Renters deserve a well-funded, independent advice and advocacy service. Instead, the ACT's Attorney-General is jeopardising the future of an organisation that many renters depend upon.
Last week, the ACT government began a closed tender for a tenants' advice service. The Tenants' Union ACT, the existing provider of this service, has been invited to tender, as have other organisations. A choice will be made in December.
On the surface, this is good public policy. Procurement decisions should happen through a transparent and competitive process. In theory, competition for the contract could drive innovation and continuous improvement, resulting in superior outcomes for people who rent.
Then again, in theory Uber is cheaper because it uses technology to create a more efficient service. In reality, customer costs are subsidised by paying drivers less and through billions in investor capital. What seemed like a market breakthrough is a sham. The only "innovation" was shifting costs.
The same risks are present in this tender process. The Tenants' Union's costs have been increasing over time, due to an increase in wages mandated by Fair Work and increased demand in the ACT from a growing number of renters. But funding hasn't kept up. What this means is that it is already providing its service as economically as possible and even having to scale it back. Any cheaper service would necessarily involve cuts and compromises.
At the end of the day, providing advice to tenants isn't a complex business. You pay knowledgeable lawyers, and they spend their time on the phone to tenants. If the ACT government thinks there is a smarter way for this to happen, I'm sure the Tenants' Union would love to hear about it. Instead, Minister Gordon Ramsay is crossing his fingers and hoping that the competitive market in tenant services will come up with an app or maybe a QR code that gets it all done more cheaply.
Making matters worse, I'm sceptical that any savings from a cheaper tenants' advice service would end up benefiting renters. Currently, about $2 million a year is generated in interest on the bond money paid by renters. Bond deposits belong to renters, and the interest income should be used to support people who rent. Instead, less than a quarter currently goes to the Tenants' Union. It would seem fair that much more of this interest income goes towards the Tenants' Union - or at least that renters have more of a say in what is done with the interest from their money.
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The Tenants' Union will submit a tender to the ACT government's process. If it's unsuccessful, much will be lost. Decades of experience with ACAT and the intricacies of tenancy law would be lost. I know firsthand that many renters are already unlikely to pick up the phone and seek legal support - I imagine this process would be much harder for them if we forfeited the name recognition and trust that the Tenants' Union ACT has built up over almost 40 years.
On the other hand, we could see a positive outcome. Rather than seek "innovation" or "savings", Minister Ramsay could commit to the minimum funding necessary for an advice service that can meet the growing need in the ACT. And if the government wants to reduce demand for tenant services in the ACT, maybe it could think about deterring lawbreaking from lessors by occasionally issuing fines. Now that's an innovation we could get behind.
There's a need in the ACT for structural reform of renting laws. The ACT government has made positive steps in this direction. But tenants still need advice, and the Tenants' Union ACT is the best organisation to provide it.
- Joel Dignam is the executive director of Better Renting, a community of renters working together for stable, affordable, and liveable homes.