Page 2678 - Week 07 - Thursday, 3 July 2008

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Affordable housing providers will undertake innovative and entrepreneurial property development for low to moderate income earners—at arm’s length from government.

This does not appear to be an “arm’s length” regime—certainly potentially, depending on what is put in place in the regulations and other instruments. There are few limits on what aspects of a provider’s operation can be dictated by the commissioner under this regime. The commissioner has very broad powers with few controls on decisions made under these powers.

For example, the commissioner is empowered to make a notifiable instrument that sets standards for community housing providers. The bill sets out four possible subject matters for the standards but does not otherwise limit or guide the commissioner on how to devise the standards. The commissioner can make a disallowable instrument to set out guidelines for monitoring the operation of both affordable housing providers and community housing providers. Under clause 25L, housing providers must comply with these guidelines.

The commissioner can demand that providers report on any matter under a contract to which the provider is a party under clause 25N. The commissioner has power to veto changes to the constitutional rules of a provider under clause 25O. There are some limits on this power of veto, but what will be seen as “unreasonable refusal” under these provisions remains to be tested and seen.

The commissioner has a very significant power to appoint people to the board of a housing provider under clause 25S. This power could be based on an assessment by the commissioner that the provider is not, in their view, adequately managing risk. These are very broad powers. The commissioner of the day will have considerable discretion as to how extensive and intrusive the system of regulatory control will prove to be. This is not exactly an “arm’s length” arrangement as purported in the EM.

As I said, the explanatory memorandum also says the bill aims to encourage “innovative and entrepreneurial property development”. It remains to be seen how much headway there will be for innovation when the commissioner can set extensive standards, demand extensive reporting, appoint board members and micro-manage rule changes for providers. These powers may well be used very sensitively and responsibly, depending on what kind of person is appointed as commissioner. But if the commissioner’s powers are used too aggressively, I do see risk that the regulatory system will stifle innovation and spook more imaginative NGOs out of entering the ACT market.

The opposition recently heard from one community service provider in Canberra who saw the intervention powers as a sledgehammer approach. The government will doubtless say that these are last resort provisions, but the potential for draconian and intrusive discretion is very plain to see.

I now turn to my second area of concern—insufficient focus on the real risks. If we are to protect taxpayers’ interests and leverage value for money from public

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