Mr ANOULACK CHANTHIVONG (Macquarie Fields) [6.22 p.m.]: I participate in debate on the Strata Schemes Development Bill 2015 and the cognate Strata Schemes Management Bill 2015. Our parliamentary democracy is one of the most admired in the world. All members of this Parliament come here to advance the public interest over private indulgence and political ideology. But that is where part 10 of the Strata Schemes Development Bill 2015 falls short. This part in particular is full of contradiction and fails the public interest advancement test. It is bad law based on flawed logic to allow strata renewal through forceful acquisition requiring only 75 per cent of strata owner support. Let me now go through some of those flaws.
It does not take long to identify the first flaw. On the very first page in the second paragraph is a summary of the three main objectives of the bill: the subdivision of land, the way strata schemes may be dealt with, and variation, termination and renewal of strata schemes. But where is the objective of advancing the public interest? Where is the aim of creating a better community? Where is the goal of upholding the fundamental principle of law and individual property? Madam Temporary Speaker, I will tell you where it is located. It is located nowhere. Without some guiding principle on how this legislation increases the greater good, part 10 of this bill is legislation that is not only without principles but also without a public purpose. If part 10 is about improving housing affordability, it should state that. If it is about redeveloping old strata titles when the structure of a building is unsound and unsafe, it should state that. If it is about renewing and revitalising older suburbs, part 10 does not show that.
Without guiding public interest principles, part 10 is at best ill-considered; at worst, it is a dangerous piece of legislation with significant adverse consequences for our community. On just terms, the basic right to own and control property is imperative for the functional capabilities of our society. Regardless of how large or how small and regardless of the type of property, whether real or personal, an owner should have full rights to buy and determine how his or her property is sold. In a free market economy, individuals are fundamentally free to have the security of capital and the autonomy of trade as they see fit, and in a circumstance that is to their benefit. Under part 10 there is never any certainty that a person's property is actually secure. If a network of neighbours can impair a person's right to his or her own domicile that creates competing interest over who claims to be the true owner of a particular parcel or property.
Although someone might be the registered proprietor, his or her interests may be subverted by popular rule, if a decision is made to sell off a strata scheme. There are a number of instances in which persons would be unwilling or incapable of giving their consent. That may include a kindred or practical link that persons might have to their local community; the strata is the only asset persons have and they wish to protect it; or, alternatively, an individual's other housing options are quite limited. When people are forced to leave their homes, they lose not only their asset but also their access to infrastructure, such as hospitals and schools, and their sense of identity that comes from being part of their local community. There are sentimental and personal values attached to a property in a caring community which is in addition to the nominal value. Compensation cannot remedy this.
The threshold of consent by at least 75 per cent, or three-quarters, of the people to consent to be able to instigate changes suggests that proportionality rather than numbers will be considered for the application of this rule. Different strata schemes will vary in the scope of impact. A four-lot strata scheme has differing and significant outcomes compared to a strata scheme of 100 lots or more. Part 10 effectively will mean that every scenario will accentuate different problems and produce different results, with varying degrees of remedy. However, by stark contrast, unanimous consent will be the same across the board. For a blanket provision that must be uniform across the whole landscape, it would make more sense for consent to be unanimous rather than being subject to an arbitrary proportion, which changes with every situation.
In my view it is a fundamental rule of law that in a just and democratic society, governments forcibly acquire a person's private property only on the rarest of occasions and with the primary obligation of producing a greater public good. This transfer of power to a private individual to forcefully acquire another individual's property without his or her consent, and without the production of a public benefit, is deeply concerning with dangerous consequences for resumptive powers, the rule of law and individual property rights. Philosophically, a person's freedom to exercise control over his or her personal asset would be taken away by those better financed, more organised and with greater resources.
When I consider the impact of part 10, I think of Warren and his young family at Minto and I think of Dominic and his elderly father at Ingleburn. Both families are honest, hardworking people in my local community, but both also are susceptible to potential predatory practices of property developers who could use their resources to force Warren and Dominic to move against their will. They are but just two families. Potentially there are many others in my local area who live in small to medium strata schemes and who could be turfed out of the place they call home and out of a community they love. All of this so that someone else can forcibly take an asset at a cheap price to make a bigger and quicker buck!
I have to say it is surprising to see a political party that has been founded on individual rights and the unshakeable belief in the power of markets introducing such legislation. It is difficult to see how part 10 fits with Liberal Party ideology. It seems the Liberals' philosophy of market freedom carries a big asterisk and notations clearly saying, "Only when it suits the political situation," as a permanent footnote. A market mechanism already exists in the situation of strata renewal without the need for a 75 per cent threshold. It is called negotiation between private individuals about the exchange of a contract on what parties agree is the true commercial value of the asset. If owners do not receive a suitable offer for their asset they simply will not sell. The solution is not forcible legislation but for the buyer to offer a price and/or incentives to make the owner want to sell.
One of the great founders of free market economics, Adam Smith, would be appalled at seeing his "invisible hands", which should determine the equilibrium price and conditions of free exchange, being nothing more than an extension of an arm of market intervention through government legislation enacted by a Liberal Party that supposedly believes in the free market. Forceful acquisition of another person's property at a non-market value or in a disputed situation only enhances an entitlement mentality on the side of property developers and speculators. Those with the means and resources will use their strength to acquire assets at below-market value and maximise their profits, not through free market exchange but through market intervention mechanisms. Once these properties are forcibly acquired, developed and sold, the realised value is likely to be significantly higher than they were once worth and definitely more than their original owners were given.
The University of New South Wales in its "Renewing the compact city" report analysed the redevelopment potential of strata schemes across Greater Sydney. The analysis results clearly show that suburbs in Sydney's inner-city ring and coastal suburbs are more likely to be forcibly acquired and redeveloped. These inner-city or coastal suburbs are likely to produce greater profits for developers and speculators but also produce situations where owners are more likely to miss out financially on the true market value of their asset. Part 10 will do nothing to improve housing affordability because the identified suburbs are already attracting prices close to or more than the $1 million price mark. All part 10 does is allow property predators to "luxurise" older strata schemes with a view to maximising their profits by acquiring property at below-market value under a bill that favours the well financed over the honest and hardworking.
An adverse repercussion of part 10 using UNSW's finding is the further segregation and decreased diversity in our suburbs. Consider the situation where strata renewal under part 10 is concentrated in the inner-city or coastal suburbs of Sydney. The newly redeveloped strata properties will only be available to those on the highest levels of income and those with the largest capital asset base. What were once suburbs housing people of varying incomes, wealth, professions, age and cultural backgrounds would become homogeneous exclusive estates with money the only determinant. A broadly representative and diverse community is greatly reduced if not eliminated where profit maximisation in an unfair system is allowed to take control. [Time expired.]
