TRANSCRIPT:
I rise today to speak on the Estate Agents, Residential Tenancies and Other Acts Amendment (Funding) Bill 2024. I want to start by thanking my colleague the member Ovens Valley on his reasoned amendment, which raises some incredibly valid concerns about the lack of detail in this bill so far. The bill itself proposes making amendments to the Estate Agents Act 1980 and the Residential Tenancies Act 1997. These amendments will allow the use of the Victorian Property Fund and the Residential Tenancies Fund to establish and fund the ongoing costs of a new dispute resolution and advocacy service, known as Rental Disputes Resolution Victoria, or RDRV. The bill also proposes abolishing the Estate Agents Council and the Public Records Advisory Council and makes various statute law revisions and amendments in updating language. The reasoned amendment calls for confirmation that the establishment of the RDRV will not impact landlords more than they already have been, as well as information about the costs associated, the time it will take to set up and more details about how the RDRV will operate.
As things stand, VCAT has been home to a wide range of tenancy-related disputes involving all aspects of the rental process, including unpaid rent, maintenance issues and rent increases. This time last year VCAT recorded a backlog of 64,000 cases from the residential tenancy list alone. On top of this, issues with VCAT processes are having an enormous impact on all parties involved. Speaking with real estate agents from Living Here Benalla, a small local agent, it becomes clear that the current method of VCAT procedure is untenable. What used to be a straightforward system now is met with delays, a lack of consistency in decision-making and exorbitant amounts of paperwork. The directors of Living Here, Nicole Irwin and Mandy Reed, say that they are no longer sure how to proceed with this broken system. Since changes were made to the Residential Tenancies Act last year that introduced a five-strike policy for repeated unpaid rent, among other considerations, there has been a lack of consistency when it comes to how these cases are handled. Only after a fifth strike do these cases even reach VCAT, where they are met with the broken system. Each case now requires hundreds of annotated documents, which they say VCAT do not even read before the hearings commence. It requires multiple days and staff hours just to put documents together.
Since these changes were implemented the agents say they are yet to have a positive hearing in VCAT. One of their cases has now had five separate hearings. Another involves a 14-month delay for a bond claim for unpaid rent, while another case has reached 136 days without rental payments as VCAT proceedings continue to drag on. In one case a tenant was $8000 behind on their rent, and a hearing was requested on 12 December. This was then delayed until January, before an urgent hearing was then requested after a lack of progress on 21 February. On 29 February VCAT informed the agents that they had received their application but failed to set a date for the hearing. On 16 March the agents followed up yet again but are yet to receive a response. During this period the owner has not received a cent of rent. These are not massive corporations owning several properties, these are regional home owners that rely on this income. The owner in this particular case is a primary caregiver for their sick husband and now has taken a second job to cover the costs lost from the lack of rental payments.
Many owners are also being frozen out of their homes. A stat dec is required just to move a family into a home someone owns, with a 60-day notice period that can still be rejected in a VCAT hearing. At the same time a tenant will have their case heard within three days. These agents understand the need to ensure tenants have their rights upheld, absolutely – and we do not want people out on the streets – but they say there is no balance. They are dealing with tenants who wilfully choose not to pay yet are still able to live in these homes for months on end. It is clear that this system has not been working, and a viable alternative is desperately needed. Unfortunately this bill does not provide enough detail as to whether the RDRV will be a better option, though.
The RDRV is designed to relieve residential tenancies list cases from VCAT as well as to provide advocacy for tenants and renters. The body itself will not be established through this bill; however, these clauses will enable the government to use funding from the Victorian Property Fund (VPF) and Residential Tenancies Fund (RTF) to help its establishment. This funding in theory will contribute to the start-up and ongoing costs of a body that has no details about how it will operate, what jurisdiction and authority it will have, what its annual revenues and expenses will be and the resources it will provide to the community. At the moment the government has suggested that the rollout of RDRV would be at least 18 to 24 months away, if not longer, as consultation has not yet begun. Given the government’s track record on delivering projects on time, I will not be holding my breath.
Additionally, we do not know how the body will complement VCAT or whether it will have sufficient enforcement and punishment powers to actually implement change to this system and reduce the VCAT backlog. Also of concern to me is the lack of information provided about the impact this will have on estate agents, landlords, strata management and property managers. There is a serious concern that the new system will be unfairly weighted towards the tenants and renters without taking into consideration the full picture on the opposing side, much like what we have already seen with VCAT. Given the government’s tendency to be highly negative when it comes to landlords, property owners and home owners, it is unclear how this balance will be achieved.
We have already seen the impact this government’s land tax changes are having in my community, so it reasons to be cautious about how this new body is established and operated. Victorians are already paying the highest property taxes in Australia, with an average of $2120 in property taxes per person across this year, compared to about $1600 in New South Wales and about $1300 in Queensland. Labor have increased the tax base by lowering the tax-free threshold from $300,000 to $50,000 while also slapping on an additional flat tax of up to $970 Victorian households. Individuals, families and businesses are rightly concerned that this tax will lead to increased pressure on households, increased costs to running a business and increased rents. My office has dealt with several concerned residents. Many of these cases, much like those being heard in VCAT, are stories of small regional property owners not being given a fair go.
[NAMES AWAITING VERIFICATION]
Lindsay contacted me last week with his story. In 2012 Lindsay, his wife, his sister and her now deceased husband purchased a two-bedroom unit for his mother, who is now 92 years old. Over the past two years they have needed to increase their mother’s rent to cover increases in interest rates, council rates, insurance and other expenses. The change to land tax has presented them with an annual liability of $975. Lindsay says this is an expense they will struggle to meet.
They do not own any other property aside from their family home, and it is very important to their mother that she maintain her independence as long as possible. $18.75 per week may not appear significant to most of the people here in the chambers, but for these pensioners it is a significant amount. Lindsay says it appears that the government have not considered the significant impact this change will have on people in their situation and the impact on low-income renters who will most likely be facing rent increases from their landlords.
Lindsay and his family are not the only ones feeling this impact. Mark from Benalla has seen significant rises with his assessment notices for businesses he owns. Benalla and many other towns within my electorate are in desperate need of business investment, yet we continue to put barriers up. Mark said:
[QUOTE AWAITING VERIFICATION]
We have made the difficult decision to close our business as a motor trader and automotive service centre, which I have been operating for 46 years. This was a business my father started 66 years ago. As a small business we find the state and federal governments’ red tape and increasing fees and potential penalties preventative in making a reasonable profit for the effort and investment. The latest land tax increase was the final straw. Because of my feelings towards our state government at present, we are considering retiring interstate.
Eighty-year-old Alan McGillivray from Knowsley has seen his land tax bill jump from $16,000 to $82,000. He is now being asked to pay $300 a day to run a business on his own land. He says this is unsustainable and impossible to budget for as the changes keep happening. Another mother and her son came in after they had both been given the same land tax bill for the same property, even though the son does not own any of it. She too says she cannot budget for it as it changes without any warning.
On top of situations like this, I have had several constituents reach out to my office concerned with errors on their land tax bill. The most frequent reason is due to mistakes in recognising that a property is someone’s primary place of residence, like 81-year-old Faye Bliss in Benalla, who received a land tax bill. As things stand, something needs to change. Whether it be through this legislation being debated today remains to be seen, but I remain hopeful that positive change will be implemented soon.