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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-09-20 Daily Xml
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CHRISTIE DOWNS HOUSING PROJECT

The Hon. J.S. LEE (14:53): I seek leave to make a brief explanation before asking the Minister for Communities and Social Inclusion a question about the Christie Downs housing project.

Leave granted.

The Hon. J.S. LEE: Reported in The Advertiser on 18 September 2012, the housing project in Christie Downs, built using federal government stimulus money, will deliver just one-third of the affordable units planned and has suffered a $1 million budget blowout. A quarterly update from the state government's Urban Renewal Authority shows that 16 apartments in the 24-home complex will now be sold on the commercial market and eight of those units will be handed to Housing SA.

When the project was planned in October 2010, it was to cost $6.5 million. It is now priced at $7.5 million. According to the report, the federal government fully funded the expected cost under the post-global financial crisis Nation Building—Economic Stimulus Plan and the state government has covered the budget blowout of $1 million. My questions are:

1. Does the minister see this blowout to be another prime example of economic waste and mismanagement conducted by the Labor government?

2. With the state government covering the budget blowout of this project, can the minister assure us that the rest of the affordable housing will be delivered?

The Hon. I.K. HUNTER (Minister for Communities and Social Inclusion, Minister for Social Housing, Minister for Disabilities, Minister for Youth, Minister for Volunteers) (14:55): The answer to the honourable member's first question obviously is no and, to the second question, yes.

Members interjecting:

The Hon. I.K. HUNTER: If they want more detail, I am happy to give it to them, but I thought they were after some concise information. Let me say that the Hon. Ms Lee is not the only person to be confused about this misleading article. The member for Morialta in the other place, I understand, tweeted incorrectly, erroneously, as follows:

$1 million blowout in Housing Trust project. Labor waste means people wait longer on Housing Trust wait list.

There is then #adelaide—I do not know what that means. It is completely wrong. You would expect the shadow in the other place to understand—I do not expect the Hon. Ms Lee to understand the intricacies of this—to actually comprehend that this is actually a good outcome, and I will explain to you why.

The Advertiser article reported that the Christie Downs social housing project is now delivering only eight Housing SA properties rather than the 24 originally planned. That is an excellent outcome. This might sound to some to be a poor outcome. The situation is not that. The decision to sell the 16 properties to private rental owners participating in the National Rental Assistance Scheme (NRAS) will mean that the project has a better mixture of tenancies, rather than a community made up of a high concentration of high-need tenants.

Additionally, this outcome provides us with 16 more social housing properties than the original number of 24, because the money realised from the sale of the properties will be reinvested to provide more public rental properties elsewhere. The project is a commonwealth-approved sale and reinvestment project under the Nation Building—Economic Stimulus Plan. All 24 dwellings are Nation Building—Economic Stimulus Plan funded, with eight to be occupied by public housing tenants and the remaining 16 sold, with all revenues—all revenues—reinvested in the construction of a further 16 social housing dwellings at a location yet to be determined. The reinvestment and further housing construction comes at a time when the building industry needs projects to keep it working and to provide ongoing employment opportunities in the construction industry—another good outcome.

At the conclusion of the NBESP sale and reinvestment program, all 24 NBESP-funded dwellings will be retained—all will be retained—within the social housing program. Construction costs have been fully funded by the commonwealth, with some consultant and land development costs funded by the state government through Housing SA.

With regard to the so-called $1 million blowout reported by The Advertiser, I can report that the budget for the project was revised in the design development phase to improve the amenity of the design. This included increasing the size of each apartment, and therefore the size of the overall building, to comply with full disability access and to complete stage 1 of the new road associated with the development.

The revision of the budget and the explanation was first reported in June 2011 in the PricewaterhouseCoopers report, so I am not surprised that it has taken this long for the member for Morialta to actually catch up. The sales of the 16 properties are targeted to private owners who agree to participate in the National Rental Assistance Scheme, where owners undertake to rent their apartments to low-income tenants at an affordable rate.

The Hon. J.M.A. Lensink: Only a Labor minister would think a blowout was a good outcome.

The Hon. I.K. HUNTER: The Hon. Ms Lensink says that only a Labor minister would think this is a good outcome—

The Hon. J.M.A. Lensink: A blowout.

The Hon. I.K. HUNTER: —perhaps only a Labor minister can count and the Liberals cannot—16 more housing outcomes for the same price. I will just repeat: the sales of the 16 projects are targeted to private owners who agree to participate in the NRAS, where owners undertake to rent their apartments to low-income tenants at an affordable rate.

The project provides $3.8 million in sales revenue for reinvestment in building an additional 16 social housing dwellings. All revenues from the sale must be reinvested in the provision of social housing under the conditions of the Nation Building—Economic Stimulus package. The state will not be a net recipient of funds from the project at the conclusion of the reinvestment phase. The NBESP sale and reinvestment program requires that 24 dwellings be constructed in the first round and a minimum 16 dwellings be constructed in the second round. An extension of the sale and reinvestment program is being discussed with the commonwealth government to provide further economic stimulus to the building industry.

The construction and development costs for the project compare favourably with the commonwealth's target construction cost of $300,000 per dwelling. The sale and reinvestment program is an excellent example of utilising commonwealth funds to build social housing and affordable housing in locations with a high amenity, lowering the living costs associated for the occupants. The second round of construction will further extend the economic stimulus benefit for the construction industry. This project is also a demonstration of full disability accessible accommodation and the opportunities of apartment living in a key location.

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