RESIDENTIAL TENANCIES AMENDMENT BILL 2024
Extract from Hansard
[COUNCIL — Tuesday, 12 March 2024]
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Hon Martin Aldridge; Hon Wilson Tucker; Hon Dr Steve Thomas; Hon Dr Brad Pettitt; Hon Sophia Moermond; Hon Dr Brian Walker; Hon Sue Ellery; Hon Neil Thomson
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bill. I oppose it not because of the good bits but, rather, because of what it is lacking and the missed opportunity. This is what we are dealing with now; nothing else is coming in the near future. We are talking years.
WA has the weakest tenancy laws in the country and this bill will do very little to move the needle any further. We will still lag behind. We did not see any disinvestment in New South Wales or Victoria when they tightened their laws. This is becoming an election issue in Tasmania. Victoria is going one step beyond the rent-bidding requirements that we will debate shortly. It found some loopholes in the system and is looking to move the needle even further to plug them up. Meanwhile, we are playing catch-up. WA is years behind every other state and territory. This bill will do very little to provide relief to renters. It is for that reason that I oppose the bill today.
The ACTING PRESIDENT: I give the call to Hon Dr Steve Thomas.
HON DR STEVE THOMAS (South West) [5.28 pm]: Sorry; I am just working out the pecking order. Hon Sue Ellery: You’re at the bottom.
Hon Dr STEVE THOMAS: Thanks for that.
I want to make a few comments on this bill and generally wax somewhat lyrical about residential tenancies. There have been some complaints about the bill. One is that it goes too far and the other is that it does not go far enough. It is interesting to find that we might be somewhere in the middle again.
Hon Sue Ellery: I think I might have got it about right; no-one is happy!
Hon Dr STEVE THOMAS: Well, we have not quite gone to that extent yet, Leader of the House.
I think someone’s view of the bill will depend a lot on what they think it is trying to achieve. It does not appear that the bill will rectify issues with the number of houses that are available or govern housing policy more generally. It will do a key number of specific things. If the expectation is that the bill before the house will provide, for those who like their Australiana, a magic pudding for housing, it obviously will not. If we take a fairly modest expectation
of what the bill is trying to achieve, we might get down to the key areas of the debate.
I want to comment on some of the things that have been said so far, particularly in review, because there have been some interesting comments. I apologise if some of this is about the overall argument about how we provide housing rather than the specifics of the bill, which I will come to in the fullness of time. We are getting a bit diverse in where we are going with this. I will work backwards. I always appreciate the contributions from Hon Wilson Tucker,
but when he starts to talk about the concept of a right to housing, he is in a very different realm from what the bill is trying to deliver. It is difficult to separate a right to housing from the obligation that society owes someone a house. I do not think that is what Hon Wilson Tucker was trying to say in his contribution, but that is where the risk starts to develop.
Hon Wilson Tucker interjected.
Hon Dr STEVE THOMAS: Yes, I took the member’s intent rather than getting pedantic about the wording. There are risks involved in the concept of a right to own a house. Government needs to be particularly careful. If government gives the impression that it owes someone a house, it is on a very slippery slope—although that is not what the member said—because then, in theory, it has the obligation that it owes everybody a house.
I will look at where housing is provided at the moment. Everybody else has thrown in their statistics, so I am going to throw in a few too. The latest Australian Bureau of Statistics census was in 2021. There were 263 826 rented properties in Western Australia, which represented 27.3 per cent of all the dwellings in the state. A bit over one-quarter of the dwellings in the state were rental dwellings. According to the 2011 census, for the decade earlier, there were 231 824 units, which represented 29.2 per cent of all the dwellings. Basically, 32 000 rental units were added across the state, but the number dropped by two per cent as a share of the total number of dwellings. That is not unusual for Western Australia, which all through that decade was a reasonably wealthy state, so it would be expected that people would try to invest in the property market. Overall, there was a slight drop. The population went up by 19 per cent from 2.2 million to nearly 2.7 million over that period. There was a 19 per cent increase in the population and a nearly 14 per cent increase in rental housing stock, but a drop of two per cent as a share of the total number of dwellings. On population, we are still beating everybody else.
I used the Shelter WA website to look up the number of social houses. In 2020–21, community housing stock totalled 42 661 units, or 16 per cent of the total rental market, and that had dropped from 44 000 in 2016–17. What we are talking about here is the other 84 per cent. We get very excited about the social housing market and how important it is, and it is very important for that group of people who will always struggle to get into the housing market, even in a rental form, but the vast majority—84 per cent—of rentals are in the private sector. They are critically important, so the work that will be done under this bill is of interest to an enormous number of people. If 84 per cent of those 263 000 rental dwellings from 2021 means that there are about 220 000 private rentals, that is an enormous number of people who will potentially be impacted.
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Hon Martin Aldridge; Hon Wilson Tucker; Hon Dr Steve Thomas; Hon Dr Brad Pettitt; Hon Sophia Moermond; Hon Dr Brian Walker; Hon Sue Ellery; Hon Neil Thomson
I want to jump to some of the comments from Hon Martin Aldridge that I thought were very good, and the first is renting versus buying. There are numerous studies. The one he mentioned was not the only study that has been put forward to suggest that, in many circumstances, people are financially better off renting forever than they are purchasing. There are circumstances in which that applies. The only problem with it is human nature. In a very small
proportion of cases, people who rent forever and do not make higher repayments to get into the property market save the extra money and invest it in the stock market or other things. I know some people who have rented forever and have got into the residential investment property market. Some people often rent a house for a lower price, but they purchase a more expensive house that provides a higher rental yield. There are people who do not live in the house that they own; they rent the house that they live in, but they are also a landlord. That does occur, but what tends to happen is that people do not invest the additional savings, and that is where things start to go dramatically wrong. I will never forget when I was in the other house a long time ago—nearly 20 years ago—and some constituents in the seat of Capel came to see me. They were struggling to survive on a pension in the mid-2000s.
I asked them whether they owned their house, because most pensioners who own their house survive reasonably well on a pension. It is not steak and caviar every night. I know lots of pensioners who own their house and still travel up north and go fishing and spend their winters in Shark Bay or climes a little further up, so it is doable. I asked this couple whether they had ever owned their own house or whether they had lost it, because lots of people lose their house, particularly through divorce. There are lots of couples who started out with the best intentions of owning
a house and then they get half a house each and they cannot afford to keep it, and the legal fees eat up most of their assets. This couple said that they had never owned a house. They were employed by the railway and they came out of Collie. They had retired and they had never owned their own house, but they had also never saved and then used the savings to invest. They had a peppercorn lease, so they had a massive capacity to invest those savings.
I think the vast majority of people who rent permanently do not take the potential savings and invest them. Although I think that is true, and Hon Martin Aldridge raised a good point, practical experience means that that is not the general outcome. That is not what usually happens for people. Most of those people use that money; it becomes more discretionary spending. When they get to the end of the rental period, they are in trouble because they are still paying rent as they go into retirement. Unless they have significant investments in superannuation, they are in strife.
By the time people in the modern generation who started work at the age of 20 after about 1992, when compulsory superannuation came in, retire at 65, they will have accumulated a fair amount of super in those 45 years, but the group of people who started in 1990 are not retiring yet. They are not quite at retirement age. A lot of people do not have superannuation or the level of super that the next generation will potentially have. Bear in mind that the superannuation component was originally designed quite brilliantly by Paul Keating to replace the pension rather than make everybody rich, because he decided that the government could not afford to basically keep paying everybody when this massive baby boomer bubble was coming along. We come back to the discussion around whether people are owed a house. The other question is: are people owed an income? Paul Keating, despite being on the wrong side of politics, successfully looked at that and decided he needed to do something about it. It is the case that people can work out a way to be a long-term renter and be equally financially rewarded, but most people do not do that. It is a bit like Paul Keating’s compulsory employee superannuation, which is in effect compulsory saving. Ultimately that is what paying off a house is as well. It becomes compulsory saving, and that is the advantage of it. When people get into the housing market, they are effectively saving for their own future. That is very much what is going on.
Once people get to a better financial position and decide that they have paid off a sufficient amount of the house that they are living in and that they want to step into investment, residential housing has traditionally been a very good investment. The difficulty comes with the price of housing. I have upgraded a chart that I have used on a couple of occasions previously. I have simply updated a comparison of mean house price, mean annual income, and house growth equal to wage growth if it were growing at the same rate as house prices were going. This is relevant to a large number of contributions today.
Sorry, can I seek leave to table the document that just fell on the floor?
[Leave granted. See paper 3004.]
Hon Dr STEVE THOMAS: Members have seen a similar document before, but I want to make this point, and it is a point I made to Hon Wilson Tucker not that long ago in a separate debate. The biggest difference is the price of housing in Western Australia if someone is trying to get into the housing market. I have said in this chamber before that I purchased my first property in 1991, I think it was. Yes, it was a long time ago. I paid $42 500 for it.
Hon Matthew Swinbourn: I was still in high school then.
Hon Dr STEVE THOMAS: The member was still in high school then. Yes, thank you, everybody! Hon Martin Pritchard: I wasn’t.
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Hon Martin Aldridge; Hon Wilson Tucker; Hon Dr Steve Thomas; Hon Dr Brad Pettitt; Hon Sophia Moermond; Hon Dr Brian Walker; Hon Sue Ellery; Hon Neil Thomson
Hon Dr STEVE THOMAS: Hon Martin Pritchard and I share the dinosaur badge all over again, so thank you, Hon Martin Pritchard.
I paid $42 500 for it and my wage was $25 000, which is less than two to one. My wage was the average wage at the time. I have added some of this information to my chart. At the time, in 1990, which is near enough, the average house price in Perth was $101 000. Bear in mind, I was buying in Donnybrook, which was probably a bit cheaper, and, like most young people, I bought an older house that was a bit scrappy. The average annual wage in Australia was $29 000 in 1990, and so the house was three and a half times the average wage. In 2004, the average annual wage
across Australia was $51 000, and the average house price in Perth was $262 000. But the next big jump, and members will see it when they see the chart, was a massive leap in house prices in the years 2003 to 2006. In 2008, the average house price in Perth was $455 000 and the average annual wage was $61 000, which is 5.1 times the average wage.
The rate was reasonably steady from 2009–10 to 2019–20. In 2019, there was a drop, and the average house price came back to $480 000, which was 5.6 times the average annual wage of $85 000. The interesting thing is that in the last year or so there has been another leap. According to the Real Estate Institute of Western Australia, the average house price in Perth is $610 000 and the mean annual wage is now $98 000, so we are up to 6.2 times the average wage, and that has been a significant change in getting people into the housing market. Interest rates are lower now. Back in the 1990s, interest rates were a lot higher and people were paying 12 to 14 per cent. At the moment, people can probably get the first bit of their housing loan for six per cent or so, but it is the purchase price that gets them, and that makes it tough. Therefore, people have to rent because that purchase price is a mountain to climb. Most banks will lend people about three times their income.
Hon Martin Pritchard: The bank of mum and dad is more generous.
Hon Dr STEVE THOMAS: Yes, they have to be, and we will come to that.
Most banks will lend people three times their income, so unless they have half of that $610 000 as a deposit and they are earning $100 000 a year, it is very difficult to get their foot in the door. That is the issue that we face, and we see it everywhere. I used to see it in Dalyellup. Two professionals, a teacher and a police officer, would be living together. They would both be on $100 000 a year and they could make $200 000 a year. Triple the family income would be $600 000. They could afford to buy a house in the town but if something went wrong and suddenly one of them became unemployed, they would be bust. The housing market is very difficult to get into.
The reality is that that difficulty as it relates to house purchase for individuals also relates to investors. If an investor purchased a house in 1990, paid $100 000 for it, and rents it out at today’s prices, they are probably doing really well. The problem is that we must have a continual increase in stock, so right now we would have to get someone to invest in that $600 000 house and rent it out. It is okay if a person bought it many years ago, but if they did not, they missed out on the marketplace. We talk about intergenerational warfare. If intergenerational warfare is going to arrive, it is because we have a generation that is not keeping up. It is the generation that bought houses in 1990, whose houses were then worth $100 000 and might now be worth $600 000, that has made it difficult for the next generation to start over. No policy that would reduce the value of the family home or an investment home would be popular, so what policy is going to drive down the price of housing to a point at which everybody takes a $200 000 haircut on their house? I do not imagine that that government would do particularly well, and so that all gets put in the too-hard basket. How do we get housing prices back down to a point at which young people can afford to enter the market? There is ultimately some benefit in that because if we can drive investment in housing back down to
a point at which investors could get back into the marketplace, we might find that they do so.
Part of the problem is, of course, that we have a completely overheated construction market. The construction market is an absolute mess and part of that is the government’s fault. The government is out there trying to spend $11 billion or $12 billion on its infrastructure program year in, year out, and it can do so because it has a $6 billion surplus and we had the biggest iron ore boom that we have ever seen, but it is in direct competition with everybody trying to build a house. It is inflationary in both money and time. The government has a $2.6 billion budget to put another 4 000 social houses out there, and it is getting some built, but it is going to struggle to be on schedule because it is competing with itself. It has to build Metronet and cut all the ribbons before the next election, so it is competing with itself and its own social housing market, and it is competing with every person out there trying to build their own house. There is a reason that a house that used to take nine or 10 months to build is now taking two years and, in some cases, longer than that. It is hard to get contractors. It is hard to get materials. Everything is being driven up. When we see prices going up, a median price of $610 000 is perhaps the natural value we have reached because it is probably going to cost someone that much to buy a block of land and put the house that they want on it, and it is going to take them two years to do so.
Someone may be paying $30 000 a year in rent. At the moment, the average rental property in Perth costs $640 000, so that is about $32 000 a year. They are paying $60 000 while they are trying to get in.
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Hon Martin Aldridge; Hon Wilson Tucker; Hon Dr Steve Thomas; Hon Dr Brad Pettitt; Hon Sophia Moermond; Hon Dr Brian Walker; Hon Sue Ellery; Hon Neil Thomson
The government is in direct competition with itself in the housing market. Its construction of Metronet and everything else it is trying to do are in direct competition with its housing construction program, and that is in direct competition with the private housing construction program. I do not know what will fix this overheated marketplace except for the next crash. The price of iron ore dropped about $US10 a tonne in the last couple of days, so the correction I thought would happen last year might be starting to kick in. As that kicks in and the correction comes forward, it will be really interesting to see whether the government has the capacity to deliver everything it wants to, but that is a bit of a sideline.
The other thing that has been raised a couple of times is commonwealth housing policy—federal not state—and, particularly, the constant attacks on negative gearing, largely by the Greens and some others. Sometimes I have to repeat myself: negative gearing is a tax deduction for an expense. Negative gearing is simply what every business does and what huge numbers of individual taxpayers do when they put in their tax returns. I have no doubt that all members do it too, especially now that it has been confirmed that they are allowed to advertise and advertising is
a legitimate tax deduction. Members take tax deductions for legitimate expenses, as I do and the vast majority of people do, unless they are wage earners with no tax deductions. Unless they go to work, use everything at the office and go home again, and have no tax deductions—no uniforms, no ongoing education expenses or any of those things—they take legitimate tax deductions for expenses related to their income, and that is no different from negative gearing. There is no point in negative gearing forever because people would simply be wasting money, but it is
a legitimate tax deduction for an expense. We should focus on that.
One issue that has been mentioned before in this debate is that at some point we have to stop vilifying landlords and accusing them of being grasping and greedy, and getting rich on people’s backs. A few landlords have become quite wealthy—there is absolutely no doubt of that—but a lot of landlords are doing it tough and have income that is not great. I know a few retiree landlords who own a couple of houses and would probably be better off selling their assets, handing it over to the kids and going on the pension. The tax deduction exists, so people might as well use it. The pension exists, so they might as well use it, but these are proud people who say that they would rather be independent. They own a couple of houses and are renting them out for $25 000 a year, so they earn $50 000 a year, but it probably costs them nearly $20 000 a year in expenses by the time they have paid for insurance, rates, maintenance and all the rest of it. They are making $30 000 a year, so they are basically earning the same amount as the pension. Instead of their superannuation providing them with the pension replacement or going on the pension itself, they use residential real estate investment to provide that, probably to their own detriment. I imagine that they would be better off with the additional social welfare available, such as pension cards and Medicare.
Let us not vilify landlords in the process. It is far too easy to do. Perhaps it could be argued that this bill does not vilify landlords, but it probably does not glorify them. It provides opportunities to make being a landlord much more difficult. A little bit of this is about the messaging, and the government might take this on board: we need to value landlords. Currently, 84 per cent of rental properties are in the private housing sector, and the vast majority of landlords are doing the right thing. They love and tend to look after good tenants. The great 80:20 rule of life is that 20 per cent of landlords are probably dreadful in the same way that 10 or 20 per cent of tenants are probably dreadful. Where it works, it works reasonably well. I do not think that the system itself is that broken. The system has a problem with the level of supply and the capacity to meet the level of housing demand. That is where the system is struggling. There are some issues with what the government can do to make landlords feel that their investment is worthwhile.
Most friends and people I know who have invested in residential real estate as a wealth-creation device either have got out or are considering getting out of it. They are not interested in staying in a marketplace that looks so difficult. Have a look at the number of empty houses at the moment. We need to be aware of two things that are happening. The first is that a lot of people own residential real estate but are not bothering to put it on the long-term marketplace, particularly down my way in the south west, which is, of course, the best area of the state, so we understand that they want to come.
Hon Martin Pritchard: To visit.
Hon Dr STEVE THOMAS: Well, it is the best area of the state to live in but also to visit. People come to the south west and invest in residential real estate. After a while, as their liquidity in the house increases and their need for additional income to cover the costs decreases, a lot of them are saying, “You know what? This is my weekender,” when before it was a house that was available for a family. There are huge issues all the way from Bunbury, Capel, Busselton, Dunsborough, Yallingup and Margaret River to Augusta. Real estate has become really precious. I was in Augusta last week, and people were saying that the starting point is $1 million to get into the Augusta marketplace. Augusta was always where south west farmers had their holiday houses, and a lot of the houses were originally built fairly cheaply.
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Hon Martin Aldridge; Hon Wilson Tucker; Hon Dr Steve Thomas; Hon Dr Brad Pettitt; Hon Sophia Moermond; Hon Dr Brian Walker; Hon Sue Ellery; Hon Neil Thomson
Two things are happening: one is that people are going to the south west and choosing not to rent out their property, and the second is that if they do rent it out, they will put it on the short-term rental market and Airbnb it. If they put permanent or long-term residents in the property, they have far less control over their assets, and if there is an issue, it is far more difficult to remove the tenants. In many cases, they can rent out the property on Airbnb and make
more money in six months than they could make in a whole year in the long-term rental market. That is not a good outcome, nor is leaving a lot of these houses empty just for the odd weekend. It is not a good outcome for the local community or for the person themselves. Businesses and families trying to move there are struggling to find accommodation. We need to try to focus, as much as we can, on minimising those imposts and recognising that landlords are generally good people.
It is a bit like, dare I say it, the argument with the police force. It is a pretty tough and miserable job, and police tend to get abused a fair bit. If everybody starts to value and support police officers, they are more likely to stay in place. Guess what? If people started to value and support landlords, perhaps there might be more houses on the marketplace for long-term accommodation, which is exactly what we need.
We need more houses for young families in places like Busselton. Much of Busselton’s population is older than Hon Martin Pritchard, Hon Neil Thomson and me. They are doing all right, thank you very much. They have retired and taken their assets there, but where will they get their services from without the next generation? That is part of the problem and the town is working on that.
We have to encourage and support landlords more than we disparage them. I appreciate that the government has made some changes to this legislation after consultation. I think it has done some of that. To some degree, it mooted some of the criticisms about villainising or demonising landlords. There has been some change.
Sitting suspended from 6.00 to 7.00 pm
Hon Dr STEVE THOMAS: We were disrupted by the dinner break but it was beautifully held out in the courtyard with the Greek community of Perth, which was absolutely fantastic —
Hon Dan Caddy: The Hellenic Australian Chamber of Commerce and Industry.
Hon Dr STEVE THOMAS: The Hellenic Australian Chamber of Commerce and Industry. I had a lovely conversation with the Greek bishop, amongst others. What a great community they are. We have come back invigorated by the home of democracy to engage in little more democracy, as it were. We will not talk about all the things that democracy means, because we will get distracted. What a great break.
We have been through the general philosophy of housing. We have largely addressed what the bill is not—that is, the solution to all things. It is not something that will suddenly house everybody. It is not the $2.6 billion the government keeps saying it is spending on social housing, which is great, but will obviously be difficult to expend and get out there. I am interested to see how we get through that, because an answer to a question today said that it will be fully acquitted through the forward estimates, which is a herculean aim that the government has set for itself.
The time has come in the last few minutes to address what is the bill is actually about, and I know that that will surprise the minister managing the bill, but we have come to the point at which we can exclude all that are extraneous and get to the actual point of the bill, which is to empower residents of tenancies to have greater power over the home that they are leasing. There are a number of parts to this, including that they will be able to make alterations. Some of those are quite reasonable, particularly alterations around disabilities et cetera. It will be much more difficult to prevent tenants from having pets. There are some problems around that and that will be explored more than adequately during the Committee of the Whole House stage.
I want to make a critical point in these last few minutes. There is a trend in this government to present legislation that sounds not too onerous at the first stage, but that in many places suggests that regulations will be developed and those regulations will determine precisely how these things are to be interpreted. It is a trend and it is a disturbing trend that this government has got into. We thought it might have learnt from the Aboriginal Cultural Heritage Act that the devil is sometimes in the detail and perhaps the regulations should be a bit further spelt out. It would be interesting to see more of the detail go into the bill. I would much rather prefer that, but I am often reminded of a Yes Minister episode around the national integrated database, when the minister said that despite the interference of Sir Humphrey, the regulations should be developed alongside the bill, not necessarily afterwards. I feel myself very much in a Yes Minister moment, when yet another bill has been presented by the current government and we are asked to take the regulations on trust. I suspect that that trust is perhaps a little strained at the moment. Dare I say it, when we are running in conflict with Yes Minister, that should ring alarm bells for members of the government
as well as members of the opposition.
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Hon Martin Aldridge; Hon Wilson Tucker; Hon Dr Steve Thomas; Hon Dr Brad Pettitt; Hon Sophia Moermond; Hon Dr Brian Walker; Hon Sue Ellery; Hon Neil Thomson
There are a number of areas that this government expects us to take on trust. I will give members just a few examples going forward. I plucked out a few specific ones. On page 20 of the bill is division 3, “Retaliatory action taken by the lessor”. I think more detail needs to be put in place to define how somebody will determine what form of action is retaliatory, because I suspect that we will be bogged down in this particular part of the legislation. What
is retaliatory and how do we prove that something was retaliatory or not? If I go back to the Yes Minister episode, the English civil service has an amazing process in which it does not take retaliatory action against public servants it does not like; it actually shuffles them to one side or promotes them, and puts them somewhere where they cannot do any further damage. Is that retaliatory? No, it is very careful and clever. If it is good at it, it makes it look
like a promotion as a part of that process. We may get to the definition of retaliatory in the committee stages of the bill, and the minister might feel inclined to give us more detail in her second reading response to define precisely what is retaliatory versus what is simply moving forward, I suspect, to some degree in getting on with the job. That is on page 20 of the bill for those who are looking at that.
There is a good example on page 32 of the bill, under clause 33. It introduces proposed section 50C, “Conditions for approval to keep pet at premises”, and states —
The lessor’s consent for a tenant to keep a pet at the premises may be subject to —
(a) a reasonable condition about —
…
(iii) a prescribed matter;
Under proposed section 50D, grounds for refusal are “a prescribed ground”. Much of these things are yet to be written. Much of these things we cannot debate because we do not actually know, so how can we determine the impact on landlords, in particular? I take the view that the legislation is largely written in the interests of tenants. I do not think the government denies it. It has been quite open about that process and I think that is quite reasonable; that is the intent of the government. This bill is not about fixing the housing crisis in Western Australia; it is about empowering tenants a bit further than they are empowered. As I said before the delightful break with the Hellenic community, I accept that on face value and I accept that the government’s intent is specific in this case. But without regulations, without the further explanation of exactly what it is planning to do, it makes it very difficult to assess this bill. I urge the government, above all other things, to actually try to give a bit more detail, because the simple reality is that after things like the Aboriginal Cultural Heritage Act, it is quite difficult to take the government on trust—not necessarily even the intent of the government.
I take the view that ultimately most members of Parliament and most governments come here to try to do the right thing. I have known the very rare exception to that, but for the most part—do not look at me askance when I say that, one member in particular—most turn up to try to do the right thing. I am prepared to suggest that the government has a reasonable intent with this bill. This is an issue of us trusting the government to get the job done in a reasonable way that does not significantly impact those people whom the government is saying it is trying to protect, in this case, landlords.
Another example is found on page 38 at proposed section 50(L), still in clause 33, “Grounds for refusing tenant’s request to make furniture safety modification”. Proposed section 50(L)(1)(d) provides that one such ground is “a prescribed ground.” Once again, we have to wait for all those things. Under what precise circumstances will a landlord be prevented or prohibited from increasing the rent if interest rates go up again? I actually do not think they will. I think that interest rates are likely to stay steady; they might even drop towards the end of this year. Here is a Nostradamus prediction for you, Acting President. I think that if we get an interest rate drop in September, we will be in a federal election by November. There we go—we will put that one in the books, as well as a $5 billion to $6 billion surplus. Is the member putting a wager on there? We will see how we go. There is my prediction. If we drop to 4.35 per cent, it will only go down 0.25 to 4.1 per cent in September, and we will have a November federal election.
Hon Martin Aldridge: You know what happened to the Governor of the Reserve Bank when they started making predictions!
Hon Dr STEVE THOMAS: Yes, I know; it is difficult. I predicted the budget surplus better than the Treasury did three years in a row, so I am going to back myself on this. That will happen if the interest rate drops; I think it will. I think that the $5 billion to $6 billion is already pencilled in, even though the iron ore price is dropping a bit, and the correction is coming. I was a little bit off with the timing of what I said last year; I said last year instead of this year, but I think the reality is that we will be in that process.
Here is the issue with this bill. Once again, the government is asking us to take on trust its capacity to write regulations for the best interests of everybody. Because of my respect for the Leader of the House, I am even prepared to
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Extract from Hansard
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Hon Martin Aldridge; Hon Wilson Tucker; Hon Dr Steve Thomas; Hon Dr Brad Pettitt; Hon Sophia Moermond; Hon Dr Brian Walker; Hon Sue Ellery; Hon Neil Thomson
accept that the intent might be to write good regulations for everybody, but the performance to date does not reflect that high aspiration.
I think the greatest concern about this piece of legislation is firstly that it reinforces the concern that landlords are a problem, not an asset. Most private landlords out there are doing the right thing and are trying to provide homes over people’s heads, and 84 per cent of the homes over renters’ heads are provided by the private sector. I suspect that the minister probably believes that most of those landlords are doing the right thing, as well. There might even be a few landlords amongst the members opposite; I have no idea. It is a perfectly legitimate, legal and morally viable way to create wealth. As my good friend Hon Martin Pritchard says, eventually one can sell it all and invest it in the kids, who will need it to get into the residential housing market, or simply sign over the lease to them.
I think that is the only way any of my children will get into the housing market at this point, so I agree with the member. I just hope that they do not choose the cheapest nursing home when we get to the other end of the argument. I try to guilt them into all these things early on!
Hon Dan Caddy: None of them will be too cheap in about three years; you’ll be fine!
Hon Dr STEVE THOMAS: No; the price might go up! I have four daughters, all of whom I have been trying to guilt into making sure that I am well looked after in my dotage. It is not looking good so far; anyway, we will see how we go. Here is the issue. It would be far easier for us if we had a greater degree of certainty about where all the subsidiary litigation and regulations are and are likely to be as we go forward. Even though I am not opposed to the intent of the government, it is very hard to endorse the position of the government without that level of detail, because I would hate to see the Parliament of Western Australia go down a path that will vilify and alienate landlords who are 86 per cent of the market, the vast majority of whom are good people, just trying to get by, investing in their retirement so that they are not a drain on the community going into the future. This is a good group of people, who have largely been leaving this investment marketplace. I kind of beg of the minister—it has been a month for humility for me—to reinforce the support that might come for landlords as a part of this process and tell them that they matter, they are important, their investment helps put a roof over the heads of families in Western Australia, and that action is valued by the government.
HON DR BRAD PETTITT (South Metropolitan) [7.14 pm]: This debate on the Residential Tenancies Amendment Bill 2023 is very timely. Over the weekend, The West Australian—I am sure that many members saw the front page—had a heading that read, “Why it’s NEVER been harder to rent in WA”. The article stated —
Rents in WA have grown by more than anywhere else in Australia since the COVID pandemic hit—and could rise by as much as 30 per cent in some parts of the State by the end of the year.
The article continued —
New data shows Perth tenants are being slugged an extra $240-a-week in median rent …
That is an increase of an extraordinary 67 per cent on March 2020. Concerningly, The West Australian article continued —
… a separate Suburbtrends report indicates life may still get harder for tenants.
It forecasts renters in South West towns and parts of the Perth Hills could be forking out around 30 per cent more by the end of this year, while, suburbs in the south-east corridor including Huntingdale, Maddington, Thornlie, and Gosnells are tipped to be hit with increases of more than 20 per cent.
In light of this, perhaps the key question to ask as we debate a bill aimed at renters is: is the bill before us going to actually address the key issues that are facing renters today? Of course, one of those issues is runaway rents. Western Australian renters are paying more than ever before. As The West Australian said, it has never been harder to be a renter in WA. There is a clear answer to that question. Frustratingly, this bill will not do that. This legislation has some good things in it, but they are very small; in fact, “timid” is probably the word I would use to describe the reforms in this bill.
I think that these reforms are hard to argue with. They will restrict rent increases to once every 12 months. Tenants will be allowed to have pets. There will be a ban on rent bidding. Provisions like this are already quite commonplace across the rest of Australia; there is certainly nothing radical in these reforms at all. Although I and the Greens support those changes, we are also extremely disappointed that what we see in this bill will largely not deal effectively with the real challenges that sit before us today. I will give an example of some of those challenges. A landlord will now be able to increase rents only once every 12 months; but, of course, there is nothing to stop a landlord rolling over what was going to be a six-month increase into a larger 12-month increase. That could happen quite lawfully. Quite frankly, we could pretty easily drive a removal truck through the rent bidding provisions. The Western Australian Council of Social Service gave this bill a generous reading in The West Australian; I think that WACOSS likes to be generous. It said that is a first good step, but it went on very quickly to say that it looks