Page 3820 - Week 13 - Wednesday, 16 October 1991
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about how that is to be achieved and the strategies I have embarked upon, other than those I have already described. Something tells me that it is not the wish of the Assembly to hear that at great length.
Mr Jensen: Let us have a ministerial statement later on.
MS FOLLETT: There may be a hint to me that I might make a ministerial statement on the matter at some early stage.
Housing Trust Loan Repayments
MR STEVENSON: My question is to the Attorney-General. I refer to an earlier question on 7 August this year and the Attorney-General's written reply of 2 October. In my original question I referred to the fact that it was possible to ease the burden of mortgage payments for ACT Housing Trust clients by making more frequent repayments, and by having its software modified to allow Housing Trust mortgagees to avail themselves of this facility. Mr Connolly indicated in his reply that this was not possible as the Housing Trust uses a different format for repayment calculations from the trading banks. The obvious question that arises from this is this: Are we to infer from the reply that ACT Housing Trust borrowers are on less than equal terms with those borrowing from commercial lending institutions, bearing in mind that these Housing Trust loans are usually sought by the disadvantaged, who could not normally satisfy commercial lending criteria? Is the Housing Trust, therefore, taking unfair advantage of this situation? Will Mr Connolly undertake to review this matter urgently to ensure that Housing Trust borrowers enjoy equal benefits to commercial borrowers?
MR CONNOLLY: Mr Stevenson's question basically is whether Housing Trust borrowers are on a different basis from borrowers from commercial banks. The short answer is yes, they are. They are on a significantly better arrangement than those with the private banks because the basis of calculation of interest is more beneficial to the tenant. That is why it does not advantage the tenant to pay more frequently, unless he does it on a fortnightly basis, which over a year means 26 fortnightly payments as opposed to 12 monthly payments. If you were to do that, you would pay back your loan more quickly but it would not affect the amount of interest you pay.
The way interest is calculated on Housing Trust mortgages is different from the way interest is calculated on ordinary commercial mortgages, to the benefit of the Housing Trust tenant. The problem with the commercial loan is that it is calculated on the outstanding balance at the end of the month. If you break that down, it is on the outstanding balance each fortnight. That is not the case with Housing Trust tenants, as was explained in that fairly long and complex answer to you. I can provide officers to take you through the detail of that.
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