Lawyers say the Northern Territory government ‘quietly’ erased $70million in rental debt allegedly owed by remote residents who were unaware the debt existed.
- The government has not officially announced debt cancellation and it comes as rents are expected to rise
- Lawyer Dan Kelly says saga is proof NT remote housing ‘doesn’t work’
- The NT is embroiled in years-long legal battles over remote housing status
The existence of the alleged debt came to light when the community of Santa Teresa sued the NT Department of Housing for providing uninhabitable housing stock.
In 2016, the government announced it would sue residents by filing a lawsuit against them, claiming households owed the department up to $21,000 in unpaid rent.
Australian Lawyers for Aborigines Rights Lawyers at a Distance, Dan Kelly, represents the Santa Teresa community and said this alleged debt came “out of nowhere” for residents.
“It was obviously very worrying and distressing,” he said.
“They felt like they had paid their rent according to direct debit instructions.”
Freedom of Information requests revealed that the territorial government alleged the community owed a total of $2 million in unpaid rent but never pursued the debts.
Debt waiver not made public
Mr Kelly said the alleged debt write-off only came to light because a similar counter-suit brought by the government against Laramba residents was suddenly dropped earlier this month in the Civil and Administrative Court of the NT (NTCAT).
Since 2018, residents of Laramba have taken legal action against the Ministry of Housing, arguing that they have the right to safe drinking water following revelations that they contain three times the recommended levels of uranium.
“They announced in court that the Treasurer had made a decision under the Financial Management Act waiving or canceling any alleged debt,” Mr Kelly said.
“That’s basically all we know.”
NTCAT has learned that the decision to erase the alleged debt was made in late June.
In a statement, the government said tenants had been visited by letting agents to inform them that historic rental debt up to December 11, 2021 would not be pursued.
The decision to write off $70 million in debt was not made public by the government.
Mr Kelly said the government’s countersuit against Santa Teresa residents ultimately failed because ‘the records were unable to support that the amount was in fact owed’.
Wiping off those debts means the government can no longer prosecute residents who take them to court in the same way, but Mr Kelly said that based on the outcome of Santa Teresa’s counter-suit, he was ” questionable” whether debts could have been proven.
“Their records, I think, have proven to be unreliable.”
In a statement, the government said the rental system was “outdated” and “inefficient, confusing for tenants and difficult to administer”.
Mr Kelly said the saga surrounding unprosecuted and unproven debts indicated the policy of remote housing was “failing” in the NT.
“It’s a policy that failed because Indigenous-controlled organizations weren’t part of the conversation and Indigenous voices weren’t involved in the policy.
“It was money that should have been used to fix the houses and make sure they were up to a reasonable and comfortable standard.”
Debt canceled as rent increases
The decision to waive the alleged debt comes as the government plans to raise rents for many residents of remote communities and urban camps under the new remote rent framework.
On September 5, the government will abolish income-based rent-setting for these properties and introduce pricing schemes which researchers at the Australian National University say would in turn raise the rent for 68% of tenants.
Researchers found rent would go up for 80% of Central Australian tenants and 81% of Barkly residents.
“Our view on the new rent system is that it will no longer work – it was designed without the proper involvement of Indigenous organizations,” Mr Kelly said.
In a statement, the territory’s Department of Families, Housing and Communities said the new framework was “simple” and “has built-in safeguards to protect people from rental stress if the rent paid by tenants exceeds 25% household income”.
“Consultation on the Remote Rent Framework began in 2018 with key stakeholders, including a working group with housing industry leaders,” he said.
“Letting agents went door-to-door in more than 80 communities to provide tenants with information about the new framework.”