIN – Or the consolidated fund, is my advice, so it all goes to Homes Tas.
Ms O’CONNOR – I know this question has been raised downstairs and come up publicly, but it’d be really great to have some clarity about actual numbers on delivery, because there’s allegations of fudging figures, and double counting. For example, counting a house again after a lease. Exactly how many new social or affordable properties has Homes Tasmania delivered since it came into being on the 1 December 2022? Not leases, not private rentals – new builds.
Mr LIMKIN – Minister, I can answer Ms O’Connor’s question on the grant while you find that. The grant payment from State Growth to Homes Tas in 2025‑26 is $189.5 million, and that is passed through.
Ms O’CONNOR – Okay. That’s so that Homes Tasmania can service its borrowings and run its operations, yes?
Mr LIMKIN – That also includes payment for the National Agreement on Social Housing –
Ms O’CONNOR – Specialist homelessness services?
Mr LIMKIN – The Commonwealth pays it to us, and we are just a through part on that, but that’s included in that.
Ms O’CONNOR – Thanks, Mr Limkin. Yes, hard numbers on new builds, whether it’s in a partnership or not, since the 1 December 2022.
Mr VINCENT – The CEO has those figures.
Ms MORGAN-THOMAS – Not from December 2022, because the count started before Homes Tasmania was created. It started in October 2022.
Ms O’CONNOR – I am more interested in understanding and the performance of this newly created public non-financial corporation. I preface this by saying this is no criticism of Homes Tasmania, who are are amazing people trying to do great things. It’s the structure that is causing concern.
Mr VINCENT – I have some of these numbers here. I will read across the page. Social housing: Homes Tas, 235. Community partner: 815 for a total of 1050.
Ms O’CONNOR – Sorry, those numbers – what?
Mr VINCENT – It is 235 for Homes Tas social, under community partner 815, to give a total of 1050. Supported accommodation: 140 under Homes Tasmania, three under community partner for a total of 143. Affordable housing –
Ms O’CONNOR – Now what’s that? Is that the private rental scheme? What’s the affordable housing one? Are they builds or existing homes?
Ms MORGAN-THOMAS – There’s a mix of both.
Ms O’CONNOR – We can’t get clarity on that?
Mr VINCENT – Not at this point on the figures here, but we can chase that. Zero and community partner 62 for a total of 62. Homeless accommodation 105 under Homes Tas, six under the community partner for a total of 111 which gives a total of 1366.
Ms LOVELL – Was that one homeless accommodation?
Mr VINCENT – Yes. Now, just to break that up, the same numbers. In one-bedroom units Homes Tasmania 341 and community partners 75 –
Ms LOVELL – Is that a breakdown of the type of accommodation in all these numbers? All of these numbers added together –
Mr VINCENT – Sorry, yes. It’s the same numbers, but this is the bedroom breakdown. I will start again. One bedroom, Homes Tas, 341, community partner, 75 for a total of 416. Two bedrooms, 97 for Homes Tas, 747 for community partner at a total of 844. Three-bedroom units, 38 under Homes Tas, community partner 58 for a total of 96. Four bedrooms plus units 4 for Homes Tasmania, 6 for community partner for a total 10. In accounting terms, 1366 adds up on both lists.
Ms O’CONNOR – To be clear, they’re not all new builds, are they?
Mr VINCENT – I think that’s what the CEO indicated there.
Ms O’CONNOR – Some of those tenancies which are part of the private rental scheme? Existing homes?
Ms MORGAN-THOMAS – No, they’re all new builds.
Ms O’CONNOR – All of them are new builds.
Ms MORGAN-THOMAS – That’s not including the rental properties sit in a different – they’re on top of that.
Ms O’CONNOR – Is that from the date that we heard before 2020 or from 1 December 2022?
Mr VINCENT – That’s 2022, but it doesn’t give us a month. I would think it is October, but we’re not sure on the month.
Ms O’CONNOR – You will probably be asked to table that downstairs and perhaps you could do for us again.
Mr VINCENT – It’s just that’s new information to me, on a break today.
Ms O’CONNOR – We would quite like that, I think.
Mr VINCENT – If you’d like that tabled, I don’t think there’s any problem with that. We can organise for that to be tabled.
Ms O’CONNOR – I will wind up on this line of questioning. Minister, I gather given there’s a review underway following the corporate report, you do see some problems with the model. Which is a loading of debt, a reliance on commonwealth (inaudible) funding, a reliance on partnerships with community providers, but this ever-growing trajectory of debt and borrowing costs. You must see a problem with that.
Mr VINCENT – Yes, every everybody can see the issue around the debt to service this area of our community. In the short time I’ve been in this role it is obvious the Crawford report was a very sensible report. You really need a two-year window to do that sort of report and look at it and that’s why it’s pretty important. We would and we are working presently as I have stated in the House during normal working of our sense of urgency to get the dashboard into a position that reports more openly and transparently for everybody to have a look.
It is not quite as easy as I thought it might be from my ignorance on that sort of thing. We are working through some of those things. Early in the new year I believe we will have much more transparency. It might take us a couple of goes, but we will get it right and break that up into a lot more of the divisions or numbers, so it is very easy to identify what’s going on and the reasons for it. A lot of the other parts of it are being worked on by board, management. It’s obviously very clear to us all going into 2026 that we need to adjust and readjust. Some of my conversations back to the secretary of State Growth have been on understanding the 10 thousand. I have read the strategies, but there’s not a lot in the strategies per se in what I consider targets that I like to be able to chase and look at.
With the increase, as I was touching on a few minutes ago, we really want to drill down and understand. Those one‑ and two-bedroom units are 53 to 60 per cent depending on the area of what people are requiring now.
Ms O’CONNOR – That’s why we need more medium density.
Mr VINCENT – That changes the whole way of this community’s thinking of what we’ve grown up with, with three– and four-bedroom homes for a lot of years.
The way they are constructed also is of importance. Having visited some of the Youth2Independence facilities and talking to the young people, they mentioned yesterday the noise from the mod homes that can transfer through, bouncing along the floors between units close together. And some of the other little idiosyncrasies that the young people living in these have passed on have been valuable in understanding the distance, the landscaping even, and the accessibility to these units. There’s a lot of things we’ve got to adjust.
We can talk about some things in planning as well that need to happen; not just density but also how we can understand how mod homes, or quicker versions of developing builds and getting them on site faster, but still have the quality and the aesthetics to make it part of a subdivision is very important to us during the next year.
Ms O’CONNOR – We know how consultancies work. What was the direction given to KPMG for the review?
Mr VINCENT – That was before my time so I might just ask for clarification.
Mr LIMKIN – What do you mean by direction, I’m sorry?
Ms O’CONNOR – I’ve worked with KPMG and other consultancies before. I know that when you sit there as minister, for example, or the secretary, the consultant – and I’m not going to just point to KPMG ‑ goes, ‘Well, what do you want?’ I’m interested to know what the brief was.
CHAIR – ‘What’s the answer you’re looking for and what information do you want?’
Ms O’CONNOR – Yeah, ‘What outcome do you want?’ is implicit in the conversation, where the consultant says, ‘What outcome do you want?’ Given that you’re paying how many of thousands of dollars for the report, what did you ask KPMG? What’s the outcome that you want?
Mr VINCENT – The outcome I’d want is –
Ms O’CONNOR – Not you, the secretary.
Mr LIMKIN – The outcome we want is a very clear understanding of what options government has to ensure that Homes Tas is able to deliver. How do we ensure the targets are appropriate, given there is time that’s moved on, and there is an ever‑changing market, and how do we ensure it is sustainable for our state? Then we have referred them to the terms of reference.
Apart from that, Ms O’Connor, I have had no other conversation about a directive or anything. I’m very keen to see what the report comes back with. But we have asked for options because this is going to be policy choices that the government is going to have to take, and financial choices. So, for me, it’s about making sure we have all those options, and the risk and benefits of each option, for government to be able to weigh up and make those choices. So, we have asked the consultant not to come back with an answer, but options that the government can choose from.
Ms O’CONNOR – At what cost was the consultancy?
Mr LIMKIN – I would have to check that.
Ms O’CONNOR – Are you going to take that on notice?
Mr LIMKIN – I’m happy to take that on notice, through you, minister.
CHAIR – We’re still on Homes Tasmania. Minister, when this was set up, I was here in the parliament. I know you weren’t. The point that was sold to us was that this was going to deliver all these new homes. Yes, they had capacity to borrow, but it seems like that capacity has been well and truly exercised where all the debt, a bit over $1 billion of debt, will sit with Homes Tasmania, which is just a convenient way of getting it off our balance sheet.
Ms O’CONNOR – That’s right.
CHAIR – But the general government is still having to pay the interest. Why wouldn’t you put all the debt on our balance sheet, the state balance sheet?
Mr VINCENT – That would be a topic for the Treasurer and Treasury. In my time there, I was given a very clear commitment and understanding of what I’m looking at of fixing the model that we’re working with at the moment, with reviews going on as to what needs to be done in the future. I haven’t given any consideration for the movement to Homes Tas away from the model that’s there at the moment.
Ms O’CONNOR – I thought you said you were thinking about it.
Mr VINCENT – Yeah, but the model that’s there at the moment, we’ve got to review recommendations in place, is what I mean by that.
The delivery time and the speed of delivery is something that we’re very conscious of and there’s no running away from the conversations that have been had all around regarding Huntingfield. I don’t think some of the issues Homes Tas has faced on that have been properly put into record, but there’s been a lot learnt from that, from what I can gather. There is a lot of things we can do differently. Some of those are planning things, some are communications with the community.
We’re seeing that with the old Penguin sportsground that the communication can certainly be done different. Homes Tas showed a lot of flexibility on what they thought was a viable commercial model for that land. I think it might have been in the high 50s originally. With community consultation and then discussion about open space and similar sorts of things, it’s come back to 45 now, or thereabouts. You get that community conversation right, but you still need to have some sustainability and some some finances around it.
The other thing that I think will come into play in some of these numbers is the parcels of land that Homes Tas will work pretty hard to secure from government, and also a couple of places that were military at Warrane. There are substantial parcels of land now that need to be-
CHAIR – Built on?
Mr VINCENT – Built on. But the process there, though, is there’s still some things on the side that have to be removed or understood. There is the possibility of contamination, so working with the councils to get that right.
In my opening we said about accelerating in ’27. There is a lot of things there, if we can tidy up some of the planning, tidy up the work with council and the local communication, and get our systems better, that the delivery should and can increase quite dramatically with those parcels on land we have. My concentration in my short time has been to understand some of those points, fully understanding the high level of debt that’s coming up. We have to change that model.
The thing about the land, whether it’s Huntingfield or Penguin, or any of the other parcels of land, that I’ve been quite fascinated by is a split of 85:15 between affordable housing and social housing, which allows for a lot of the blocks to be sold. That then, in return, pays for a lot of the other units for rental. Please correct me if I get this wrong, but that split has some sustainable numbers around it, which does help in some of the finances going forward. The CEO might like to add to that.
Ms MORGAN-THOMAS – It does very much depend on where the land is. Huntingfield’s obviously got higher value than some land we have in the north-west just because of the nature of land values. Our goal is to bring those on progressively so that there’s an income stream from that and use the proceeds from that to reduce our call on debt.
That’s the same, same approach we’re using for the equity shares that we have in the shared home ownership product. What we are seeing although MyHome, the current shared equity product has only been around for not quite three years, a number of co‑purchasers have refinanced, in which case our funds have come back to us, so we’re able to use those proceeds to reduce our call on debt. There’s quite a long tail on the MyHome purchases. We’re looking at how we blend our capital to reduce the [inaudible].
Mr LIMKIN – For the member of Hobart, the KPMG contract is a fixed price contract. It is $215,175 plus GST, so $215,000 plus GST.
CHAIR – It was the outcome you were asking about, wasn’t it, or did you get that?
Mr VINCENT – No, the price.
Ms O’CONNOR – It was the outcome to the consultancy, to the instruction. But thank you, Mr Limkin, for the consultancy.
Ms O’CONNOR – I just wanted to explore why housing policy was taken away from Homes Tasmania? In my experience, the deep knowledge of housing policy – what works, what doesn’t, the development of livability strategies, for example – that knowledge was always in Housing Tasmania, and now it’s sitting over under the all-powerful Mr Limkin, if we look at the stadium order.
It feels to me a little bit like empire-building if you take away from Homes Tasmania the capacity to help advise government on policy. What we’ve turned Homes Tasmania into is just a delivery arm for housing. It’s almost insulting, in a way, to the people who, for many years, have been able to help government set good housing policy so long as there was the resources there to build homes.
Mr VINCENT – It was a very strong recommendation from the Margaret Crawford report for that to happen and the secretary might have some thoughts on how it’s going to work.
Mr LIMKIN – Margaret Crawford’s recommendation 6 was clear that strategy for housing and homeless policy is the responsibility of government through the Department of State Growth, and so we are implementing that recommendation, and the government’s accepted that recommendation.
Ms O’CONNOR – Can I ask: when a decision was made to do that, did you populate that division within State Growth with people from Homes Tasmania who had that policy experience?
LIMKIN – That is the conversation we’re currently having, Ms O’Connor. We have not actually moved anyone across yet, that is a change‑management process that we need to go through. It’s an ongoing conversation we have not finalised, and I acknowledge your comments about Homes Tasmania, they do have an amazing team with deep knowledge and that’s why we’re continuing to work together and have those conversations.
Ms O’CONNOR – Who’s doing the policy work in DSG now; is that another one of your jobs?
Mr LIMKIN – No.
Ms O’CONNOR – Just checking.
Mr LIMKIN – We’ve always had some housing responsibility, more about urban planning, not actually about housing and homelessness policy, I acknowledge that, and so, that policy function has not yet transferred across as I indicated earlier.
Ms O’CONNOR – Who is writing the policy now?
Mr LIMKIN – It is a collaborative piece of work that is an ongoing with Homes Tasmania. Any policy or any intergovernmental arrangements at the moment is a collaborative piece of work between the departments. My personal view is housing and homelessness is a whole‑of‑government response, and we should be collaborating at all times.
Ms O’CONNOR – We hear about whole‑of‑government responses across all portfolios and often it’s a way, through you, minister, to sort of diffuse and deflect responsibility; but just take that as a comment. No-one becomes responsible because it’s a whole‑of‑government responsibility. We’ve heard it from the Minister for the Environment the other day on climate, and it just strikes me as a loss of focus.
Mr VINCENT – I should say my focus is very squarely here and while I’m the minister, I can guarantee the focus won’t change except for improvement and positivity, and whole of government means that I would be calling on whole of government, but my responsibility, my effort to make it happen.
