Bond Interest: Final Comments

Now comes the fun part. There’s enough holes here to sink a leaking ship. I almost feel like running for political office. 

Tenants are expected to pay for law reform, dispute resolution, information services, and administrative management. Why isn’t a tax imposed on real estate agencies? They are a business and landlords pay for their so-called expert services. Some landlords make a business out of the investment in residential properties. This is substantively different to the provision of goods and services. Why isn’t a tax or levy imposed on landlords for the use of advisory services?

I don’t have any particular knowledge of the intricacies of government funding so I will talk in loose terms. Say we have a workers compensation authority that is funded by premiums. Premiums are used to influence the behaviour of employers so they provide a safe working environment for their employees. Say we have a local council that fines car owners for parking infringements. Car owners are penalised if they don't pay for parking. I won’t get into how many parking fines I have been given!

When it comes to interest accrued from residential bonds, tenants have not done anything wrong. They have not violated a law or committed an unlawful act. The accrual of interest from tenant bonds is substantively different. I’m going to pretend to be a government administrator. I understand the need to pay for programs and services. But this must be done in a structurally fair and just manner. In some states and territories, landlords can be investigated and fines can be imposed. I would be interested in figures which show the breakdown of interest compared to penalties. What would this show?

 

Institutionalised, legalised and systemised bullying is no worse than a child beating up peers on the playground. Who is the bigger bully? The landlord or the government? Have we merely swapped one for the other? Clearly it is better for a statutory authority to hold onto bonds rather than landlords. Before the reform in Tasmania, some landlords were treating bond money like it was their own money for personal use. But if the money is managed by a statutory authority, and landlords exploit loopholes and unfairly claim bond moneys anyway, what is the point of another level of bureaucracy which tenants pay for anyway. Sorry if I sound a bit harsh but good intentions don't translate to results on the ground.

I would also ask why tenants should pay for a system that is legislatively and administratively biased in favour of landlords. Tenants are paying for a system that does not effectively enforce their rights. If we take a birds-eye view of tenancy laws, we can see the significant impact of landlord lobby groups and the somewhat tortured attempts of hamstrung tenant advocacy groups.

The use of tenant bond interest also raises a few questions. Why should tenants in the private sector forego advice and advocacy to provide for public housing they don't use? Why should a government have access to tenant interest for general governmental purposes? Funding is important. As everyone knows, money is power. Tenant services have done the absolute best they can do with the funding they have been provided by respective governments. When the same body makes decisions about funding of tenant services, but also provides public housing, there is a conflict of interest.

States and territories permit the allocation of funds for the purposes of research and education. Education is great. I’m all for it. Whether this happens is another matter. But I’m looking at the bigger picture here. What is the point of tenants knowing their rights when their rights are not that great to start off with? What is the point when landlords have better rights, and more loopholes to exploit?

Turning to the funding of tenancy tribunals from residential bond interest. Let’s use Victoria as an example. From figures provided by VCAT, roughly 95% of applications are lodged by landlords. Surprise, surprise. I have even heard VCAT referred to as a kangaroo court. I don’t believe for one second this figure accurately reflects the division of fault between tenants and landlords.

Statistics only take us so far. But I think it shows the current system is biased in favour of landlords. We can’t draw this conclusion in relation to all states and territories, but I wouldn’t be surprised if figures were similar. I think the tribunal system has failed when it comes to tenants. Whether it comes down to legislative instruments or judicial discretion is anyone’s guess. 

My brain hurts now as I’m sure yours does. So I am going to end this post on a light note. View animation below for a few laughs.