Tenants' bonds generate a lot of money for the NSW State Government. More of that money should be used for the benefit of tenants, through improved funding for Tenants Advice and Advocacy Services (TAASs).
Over $1 billion of tenants' money is lodged as bonds at the NSW Rental Bond Board. This money generates tens of millions of dollars in interest each year: about $60 million in 2012-13. The NSW State Government decides how this money is spent.
Most of the money — about two-thirds of the total — is paid to NSW State Government agencies, primarily the NSW Department of Finance and Services, and the NSW Civil and Administrative Tribunal.
A small portion is used to fund the TAASs. Other smaller amounts go to other community services (such as financial counselling services, and the No-Interest Loans Scheme) and affordable housing programs.
A tiny amount is paid as interest to individual tenants when they claim their bonds at the end of their tenancies.
After these payments, the Rental Bond Interest Account retains a surplus. Accumulated surpluses now amount to about $60 million.
TAASs are community organisations that work for tenants. Across New South Wales there are 15 local TAASs, and four local Aboriginal TAASs, that provide:
There are also two resource TAASs, the Tenants' Union of NSW and Dtarawarra (Aboriginal Resource Unit), that provide the local TAASs with legal backup, training and other support, and provide tenants with:
Half the funding for TAASs comes from the Rental Bond Interest Account. (The other half comes from interest paid on agents, statutory trust accounts – which includes tenants' money too.)
Total funding to TAASs has not increased in real terms for over 12 years. However, the number of tenants has grown by 25 per cent over that time. This has left TAASs stretched thin. Increasingly, tenants are missing out on the services they need and deserve.
We're calling for funding to TAASs to be increased now by $5.2 million per annum — and going forward, funding for TAAS should grow in line with the number of tenants in New South Wales.
The increase would:
And tenants individually should get more of their bond interest. The interest rate should be tied to the Commonwealth Bank's Everyday Account rate for a deposit of $100 000 (currently 0.2 per cent per annum) rather than $1 000 (0.01 per cent – the lowest rate offered). This would return $2.9 million per annum to tenants individually (instead of $132 000 currently).
These proposals are affordable. After paying its share of the funding increase to TAASs, and increased interest payments to tenants individually, the Rental Bonds Interest Account would ordinarily still be in surplus.