Legislative Council Fifty-Fifth Parliament, First Session (55-1) 55 1 Parliament of South Australia Legislative Council published Answers to Questions HomeStart HomeStart The Hon. H.M. GIROLAMO Legislative Council HomeStart 178 The Hon. H.M. GIROLAMO ().16 November 2022). Can the Treasurer advise— 1.	Why has HomeStart's comprehensive income increased from $3m to $24m? 2.	Why has HomeStart's loans and advances decreased from $2,250 million to $2,096 million? 3.	What are the reasons behind HomeStart's profits increasing from $52m to $74m? (November 16) The Hon. K.J. MAHER Legislative Council Minister for Aboriginal Affairs Attorney-General Minister for Industrial Relations and Public Sector HomeStart The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector): The Treasurer has advised: 1.	HomeStart's other comprehensive income relates to fair value movements on the financial instruments it uses for hedging its interest rate risks. The reported fair value of the hedges is impacted by changes in market interest rates, as required by accounting standards. The value of HomeStart's interest rate hedges increased by $3m in 2020-21 and by $24m in 2021-22, principally due to increases in market interest rates. 2.	HomeStart's loan portfolio increases as new loans are granted and decreases as repayments are made or loans are discharged through refinance or sale. The high level of competition in the home loan market during 2021-22 and rises in property values creating equity for HomeStart's customers, resulted in a high level of customer discharges, principally refinancing to mainstream lenders. While the high level of refinancing reduces HomeStart's portfolio balance, it is positive in relation to HomeStart's purpose, as those borrowers are now able to secure financing through a mainstream lender. 3.	The figures referred to in the question relate to HomeStart's net payments to government, rather than HomeStart's profit. HomeStart makes payments to the government for income tax equivalents and dividends on its annual profit, as well as government guarantee fees on its borrowings. HomeStart also receives community service obligation funding from the government related to certain products and activities. Payments to government increased from $52m in 2020-21 to $74m in 2021-22. This increase included a dividend of $9.7m which related to profit in 2020-21 but was paid by HomeStart in 2021-22. HomeStart's profit before tax rose from $49.6m in 2020-21 to $55.7m in 2021-22. The improved result relates principally to gains in the value of HomeStart's Breakthrough and Shared Equity Option products due to increases in Adelaide house prices. This was partly offset with lower interest income due to a reduction in the value of HomeStart's loan portfolio.