NSW Government must account for Millers Point windfall

Nicole Hasham   October 3, 2014

To all but the most resolute critics, there is a plausible case to sell at least some Millers Point properties." Photo: Lisa Maree

Next Wednesday night's auction for 30 Argyle Place – a crumbling Georgian terrace at Millers Point, expected to fetch more than $1 million – will be strictly invite only.

In keeping with the NSW government's stern direction at five previous sales, media are banned, and pre-registered potential buyers must show photo ID at the door, lest protesters and other ne'er-do-wells disrupt the money-making.

The insistence on security measures akin to a heightened terrorism threat only furthers criticism of the government's imperious, iron-fisted public housing sell-off designed to prop up a system in financial disarray.

Imperious because despite the government having no business plan, obsolete public housing policies and a sell-off mentality that even the NSW Auditor-General described as "not financially sustainable", it is hurriedly offloading some of the state's most valuable residential real estate

Iron-fisted because notwithstanding advice from its own social planning experts and pleas from the public housing tenants themselves, the government has refused to set aside even a fraction of the Millers Point portfolio to allow some residents to stay, and save the suburb from becoming what even some real estate agents fear will be a characterless inner-city enclave.

Putting aside for a moment the human impact of the decision, let's look at the financial rationale.
To all but the most resolute critics, there is a plausible case to sell at least some Millers Point properties. They occupy some of the best harbourside land in Sydney, cost a motza to maintain, and test sales already show overwhelming buyer interest.

The first five properties netted the government more than $13 million and, if market conditions persist, more than $500 million will likely be raised when the sales program is complete.

As Community Services Minister Gabrielle Upton is fond of saying, the money will be reinvested "back into the social housing system" to assist about 58,000 households on the public housing waiting list. That number is expected to blow out to more than 86,000 by 2016 unless things change dramatically.

Millers Point: a community under the hammer

But she has refused to detail exactly how that money will be spent. And in the absence of economic modelling or a social housing policy (the NSW Auditor-General called for one by last year; it is now 10 months overdue), how can those thousands of needy families be confident of being allocated a home at all, let alone one that meets their needs? Will the sales be timed to fetch the best prices? How many new homes will be built from the proceeds, and will they be located on cheap land at the city's fringe, or in the inner city, close to jobs and services?

The potential $500 million-plus windfall must also be considered in the context of the NSW public housing system's dire financial position.

It runs at a loss of $300 million a year, and much of the existing housing stock is run down. It is possible that in just a few short years, the Millers Point proceeds will be soaked up by that budget black hole, and the public housing system would remain in the red.

And then there is the issue of fairness. The government, despite receiving expert advice to the contrary, is insisting on selling all 293 properties at Millers Point and The Rocks, emptying the dwellings of their human contents.

For some tenants, the move means a welcome fresh start. But many do not want to leave. They may be elderly and sick, reliant on neighbours for support. Others have generational links to the area stretching back to the 1800s.

The government has hitherto been unmoved by expert advice that moving elderly residents may increase their risk of death, and that new, accessible seniors' housing at Millers Point should be built from the sales proceeds.

With its tin ear, the government appears intent on reaping every possible dollar from the Millers Point sale, and ploughing it back into an unsustainable system lacking transparency and a long-term direction.

Once 30 Argyle Place is sold and the pilot sales are complete, the government will have a better idea of the financial bonanza potentially coming its way over the next 18 months as the rest of the homes go to market.

Surely Ms Upton then has no choice but to answer basic questions about how she will fix the public housing system, bridge the woeful gap between supply and demand and spend the Millers Point proceeds so the immense disruption being wrought on a vulnerable, tight-knit community is not for nought. Perhaps some residents may even be allowed to stay.

Let's hope the answers live up to her department's own stated objective: putting people first.

RESOURCED: http://www.smh.com.au/comment/nsw-government-must-account-for-millers-point-windfall-20141002-10p7f3.html#ixzz3F7dWw1DR