Invisible Taxes

628,153 residential households that rent in NSW were indirectly taxed $42,366,000 in 2006/07. The latest available annual report from the NSW rental bond board (2006-07) show that they were holding $696,497,000 of our bond monies, that they received $42,459,000 in interest income, but only paid out $93,000 in "interest" to the tenants who supplied that money.

The Board pays out interest based on a "benchmark" rate – the Commonwealth Bank's "Streamline Account" product. That pays 0.01%pa

Even so, the Board declared a $23.9m, loss for the year that year. How? Well, the Office of Fair Trading charged the board $21m, run the operation (up $3.15m on prior year even though face to face and phone inquiries are plummeting). $21m to run the Rental Bond Board? Sounds like the administrative charge from Office of Fair Trading is subsidising other core work. Hardly seems "fair".

In the overall scheme of things, the $1.15m discrepancy between what the Rental Bond Board says ($9.152m) it paid towards the Consumer, Trader and Tenancy Tribunal and what that Tribunal reported receiving from the Bond Board ($8.002m) are neither here nor there, so I'll move onto grants for Tenancy Services.

Tenancy Services "provides impartial information, mediation and education services to tenants, village residents, landlords, their agents and village management about their rights and obligations under this legislation" – so $491k pa year sounds reasonable. But $30.491m?

The notes under "Tenancy Services" shows the Board in that year pumped $30 million into "NSW Land and Housing Commission for Stage 2 of the Affordable Housing Initiative. Stage 1 was funded for an amount of 9.9m in 2005/2006".

A quick google and reference to Hansard shows that this money was appropriated in 1998 and the project was never been heard of again –except when Sylvia Hale MLC demanded it be fulfilled during the Law Enforcement Legislation Amendment (Public Safety) Bill debate following the Cronulla Riots.

So in two years $40m of Aussie Battler Renters' bond interest has been ploughed into something that hasn't been heard of since 1998.

I know that the government coffers have been tight for years, and we have to expect some user pays. I don't mind some of my hard earned interest going to supporting rental services etc, but to siphon off forty million into a scheme that was supposedly budgeted for in the late 90's and which has never been mentioned by our extremely announcement and re-announcement focussed government beggars belief.

Still – now I know why I only got 34 cents for 18 months of a $1660 bond. Pity that the money orders cost five bucks originally.