Legislative Assembly for the ACT: 2014 Week 12 Hansard (28 October) . .
DR BOURKE: My question is to the Chief Minister. Chief Minister, there were reports in the morning's media that the commonwealth has responded to your request for financial support and assistance to deal with the legacy of the Mr Fluffy homes. Can you please update the Assembly?
MS GALLAGHER: I thank Dr Bourke for the question and also the opportunity to update the Assembly quickly after the announcement of agreement being reached in principle with the commonwealth. I have had the opportunity to discuss the commonwealth's offer with Mr Hanson and Mr Rattenbury today in line with the approach we have taken to look after the Mr Fluffy home owners first and foremost.
We have reached in-principle agreement for the commonwealth to provide a $1 billion loan to the ACT government. They will do this and charge interest at the commonwealth bond rate, which is about 0.06 per cent cheaper than we would have been able to borrow the capital at. It will have a saving to the ACT over the life of the program.
I think the important news today, though, is that we have a way forward for the 1,000 home owners who have been waiting for the governments to reach agreement on the way forward. There will be a buyback and demolition program. We will look to start that as soon as the funds become available around 1 January 2015. There is a lot of work that we need to do in the meantime to support home owners to get all the information to them and to put in place the systems that we need to run the program efficiently.
I would say that it is not what we had asked for from the commonwealth. We had asked that they share some of the net costs of the scheme once the houses have been bought and demolished and blocks cleaned and land sold, that the net costs be shared and that they be shared in line with the MOU. The commonwealth's very strong response to that was that their legal advice indicated that the MOU did not have any legal standing, that there was no legal liability from the commonwealth for the legacy issues of Mr Fluffy and that those had been extinguished at the point of self-government.
It is not a position we agreed with, but in the end we had to work out a way forward. The commonwealth's offer was not going to change. They have agreed with us in terms of the payback time being over 10 years. We will look to maximise the opportunities there to ensure that we are minimising the costs both on the ACT budget and for taxpayers at the end of this scheme.
It is not the outcome that we had hoped for. We did feel that the commonwealth should assist with some of the costs—not all of them: we did not ask for all of them; we asked for it to be in line with the MOU. The commonwealth's response has been to offer essentially what has been offered to New South Wales through the James Hardie trust, which is similar to the arrangements that have been outlined in Minister Abetz's letter to me today.
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