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A government program assisting Canberrans with bond costs is failing to address the issue of high rents in the capital, a welfare agency says.
 
The ACT Government will boast today that it has helped 70 per cent more families enter the rental market through its Rental Bond Loan Scheme.
 
The scheme, which provides 20-month interest free loans to cover bond costs, has almost doubled the number of loans issued since its eligibility criteria was extended in May last year .
 
But St Vincent de Paul Canberra-Goulburn chief Bob Wilson said its success was rendered pointless when so many people continued to struggle to pay rent costs alone.
 
''It is great that people can borrow money just to get into the house, but it is the long-term sustainability of the rental costs that remains the problem,'' he said.
 
''Most of the people we assist in society are low-income people on Centrelink and benefits schemes, they just can't afford rent costs of $400 or $450 a week.''
 
Mr Wilson's comments were supported by a recent Tenants Union of Victoria report showing rental prices for a two-bedroom flat were equivalent to 87 per cent of an age pensioner's income, 70 per cent of a single parent's income and more than 100 per cent for someone receiving Austudy benefits.
 
Opposition Leader Zed Seselja said these costs were at the heart of the problem as they directly influenced bond charges.
 
''ACT Labor has worsened the situation by adding a large tax on rents,'' he said.
 
But Community Services Minister Joy Burch insists the scheme is having a positive impact on the market, particularly since the eligibility criteria were loosened.
 
Last year, the income threshold for families with dependants was raised from $1717 a week to $1908 while the threshold for those with no dependants jumped from $1383 to $1431.
 
The loan was also increased to cover 90 per cent of the bond cost, up from 80 per cent.
 
Since the changes, Ms Burch said the number of loans issued had almost doubled from 128 to 215.
 
''It has been extraordinarily successful, people really appreciate it and are taking advantage of it,'' she said.
 
''We have doubled our cash outlay [to $235,000] and the households we are helping has increased by 70 per cent.''
 
Ms Burch pointed out that once applicants had paid off the loan, the Office of Rental Bonds recorded the bond as having been paid in full, which assisted renters in building up a credible rental history.
 
The scheme was praised by the ACT Council of Social Service's director, Roslyn Dundas, who said more people were able to enter the rental market as a result of its assistance.
 
''There are many people out there who can manage fortnight to fortnight but who find it difficult to save, so paying four weeks' rent up front is quite a challenge for them,'' she said.
 
''Through this strategy people have the support to at least get into the private rental market, build up a good record of working with private landlords and get good referrals, so if they have to move again in the next six months or so, they have a better history.''

-  Breanna Tucker
The Canberra Times

Monday, 29 August, 2011