Senate Economics Legislation Committee, , 4:59:39 to 5:34:40
Treasury discusses staff turnover at Housing Australia and the impact of migration on housing demand.
Topics: Workplace culture, Infrastructure, Workplace relations
Speakers: Scott Langford, Hon Tim Ayres, Barbara Pocock, Andrew Bragg, Cathie Armour, Ben Rimmer, Dr Nerida Hunter, Hon Matthew Canavan, Lisa Darmanin, Speaker 25
>> Sure. I just have a few questions. So, uh, can I I want to ask uh the chair, Mr. Tangey, some questions, and it might be useful to get Miss Arma to come up as So um I just want to go through some of these board issues. So you've now been briefed on these issues that were canvased in the treasury report done by intersection.
>> I've been made aware of the report Senator. I have read the redacted version of the report which I received after the OPD production of same. Uh so my exposure to that report is limited to the reading of the redacted version on the 15th of January.
>> Okay. And Miss Army, you've been on the board for the whole time uh that these things were being undertaken in the report, haven't you?
>> I joined the the board late October 2023. My first board meeting was November 2023.
>> And you've also been briefed on the recommendations from that report.
>> I've seen the same document that you've seen.
>> Okay. And so what confidence can you give the community now that the recommendations that were made about these matters uh have been addressed and there are better risk management pro protocols in place.
>> Sorry, I I I I haven't seen a report that says anything about risk management protocols, Senator. Um, I've seen a report that's heavily redacted, but that says that the um, matters raised by the complainant, whomever the complainant was, were in relation to the former chair were not substantiated. That's all I've seen.
>> So, what about the governance issues at Housing Australia?
>> What governance issues are they? Senator,
>> you don't think there are any governance issues at Housing Australia?
>> I'd like to know what the governance issues are.
>> Well, what what did the Deote report say about the governance at Housing
Australia? So the deote report was a a um a review that was done real time >> during the um half round one at Housing Australia's um request and it made some observations about things that needed to be addressed. For example, it made an observation that we needed to update our board charters. We have updated our board charters. It made an observation um about uh uh board members who are not part of the audit and risk committee attending the audit risk committee.
>> Well, that's a governance issue.
>> That's a difference of opinion frankly between um the people from Deote and um not only the housing Australia um the um guidance given by the department of finance and the practice of the other sibs. If you have a look at the practice of the other other SIVs in the Commonwealth, um the other other members of the um boards of those organizations attend audit and risk committees.
>> Well, I've got to say I mean I'm surprised to hear you say that because I don't think that there'd be many occasions when a member of the board who is not a member of the order risk committee would just turn up to a
>> Well, I think you're completely wrong, Senator. It's absolutely standard in listed companies in Australia. um for other members of the board who are not a member of a committee to attend.
>> It could be a huge conflict of interest.
>> It's where is the conflict of interest?
>> Well, it could be
>> the the under the PGPA act um the board board is responsible for the financial reporting and risk management systems of the um of the organization under the housing Australia act. The board is responsible. Do you think it
was fine for
>> it's absolutely fine. We discussed it both with with the deote um representative at the audit and risk committee.
>> So what did they say?
>> They said the key they thought the key element um was to ensure that the audit and risk committee was able to um give a different perspective >> from um a meeting where the chair may normally direct which is a a board meeting. We thought about that. We considered it and we we didn't have the same issues that they they they were raising.
>> Okay. But I mean at the last hearing when you were here, I think you were here then. Um the evidence was that 25% of the staff had turned over. I mean you had a board meeting this week, didn't
>> Yes, we did.
>> And did you discuss this the staff survey that board meeting?
>> Yes, we did.
>> Okay. And how how's the staff going there? Housing Australia. How's the
morale? Well, I think um I think uh Housing Australia is performing really well. We're very proud of the work that Housing Australia is doing and the and the efforts of our staff in delivering the programs is exemplary. Um as as to the details of the survey and the and the way we're addressing it, I think Mr. Langford is best placed to address that.
>> You don't think that these issues are governance issues though for the organization? >> Oh. quarter of the staff is turning over on a regular basis and the staff surveys are terrible and you're losing senior executives on a regular basis plus you've had to have a treasury investigation into into board members. I mean, most people would look at it and say, "Well,
>> Senator Bragg, can if if it's pretty um unexceptional if a complaint is made about um a person for that complaint to be um investigated, that is probably best practice. And in the case where the complaint or the concerns that have been raised um pertain to a chair, it's the appropriate person in the comwalth is is for the relevant um department that looks after that organization. That's I would have thought that's just good practice.
>> So what's hap So what happened with the Have you got a CFO at the moment?
>> Yes.
>> Yes, we do.
>> Okay. And have you got a chief legal
officer? The chief legal officer has recently resigned. Senator >> uh I think with an effective date of the 4th of February, but I can take that to check. So very recently.
>> Okay. So how many of your direct reports have you lost in the last year?
>> Uh when you say lost, Senator, I've
>> How many of how many of your how many people report to you in the or chart?
>> Uh so if you'd like me to run through them, Senator,
>> no. How many are there?
So I think because you're asking about context over the last year, it's important to step through. So yes, um I've made some staffing changes during the last year, I've also made some changes to the organizational structure. Currently I have a chief investment officer looks after our more homes, looking after the social affordable housing programs. Um I have two executive leaders that responsible for the respective uh uh programs in home ownership, a a CFO uh a chief risk officer uh and a chief operating officer.
>> Senator, so so what did the staff survey say? What's what was the key takeaway?
>> So Senator, um the staff survey said that at a headline five out of 10 staff are very engaged. >> Five out of 10. Senator, two and a half are sitting in a neutral category and two and a half have expressed dissatisfaction.
>> So what do you think about that?
>> So Senator, when we look at the survey and we take this very seriously, it's been we understand it's been a very challenging operating environment. There is a very contested policy space that there is frequent public commentary that many of our staff have taken very personally uh because they are putting in enormous efforts. We've also taken on board feedback that they've given us about clarity and communication. There is a strong sentiment about the prolonged uncertainties through the course of last year in you know what was a very highly contested remains to be very highly contested policy space where there was uh in the election a lot of uncertainty for housing Australia's programs that has created ongoing challenges for staff. We've had to build a lot of organizational systems and structures to cope with a much larger expanded remit and the scale, risk and complexity of the organization.
>> Yeah,
>> there is really valuable feedback that staff have given us. We've given a number of briefings to staff and we've committed an action plan around the steps that we're taking to encourage a a work environment where everyone feels they can come to work and do their best work and be well supported. Okay. >> The the key themes of that center, if you'd like me to step through it. Well,
so 50% of the staff are not engaged.
>> No, that's not what I said. Senator,
>> say it again then.
>> So I said this the survey tool we used tells us that five out of 10 staff, we had a very high response rate um in the order of 86%.
>> Yeah, that's good.
>> So very positive staff want to express their views. Five out of 10 staff have expressed a view that says that they're engaged. Two and a half have offered a neutral perspective. that is to say that there is room for improvement and then two and a half out of 10 have expressed a dissatisfaction or sentiments that express dissatisfaction.
>> So what are you going to do to drive the turnover rate down?
>> Well, Senator, turnover rate is absolutely an important factor, but I would say it's not unusual given the context of the organization and where we've come from and are moving to that there has been turnover. But there are steps that we have put in place about creating a work environment that's conducive to high performance and retention of people that are offering high performance. Um and we've got some very deliberate plans with staff about
>> So you got some plans. Okay. So the board discussed this, did they?
>> It was part of the reporting to discuss
it. >> Yep.
organization and and task the organization with coming back to the board ultimately with its sequence of uh remediation treatments to ensure that we have benchmark improvements in the
>> Okay. Well, can you supply on notice? I'm just trying to finish up with you because I know that people want to do stuff. So, can you supply on notice a summary of the findings, staff survey, and what whatever your rectification plan is in broad terms that's been to the board and discussed to the board on
Tuesday? Uh yes, Senator, I I would point you there is a question on notice we've already responded to or it may yet to be to be tabled, but we'll look at that in relation to the the um results, but I'm very happy to offer take a question on notice in relation to the plan that we've got.
>> And were you part of this discussion, Mr. Rimmer, on Tuesday?
>> I observed this discussion.
>> Did you say anything?
>> Uh I can't recall whether I said anything in relation to this particular part of the agenda. All right. I just
want to ask you about the um in the board meeting minutes from the 29th of May 2025, there was a discussion that went along the lines of the chair noted that the lumber supporting gray chair should be utilized as a preference in housing Australia meeting rooms for meeting attendees comfort and better back health for longer meetings. Is there any reason why that was included in the minutes?
>> So Senator, firstly let me say it's quite a funny well supported by the chair. Yeah. >> So, Senator, I know that that can be read out of context and it does seem extraordinary that something like that might be recorded in the minutes, but if I could just speak to the that at the start of every board meeting, there is a a reflection that we call a safety moment that is designed to create a conversation about matters that go to staff safety and well-being. It's very good practice for boards to do this. On that particular occasion, it was raised. There was a a discussion about it. Uh I would on reflection suggest that maybe the the minutes went to an extent that may have been unnecessary. Uh but I would acknowledge that it is a real issue and that it is something that for people who have prolonged periods of sitting it can cause pain and discomfort. So
>> I appreciate your cander. My final question is just about the ANAO audit of housing fund. Um has anything happened on that front yet Mr. Langford?
>> Senator that's that's a matter that's best addressed by the Treasury. Um the ANAO audit is into Treasury's administration of the Housing Australia future fund. Uh that audit program is underway uh in accordance with the timeline agreed uh by the ANR.
>> Have you met with them?
>> Uh I haven't personally met with them but my team has been and I >> uh
>> so I met with them in uh an introductory meeting.
>> Yeah. When was that?
uh I might need to take on notice. I think it was around November. It was around the commencement of the or September October it was the commencement of the review. The team has been working um very closely with the ANAO throughout the last few months um providing documentation and supporting their analysis as you'd expect in the ordinary course of supporting audit
activity. Very important process. Thank
you. just to just to make sure I correct a [clears throat] um answer and there was part of an exchange uh with Senator Bragg um a few minutes ago where I think his question went to the veracity of an answer that Senator Wong gave um in the Senate to a question from him. I think we established that Senator Bragg, your claim uh that uh somehow Senator Wong misled. I think we've dealt with that. >> I now just want to turn to your question which I've been provided and you claimed that your question went to the uh delivery under the half. Yeah. Um to just to remind you in case you've forgotten your question said my question is to the minister representing the prime minister Senator Wong. >> Across the government's housing funds how many dwellings have now been completed because of Commonwealth support since Labour came to office. >> What is the number? I'm not looking for how many houses were funded, were approved, or are in the pipeline. My question is, how many were completed and are available to occupy? Not only have you misrepresented Senator Wong, you've misrepresented yourself.
>> I'd have to check that,
>> Senator. But that's I mean that the
problem I've asked so many questions. >> The problem the problem with turning up
>> and leading with the smear,
>> we never get straight answers
>> is you actually have to do the work. And as you've acknledled as you've acknowledged >> um you that this is complicated like the administration of this scheme is complicated have some difficulty clearly uh getting on top of it. I understand that's led to a reflexive negativity but it shouldn't lead you to misrepresent Senator Wong and it certainly shouldn't lead you to misrepresent yourself.
>> Well, we've asked I think a thousand times how many houses is that? got an
answer every time and the number as I keep saying gets bigger and fudge and bigger and bigger every day. More houses are built. We don't go around knocking houses down. We go around building houses and the number gets bigger and bigger in an incremental and and steady way. Uh and we're holding ourselves accountable, >> including here. Let's see if you get >> for the progress of that important work
>> It's been a very expensive endeavor. Very expensive. $80 billion for fewer houses.
>> All right. Thank you, Senator Bragg. >> We will rotate the call now to Senator PCO. >> Thank you, Chair. Um, want to come back to a couple more issues. Uh, I'm really curious about the way in which uh half projects get funded and where they get funded. Um, it strikes me that these projects require considerable capacity in the applicant. Um, and some places in Australia are better set up for that than others. Have more of a deeper history with community housing providers and so on, which leads me to think of this as a capacity based allocation as opposed to a needs-based allocation. I mean, I think I last time mentioned Newcastle. I'm also thinking of places like the Riverland in my state or what we used to call the iron triangle. These are places with a lot of housing need with very, very limited capability. What do you say to the fact that um HAF needs to reach places with limited capability? What's its ability to to really meet the need where it is?
>> Senator, I I might provide some answer to that, but then ask Mr. Langford to talk about the the uh the evaluation process that projects go through. HAF is not the only program supporting social and affordable housing. Uh for example, the Northern Territory remote housing program has a very specific target that you know it is what it says on the on the label. Uh there are many state and territory programs that are suited to particular cohorts or particular ge geographic outcomes. your your characterization of HAF is I think accurate that it requires a degree of sophistication and capacity uh to uh engage uh directly with housing Australia uh and the financial models that are involved in HAF. Uh but there's also the social housing accelerator program that you've mentioned and and a range of other programs. Uh it's also the case that HF's outcomes from round one and two are pretty well distributed across jurisdictions. Um
>> but regions I understand really missed out.
>> Uh the there there is a reasonable distribution between um metro and regional. I mean could it be better? Certainly. Uh you know are there improvements that uh are being made? That's actually why in half round three uh there are there is uh there are four specific streams of funding uh now in place uh one of which is um I'll get this name wrong but specialtity and diversity >> housing diversity
Mr. If you're happy, I'll pick up from there. So Oh, sorry. Big pardon,
>> No, no, go. I'm just wondering I could get this probably on notice rather than hold up things here if if it's
>> I can make a very brief remark senator and then happy to if you want further information. So certainly in round three, as Mr. Rema said, there are four funding streams. One one of the mechanisms by which we are encouraging that capacity building that you're talking about. uh if I go to two specific streams. So working with states and territories, we can provide a commitment to a state and territory that allows them to bring together the project and then they find the community housing provider that they want to work with. And we've encouraged them to think about areas that they could do that where there may they may be underserved where the capacity of community housing providers may not be appropriate and then they go through a process with us where effectively we and the state are working together to facilitate the outcome. That's been a a big part of the construct of half round two and it's something we've continued into half round three. It really starts from a recognition that in particular in social housing the states are the primary custodian of that system and so supporting a range of outcomes including in regions and with smaller providers that's an important way to do that. I'd also add that um the uh the First Nations stream very specifically recognizes that that is a naent sector um in many in many ways. There are some outstanding providers who do great work but the establishment of a concurge service uh to work with applicants um by housing Australia is in part a recognition and response to how we support First Nationsled housing organizations. It will have a different experience to it. And then of course there's the half CT quite separate uh Lee which is is funding crisis and transitional accommodation which does work with a lot more diverse providers.
>> Thank you for that and if there's any further information you want to give to me on notice I'd appreciate the detail. Um I I wonder do you have any concerns about um if I can use this term sort of community housing provider cladding by profiteeers uh by people organizations out of the financial sector which uh clip the ticket at all the levels of a project and make a nice tidy sum and just make use uh for the front of their application and their work of uh a compliant community housing provider.
So Senator, very specifically in relation to round three. This is an issue we've thought deeply about. It's something that we uh uh want to see a deeper evidence base. Um our experience in round one and two suggests that by and large these are tradition very traditional comm community housing providers who are working with a range of partners often in very established relationships. We've relied heavily on both the charities regulator and the community housing regulators for their checks and balances. In round three, there are additional tests that we're applying that are are really going to the um deeper elements of control of that the substance of the outcome. Much like in the the First Nations stream, we are very focused on how we ensure very authentic outcomes in that stream and avoid the um I think to use your term cladding uh around an application because we want to ensure that it is appropriate for the private sector to play a role in the delivery of housing and the financing of it. uh because that is a way that we're mobilizing additional resources and an ability to manage risk, but we want to ensure that it is fairly remunerated having regard to those the risks that are being taken on. And so there are mechanisms of control that we've also used in round one and two without getting too technical but effectively our agreement uh to provide our funding comes with often what like think of it like a tripartite arrangement with funders and others that says there are there are reasonable controls we have in place and if you exceed returns of X then you may need to return money to the Commonwealth. We call it an intercredititor arrangement but they're really important mechanisms by which we're trying to ensure that the value is being built. Um as Mr. Mr. Rimmer referred to earlier over time in the community housing sector so that HAF is building a a legacy that will extend beyond the program.
>> Thank you for that. Mr. Rimmer, will you be undertaking a comparative analysis? You mentioned before that something like the accelerator does a different thing than the half uh and that there are real maintenance costs uh and rental gap costs for social renters um or lowinccome renters. It would be very interesting, would it not, to see an analysis of the first 5,000 homes and how their costs compare to a direct funding of such housing through a community housing provider, building in rental subsidies as necessary and maintenance. I mean, just seems to me we're doing a very complicated thing here, uh, which is incredibly profitable for some people without a long-term housing outcome in some cases. Uh, and we could be doing it a different way. and Treasury, it seems to me, should be looking at uh the comparison.
>> Senator, part of our policy responsibilities is to is accountability for social and affordable housing policy advice to ministers. And as part of that, I have no doubt that we'll do work of that kind uh in addition to other evaluation processes that are set up uh for itself such as the legislative review.
>> Okay. Thank you. And my last set of questions go to the question of the revolving door and the role of advisers. As reported in the media, the housing minister's policy adviser has one of the housing minister's policy advisers has recently made the move to the Comwalth Bank. Um, one of the big four banks that is certainly making a lot of money out of bigger home loans. Uh, partly driven by the changes to the 5% deposit scheme. This is the same bank that just yesterday announced that enormous profit of over $5 billion. Uh when will that officer begin that new
Senator PCO, normally uh I appreciate you haven't used the staff's name.
>> I'm not using their name. Yeah. No, I >> I'm interested in some principles here, but I'd like to know when they are.
>> So, let me let me just uh answer the I I have noticed in one other incident uh around this place uh somebody decided it was okay uh to do that. uh for people for people who can't defend themselves >> um wasn't you but somebody did and it was a matter of deep regret >> and I hope they've reflected upon that just use this opportunity to make that point because it was my view pretty bad form um and not the way that these questions are usually approached um what I can tell you and I'll come back to you on notice if that's required um to provide anything else that we can provide is that person is not working in a role that has anything to do with housing
>> in their new role
>> in their new role.
>> My question is when do they start?
>> Yes, I understand that that's your question. I just that that's what I know. Um if there's anything else we can provide you, we will.
>> So you will provide me with when they
>> if if we can. Yes. Yes.
uh what obligations or requirements does such a person have as they move to an institution uh which will find much of their special knowledge of interest?
Well, I think I've answered that in my previous answer that is um I I don't believe on the basis of what I know about this that that person is working in an area that has anything to do with their um the responsibilities that they discharged on behalf of the minister or the work that they were doing.
>> Minister, the lobbying code of conduct says uh a person who was previously employed in the office of a minister >> Yes. must not for a period of 12 months after the person ceases employment engaged in lobbying activities relating to any matter that the person had official dealings with in the previous 12 months of that employment
>> and I'm very confident that that code of conduct has been followed scrupulously
>> and how okay >> you don't see them as being required to uh meet any obligation in relation to
>> the person is not engaged in lobbying activities
>> or lobbying
>> a that's it that's it
>> they're not engaged in any lobbying but lobbying the definition of lobbying is influencing decision making
>> as as broadly as it could be
>> influential person in their your
>> as as broadly as it could be construed as I understand it this person is working in a um in a role that is not related to any of that kind of work either in their either in the policy area that they're in or more broadly in terms of what you might call you know that lobbying work that is not the function that they are performing.
>> Do you have concerns minister about uh the rotation of people from key influential roles in your ID government into very profitable institutions where their knowledge will be of great interest to senior decision makers?
>> Well, there's a ministerial code ministerial staff code of conduct. has been followed scrupulously. Uh and uh that should uh that gives me uh and it should give uh others confidence uh that uh uh that the right thing has happened here. The code of conduct is designed to deal with the kind of apprehensions that you might have about these kind of issues and it's been followed.
>> I certainly do have those concerns. um why I mean because of I think there is a great deal of evidence that the revolving door is incredible
organizations not in this case
>> so I look forward to any information you can give me on that outside this and I'm very happy to take it privately thank
>> thanks chair Senator Canavan just a couple and then we can move on
>> sorry knocked off a mic there um uh I just wanted to ask a housing question um uh uh particularly international developments. It seems that uh Canada and New Zealand I think to a certain extent are seeing some moderation even some decreases in their housing uh costs. Uh they've uh both countries seem to have uh taken a fairly aggressive stance on migration, reduce those levels. Have you looked at the relationship between migration and house prices around the world and whether or not the approach of Canada and New Zealand is is working? >> No, Senator. All right. You Where are you guys? I'm sorry I haven't. Where are you guys from? Treasury or housing?
>> Treasury. housing housing.
>> What? Why haven't you done that? Why haven't you looked at like what might work overseas?
>> Uh, Senator, we're we're uh continuously looking for overseas experience about housing policy. We're also working closely with colleagues across government, including uh colleagues responsible for migration policy and the Department of Home Affairs. Uh but you asked a very specific question and the answer to your very specific question was no.
>> It's had a lot of reporting particularly the Canadian experience is having a lot of uh focus and attention right now. We've got this massive housing issue. We've had a massive surge in immigration alongside it. Uh it's just strange that you haven't looked at it. I mean have you got have you made any attempt to analyze the effects of the unprecedented level of migration we've seen the last few years uh and the housing market outcomes for particularly young
Australians? Senator, we we look at the relationship between migration and housing demand. The National Housing Supply and Affordability Council looks at that on a routine basis uh in their annual report. It's a complicated relationship because uh for all kinds of reasons, including that skilled migrants can add to our capacity to meet uh housing um housing supply challenges. So uh but I mean beyond that
>> that's all true but you've got a there's a real world example now in theory there's always different lots of different effects. You got a real world situation going on overseas. We have people marching on our streets against migration levels. Twothirds of Australians want migration to come down. I I I just don't understand why you're not even asking the question and be able to give give us answers on this issue that is of keen concern to Australians. Obviously
>> Senator we're not responsible for
responsible for housing [clears throat] policy.
>> Sure. And we provide >> I mean you can't tell me whether you
can't even you can't even tell me whether our high levels of migration have made housing outcomes for
Senator, um reluctant as I am to reflect upon the market conditions in Canada, um given the uh given the last couple of weeks, the um the truth is um a range of factors uh impact house prices. Um in Canada, recent data shows 0% growth in their economy. 0% growth, a stagnant economy. Now it is true stagnant economy does often not always often lead to falling prices of assets including homes. That's true. Um now we um we're roughly growing what one and a bit percent to just a bit over 2% on average um year on year. Now now that is that is a different outcome. Now, I'm I'm for growth, uh, economic growth. I'm for rising wages. I'm for more employment. I'm for a bigger economy. I'm for more economic resilience. Um, if you um
>> My question just is though, my question just is why isn't the government looking at this issue? I mean, you you can hang on, hang on. You can do a Google search and tell me a few stats. But my question is, why hasn't the government asked for detailed advice on whether the rate of migration we've been experiencing is exacerbating the situation for, as I say, especially young Australians who just want to own their own home.
>> There there's the government um uh considers all sorts of factors. I have to say I I take exception to the Google search obser somebody somebody else did it for me. [laughter] >> Somebody else did it for me. >> I mean, you know, >> Yeah, you're giving me far too much credit. Um here um but but a range of factors but but a range of factors >> and and and the government looks at all of these questions across all of the economic settings. Um now I know that there's a um school of thought. We'll see where you know we'll see what happens over the next couple of days. The the um uh there's a section of the Liberal and National Party that are all about importing extremist ideas and exporting jobs. I understand that. Um whether that's the sort of grouping that that has more sway or not, well, we'll see.
>> Well, just to respond, I mean, I think I deserve a response to that. uh as I say uh very clear that uh in every poll that's asked twothirds of Australians want migration levels to come down.
responsible approach
you would uh uh label two Australians as
what I suggest you lot are the extremists you're the extremist
representing the two of Australians who
want migration to come down person.
>> Not only not only are you not listening
to extremist ideas,
>> you're not even asking the question
about whether they what they are concerned. >> You wonder why the center of Australians don't want anything to do with you.
>> Okay. Um do you have any more question? All right. Thank you. Um thank you very much colleagues. So that concludes our time now with um Department of Treasury Representatives and Housing um Australia Housing Group. So you you can leave now. Thank you. Um, we're going to swap portfolios over. The committee now concludes its consideration of the Treasury portfolio for today and thank the officers of Treasury who have provided evidence. >> And we will wait for our um next group, Department of Industry, Science and