HOUSING AUTHORITY ANNUAL REPORT 2014 – 2015
STATEMENT OF COMPLIANCE Hon Colin Holt MLC Minister for Housing In accordance with section 63 of the Financial Management Act 2006, I hereby submit for your information and presentation to Parliament the Annual Report of the Housing Authority for the fi nancial year ended 30 June 2015. The Annual Report has been prepared in accordance with the provisions of the Financial Management Act 2006.
Hon Colin Holt MLC
Paul Whyte Acting Chief Executive Offi cer
15 September 2015
Annual Report 2014 – 15 1 Contents
Statement of Compliance 1 Disclosures and legal compliance 125 Overview 3 Auditor General’s opinion 126 Chief Executive Offi cer’s overview 4 Financial Statements 129 Opening doors 8 Key Performance Indicators 196 Our scorecard 13 Ministerial directives 207 About us 15 Other fi nancial disclosures 207 Performance management framework 24 Governance disclosures 212 Other legal requirements 215 Agency performance 31 Government policy requirements 220 Setting the direction 32 Transforming the market 37 Appendices 227 Stimulating the diversity of land and housing supply 43 Appendix 1: Glossary 228 Capturing benefi ts for affordable housing 59 Appendix 2: Authority’s key functions 229 Maximising benefi ts for social housing 75 Appendix 3: Housing statistics 231 Transforming our organisation 97 Appendix 4: Our offi ces 235
Signifi cant issues impacting the Authority 117 Our environment 118 Signifi cant issues and commitments 119
2 Housing Authority OVERVIEW This section provides a review of the year by our Chief Executive Offi cer, an executive summary of our performance for the year, overview of the organisation’s role, structure and functions, and legislative arrangements.
Annual Report 2014 – 15 3 Chief Executive Offi cer’s overview
Each day, through our work, we have an unique opportunity –to make a difference in the lives of Western Australians. We assist low to moderate income families, singles, seniors and those with a disability to have a place to call home. As the State continues to grow, housing remains unaffordable for many Western Australians, particularly those on low to moderate incomes. The provision of suffi cient affordable and social housing for now and into the future is no longer a cyclic issue, rather a systemic one.
The market currently fails to provide suffi cient housing at the lower cost end that people on low to moderate incomes can afford. Leadership from the government sector is required where the market is not delivering suffi cient diversity of affordable housing supply. The Housing Authority (the Authority), plays a key policy and delivery role in leading housing affordability transformation through the State Government’s Affordable Housing Strategy 2010 to 2020: Opening Doors to Affordable Housing (Affordable Housing Strategy).
4 Housing Authority Most notable, was our achievement of the target of 20,000 affordable I am proud of the many achievements delivered through our new housing opportunities fi ve years early. In response, Cabinet has Strategic Plan 2020. approved a new roadmap for the next few years and a new 30,000 Transforming the market is a key focus as we model new, innovative target by 2020. The Government’s commitment of more than half practices to broader industry and look for opportunities to address a billion dollars of land and capital to tackle the priority waiting list market gaps. One such transformational development is Adara for social housing, was welcomed. This investment will primarily Apartments in Success, a partnered development with Goodland be realised during 2016-17. Building Company. This six-storey development, near Cockburn Across the housing continuum we assisted and supported many Central train station, showcased cutting-edge modular building Western Australians who would otherwise struggle to access methods, with the potential to reduce construction time and yield cost housing or be shut out of the market. These included more than: savings. The building was awarded the Jim Saunders Memorial – Judges Innovation award at the Bankwest Master Builder’s > 3,400 on low to moderate incomes realising the dream of Excellence in Construction Awards. home ownership > 10,000 who were able secure a rental in the private market We are also proud of our work in the Kimberley. One facility making because of assistance with a bond a difference in the lives of Aboriginal people is the Derby short stay accommodation facility. In regional centres like Derby, a signifi cant > 40,000 social housing homes for the most vulnerable and percentage of Aboriginal people are temporary residents, from in need in our community. surrounding remote communities, visiting family and accessing important Our ability to utilise broad commercial roles and partnerships government services. They often cannot access mainstream visitor enables us to deliver social policy outcomes for Government. accommodation and some end up ‘sleeping rough’. This facility provides safe, affordable and culturally appropriate short stay accommodation.
Annual Report 2014 – 15 5 Partnering enabled a whole-of-government approach to the provision Maximising benefi ts for social housing from our operations continued of targeted support services for those staying at the facility. to be a strong focus with 2,700 including more than 1,500 of those most in need and vulnerable in our community housed during the Over the past fi ve years we have been transforming ourselves – year. Our practices were transformed around the management doing things differently, innovating as we strive to be a world-class of public housing assets and tenancies with the implementation housing agency. Winning the Premier’s Overall Award for Public of a new Head Maintenance Contract system and a new tenancy Sector Excellence and the ‘Developing the Economy’ award in 2014 management system, ‘Habitat’. for our Shared Equity Expression of Interest Program was a great achievement. Shared equity has assisted many Western Australians We cannot achieve all our outcomes on our own. Close partnership into home ownership since it commenced and realises our vision with the private, government and not-for-profi t sectors enables of ‘opening doors’. us to fi nd new ways to increase the supply of affordable housing in Western Australia. Effort was maintained on our strategic direction ofstimulating diversity of housing supply with developments such as the Abode Apartments Transformation of our organisation is driven by the changing in West Perth. This development focused on delivering the State environment and expectations of the Western Australian community. Government’s housing and planning policies and affordable housing Changes to our business model and strategies, market and customer through inner city densifi cation. Approximately one third of the engagement, and organisational capability and performance culture apartments were retained for affordable and social housing outcomes. have been a focus of our efforts during the past year. We have exceeded our strategic and annual plan targets with 94 per cent of homes sold being under the median price of which 56 per cent in the lower quartile price as we captured the benefi ts for affordable housing. With our joint venture partners, land supply was released with 66 per cent of lots sold below the median land price, and 34 per cent in the lower quartile price.
6 Housing Authority Also, during the year, Grahame Searle, the Authority’s Chief Executive Offi cer for the past six and a half years, resigned to undertake a key role relating to the State Government’s regional services reforms. I would like to acknowledge his contribution to improving housing outcomes for many Western Australians. Under Grahame’s leadership, the Authority has built a focus on innovation, partnerships and making a difference. It has transformed and grown into an innovative, policy driven organisation that leads the sector and demonstrates new ways to the market. This direction will continue under our Strategic Plan 2020. I would also like to acknowledge the collective effort of our partners, stakeholders and staff throughout the year. I look forward to working alongside you to deliver further positive housing outcomes in 2015-16. I am pleased to present the 2014-15 Housing Authority Annual Report to the Parliament of Western Australia.
Paul Whyte Acting Chief Executive Offi cer
Derby short stay
accommodation facility
Annual Report 2014 – 15 7 Opening doors The challenge and opportunity As Western Australia’s population continues to grow, the State is facing greater pressure to ensure suffi cient affordable and social housing for now and into the future. Despite recent peaks in construction activity, Western Australia still has a shortage of housing supply relative to demand, particularly at the lower cost end where the market still fails to provide housing that people on low to moderate incomes need and can afford. Incomes in Western Australia have not kept pace with the rapid rises in house prices and the impact is being felt across the community: from young people wanting to leave home, to couples searching for a home in which to raise a family, to key workers who can’t afford to live in regions where employment opportunities are high, to pensioners coping with increased rents. Leadership from the government sector is required where the market is not delivering suffi cient diversity of affordable housing supply. The Authority has a unique role in addressing these challenges and Social tenant Heidy with her daughters will keep innovating and improving the way we do business to make a difference in the lives of low to moderate income Western Australians.
8 Housing Authority Our unique role The Authority, while most known for its role as a provider of public housing, is a market-based statutory authority that uses its broad commercial roles and partnerships to deliver social policy outcomes. We are a policy-driven organisation working across all parts of the housing continuum. We are focused on increasing the range and diversity of affordable housing options for people on low to moderate incomes – from more than 40,000 social homes to private rental assistance and affordable home ownership. We operate across the land, housing and mortgage fi nance sectors to deliver a broad range of affordable housing solutions for a growing number of Western Australians. Working in close collaboration and partnership with the private, government and not-for-profi t sectors enables us to fi nd new ways to increase the supply of affordable housing in Western Australia. We are a signifi cant public sector agency with a regional network of 30 offi ces across the State and a staff of 1,689. We are responding to the affordable housing challenge through our Strategic Plan 2020 that supports the State Government’s Affordable Housing Strategy and the Housing Act 1980. Interior – Adara
Annual Report 2014 – 15 9 We are transforming Over the past 100 years, as an agency, we have adapted and responded to changing market conditions. We have been on a journey and during the past fi ve years things have changed for the better. We have continued to balance our focus on social through to affordable housing. We have been innovative and developed new ways for people who aren’t well-off, to rent or even buy a home. We’ve worked hard to make the limited supply of social housing go further, for those who really need it. Partnerships have been actively created with business and the not-for-profi t sectors, rather than trying to do it all ourselves. These changes in the way we do business have had a signifi cant impact, in some cases life changing, for many Western Australians. There is still more to do and we need to continue to transform by innovating and improving our capability. Changes to our business model and strategies, market and customer engagement, and organisational capability and performance culture are all elements Housing Authority staff to our success. We will be fl exible and adapt to meet immediate and future challenges as we continue to make a difference to the lives of the individuals, families and communities we touch.
10 Housing Authority Strategic direction Our vision, mission and values
Our Vision Opening doors
Our Mission Working in partnership to build economic and social prosperity by enabling Western Our Values Australians to have Accountability; Continuous a place to call home. improvement; Teamwork; Customer satisfaction; Open communication Respect
Annual Report 2014 – 15 11 Our strategic direction Our purpose is derived from the Housing Act 1980, which provides a clear policy mandate to create affordable housing opportunities Transform for people the market overlooks.
Our strategic direction is driven by the State Government’s policy Stimulate priorities in the Affordable Housing Strategy. We are focused on diversity of Capture providing holistic responses to housing affordability challenges, using housing benefits for our strengths to deliver better outcomes for Western Australians. supply affordable Our ability to interact with and transform the market and the housing organisation is critical to our success. We operate as an integrated whole, utilising our development, lending and rental property Transform management functions to deliver diversity, affordability and social Maximise housing outcomes. benefits for social Our Strategic Plan 2020 leads our activities over the next fi ve years. Transform housing The plan reaffi rms our vision and supports our ongoing commitment to the State Government’s Affordable Housing Strategy. It guides our decisions and maps out what we can all do to achieve our targets and make housing affordable, appropriate and available for low to moderate Western Australians.
12 Housing Authority Our scorecard Operational performance
CAPTURE BENEFITS FOR MAXIMISE BENEFITS FOR STIMULATE HOUSING SUPPLY AFFORDABLE HOUSING SOCIAL HOUSING
Completion of the Adara 4,112 Delivering core system reforms modular apartments in housing opportunities Success Habitat Maintenance 338 social housing 354 a ordable Improve the 94% rentals management Tenancy Building sta capability of dwellings below Management of public median price housing Quality Assurance Graduate Program Disruptive 56% of dwellings in Aboriginal Trainee Program the lower quartile Behaviour Management Leadership programs Workforce and Diversity Plan released Change Management E-Handbook
3,420 a ordable connecting the dots home ownership Completion of the Derby 54-bed short stay accommodation facility 1,569 Award winning housing agency More than 10,000 priority applicants assisted into private housed rentals with a Bond Premier’s Awards Assistance Loan Overall & Developing the Economy – Shared Equity Program
66% 20,000 of lots were below World Prix d’ Excellence Award median price Target achieved Best master-planned community before 2020 – Ellenbrook
Auscontact Awards Contact Centre of the Year – 31-81 FTE IPAA Achievements Awards 34% of lots in Best Practice in Collaboration the lower quartile 2015 – Remote Community Swimming Pool Program
Annual Report 2014 – 15 13 Financial performance This is an executive summary of our fi nancial performance (Income Statement) for 2014-15. Further information is available in the Financial Statements contained in the Disclosures and Legal Compliance section of this report.
Total sources of funding Total application of funds (Recurrent and Capital Expenditure) $15.04b Value of Net Assets
15.1% 14.9% 10.9% 22.9% 4.7% 5.4% 26.5% 3.9%
35.7% 13.4% 8.7% $1.42b Expenses 10.7% 10.1% 17.0%
Commonwealth Land and Housing Development State inc Borrowings, Royalties for Other Capital Expenditure Regions and Other Government Departments Debt Land and Property Development Aboriginal Housing $1.38b Revenue (inc State Grants) Rent (Housing) Maintenance, Rates and Improvements Rent (Government Regional Officers’ Housing and Key Worker) Program Operating and Administration Keystart Dividend Net Increase in Cash $0.04b Loss Other Operating Income (inc. Interest)
Figure 1: Financial performance (Housing Authority) for the year ended 30 June 2015
14 Housing Authority About us Enabling legislation Changes to legislation administered The Housing Authority is a statutory authority established under The Statutes (Repeals and Minor Amendments) Act 2014 corrected a the Housing Act 1980 with a clear mandate to provide and improve reference in section 6(1) of the Housing Act 1980, amending ‘The State housing and accommodation in Western Australia. The Authority Housing Authority’ to ‘The State Housing Commission’. also provides housing for State Government employees through administration of the Government Employees’ Housing Act 1964. Our key functions Responsible Minister We realise our vision of ‘opening doors’ for Western Australians through the delivery of services and programs across the State The Housing Authority and the legislation administered are under for people on low to moderate incomes. the control of the Hon Colin Holt MLC, Minister for Housing, who was appointed in December 2014 replacing the Hon Bill Marmion MLA. VERY LOW INCOME LOW INCOME MODERATE INCOME Legislation administered < $43,500 $43,500 – $69,600 > $69,600 The Housing Authority assists the Minister for Housing to administer the following Acts: SOCIAL AFFORDABLE MARKET KEYSTART CRISIS RENTAL RENTAL SHARED HOUSING RENTAL EQUITY HOME > Country Housing Act 1998 HOUSING HOUSING HOUSING OWNERSHIP > Government Employees’ Housing Act 1964 > Housing Act 1980.
Annual Report 2014 – 15 15 Minister for Housing Hon Colin Holt MLC
Chief Executiv e Officer Paul Whyte (Acting)
Office of the Chief Executive Officer
Organisational Strategy and Policy Service Delivery Commercial Operations Transformation Business Services
General Manager General Manager General Manager General Manager Executive Director Tania Loosley-Smith Greg Cash Nigel Hindmarsh (Acting) Duncan Mackay Jeremy Hubble
Strategic Coordination Aboriginal Housing Asset Management Business Planning and Corporate Services and Client Services North and Planning Improvement
Inter-Governmental Finance Outcomes Client Services South Business Development Workforce Development
Social Housing System Service Delivery Central Complex Projects Strategic Communications
Market Innovations Maintenance Housing Programs Project Management Office and Partnerships
Land and Housing Construction
Figure 2: Housing Authority organisational structure as at 30 June 2015
16 Housing Authority Our structure We deliver our services through the Offi ce of the Chief Executive Strategy and Policy Offi cer and fi ve divisions: The Division provides leadership, coordination and advice for the > Strategy and Policy Affordable Housing Strategy by: > Commercial Operations > reforming the social housing system to act as a safety net for > Service Delivery the most vulnerable and a pathway for those with the capacity > Organisational Transformation for self suffi ciency > Business Services. > developing new policy options, pathways and market-based solutions to help increase affordable housing options Offi ce of the Chief Executive Offi cer > working across government to deliver on systemic changes in support of affordable housing and market innovation and effi ciency The Offi ce provides support and executive services to the Chief Executive Offi cer including: > negotiating reform priorities and funding arrangements. > ministerial and parliamentary services > media communications > internal audit requirements. The Offi ce also supports the Director General of the Department of Housing, a position held currently by the Authority’s Chief Executive Offi cer.
Annual Report 2014 – 15 17 Service Delivery Commercial Operations The Division leads delivery and management of public housing The Division enables and supports social and affordable housing services and programs to Western Australians by: through the optimisation of the Authority’s assets in the areas of: > coordinating effective, effi cient and value for money housing > housing construction programs for public and community maintenance services housing, transitional housing, supported housing for people with > undertaking effective continuous improvement in the provision of complex needs, housing for government employees in regional property and tenancy management services Western Australia and crisis accommodation > planning, enabling and delivering Aboriginal remote and town > complex construction and development projects including large based housing services. scale apartment projects, and other projects delivering State Government commitments > residential land developments and urban renewal programs > built form and civil construction activities to increase housing stocks, land and housing.
18 Housing Authority Organisational Transformation Business Services The Division implements and supports the strategic direction, culture The Division was formed on 1 January 2015, bringing together the and capabilities required to take the Authority into the future through: corporate and fi nance services that support the Authority to function effi ciently including: > strategic planning, reporting and performance > business improvement and innovation > fi nancial services > strategic communications > human resource management > workforce development > information, communication and technology services > project and change management capability. > records management > facilities management > legal and legislative services > securities and conveyancing services > urban planning, design and approvals.
Annual Report 2014 – 15 19 Our executive Grahame Searle Former Chief Executive Offi cer (October 2008 - February 2015)
Grahame, a respected public servant with extensive In the decade from 1998 to 2008, he drove the experience in service delivery and public administration, transformation of the former Department of Land was appointed Chief Executive Offi cer of the Authority Administration from its origins as a traditional public and Director General of the Department of Housing on service agency to Landgate, a statutory authority. 21 October 2008. He was reappointed from 21 October 2013 Grahame is an honorary fellow of the Spatial Sciences for a term of fi ve years and resigned at the end of the Institute of Australia and a board member of the Western reporting year to lead major reforms to the way Australian Treasury Corporation. He is a past president infrastructure and human services are provided to of the Institute of Public Administration (WA Division). In Aboriginal communities in Western Australia. June 2012, the Institute of Public Administration Australia Grahame has a Bachelor of Business and extensive experience (WA Division) recognised Grahame’s accomplishments by in service delivery, leadership and organisational change. honouring him with the Patrons Award for his outstanding contribution over a substantial number of years towards During his time as Chief Executive Offi cer, Grahame was excellence in public sector administration and management. focused on forging new and innovative ways to meet the increasing demand for housing, including establishing new partnerships with the private sector and community housing organisations across the State. Grahame has a strong background in information technology and, in particular, integrating computer systems for customer service delivery. He has extensive experience in managing information technology projects in Victoria and Western Australia.
20 Housing Authority Paul Whyte Acting Chief Executive Offi cer (March 2015 – ongoing)
Paul commenced the role of Acting Chief Executive Offi cer Paul has held the position of Policy Adviser to the Western for the Authority in March 2015. Concurrently, he also Australian Treasury Corporation and has worked in the currently holds the role of Acting Director General of the private sector as a managing director of a number of Department of Housing. successful established and start-up businesses. Paul holds a Bachelor of Commerce and Master of Business He has broad experience in the private and public sectors. Administration, and is a Certifi ed Practising Accountant. Before joining the Housing Authority in September 2009, He is a board member of Ocean Springs Pty Ltd (Butler he was acting Chief Executive Offi cer at Landgate and Joint Venture) and a member of the Department of held the permanent position of Executive Director, Planning’s Infrastructure Coordinating Committee Business Development. and the Western Australian Planning Commission. Paul was with Landgate (formerly the Department of Land Information and before that the Department of Land Administration) from 2001. Prior to this, he was a member of the Corporate Executive at the Valuer General’s Offi ce.
Tania Loosley-Smith General Manager, Strategy and Policy
Tania joined the Authority in August 2008 and was appointed Tania has a Bachelor of Social Science and has an the General Manager of the Strategy and Policy Division in Australian and New Zealand School of Government December 2009. Executive Masters in Public Administration. This division is responsible for providing leadership in She joined the Public Service in 1994 and has worked in the the design and implementation of the Affordable Housing Disability Services Commission and Landgate. Before joining Strategy and related initiatives. This involves creating new the public sector Tania worked in the non-government policy options, pathways and market-based solutions to sector and with Westpac Banking Corporation. help address the demand for social and affordable housing; trialling new partnerships with the private and not-for-profi t sectors; supporting the sustainable development of the social housing sector and shaping and negotiating national reform priorities and funding arrangements.
Tania is a board member of Ellenbrook Management Pty Ltd.
Annual Report 2014 – 15 21 Greg Cash General Manager, Service Delivery Greg commenced in the role of General Manager Service leading the setting and evaluation of strategic policy for Delivery in 2014 and is responsible for the delivery and the Authority’s state-wide market-facing affordable housing management and maintenance of public housing across activities. More recently in the Commercial Operations Western Australia. Greg is also responsible for Western division Greg took a leading role in shaping the Authority’s Australia’s award winning delivery of new homes, land and built form investment decisions. refurbishments and a new approach to tenancy Greg is a board member of Ellenbrook Management management in remote Indigenous communities Pty Ltd, Woburn Park and Golden Bay joint ventures. via the National Partnership Agreement on Remote Indigenous Housing (NPARIH). Greg is a Murdoch University graduate with a double degree in Politics and International Studies and Public Greg has signifi cant experience across a variety of roles at Policy and Management and has brought a strong focus the Authority over more than 20 years including Ministerial on governance, accountability and performance and executive support positions, as Regional Manager of the management to the Service Delivery portfolio. Metropolitan North region and in the strategic policy arena
Nigel Hindmarsh Acting General Manager, Commercial Operations
Nigel has broad leadership and management experience Nigel holds a Bachelor of Civil Engineering. He is a board and has worked at senior levels across the public sector member of Ocean Springs Pty Ltd (Butler Joint Venture) and in Defence Engineering. and Sienna Wood Joint Venture. Before joining the Authority in October 2013, he was a strategic planner and Operations Manager for the Ministry of Defence during the London 2012 Olympic Games. Nigel served as an offi cer in the Corps of Royal Engineers in the British Army for 20 years prior to emigrating to Perth. Since joining the Authority, he has held the positions of Director Land and Housing Construction and Acting General Manager.
22 Housing Authority Duncan Mackay General Manager, Organisational Transformation Duncan has broad experience in organisational change Duncan’s role involved developing and implementing and strategy, communications and market regulation. strategic change, corporate planning, organisational development, governance reform and change management Before joining the Authority in April 2011, he was Director of for employees and stakeholders. Before joining the Western Consumer Protection Policy at the Department of Commerce Australian public service, Duncan worked as a journalist, for two years. He was responsible for policy and legislative historian and author. reform in many areas of consumer affairs, including aspects of the land and housing markets. Duncan holds postgraduate qualifi cations in political science and journalism. Duncan is a board member of the Village at Between 2001 and 2008, Duncan played a major role Wellard Joint Venture. in helping transform the State Government agency, now Landgate, which provides services for the titling, mapping and valuation of land.
Jeremy Hubble Executive Director, Business Services
Jeremy is a qualifi ed Chartered Accountant with substantial experience in commercial, local government and state government industries. He also has 20 years’ experience as a company director and is a member of the Australian Institute of Company Directors. Before joining the Authority in 2014 Jeremy was a senior executive in local government for 18 years, including extensive rural experience. Jeremy has also held senior positions within a major international charted accounting fi rm and commercial operations. Jeremy holds a Bachelor of Business and an MBA. Jeremy is a Director of Keystart Loans Limited and is a board member of the Golden Bay Joint Venture.
Annual Report 2014 – 15 23 Performance management framework We measure our performance against key performance indicators and deliverables that are set out in our outcome based management framework. Outcome based management framework The Authority enhances the quality of life and wellbeing of Western Australians by satisfying the fundamental human need for shelter. In the wider context, affordable, available and appropriate housing contributes to positive social outcomes in health, education and employment. Specifi cally, the Authority contributes by providing housing through rental, home fi nance and land development activities for eligible Western Australians who may not otherwise be able to afford housing. The Authority also contributes through Government Regional Offi cers’ Housing, which provides government employees with Ellenbook suitable housing in regional areas. This supports the Government’s commitment to delivering public services such as education, health and policing throughout the State.
24 Housing Authority Housing Authority Efficiency Government Goal Service Agency Level Outcome Measures
Results-Based Housing eligible Operating cost per Rental Housing Service Delivery Western Australians rental property
Operating cost per Greater focus on Home Loans achieving results in key current loan account service delivery areas Effectiveness for the benefit of all Measures Operating cost per Western Australians lot developed Land and Housing Supply The extent to which the Operating cost per Housing Authority is property sold responsive to the housing needs of eligible Western Australians Government Regional Operating cost Officers’ Housing per property
Waiting times for accommodation – applicants housed
The extent to which the Government Regional Officers’ Housing is responsive to the provision of housing to meet the needs of eligible Western Australian Government employees
Figure 3: The Authority’s outcomes, services and key performance indicators and relationship to government goals.
Annual Report 2014 – 15 25 Changes to outcome based management framework The Under Treasurer approved a change to the Authority’s outcome based management framework in 2014-15, amending Service 3: Land, to Service 3: Land and Housing Supply and creating a new Key Effi ciency Indicator. This change ensures that housing for sale to the public is appropriately refl ected within the Service structure. Service 3: Land and Housing Supply contributes to the Authority’s outcome by developing land for housing and providing housing for sale to the Western Australian housing market. The Key Effi ciency Indicator for the ‘housing supply’ aspect of Service 3: Land and Housing Supply reported for the fi rst time in 2014-15, (Operating cost per property sold). This indicator measures the Authority’s operating cost effi ciency in supplying housing for purchase by home buyers.
Osprey key worker village
26 Housing Authority Resource Agreement summary The following summary of performance information (fi nancial and non-fi nancial performance) is the subject of a Resource Agreement signed by the Minister, the Housing Authority and Treasurer under Part 3, Division 5, of theFinancial Management Act 2006.
Financial performance Table 1: Summary of fi nancial performance for 2014-15 Indicator Target (1) Actual (2) Variation Explanation of signifi cant variance $’000 $’000 $’000 Total Cost of Services $1,728,063 $1,417,376 ($310,687) The variance comprises: > Expenditure was deferred due to delays in negotiations with the Commonwealth for the 2014-2016 NPARIH capital works > Reduction in cost of goods sold for the affordable housing program due to market conditions and deferment of Public Housing Stock Redevelopment Strategy sales to 2015-16 > Keystart’s interest expense was lower due to higher discharges than expected and lower approvals for the SharedStart shared equity program – this is offset by interest revenue > Interest rates to borrowers were lower refl ecting the declining interest rate environment.
Annual Report 2014 – 15 27 Table 1: Summary of fi nancial performance for 2014-15 (continued) Indicator Target (1) Actual (2) Variation Explanation of signifi cant variance $’000 $’000 $’000 Net Cost of Services $102,308 $119,184 $16,876 The increase in the Net Cost of Services is mostly a result of: > Deferment of the NPARIH funding > Economic downturn in the Pilbara has seen low sale rates due to decreased purchaser confi dence > The majority of Public Housing Stock Redevelopment Strategy sales to occur in 2015-16 Offsetting this is the Total Cost of Services explanation identifi ed (above). Total equity $13,536,010 $15,037,680 $1,501,670 Equity has gone up due to lower Net Cost of Services and an increase in the value of property assets. Net increase (decrease) $130,202 $91,266 ($38,936) The Public Housing Stock Redevelopment Strategy has contributed to the cash in cash held movement being lower than forecast. The majority of expenditure for this program occurred in 2014-15 with most sales activity to occur in 2015-16.
Notes: (1) The targets were derived from the 2014-15 Budget Papers (Volume 2, Part 10). (2) As specifi ed in the Financial Statements (Housing Authority) contained in the Disclosures and Legal Compliance section of this report.
28 Housing Authority Key Performance Indicators Table 2: Summary of non-fi nancial performance (Key Performance Indicators) for 2014-15 Indicator Target (1) Actual (2) Explanation of signifi cant variance Outcome and effectiveness indicators Outcome – Housing eligible Western Australians Effectiveness indicator 1: The extent to which the Housing Authority 0.84 0.85 is responsive to the housing needs of eligible Western Australians Effectiveness indicator 2: Waiting times for accommodation – 139 weeks 158 weeks Fewer public housing properties becoming available for rent during the applicants housed (average) (3) year resulted in an increase in the wait time. The waiting times for applicants housed were also higher due to the Authority allocating housing to a larger percentage of applicants who had waited longer compared to the prior year. Effectiveness indicator 3: The extent to which the Government 95% 97% Regional Offi cers’ Housing is responsive to the provision of housing to meet the needs of eligible Western Australian government employees Services and effi ciency indicators Service 1 – Rental Housing Effi ciency indicator: Operating cost per rental property $16,256 $14,750 A slowing of market conditions in South Hedland resulted in a reduction in expenditure for the refurbishment of former public housing properties for sale.
Annual Report 2014 – 15 29 Table 2: Summary of non-fi nancial performance (Key Performance Indicators) for 2014-15 (continued) Indicator Target (1) Actual (2) Explanation of signifi cant variance Service 2 – Home loans Effi ciency indicator: Operating cost per current loan account $1,576 $1,996 A reduction in Keystart’s approved borrowing limit meant the targeted levels of new lending were not achieved, resulting in a lower number of current loans compared to the Target. Service 3 – Land and Housing Supply ( 4 ) Effi ciency indicator: Operating cost per lot developed $20,188 $17,268 This variance was primarily due to higher estimated movement in land inventory costs considered in the Target compared to the actual movements during the year, and an increase in production of lots through the Joint Venture program. The number of lots developed in 2014-15 was higher than anticipated due to higher than anticipated market demand. Service 4 – Government Regional Offi cers’ Housing Effi ciency indicator: Operating cost per property (5) $34,770 $30,771 This variance was primarily due to declining rents in the Pilbara market. Savings were also made on maintenance costs and redirected into construction to provide additional properties in regional areas where it is diffi cult to lease stock from the market.
Notes: (1) The targets were derived from the 2014-15 Budget Papers (Volume 2, Part 10). (2) As specifi ed in the audited Key Performance Indicators 2014-15 contained in the Disclosures and Legal Compliance section of this report. (3) Calculated as the average waiting time in weeks for applicants housed. (4) The 2014-15 Key Performance Indicators in the Disclosures and Legal Compliance section of this report includes a new Key Effi ciency Indicator for Service 3: Land and Housing Supply (Operating cost per property sold). This indicator was approved by the Under Treasurer following the 2014-15 State Budget and was therefore not included in the 2014-15 Resource Agreement. As a result, the indicator is not reported in this section. (5) The lease function is operated on a cost neutral basis which is fully recouped from the Authority’s client agencies.
30 Housing Authority AGENCY PERFORMANCE A review of how we performed during year one of our Strategic Plan 2020.
Annual Report 2014 – 15 31 Setting the direction State Government’s Affordable Housing Strategy On 14 July 2015 the Premier of Western Australia, the Hon Colin The Affordable Housing Strategy recognises that housing affordability Barnett MLA, announced that the State Government’s Affordable is heavily infl uenced by the broader housing market and that effective Housing Strategy had achieved its original target of 20,000 homes long-term solutions to improve the supply and diversity of affordable by 2020 and that the Government was committed to a new target housing options require responses that infl uence market behaviour, of 30,000 by 2020. rather than just respond to it.
In support of this, the Affordable Housing Strategy: Aiming Higher With a clear focus on people on low to moderate incomes who face 2015-2020 Action Plan was also released by the Minister for Housing signifi cant barriers across the whole of the housing continuum, in July 2015. the Strategy is changing lives and achieving signifi cant social and economic outcomes for Western Australia. It has already delivered: The fi rst of its kind in Australia, the Affordable Housing Strategy established a framework for collective action across government. > an additional 20,000 homes – changing the lives of around 50,000 people who are now renting affordably or have a home of their Two themes, working across the housing continuum and a focus on own; and value-adding partnerships, underpin the philosophy of the Affordable Housing Strategy and have informed affordable housing responses > 13,700 newly constructed homes – supporting an estimated since 2010. $6.8 billion in economic activity and 30,000 jobs in construction and related industries.
32 Housing Authority The Affordable Housing Strategy continues to demonstrate the value of government partnerships with the private and not-for-profi t sectors to deliver affordable housing more effectively, at greater scale, and with lower cost to the taxpayer. The smart use of these partnering arrangements and the effi cient leveraging of government assets will need to remain a core plank of the affordable housing response into the future.
Home Ownership Affordable Community Private Rentals Housing Public Housing Public Housing
Affordable Housing Strategy
Very Low Income Low Moderate
Figure 4: Housing continuum
Annual Report 2014 – 15 33 Progress highlights 1 January 2010 to 30 June 2015 Through partnerships with the private and community sectors, the Authority has delivered more than 20,000 affordable homes. Success in achieving this milestone has been the result of many factors, including innovations in procurement, design, construction and fi nance to increase the supply of affordable and social housing for people on low to moderate incomes.
34 Housing Authority Achievements since its inception in January 2010 include: > 913 low to moderate income households assisted to purchase a home with Keystart’s SharedStart shared equity home loan. > 4,803 new social houses for people with very low incomes and no other viable housing choices. > 53,705 people assisted by the Authority through bond assistance loans. > 186 additional houses have been delivered by community housing ‘growth providers’. > 523 dwellings provided to Government regional offi cers and employees of non-government organisations. > 563 houses constructed and 1,374 refurbished in remote Indigenous communities, exceeding targets under the NPARIH > 11,390 lots produced by the Authority and its joint venture partners with the Commonwealth Government. for sale to market as well as for government housing programs, with an average of 75 per cent of residential lots being sold below > 2,805 dwellings completed and potential for more than 2,400 to the Real Estate Institute of Western Australia (REIWA) median be delivered under the National Rental Affordability Scheme price each year. (NRAS) by 30 June 2016. > 12,049 households who could not otherwise access fi nance, helped to purchase a home through Keystart Home Loans.
Annual Report 2014 – 15 35 Strategic Plan 2020 Transform We will continue the transformation of our organisation and the broader land The State Government’s Affordable Housing Strategy is supported and housing market. Actively engage and support partners and industry at agency level by specifi c outcomes. to deliver market transformation. Create broader organisational capability and capacity Our Strategic Plan 2020, developed in 2014, sets the direction for the to deliver the Housing Authority’s strategic direction.
Authority to help build economic and social prosperity in Western Transform Australia by enabling Western Australians to have a place to call home. Stimulate diversity of housing supply Stimulate We will strategically diversity of Capture partner to stimulate Capture benefits for and diversify land housing bene ts for affordable housing and housing supply. supply a ordable Diversify sources for housing We will capture the benefits capital funding Facilitate of supply for low to moderate and lead innovation in income earners. the housing market. Facilitate opportunities for Transform Optimise the use of the affordable home ownership. Maximise Housing Authority’s assets, Implement mechanisms directly or in partnership. bene ts for to improve affordable social rental supply. Deliver key infill and urban Transform developments to transform housing Influence government, the housing market. partners and stakeholders Facilitate diversity of housing to deliver affordable housing supply for specific target groups. through policy, planning and investment.
Maximise benefits for social housing We will support the provision of housing for the most vulnerable and those most in need in our community. Support transition through the housing continuum. Diversify and create efficiencies in the social housing delivery system. Grow the non-government sector to deliver a greater proportion of social housing. Work in partnership to develop and maintain a sustainable social housing safety net.
36 Housing Authority Transforming the market We will continue the transformation of the broader land and housing market to: Highlights 2014 – 2015 > improve the supply of affordable and diverse housing to support Western Australia’s economy and population growth Completion of the Adara modular apartments in Success > actively engage and support partners and industry to deliver market transformation.
Transform
Stimulate diversity of Capture housing benefits for supply affordable housing
Transform Completion of the Derby 54-bed short stay accommodation facility Maximise benefits for social Transform housing
Annual Report 2014 – 15 37 The Authority recognises that housing affordability is a challenge This can not be done on our own and, with a history of successful that cannot be addressed by government alone. Structural partnerships with the private and not-for-profi t sectors, we reform in the market is needed to improve overall supply and continue to engage and support partners and industry to deliver diversity to meet population growth and needs. market transformation. Our role is to facilitate, lead and infl uence market change. We are focused on innovative, ‘game changing’ transformational Other agencies, such as the Department of Planning, complement activities that challenge and alter market behaviour or demonstrate this role by adjusting regulatory settings to encourage greater new ways of working or doing business to diversify housing supply. diversity and innovation in the development industry. In 2014-15, two transformation developments were realised with Leading the market to deliver more affordable land and housing our partners: requires out-of-the-box thinking. We need to do things differently > Apartment modular construction in Success to improve diversity of supply for Western Australians on low to moderate incomes. > Short stay facility for Aboriginal people in Derby.
38 Housing Authority Modular construction can provide effi ciencies and cost savings through reducing construction time, minimising ADARA APARTMENTS waste and reducing environmental impacts without compromising on the PIONEERING HOUSING PROJECT quality of the built form outcome. The main structure consists of
SNAPSHOT BOUND FOR SUCCESS 96 modules that were pre-fabricated off site. Detailed planning and design was required to ensure millimetre-perfect precision in the construction stage. As a The Adara apartment building in Success result, when the modules arrived on site is a major transformational project, and they were stacked in just two weeks. the fi rst high-density modular residential The Authority retained 14 units in Adara, building to be completed in the Perth of which, six are used for social housing metropolitan area. and eight for affordable sale under the Comprising 77 apartments over six Authority’s shared equity scheme. storeys, the development reached practical "Adara is a great example of how the completion in late December 2014. Authority is transforming the way we Adara was developed by Goldmaster build to capture benefi ts for social and Enterprises Pty Ltd – a private-public affordable housing, and focussing on venture of which the Authority is a major projects that are on the doorstep of partner – and constructed by Goodland transport, services and employment," Building Company. explained Mr Whyte. The development showcases how the Adara apartments are adjacent to the Authority is using effective partnerships Cockburn Gateway shopping centre, just to take the lead in transforming the land 20 minutes from the Central Business and housing market in Western Australia. District (CBD) by train from the nearby Cockburn Central station, and one stop "As part of the Authority’s Strategic Plan away from the new Fiona Stanley 2020, the agency is partnering with the Hospital and Murdoch University. private sector to increase supply of housing and ensure developments have a high proportion of affordability," Acting Chief Executive Offi cer Paul Whyte said.
Annual Report 2014 – 15 39 “Many people accessing the facility who are experiencing hardship have found the Derby Short Stay and the DERBY SHORTSTAY associated services and referrals it offers to be invaluable.” IMPROVING ABORIGINAL The facility’s success is the result of a high level of continued inter-agency
SNAPSHOT OUTCOMES IN THE KIMBERLEY collaboration. “This partnership model between government agencies and local government has been further enhanced The Authority’s Derby Aboriginal Short Stay by facility managers MercyCare and Accommodation Facility is making a real CentaCare Kimberley whose excellence difference and helping to transform the in management enables us to deliver an lives of Aboriginal people in the Kimberley. effective whole-of-government approach General Manager, Service Delivery Greg to provide services and support to Cash said since opening in September Aboriginal people in the Kimberley,” 2014, the facility has provided more than Mr Cash said. 8,000 bed nights of accommodation to “MercyCare and CentaCare Kimberley Aboriginal people who otherwise would are committed to employing local have been overcrowding public housing Aboriginal people to work at the facility. tenancies in Derby or sleeping rough This commitment has resulted in the in town. workforce comprising of over two thirds “The facility has quickly earnt a reputation local Aboriginal people, fulfi lling roles in the Kimberley as a safe, peaceful and across management, Aboriginal support affordable place to stay and this is borne workers, Reception, night porters and out by the high number of people staying general hands.” at the facility,” he said. “In addition to providing Aboriginal people visiting Derby with a place to stay, the facility has made a big impact in actively helping to improve the lives of those who stay there, with in-reach support services and referrals available to all guests.
40 Housing Authority Research and development The Authority continued to collaborate with research institutions In June 2015 the Authority and the Co-operative Research Centre and universities to develop innovative, sustainable solutions to help for Water Sensitive Cities conducted a two-day Synthesis Workshop transform the housing market and build industry capability. In on the Bentley Regeneration Project. The aims of the workshop 2014-15, the Authority continued to support a number of research were to expand on the current landscape and water management and development initiatives. recommendations and to optimise outcomes that would deliver best practice water sensitive initiatives in an infi ll context in the Perth Water management metropolitan region. Ensuring cities are able to sustainably manage water supplies in the face of population and climate change pressures is a key focus Greening the middle suburbs of the Co-operative Research Centre for Water Sensitive Cities. In partnership with the Co-operative Research Centre for Spatial The Authority is one of more than 80 partners with the Co-operative Information, the Authority continued participation in the ‘Greening Research Centre, supporting international studies to transform the the greyfi elds: precinct visualisation and community engagement’ way new cities are designed and to improve existing ones through research project. This is an ongoing project involving Curtin University, better urban water management. Swinburne University, the University of Canterbury and the Authority. The project seeks to develop strategies and tools to help enhance In 2014-15, the funding provided by the Authority continued soil greyfi eld areas – middle suburban redevelopment of failing or research to occur on a trial concluded in Gosnells. The purpose underused real estate assets or land. of the trial was to ascertain the effectiveness of soil amendments in preventing leaching of nutrients into the groundwater. The trial In 2014-15, the Authority assisted in defi ning the typical infi ll of suburban has successfully provided new approaches for future developments lots through middle band suburbs. The research was a desktop analysis in low lying areas. of typical lots and group housing infi ll in the various suburbs. As a result, a typology matrix was developed refl ecting the most likely development outcomes and recommendations for best practice.
Annual Report 2014 – 15 41 Australian Housing and Urban Research Institute The Authority continues to support the work of the Australian The second phase of the research commenced in September 2014 and Housing and Urban Research Institute (AHURI) in furthering the involved the monitoring and analysis of both building’s performance, body of knowledge on housing, homelessness and issues in the and the variance between conventional rammed earth and insulated urban environment. The Authority and AHURI are also collaborating rammed earth. From September 2014 to December 2014, the houses to deliver the National Housing Conference in Perth in October 2015. were empty and monitoring was used to calibrate the sensors. On 15 December 2014, tenants moved into the houses. Since then, Rammed earth construction recording of the thermal performance of the occupied houses In 2014-15 support for research into rammed earth as a construction has occurred. Data collection is planned over a 12 month period. material for remote Aboriginal communities continued. With funding from the Australia Research Council, the project undertaken by the Sustainable Built Environment National Research Centre University of Western Australia addresses the lack of an Australian The Authority is a participant in research through the Sustainable Standards code for the use of rammed earth construction. Other Built Environment National Research Centre. Currently the Authority partners in the research project were Ramtec Pty Ltd, Scott Smalley is actively involved in three projects relating to the sustainability Partnership Pty Ltd and Durham University. A second funded research of buildings, modular construction and valuing social housing. project is investigating the thermal performance of rammed earth residential buildings and implications in energy saving design. This project will measure the performance of two houses constructed in the fi rst research project.
42 Housing Authority Stimulating diversity of land and housing supply Highlights 2014 – 2015 We will strategically partner to stimulate and diversify land and housing supply. > Diversify sources for capital funding > Facilitate and lead innovation in the housing market > Optimise the use of the Authority’s assets, directly or in partnership.
Transform 66% of lots were below Stimulate median price diversity of Capture 94% housing benefits for supply affordable of dwellings below housing median price
Transform 56% of dwellings in 34% of lots in the lower quartile the lower quartile Maximise benefits for social Transform housing
Annual Report 2014 – 15 43 > Deliver key infi ll and urban developments to transform The breadth of our development activity ranges from master the housing market planned urban developments to master planned apartment > Facilitate diversity of housing supply for specifi c developments, medium scale infi ll to urban renewal and projects target groups. around key transport links and activity centres. We value embedding social and affordable housing options across the With our vision of ‘opening doors’, the Authority leads a vital community to provide an opportunity for all Western Australians change in the supply of affordable housing in Western Australia to participate socially and economically. to deliver long-term benefi ts to the State. Our role in stimulating the diversity of land and housing supply ensures ongoing supply and helps to moderate prices at the lower cost end of the market. Population projections for Perth estimate an extra million people will live in Perth within 10 years. Therefore, increasing density on key transport corridors and diversity of housing is essential.
44 Housing Authority Residential land supply The Authority works with partners to develop land for its social, community and affordable housing programs. In 2014-15, the Authority continued to improve the supply of affordable residential land with a strong focus on lots in the lower price quartile of the market. In addition, the revenue from land sales subsidises the operating costs of social housing and housing programs. In 2014-15 1,830 lots were sold. Of the private residential lots sold 66 per cent were below the REIWA median land price, and 34 per cent were in the lower price quartile, directly supplying affordable land to the market. Our land activities include: > land development – land development programs conducted either by the Authority or in partnership with the private sector in both metropolitan and regional areas > urban renewal – the redevelopment of locations with high public housing presence to provide more sustainable suburbs > urban development and redevelopment – infi ll development programs or underdeveloped sites in existing suburbs.
Annual Report 2014 – 15 45 Land development The Authority has a long and successful history of collaborating with the private sector through joint venture land developments to supply appropriate residential land at the affordable end of the market and support the requirements of its housing programs. While overall market activity slowed in the second half of the fi nancial year, impacting sales at several projects, the following joint ventures continue to demonstrate the effectiveness of these partnerships in delivering housing outcomes to Western Australia. Eden Beach – Telethon Home
Ellenbrook Ellenbrook is a joint venture between the Authority and Morella, and is managed by LWP Property Group. Located in the City of Swan and 21 kilometres north east of the Perth CBD, Ellenbrook is planned as a town of self-supporting villages, each offering its own individual style. This master planned community has marked its 25th year; when fi nished it will deliver 11,000 lots and house up to 35,000 residents. In May 2015, the Ellenbook Joint Venture received global recognition when it was awarded with the FIABCI (International Real Estate Federation) World Prix d’Excellence Award 2015 for best master planned community. Ellenbook
46 Housing Authority Brighton, Butler/Jindalee Brighton is a joint venture between the Authority and Butler Land Company and is managed by Satterley Property Group, located on the coast 40 kilometres from the Perth CBD. The last major residential stage in Butler was completed and the Butler Train Station opened in September 2014 providing residents with fast transport links to the CBD. Brighton now provides modern and affordable housing to nearly 8,000 diverse households with more than 50 neighbourhood parks, private and public schools, sporting facilities and medical and shopping centres. Brighton won the 2014 Urban Development Institute Award for Master Planned Community (WA). Brighton
Banksia Grove Banksia Grove is a joint venture between the Authority and Banksia Grove Nominees Pty Ltd, located 30 kilometres north of the Perth CBD and about fi ve kilometres from Wanneroo. It comprises 338 hectares and when complete will be home to some 12,000 residents in 4,000 homes. Banksia GroveBanksia
The Village at Wellard The Village at Wellard is a joint venture between the Authority and Peet Limited, located 35 kilometres south of Perth. The fi rst dedicated transit orientated development in Perth’s southern corridor, it features a pedestrian friendly village centred around the Wellard train station on the Perth to Mandurah railway line. The Village at Wellard will be home to more than 10,000 residents and deliver approximately 3,000 lots. The Village Retail Centre opened in November 2014 and has become a central point for the community. Wellard
Annual Report 2014 – 15 47 Harrisdale Green, Harrisdale Sienna Wood, Hilbert/Haynes Golden Bay, Mandurah Harrisdale Green is a joint venture Sienna Wood is a joint venture between The Golden Bay land development is between the Authority and Cedar the Authority and Stockland, located in a joint venture between the Authority Woods, located 19 kilometres south the south east suburbs of Hilbert and and Peet Golden Bay Pty Ltd located of the Perth CBD. Harrisdale Green Haynes and nestled at the foot of the between Rockingham and Mandurah. is an urban village that will ultimately Darling Hills. More than 3,300 families When complete in 2020, the comprise up to 500 new homes. The who will call this community home development will have created more development will also include a local will have the opportunity for affordable than 1,750 lots, with a signifi cant focus retail and community centre with housing in a setting close to the Armadale on affordable product. landscaped public space and small activity centre. The estate will provide scale offi ces and showrooms. a future town centre, schools, sporting ovals and other community facilities.
48 Housing Authority lots to smaller lots and ocean-side lots. lots. ocean-side and to lots smaller lots cottage and traditional, homestead, from available sites in home diversity offers Beach Dalyellup homes. in 3,400 housed residents 10,000 to some home be will complete when and space open regional of 218 including hectares hectares 845 comprises It 10and Capel. from minutes of Bunbury south minutes seven located Group) Property (Satterley Satterley Home and Authority the between ajoint is venture Beach Dalyellup Capel Beach, Dalyellup recreation and commercial facilities. commercial and recreation village, retirement school, a primary for of land provision and land residential of sale and development the comprises fi when lots 1,200 project The nished. approximately yielded have will project the completion, Nearing of Geraldton. town in MidWest the located is and Holdings, Springdale and Authority the between ajoint is venture Seacrest Geraldton Seacrest, approximately 2,300 home sites. home 2,300 approximately comprise and 210occupy hectares ultimately will development The options. housing and of lots range River, awide King the and with Harbour Oyster overlooking of Albany east north kilometres six is located development The Development. Heath by managed is and Ltd Pty Lowe and Authority the between project ajoint is venture Harbour Oyster Albany Harbour, Oyster Annual Report 2014 – 2014 15 Report Annual
Oyster Harbour 49 Urban renewal, development and infi ll Urban renewal The Authority has identifi ed a number of metropolitan and regional priority redevelopment areas. These involve pockets of high public housing presence that will be redeveloped as ‘New Living’ style projects with the aim to rejuvenate the area and optimise the use of underused assets.
South Hedland New Living
50 Housing Authority South Hedland New Living Quattro, Queens Park New North The award winning South Hedland New Living project This successful urban The ‘New North’ project involves has continued its works in revitalising the town and renewal project has the revitalisation of ageing social improving the lifestyles and living standards of residents. transformed an old public housing in the suburbs of Balga, The project, commenced in 2006, involves extensive housing estate from the Girrawheen, Koondoola and housing refurbishment, land development, community 1950s to a modern high Westminster. It was expanded development and infrastructure improvements. The quality development that to include other suburbs such as Authority has refurbished 418 existing homes and has provided a diverse and Mirrabooka, Midland, Nollamara produced 776 new housing lots under the project, vibrant community that and Bassendean. Underutilised stimulating housing supply in South Hedland during is complementary to the and ageing social housing assets a period of shortage and high cost of accommodation existing local amenity. The in the New North project have been and quality tradespeople. A slowing of market conditions last lots have now sold and refurbished and sold to the public, resulted in a reduction in expenditure for the refurbishment construction of the fi nal mostly to fi rst homebuyers and of former public housing properties for sale during the stage has commenced: owner-occupiers. In addition, a year. The Authority’s Osprey land estate is the largest land an 86 unit development in proportion of the properties were development component of the project having created Whitlock Road, consisting refurbished and returned to the 200 fully titled residential lots to date. Ongoing marketing of affordable one, two and Authority’s public housing stock. and sale of lots has continued for Osprey and the smaller three-bedroom units, which The project will be completed in infi ll subdivisions known as Catamore and Pedlar. It is is scheduled for completion June 2016. anticipated that the project will be completed in 2016. in December 2015.
Annual Report 2014 – 15 51 Urban development The urban development program develops vacant broad hectare land for residential development in both metropolitan and regional areas.
52 Housing Authority Yanchep Kwinana Albany The Authority has two complementary developments The Kwinana project involves the The Clydesdale Park in Yanchep – Jindowie and Everley – with both projects development of landholdings in development is located in situated alongside Yanchep Beach Road. Jindowie is at Parmelia, Bertram, Orelia and McKail, about fi ve kilometres the development stage and Everley is in the planning the Kwinana Town Centre. During from the Albany CBD. stage and will commence development in early 2015. 2014-15, the Authority has worked Following the acquisition The Jindowie urban development involves the creation through environmental approvals of adjacent private land, this of more than 1,000 lots and will incorporate a proportion and Indigenous heritage issues to development will create 456 for affordable housing. The Authority has progressed six develop a portion of its landholdings lots. In 2014-15, 207 lots were stages, with more than 300 lots developed to date. Fifty- in Parmelia and the Kwinana Town developed with prices ranging six lots have been allocated to the Authority’s affordable Centre, now known as the Cassia from $70,000 for cottage housing initiative with the subsequent completed home Estates. The release saw 51 lots lots to $125,000 for larger packages sold as either full or shared equity sales. The made available for sale in Cassia traditional lots. Construction Everley development is located in Yanchep and abuts Glades (Kwinana Town Centre) and also commenced on nine the future Mitchell Freeway reserve. The development 41 lots in Cassia Rise (Parmelia). homes with completion involves the creation of approximately 750 lots and will The Authority continues to work planned in October 2015. incorporate a proportion of public and affordable housing on developing lots at Cassia North If successful, consideration and is anticipated to be complete in or around 2025. To (Parmelia), with further lots from will be given to increasing date work has progressed on the planning and approvals the Cassia Estates to be released the amount of built form for processes with the fi rst sales expected in 2016. during 2015-16. sale within the subdivision.
Annual Report 2014 – 15 53 54 Housing Authority Housing supply, affordability and diversity of housing in the metropolitan area. in metropolitan the of housing diversity and supply, affordability Plan The The infi strategic to continues undertake Authority the developments. ll greenfi between abalance strike and city infi and eld development, ll the to consolidate strategy, Government broader In keeping with infi Urban ll Affordable Housing Strategy: Aiming Higher 2015-2020 Action Action 2015-2020 Higher Aiming Strategy: Housing Affordable directly supports urban infi urban supports the directly increasing developments, ll Commission to fi obtain Commission in 2015-16. approval planning nal Planning Australian Western the and of Wanneroo City the with continue to work will Authority The apartments. multi-unit and sale for land houses, semi-detached and of detached acombination delivering lots, 75 than more across 168 dwellings potential is up to to yield There Strategy. Housing Affordable the and beyond and 2031 Directions Statethe Government’s infi urban strategic to deliver with opportunity in accordance ll an important represents it amenities, and to keyClose services in 2011. of Education Department the from site in Girrawheen School Primary Hainsworth the purchased Authority The Girrawheen
Abode Apartments with stock to be available for sale during 2015-16. during sale for to available be stock with tenant and re-location, construction housing development, 2014-15, signifiDuring Authority the lot progressed cantly price. at market sold being remainder the and scheme, ownership home shared the under available being half with Program, Sales Affordable the through market open the on sold be will homes new The ahome. buy can Australians Western income moderate and low that more so housing of affordable supply the to increase resources existing its to use Authority the for way an innovative is project The houses. 100 public existing the replaces also strategy The years. three next the over homes affordable new 500 to at create least lots large on houses public existing 100 and under-utilised lots vacant 100 large redevelop Strategy Authority the see will Redevelopment Strategy Stock Redevelopment Housing Public The Stock Housing Public the 25 hectare boundary. boundary. hectare 25 the within developed built and be can what guides in turn which use, identifi and area of land intensity and nature preferred the es for the regeneration framework the planning provides document in 2015. The Commission Planning Australian Western the by approved was Plan Regeneration’s Bentley Structure The Local Bentley Annual Report 2014 – 2014 15 Report Annual
Public Housing Stock Redevelopment Strategy in Cloverdale 55 Housing supply Increasing the supply of inner-city apartments Construction, spot purchase and refurbishment The Authority has diverse land and property development activities Abode Apartments, West Perth across the State. This includes a signifi cant construction program Abode is an 86 unit development in West Perth – just seconds from of new dwellings for public housing, community disability housing, the City West train station, on the doorstep of the CBD. crisis accommodation, affordable housing, Government Regional The Authority used its land to secure private sector investment to Offi cers’ Housing, key worker housing in regions and housing in deliver the project. As a result, the once vacant carpark, valued at remote Aboriginal communities. From time to time, the Authority $4.6 million, was transformed into a quality high-density, residential will also purchase established dwellings from the market. Table 12 development closely linked to transport and activity centres. (Appendix 3: Housing statistics) provides information on construction, spot purchases and refurbishments undertaken under the Authority’s By maintaining an active role in the development, the Authority various capital works programs. was able to ensure affordable outcomes for low to moderate income earners through shared home ownership opportunities, affordable Building permit authority private rental options and public housing. The Authority, under the Building Act 2011, is considered a Building The ability to shape the development as it evolved also provided scope Permit Authority with control over the building permit process and to test the concept that people will trade some amenity for a more other relevant building approvals for the Authority’s construction affordable, well located product. Ten units in Abode Apartments program. In 2014-15, the Building Permit Authority issued were designed with scooter bays instead of car bays. These units 584 permits for work relating to construction, demolition and were approximately $20,000 less than an equivalent unit with a car occupancy of buildings. bay, and among the fi rst units sold.
56 Housing Authority “The place was quite old and I felt like parts were always falling down around me and needing to be fi xed, but it was all ABODE APARTMENTS I could afford. “Being offered this apartment is like a INNER CITY HOUSING dream come true as it means I’ll have more than $2 in my bank account every
SNAPSHOT TRANSFORMING LIVES fortnight.” The Abode development aligns closely with a number of Government agendas – it is an infi ll development, close to public Abode Apartments is another example transport which helps to reduce reliance of how partnering with the private sector on car travel and ultimately congestion. can deliver affordable inner-city housing, Being close to public transport is also and gives people like social housing an important factor for Sheree. tenant Sheree the ability to transform their life. Sheree works in Midland and still receives treatment at Royal Perth “To look at me you wouldn’t think that Hospital, so is reliant on public transport. I had anything wrong,” Sheree said. “Living near the train line takes a lot of “But all the operations I had to go stress off my mind and makes getting through when I had brain cancer led around so much easier,” she said. to some ongoing side effects.” Through applying an innovative Sheree is one of 10 people to be development model to a piece of allocated an apartment at Abode. Government land, the Authority was able Before that, Sheree was renting privately to increase the supply and diversity of and struggling to make ends meet. housing to better meet the needs of all Despite working part-time to supplement Western Australians. her disability support pension, most of Sheree’s income went to pay the rent. “I absolutely love it in my apartment,” Often she was forced to choose between Sheree said. buying her medication or having food in “I feel safe and comfortable here. In some the house. sense it also means that I’ll be able to “I was paying $680 a fortnight in my old start living again. I’m extremely grateful.” rental which left me with $40 a fortnight to live on,” Sheree said.
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58 Housing Authority Capturing benefi ts for affordable housing We will capture the benefi ts of supply for low to moderate income earners. Highlights 2014 – 2015 > Facilitate opportunities for affordable home ownership > Implement mechanisms to improve affordable rental supply 4,112 > Infl uence government, partners and stakeholders to deliver affordable housing housing opportunities through policy, planning and investment. 338 social housing 354 affordable rentals More than 10,000 Transform assisted into private rentals with a Bond Assistance Loan
Stimulate 20,000 20,000 diversity of Capture housing Target achieved benefits for before 2020 supply affordable housing
Transform Maximise 3,420 affordable benefits for home ownership 2015 social Transform housing
Annual Report 2014 – 15 59 Shared home ownership While Perth is no longer experiencing the rapid escalation in median house price of the last seven years, real house price to income ratio is now approximately twice what it was 20 years ago. As a result, policy interventions that improve affordability for low and moderate income earners are still needed if home ownership is going to remain an attainable aspiration for low to moderate income families. Shared equity home ownership schemes are one of the policy devices that have been successful in achieving affordability for these groups. For more than 25 years, the Authority has offered shared equity home ownership schemes to specifi c target groups, including options for public housing tenants wishing to buy a home, people with disabilities, Aboriginal people and sole parents. With the Authority usually providing 20 to 30 per cent of the equity, this signifi cantly reduces the amount people need to borrow to buy a home – making the dream of home ownership an attainable reality. Shared equity is made possible by the Authority’s co-ownership and Keystart’s low deposit home loans.
Shared home ownership client
60 Housing Authority Shared equity expression of interest The shared equity Expression of Interest initiative is designed to assist low income households to enter home ownership. It was introduced at a time when there was strong upward pressure on housing prices, and affordable homes were very diffi cult to obtain. The Authority is reducing its expenditure in 2015-16, taking account of strong supply and easing demand in the wider market. In 2014, the Authority’s Expression of Interest Program received the overall Premier’s Award for Excellence in Public Sector Management; the program also received a Premier’s Award for Developing the Economy. According to independent analysis by PricewaterhouseCoopers and the Australian Housing and Urban Research Institute, the scheme had supported nearly 1,500 jobs, contributed over $150 million in direct construction activity and many millions more in induced activity by suppliers, and at no additional cost to government.
Annual Report 2014 – 15 61 Keystart home loans Keystart was created by the State Government to assist low to Shared equity loans signifi cantly improve affordability for lower moderate income Western Australians into affordable home income households. Under these schemes, the Authority retains ownership. Keystart provides products like the standard low-deposit ownership of up to 40 per cent of the property, and in most cases, home loan and shared equity loans to help ensure that home buyers can increase their share of the home to 100 per cent over ownership remains an attainable aspiration for low to moderate time. For some properties, the Authority retains its equity share income households. As most Keystart borrowers were previously in perpetuity. In these cases, the home owner must sell back to renting, Keystart is also an important part of a healthy housing the Authority when they are ready to move on to outright home continuum and the government’s overall Affordable Housing Strategy. ownership. This means the property is reserved for other lower income households to access the same shared equity opportunity. While the median price of properties has eased somewhat over the past fi nancial year, home ownership continues to be out of reach for Keystart also plays an instrumental role in achieving broader many people on low to moderate incomes. Keystart’s loan products Government objectives. As well as enabling thousands of households address this continuing need by providing a foothold on the fi rst rung to transition out of the rental market into home ownership, it is a of property ladder for people and families who need it most –low to strong supporter of the residential construction industry, which middle income earners and fi rst homebuyers with a good credit employs thousands of people and is an important contributor to the history who are unable to raise a deposit through mainstream wider economy. lenders or who may be unable to afford the full cost of a home and Keystart adjusted its income limits in May 2015, responding to need a shared equity arrangement. changing market conditions and ensuring that its focus remains on Keystart’s standard loan maintains low deposit requirements, doesn’t those who cannot access mainstream home ownership options. require lenders mortgage insurance and has no monthly account The Keystart Housing Scheme is a wholly-owned State enterprise. keeping fees – saving buyers thousands of dollars and reducing The Scheme comprises two trusts and several companies, which the time required to save for a home. are administered by an independent board of management. The trust benefi ciary and company shareholder is the Authority. Within State fi nances, the Keystart Housing Scheme is classed as a Public Financial Corporation and does not form part of the general government sector.
62 Housing Authority Keystart products Since Keystart commenced in 1989, more than 60,000 new loans Goodstart shared equity scheme have been approved, assisting more than 95,000 borrowers into The Goodstart shared equity product assists public housing rental home ownership. tenants and non-fi rst home buyers to own their own homes. In 2014-15, Keystart approved a total of 3,420 new loans valued at During the year, 22 loans to the value of $5.1 million were approved. $1,273 million. These loans can be attributed to the following schemes. Access shared equity scheme Keystart standard low deposit home loan scheme The access shared equity product helps people with disability Keystart approved 3,107 new standard loans during the fi nancial year, to purchase a home. During the year, 85 loans to the value of comprising 72 per cent for new construction and 28 per cent for $12.8 million were approved. established properties, with loans approved totalling $1,197 million. Aboriginal shared equity scheme SharedStart shared equity scheme This shared equity product assists Aboriginal people and Torres SharedStart is available to households wishing to buy a home Strait Islanders to own their own home. During the year, 63 loans constructed under the Authority’s Shared Home Ownership were provided to the value of $20.4 million. Expression of Interest Scheme. Since 2011, this initiative has assisted 913 low income households to purchase a new home in co-ownership Sole parent shared equity scheme with the Authority, with 122 loans totalling $33.2 million provided by The sole parent shared equity product assists sole parents to refi nance Keystart in 2014-15. their current family home following separation or bereavement. During the year, 21 loans to the value of $4.0 million were approved.
Annual Report 2014 – 15 63 Keystart borrower profi le Keystart is a targeted lender. It addresses a market gap for credit- Consistent with Keystart’s targeted role, at 30 June 2015: worthy low to moderate income households that cannot raise the > 68 per cent of Keystart loans have been for people who were deposit required by mainstream lenders. For example, Keystart previously renting analysis suggests that a couple with two children on a single income of $110,000 per year and renting the average home would need > 85 per cent of loans were for fi rst homebuyers almost 14 years to save a 10 per cent deposit, lenders mortgage > 80 per cent of buyers were aged 20 to 40 years insurance and other costs required to buy a $430,000 home through > 74 per cent of purchases were in the lower price quartile range normal lenders. > 87 per cent of loans were in the well established markets of To meet the deposit requirements of Keystart’s standard low deposit Perth and Peel home loan, which doesn’t require lenders mortgage insurance, would > The major occupations of borrowers include technicians and take them less than three years. tradespeople, sales, clerical and administrative positions, carers and aides, labourers, education sector, health sector, hospitality, retail and service workers, and construction trades. Since January 2010, 61 per cent of loans were for new construction rather than the purchase of an established home. This has an indirect benefi t in generating economic activity and jobs. Further information on Keystart’s products and eligibility criteria can be found at www.keystart.com.au
64 Housing Authority “I was curious, so I rang the agent, who put me in touch with Keystart to see if I was eligible, and about eight weeks later FIRST HOME I was a home owner! “I was amazed at how smooth and easy LAYS FOUNDATION the whole process was, I’d expected it to be much, much harder, but the support
SNAPSHOT FOR FUTURE I got from the agent and Keystart made it surprisingly simple.” Ms Reynolds said that the shared ownership scheme has helped transform First time home owner Lauren Reynolds her life. is thrilled that her new property has not only given her freedom from the rental “Initially, when I started looking to buy a trap but the stability from which to build property, I was frustrated with how little a better future for herself. I could borrow on a single wage. Owning my own home seemed out of reach for Ms Reynolds bought her home in Hilbert, me, and everywhere I turned there was 30 kilometres south east of Perth, another reminder that I wasn’t going to through the Authority’s Shared Home be able to do it by myself,” she said. Ownership scheme in August 2015. “I’m really glad I came across a scheme “Before I bought my house, I was renting that helped me get my foot in the door. for about seven years, and the last It’s costing me less than I had to pay in experience I had was the push I needed rent, and I’m paying off my own mortgage to start looking for my own home,” instead of someone else’s. Ms Reynolds said. “This home has put me on the fi rst step “With what I was paying, I’d had enough of the property ladder, and it’s given living in a house with a leaky roof, and me a sense of stability and control. other problems that the owner didn’t want to fi x. One day while looking at “It feels great coming home after house listings online, I stumbled on a work, instead of just coming back property being sold under the shared to another house." home ownership scheme.
Annual Report 2014 – 15 65 Affordable sales Under the Affordable Housing Strategy, our role and focus broadened The affordable homes under this program include apartments, units, from delivery of social housing and land development to facilitating and large family homes. They are delivered through working closely and enabling affordable housing opportunities to other Western with industry to ensure properties are developed for sale to the public Australians under housing pressure. at a price within the reach of as many people as possible. Properties are located throughout the Perth metropolitan area and in some The Affordable Sales program is central to providing home regional locations, providing affordable housing in proximity to ownership opportunities for low to moderate income earners in employment, amenity and transport links. The average price per Western Australia through facilitating affordable housing for sale dwelling sold under the program was $374,000. Ninety-four per cent directly to the general public. have been sold under the median dwelling price, of which 56 per cent Since its inception, the program has provided more than 1,899 singles, were below the lower price quartile. families and seniors on modest incomes with a home they can afford. In 2014-15, 786 homes were completed for sale to the market, totalling $304.6 million. Of these, 241 sales were part of the Shared Home Ownership Scheme, worth a total of $73.78 million.
66 Housing Authority Housing for people with specifi c needs While the shortage of affordable housing has a major impact on a Ridgewood wide range of low to moderate income households, specifi c groups The Ridgewood project continued in partnership with Southern Cross including some older Australians face particular disadvantages in Care. The objective of the project is to increase the diversity of supply the market. for affordable seniors housing within close proximity to key services The State Government recognises there are seniors who are among and amenities using a 6.8 hectare site in Ridgewood, 37 kilometres the most vulnerable in our community. In 2014-15, we worked closely north of the Perth CBD. with specialist care providers, Local Government and Regional The innovative development will provide mixed tenures such as social Development Commissions across the State to deliver housing for housing, seniors housing, private rental, affordable land and home people over 55 in various metropolitan and regional locations. ownership. The commercial precinct is envisaged to include facilities To facilitate the diversity of supply for age-friendly communities, such as a medical centre, supermarket and retail uses and a suite of where appropriate, the Authority incorporates universal design ‘wraparound services’ is designed to enable independence in one’s principles in new builds. own home. A Development Management Agreement was executed by the Authority and Southern Cross Care in 2014. Legal arrangements relating to restrictive covenants have progressed simultaneously with structure planning and product research testing through 2015.
Annual Report 2014 – 15 67 Affordable rentals The Authority supports access to affordable rental housing Financial assistance for private rental tenants opportunities for low to moderate income households through: The Authority has assisted more than 36,000 eligible Western > the provision of direct assistance to consumers to support Australians over the past four years to enter the private rental them to obtain rental accommodation accommodation through supplying an interest-free loan to help > the provision of incentives to owners and landlords to make pay the rental bond or two weeks rent in advance. properties available A private rental Aboriginal assistance loan is also offered as an > investment in affordable rental projects. early intervention mechanism for Aboriginal clients to sustain their private rental tenancy when rent arrears caused by extraordinary circumstances place them at risk of eviction. Clients are provided with an interest-free loan of up to six weeks’ rent. During 2014-15, 10,205 bond assistance loans and private rental Aboriginal assistance loans were issued to the value of $12.5 million.
68 Housing Authority National Rental Affordability Scheme NRAS stimulates the supply of new affordable rental houses and As at 30 June 2015, 2,855 discounted rental properties for low to reduce rental costs for low to moderate income households. It moderate income households throughout Western Australia had also encourages investment on a large scale to provide more been delivered. However, the availability of affordable rental housing affordable housing. continues to be a signifi cant issue in Western Australia, as highlighted by the 2015 Anglicare Australia Rental Affordability Snapshot. NRAS is a Commonwealth Government initiative that operates in partnerships with the States and Territories. It provides an annual To help alleviate the shortage, a further 2,456 reserved incentives incentive to investors to build and rent dwellings to eligible low to (awarded from previous rounds) are due for delivery in Western moderate income households at least 20 per cent below market rates. Australia between now and 30 June 2016. Therefore, NRAS is expected to deliver up to 5,311 dwellings in Western Australia. The current total annual incentive to investors for the NRAS year 2014-15 is $10,660 per dwelling, with the Commonwealth’s component The remaining reserved incentives are subject to delivery by approved being $7,995 and the State’s being $2,665 paid in cash. The incentive participants and the favourable determination of change requests by is indexed annually across the 10 years the property is in the scheme. the Commonwealth Department of Social Services. NRAS provides one of the few market-facing initiatives that addresses Additionally, reserved incentives are subject to withdrawal where both housing supply and affordability and has been an important part they are unable to be delivered in agreed locations and within agreed of the State Government’s Affordable Housing Strategy. timeframes. Given the above conditions, the fi nal number of NRAS dwellings delivered in Western Australia is subject to change.
Annual Report 2014 – 15 69 Employment-related accommodation The Authority delivers worker accommodation in regional communities under the Affordable Housing Strategy and Royalties for Regions – Housing for Workers initiative. This includes targeted developments such as key and service worker housing and employment-related accommodation to ensure that key community and essential services are maintained in regional areas. These initiatives ensure that small to medium businesses and non-government organisations are able to attract and retain qualifi ed and experienced employees to maintain or expand services.
South Hedland
70 Housing Authority Fostering independent living skills Housing for non-government organisations Employment-related accommodation facilities provide a safe, A signifi cant shortage of affordable housing in some regional supportive and affordable accommodation option for primarily young locations is having a major impact on the ability of non-government Aboriginal adults while they establish themselves in employment, organisations to deliver key government-funded services to regional apprenticeships and training. The facilities contribute to the success communities. Non-government organisations often struggle to of residents’ employment and training, providing a range of support attract and retain the necessary employees partly due to the limited services enabling the effective transition from remote locations, the availability of affordable and appropriate housing. development of independent living skills, and the eventual progression from the facility into sustainable housing. There are currently 58 accommodation units (including four family units) available across four facilities within the Kimberley, at Halls Creek, Fitzroy Crossing, Broome and Derby. An additional 48 accommodation units are available at the purpose-built facility in South Hedland (Mirnutharntu Maya). The Pilbara facility was established through a partnership between BHP Billiton, the Pilbara Development Commission, the Authority, the Department of Training and Workforce Development, the Department of Regional Development through Royalties for Regions, and the Commonwealth Government through the NPARIH.
Annual Report 2014 – 15 71 Key worker and service worker The Royalties for Regions – Housing for Workers initiative commits Exmouth service worker housing $270.25 million over eight years (2011-12 to 2018-19) to provide The State Government has allocated $8.8 million to increase the affordable housing for key workers in regional Western Australia. supply of affordable housing for service workers in Exmouth, who Of this, $244.77 million has been approved for 11 projects located earn low to moderate incomes and are employed locally in non-mining in South Hedland, Karratha, Newman, Onslow, Exmouth, Wickham, industries. Construction of 20 units is planned for early 2015-16. Roebourne, Tom Price, Broome, Derby, Fitzroy Crossing, Halls Creek, Kununurra, Pinjarra and the Avon Valley. Avon village This program aims to address some of the shortages of supply The Avon Village Workforce Accommodation project will deliver of appropriate and affordable housing in many regional locations, 15 dwellings, comprising a mix of one, two and three-bedrooms, for particularly in areas linked to major resource developments or key workers in Northam. The project aims to support the State’s key where there is an absence of an affordable private rental market. rural export industries and regional development in the Wheatbelt region. The accommodation is scheduled for completion and In response, the Authority is undertaking land and housing occupancy during 2015-16. development in high-need regional locations in the Kimberley including Derby, Halls Creek, Broome and Kununurra; and in the Aboriginal construction training initiative Pilbara including Onslow, Paraburdoo, Roebourne, Karratha and Newman. In 2014-15, a further 16 dwellings were delivered taking The Authority has partnered with Fairbridge Western Australia Inc., the total to 32. who through the Aboriginal Construction Training Initiative will renovate Evelyn Cottage, a residential building. Once renovated, the building will contain eight semi-independent accommodation units for young people involved in education, training and employment programs. As the refurbishment work is carried out, members of the team will undertake and complete their studies. Some of these team members will then live in the completed units.
72 Housing Authority Osprey key worker village Osprey key worker village was completed and opened in early 2014 providing 295 dwellings for key service workers in Hedland. The site was funded through Royalties for Regions ($20 million) and the Authority ($33 million) with the buildings supplied by Fleetwood Corporation Ltd on a build-fi nance-operate model. During the year the Authority replaced the interim agreement with the village managers Fleetwood Corporation Ltd with fi nal agreements which resulted in the Authority acquiring all 295 buildings for the sum of $62.3 million which was vendor fi nanced. This resulted in the Authority having full ownership of the site and buildings. The Authority also formalised a long-term (14 year) agreement with Fleetwood Corporation Ltd for the management of the village. The vendor and management fee is subject to fl uctuations in tenancy and interest rates, with a minimum guarantee provided by the Authority.
Osprey Key Workers Village
Annual Report 2014 – 15 73 Government Regional Offi cers’ Housing The Authority is responsible for providing accommodation to more During the year, the Authority responded to the needs of the than 5,014 government offi cers who provide essential health, Department of Corrective Services, with the provision of newly education, law enforcement and other services across the State’s purchased homes in Kalgoorlie to address housing needs related to vast regions. the redevelopment and expansion of the Eastern Goldfi elds Regional Prison. Rio Tinto expansion in Wickham led to the Department of As at 30 June 2015, 5,701 dwellings were managed of which 3,245 Education requiring additional employee housing as more families were owned by the Authority and 2,456 were leased from the private were attracted to the town. Land was secured and the construction market. As part of the Authority’s construction program, 89 new of eight homes will commence in the fi rst quarter of 2015-16. dwellings were completed at a cost of $45 million. The Authority also spent more than $7 million on refurbishing existing properties Through the refurbishment of Government Regional Offi cers’ thereby improving the amenity of properties and extending their Housing properties throughout regional Western Australia, economic life. properties were upgraded to meet client agency expectations and assist in the recruitment and retention of government employees In 2014-15 the Authority was allocated $35 million under the within the community. The program also provides an economic State Government’s Royalties for Regions initiative to accelerate stimulus for regional towns with local contractor employment. investment in regional communities through the provision of quality accommodation to attract and retain government employees in regional Western Australia.
74 Housing Authority Maximising benefi ts for social housing We will support the provision of housing for the most vulnerable and those most in need in Highlights 2014 – 2015 our community. > Support transition through the housing continuum > Diversify and create effi ciencies in the social housing delivery system > Grow the non-government sector to deliver a greater proportion of social housing 1,569 priority applicants > Work in partnership to develop and maintain a sustainable social housing safety net. Habitat Maintenance housed
Transform Improve the management Tenancy Management of public Stimulate housing Quality diversity of Capture Assurance housing benefits for supply affordable Disruptive Behaviour housing Management
Transform Maximise benefits for social Transform housing
Annual Report 2014 – 15 75 Housing for the most vulnerable and most in need in our We provide services to clients through our network of local community is provided by the Authority and the community offi ces (Appendix 4: Our offi ces), contracted Aboriginal regional housing sector. service providers, and contracted not-for-profi t organisations, which manage more than 20 per cent of social housing in More than 78,000 Western Australians are provided with a rental Western Australia. home through public housing. With more than 36,644 houses, it represents less than four per cent of all homes in the State. We deliver housing services to regional and remote Aboriginal communities, including tenancy management, employment- The Authority’s role includes the direct provision of tenancy and related accommodation, short-stay accommodation and remote asset management services through the public housing program area essential services maintenance. and the construction of housing for the homeless, people with disability and not-for-profi t providers. We work in partnership with the not-for-profi t sector to provide rental housing for people on very low and low incomes.
76 Housing Authority “I was living in a private rental with my brother but it was very expensive even though it was an old building. It took up SOCIAL HOUSING just about all the money I had to stay there. “I was on the public housing waiting list FOR THOSE MOST IN NEED for a few years. When I got the news that I was being offered a one-bedroom SNAPSHOT apartment in the heart of the city, my heart just went bang, bang, bang! I was lost for words and just so grateful. Now I just live a very happy life without all the stress I had about how I would be able The high cost of the private rental to get by.” became increasingly unaffordable for social housing tenant Christopher Smith Mr Smith said he loves his apartment and he struggled to make ends meet. and his new home. Born in 1946 in Bangalore, India, “With this new place, I don’t feel like I Mr Smith moved to Australia when he have to be out all the time because I’m was 19. He worked in newspaper in a comfortable space where I can relax. publishing for most of his working life I take care to always keep my home neat until he was made redundant in 2007. and tidy. I’m very happy to be here so I look after it. Social housing helped Mr Smith when he needed it most and he is very thankful “When you’ve got something nice, you for the door it has opened for him. keep it nice.. I’m proud that my home is always very tidy and clean. He is now very happy in his one-bedroom apartment in central Perth and prides “Living here I’m the happiest I’ve ever been.” himself on keeping meticulously well looked after. “I worked on the big newspaper printing machines as a reel man for many years before being made redundant eight years ago.,” Mr Smith said.
Annual Report 2014 – 15 77 Public housing Public rental housing is an affordable option for eligible very low Waiting for housing income singles and families who are unable to afford private housing. Demand for public and community housing greatly exceeds supply Housing is provided directly through the Authority to people with and cannot be delivered by the market without signifi cant subsidy. the greatest need, for their duration of their need. Public housing This has resulted in a public housing waiting list of just over 20,000 is heavily subsidised by the government. Tenants pay no more than applications and those with a priority need of 2,720 applications. 25 per cent of their assessable income as rent, a fi gure well below market rent and the Authority’s operating cost. During the year, 2,700 applicants were housed in public housing including 1,569 families, seniors and singles with a priority need. On average, applicants housed during the year waited 158 weeks. Factors infl uencing the time an applicant may wait to be housed Waiting list for housing at 30 June 2015 include the area in which housing is being sought, the turnover of properties in the region, the type of accommodation required, and the number and priority status of people ahead of the applicant on the waiting list. 14%
86%
Wait turn Priority
78 Housing Authority Kununurra
Derby EAST Broome KIMBERLEY WEST KIMBERLEY Halls Creek
South Hedland Managing tenancies Karratha
The Authority provides rental homes for 36,644 very low income PILBARA households. Our employees work closely with all tenants to ensure they meet their obligations. The great majority of tenants have a strong contribution to their local communities and do the right thing and look after their homes, pay their rent and get along with Carnarvon their neighbours. MID WEST/GASCOYNE Public housing tenants include seniors, families, low income earners, Meekatharra people with a disability, and people with complex physical or mental health needs. GOLDFIELDS Geraldton Properties are typically one, two or three-bedrooms and a mix of houses and units spread across the State. Approximately 80 per cent Kalgoorlie of our properties are within the Perth metropolitan area and 20 per cent Northam Joondalup Merredin in regional Western Australia. They are managed directly through Mirrabooka Midland Perth Cannington WHEATBELT Fremantle Armadale a network of 11 regions across the State (Appendix 4: Our offi ces). Mandurah Narrogin
Bunbury Katanning Busselton GREAT Esperance SOUTH SOUTHERN WEST Manjimup Figure 5: Authority’s service delivery regions and offi ce locations Albany
Annual Report 2014 – 15 79 Support to maintain a tenancy The Support and Tenant Education Program (STEP) provides a free service for tenants who are having problems managing their tenancy or who may be at risk of eviction due to problematic behaviour, rent arrears or poor property standards. Seven non-government organisations were funded to address the tenancy support needs of tenants in public housing in allocated regions across the State. In the fi nancial year 1,161 tenants participated in the program. Seventy-four per cent of tenants who exited the program showed moderate to signifi cant improvement in their tenancies. In addition to this program, the Authority’s employees also assist tenants to access a range of fi nancial counselling and social support programs provided by government and non-government agencies. All of these efforts are designed to support tenants to sustain their tenancies and prevent homelessness.
80 Housing Authority Housing pathways Tenancy appeals Given the strong demand for social housing, the Authority is committed The Authority’s Housing Appeals mechanism offers applicants and to encouraging tenants who can, to transition through the social recipients of housing assistance a quick, informal, thorough and fair housing system to make way for others on the waiting list. Tenants means of appealing an administrative decision affecting them. who are no longer eligible for public housing are provided assistance The two-tier appeal process allows clients to provide further to pursue a range of affordable housing options, including community information regarding their appeal and affords them the opportunity housing, the Rental Pathways Scheme, NRAS, private rentals and to have a face-to-face discussion with members of the Regional home ownership through various schemes offered by the Authority Appeals Committee. and Keystart. Each committee consists of one Authority representative and two In the past two years, Housing Pathways has expanded services to community members who are independent of the Authority. Table 3 cover all of the State and supported more than 300 tenants to move provides the statistics on appeals matters dealt with during 2014-15. out of public housing.
Table 3: Summary of appeal matters recorded in 2014-15 All Requests Received Total number of appeal requests received 1,923 Total number of eligible appeals 1,662 Total number of ineligible appeals (not progressed to Tier 1 or Tier 2) 261 Tier 1 Total of successful appeals (Decision overturned at Tier 1 or partially waived and referred to Tier 2) 775 Total of unsuccessful appeals (Completed at Tier 1 with decision upheld or referred to Tier 2) 820 Tier 2 Total of successful appeals lodged in 2014-15 (including partially successful) 276 Total of unsuccessful appeals 473
Note: (1) Appeals lodged in 2013-14 that were referred to Tier 2 and closed in 2014-15 are captured in this summary. (2) Appeals received in 2014-15 that proceeded to Tier 2 but were not fi nalised during this year are not included in this summary.
Annual Report 2014 – 15 81 Disruptive behaviour management The vast majority of public housing tenants are good neighbours and Table 4: Summary of performance for 2014-15 relating contribute positively to their communities. However, there are a small to disruptive behaviour management number of tenants whose continued anti-social behaviour disturb the Summary 2013-14 2014-15 peace and may risk the safety of neighbourhoods. Total disruptive behaviour complaints 13,324 12,593 The State Government’s Disruptive Behaviour Management Strategy, Total fi rst strikes issued 1,410 1,171 introduced in 2009 and strengthened in May 2011, clearly defi nes Total second strikes issued 513 527 what the Authority considers unacceptable behaviour and details processes and sanctions for managing disruptive tenancies. The Total third strikes issued 179 170 Authority applies the strategy within the provisions of the Residential Total tenancies terminated as a direct 81 56 Tenancies Act 1987. result of disruptive behaviour The Government has invested $12 million over four years from 2012-13 to 2015-16, to support the implementation of the strategy. The funding has provided for dedicated disruptive behaviour management employees to be placed throughout the State. The impact of these efforts to drive improved tenancy accountability can be seen in the reduction in number of strikes issued between the fi rst and subsequent strikes (Table 4).
82 Housing Authority Tenants on notice over illegal use of premises Probationary tenancies The safety and security of neighbourhoods is a priority for the State In June 2015, the State Government announced a trial of probationary Government. In 2014-15, the Authority continued to address dangerous tenancies in public housing to encourage tenants to take their illegal activities in public housing. Such activities pose an immediate responsibilities more seriously. Until now, probationary tenancies had risk to the safety or security of people or property. been used only where applicants with poor tenancy histories sought to re-enter the system. The trial is intended to improve the level of Section 75A of the Residential Tenancies Act 1987 allows the Authority understanding among new public housing tenants of community to apply to the court for the termination of a tenancy where the tenant expectations and obligations. At the end of a successful six month has used or allowed the premises to be used for an illegal purpose. probationary period, tenants will transition to the standard periodic For the period December 2014 to June 2015, termination of 16 tenancy rental agreement. agreements was sought in response to illegal activities. This represents less than 0.05 per cent of tenancies. The Illegal Use of Premises Policy helps to ensure that public housing is made available to people who abide by the terms and conditions of their tenancy agreement.
Annual Report 2014 – 15 83 Managing properties Maintaining our properties Head Maintenance Contractors Maintenance services are performed on more than 42,000 residential The Authority delivers maintenance services through a small number properties (including Government Regional Offi cers’ Housing homes). of head contractors who then manage a multitude of subcontractors The Authority issues an average of 20,000 job orders per month to deliver the services required. In October 2014 the initial Head across 11 administrative regions around the State, with services Maintenance Contracts expired and the new contracts commenced managed by a central business unit. This ensures tenant safety, on 1 November 2014. The new contracts are held with: asset protection and the longevity of stock. > Lake Maintenance Pty Ltd – East and West Kimberley, In addition to minor household repairs, maintenance is required Goldfi elds and Wheatbelt regions for the ageing rental stock across the State, a number of major > Pindan Contracting Pty Ltd – Mid West and Pilbara regions roof replacements works to several high-rise apartments in the > Programmed Facility Management Pty Ltd – South Metro, metropolitan area and cyclical programs for air-conditioning South West and Great Southern regions services, pest control, fi re services and external painting programs. > Spotless Facility Services Pty Ltd – North Metro and South East In 2014-15, $147 million was spent on day-to-day maintenance, Metro regions. vacated maintenance, refurbishments and improvements, planned and cyclical maintenance, estates maintenance and insurance work. The recent transition to the new Head Maintenance Contracts Maintenance work is carried out as required when a property is has changed the direction of how maintenance will be delivered vacated, on a day-to-day basis as repairs become necessary or to the Authority’s portfolio. From July 2015, maintenance works and through planned programs. services by head contractors will service social housing, Government Regional Offi cers’ Housing and Aboriginal housing (town-based and In addition to normal business and programs being undertaken, remote communities). a number of projects have been completed. These include the enhancement of security lighting to complexes, the Offi ce of Energy Maintenance work conducted is subject to a number of quality electric resistance hot water unit changeover project and the assurance processes that are reviewed regularly with both Head upgrade and installation of enhanced fi re protection services Contractors and the Authority in line with contract agreements. The to apartment complexes. Authority measures the head contractors’ performance via Service Level Agreements that identify performance issues on an ongoing basis, apply penalties if necessary and inform business improvement.
84 Housing Authority Asbestos management Housing and essential services for remote In 2014-15, the Offi ce of the Auditor General issued two reports that Aboriginal communities had implications for the Authority, with the fi rst relating to ‘Asbestos In the second report, ‘Delivering essential services to remote management in public sector agencies’. Aboriginal communities’, the Auditor General found that although The safety of the Authority’s tenants and employees is paramount. Remote Area Essential Services Program (RAESP) services deliver The fi nding noted there was no indication that the Authority was reliable power and water supplies to selected communities, the compromising the health or safety of tenants or employees. quality of drinking water often falls short of Australian standards. While the Authority takes appropriate action to address identifi ed On 22 January 2015, the Corporate Executive approved a new short-term water quality risks, including the supply of bottled drinking Asbestos Management Plan. The Authority inspects all its residential water to affected communities, a permanent solution to long-term properties for general condition and maintenance once every and ongoing water quality risks is outside the scope of RAESP and 12 months and inspections of asbestos containing material in houses will require signifi cant ongoing investment. constructed before 1990 are incorporated in that inspection process. A state-wide retraining exercise was undertaken to ensure that employees conducting inspections are competent as defi ned by WorkSafe. The Authority agreed that both access to and the reliability of information related to asbestos containing material needs to be improved. An upgrade to existing information systems has been approved. Our housing stock meets the defi nition of a workplace while employees are conducting inspections or contractors are completing maintenance work and the Authority’s contracting arrangements assure safe maintenance work practices. The assessment of what are reasonable controls need to be seen in that context and the Authority is of the view that it has adequate processes in place to manage the level of risk involved. However, compliance with these processes has not always been at the level required and is being addressed.
Annual Report 2014 – 15 85 Community housing Transitional housing Community housing is affordable rental housing provided by not- Transitional housing provides stable, affordable housing for Aboriginal for-profi t organisations at below market rent for low to moderate people who are employed or in training, and who ensure their children income tenants. attend school regularly. The goal is to meet the family and individual needs, remove barriers and provide a safe place to live while they The Authority is committed to building the capacity of community continue to gain skills to transition through to home ownership housing organisations and has invested nearly $500 million into or private rental with the assistance of the ongoing support. the sector, mainly through the transfers of housing assets. In 2014-15, the Authority continued the development of a proposed Transitional housing in the Kimberley administrative regulatory system for the sector. The regulatory Across the East Kimberley, only 25 per cent of Aboriginal people system aims to build capacity within the sector and provide greater have jobs and far fewer own their own homes. protection for government assets. The system is also being designed to align with government red tape reduction strategies and the Transitional housing, where the Authority provides land and housing National Regulatory System for Community Housing, which was assets, focuses on supporting adults to retain long-term employment implemented in most states of Australia from January 2014. and training, gaining greater fi nancial independence and control over their lives. This promotes personal and family wellbeing and increases living standards for the individuals and the community. One of the program’s unique aspects is in linking children’s school attendance to the provision of housing, providing opportunities to improve the education levels attained, opening future opportunity and choice for each individual.
86 Housing Authority Participants receive tailored support services that focus on health, developing life and fi nancial skills, and techniques for developing work and income stability. The Authority is proud of the outcomes achieved. Nine of the 40 families who are renting houses are in the process of applying for home loans. To date four participants have home loans approved. Children of participating families have a combined overall school attendance of 96 per cent, well above regional averages for Aboriginal children. Participants from every household are also engaged in employment. Since it began there have been 291 referrals to a range of support agencies offering participants a wide variety of assistance. The original program in Kununurra, established in partnership with the Wunan Foundation, commenced in September 2012 with property management by participants and their engagement in support services progressing successfully. Building on the success of transitional housing in Kununurra, a further 15 houses are being delivered in Halls Creek. Stage 1 delivered eight new dwellings in February 2015; Stage 2 will deliver the remaining seven in 2015-16. The Halls Creek transitional housing is a partnership between the Authority, the Kimberley Development Commission and the Halls Creek Aboriginal Housing Group.
Transitional Housing Halls Creek
Annual Report 2014 – 15 87 “The program has been a real blessing for me and my family, and it has opened a door to better opportunities,” Mr Little said.
TRANSITIONING “So far it has been a very rewarding experience and I’ve benefi tted a lot from TO A BETTER FUTURE the support services that are a part of the program. SNAPSHOT “It is comforting to know there is support available for us as we work towards our goals as part of the program.” Former public housing tenant, Aaron “I am excited to be working towards Little, could not be more pleased to be a owning my own home, especially now part of the Authority’s Transitional that I’ve gained more fi nancial knowledge Housing Program and start his journey through the program. They’ve taught us towards home ownership. how to budget and save for the future,” Mr Little said. The program aims to assist eligible Aboriginal people into home ownership “Owning my own home will give me or private rental. Participants are a sense of pride and accomplishment, supported with a range of services to and it will mean a strong foundation help them attain fi nancial independence for a better life for me and my family. while renting their new home. Successful “The program is just awesome!” applicants must be employed or in training, and if they have children, the The Transitional Housing Program in Halls children must attend school regularly. Creek is a partnership between the Housing Authority, the Kimberley Development Mr Little currently lives in Halls Creek Commission and the Halls Creek with his partner and young son, and Aboriginal Housing Group. The project joined the program in April 2015. He is supported by the State Government’s works as a health worker for Jungarni Royalties for Regions program. Aboriginal Corporation.
88 Housing Authority Housing for Aboriginal youth at risk
Youth Involvement Council hostel, South Hedland Managed by the Youth Involvement Council, the impressive new single-storey, eight-bedroom homeless youth facility in South Hedland provides much-needed crisis accommodation and support services for at-risk/homeless young males aged 15-25 years. The facility houses up to eight youth in the one-bedroom units and also provides two separate transitional units in a single bedsit confi guration, which increases capacity up to 10 youths.
The project supports the Council’s Aboriginal Youth Program which assists youths to address problems such as aggression, substance abuse and other social/emotional disorders resulting from factors such as family breakdown, homelessness, unemployment and legal problems. Secure housing and intensive counselling, training, education and a support plan increases the prospect of successful reintegration into the community. The Authority fully funded the $3 million facility and contributed land worth $1.2 million.
South Hedland
Youth Involvement Council hostel, Annual Report 2014 – 15 89 Housing for people with specifi c needs Across the State, properties were made available to assist people who are homeless or in immediate housing crisis. The Authority’s While the shortage of affordable housing has a major impact on a crisis accommodation program provides capital funds to build and wide range of low to moderate income households, specifi c groups buy residential premises such as women’s refuges, night shelters face particular disadvantages and the risk of housing stress or and emergency accommodation for youth. Accommodation is homelessness. For example, single-parent families on low incomes primarily managed by community housing organisations, with spend the most on housing as a percentage of their weekly gross wage. many support services funded through the Department for Child Housing for people who are homeless or in crisis Protection and Family Support. In partnership with the Department for Child Protection and Family Family refuge Support (lead agency), the Authority continued to assist people who Construction of a new refuge for women and children escaping family were homeless or at risk of being homeless by providing homes to and domestic violence commenced in April 2015 in the north east individuals and families through the National Partnership Agreement metropolitan area. The new refuge will offer fi ve independent units on Homelessness. of various sizes in a secure location. The facility will include support Strong engagement and referral processes with support agencies and outreach services for both clients accommodated in the units funded under the Agreement are in place ensuring that clients have and women in the community seeking support. The refuge is a smooth access to social housing as it becomes available. collaborative partnership with the Department for Child Protection and Family Support. A further two-year extension of the Agreement has been negotiated with the Commonwealth with funding from 2015-16 to 2017-18 at Wooree Miya women’s refuge nearly $15 million per year. The funding does not include a capital component. However, the funding prioritises frontline services The Wooree Miya Women’s Refuge, operated by the Aboriginal contracted through the Department of Child Protection and Family Alcohol and Drug Service, provides crisis accommodation for Support to meet the needs of Western Australians who are homeless. Aboriginal women and children who are escaping from family and domestic violence. The construction contract was awarded in June 2015 on a new $6 million facility to relocate this service into more appropriate accommodation. The new facility will double the capacity of Wooree Miya from fi ve families to 10 families and be ideally situated, with easy access to transport and other services.
90 Housing Authority Breathing space In June 2015, Communicare Inc. opened six new transitional units in a southern metropolitan suburb for men who have been violent or abusive in the family. The units provide a stable and affordable place to stay after they undertake a behaviour change program (called Breathing Space) to help break the cycle of domestic violence. The Authority managed lengthy subdivision, rezoning and development approvals to achieve higher density living for the project, in support of the aims of our Strategic Plan 2020. The Commonwealth Government contributed $367,000 of the $1.27 million cost of the project while the Authority funded the balance.
Youth crisis facility Construction of the new ‘Chesterfi eld House’ six-bedroom facility, located in a southern metropolitan suburb, commenced in March 2015 and will provide crisis accommodation for homeless young people aged 15 to 19 years old, operated by Anglicare WA. The short-term accommodation will house six young people for up to three months at a time. Two additional separate one-bedroom transitional units are also being built on the site.
Breathing Space transitional unit
Annual Report 2014 – 15 91 Housing for people with a disability or mental illness Access to appropriate and affordable housing remains a challenge for In addition, 16 community-based houses for people with mental many people with disabilities. In recent times, many vulnerable people illness were delivered, following capital investment by the State have struggled to fi nd private affordable rental properties. For people Government to support the needs of people with severe and with physical disability this is a double disadvantage as most people persistent mental illness and complex care through the Mental with physical disability require modifi cations to standard housing and Health Commission. are not able to pay the high rent rates as they are on a pension or During 2014-15, capital funding of $2.8 million was allocated to other supplemented income. construct a respite facility in Hedland. The Disability Services More than 420 Western Australians with a disability now have a place Commission provided funding of $1.6 million to construct three units to call home as a result of a partnership between the Authority, the under the National Disability Insurance Scheme ‘MyWay’ initiative. Disability Services Commission, the Mental Health Commission and Access Housing will fund the construction of a further two units the Drug and Alcohol Offi ce. and manage the fi ve units. The construction contract was awarded in June 2015. Exceeding the target of 284, the Authority delivered 316 appropriate and affordable homes for people living in the community with a The Authority also continues to providing housing for people with disability, suffering from mental illness and exiting alcohol and other disability and/or mental illness through the vacation and reallocation drug treatment services. This has been made possible through process for the community disability housing program. a $196 million investment by the State Government through the Combined Capital Bid initiative. Clients with high support needs are supported to move from unsuitable care arrangements to their own rental accommodation by providing a coordinated package of housing and support.
92 Housing Authority Housing in remote Aboriginal communities Services are provided to discrete remote and town-based Aboriginal communities in Western Australia to ensure safer and healthier housing. NPARIH aims to facilitate signifi cant reform in the provision of housing for Indigenous people in remote communities and to address overcrowding, homelessness, poor housing and severe housing shortage in remote Indigenous communities. The key strategies are to grow the supply of quality housing, ensure that houses are well maintained and managed to mainstream standards. The Agreement also provides increased employment opportunities to local Aboriginal workers, and supports people wanting to move from remote communities to regional town locations.
Kalgoorlie Short Stay
Annual Report 2014 – 15 93 Managing tenancies in remote communities Support to maintain a tenancy The Authority delivers a comprehensive housing management The Support and Tenant Education Program also assists Aboriginal service to 2,575 homes in 118 remote Aboriginal communities. tenants in remote and discrete Aboriginal communities who are having problems managing their tenancy or who may be at risk of Six regionally-based, primarily Aboriginal organisations have been eviction due to problematic behaviour, rent arrears or poor property responsible under a contractual arrangement for the delivery of standards. During the year, six regional service providers, fi ve of which housing management services to 1,454 community houses across the are Aboriginal Corporations, provided tenancy support services. State. A further 1,121 houses are directly managed by the Authority. The program provides a case management-based service coupled For both delivery methods all rent collected goes towards repairs with education to communities. Remote Aboriginal housing tenants and maintenance in the community. moving into a new or refurbished property are offered the New Living Contractual arrangements with regional service providers ended Skills Program through the housing management team and are on 30 June 2015. In preparation for this, an open tender process provided a comprehensive induction to the property. Providers for the provision of property and tenancy management services for undertake a follow-up visit with tenants to promote the tenancy six zones throughout the State occurred. Contracts were awarded support program and offer further support if required. to fi ve regional service providers for three years, with a further two, one-year options to extend. The new contracts are effective from 1 July 2015, which is aligned with the implementation of a new property and tenancy management information system and Head Maintenance Contractor model for housing managed directly by the Authority or the regional service providers.
94 Housing Authority Rent Reform National Partnership Agreement on Remote Consistent with the introduction of public housing standards to Indigenous Housing capital works remote Aboriginal communities, rent reform has been introduced in Capital works is the primary element of NPARIH, aimed to address a staged manner since 1 July 2013 for tenants in remote communities housing conditions and overcrowding. By the end of the fi rst seven with houses newly built or refurbished under the NPARIH. years, 1,368 refurbishments and 564 new houses were required to The new rents are capped at a maximum of 25 per cent of assessable be completed. household income, in line with Western Australian public housing. The Authority used a close relationship management approach (early In parallel, there is a comprehensive schedule of rolling inspections builder involvement) with the private sector to build new houses and and maintenance programs to ensure that health, safety and amenity undertake refurbishments. As at 30 June 2015, 1,391 refurbishments levels are maintained. and 570 new houses have been delivered for Aboriginal people in The Authority has continued to implement rent reform in Carnarvon, Halls Creek, Kununurra, Onslow and 64 Aboriginal 52 communities with more than 1,600 tenancies transitioning to communities across the State at a cost of $452 million. the public housing-like rent model. The 2014-15 target was exceeded with 92 refurbishments and 69 new houses constructed at a cost of $42 million across 13 communities. The Authority has also succeeded in supporting Indigenous employment, business development and apprenticeships through its construction programs and projects. Within NPARIH, contractors are mandated to provide a minimum of 20 per cent Indigenous employment within their workforce and are currently exceeding 40 per cent within the current contracts. Small and medium-sized Indigenous businesses are also being supported, with more than 35 per cent of the works under NPARIH being contracted to Aboriginal-owned or managed businesses.
Annual Report 2014 – 15 95 Delivering essential services in remote areas On behalf of the State Government, the Authority provides the repairs and maintenance of power, water and waste water services for more than 11,000 people in up to 91 remote Aboriginal communities under RAESP. The State Government invested $30 million for repairs and maintenance in communities. Existing and ageing water, power and waste water infrastructure with an estimated worth of $765 million poses a signifi cant challenge as increased repair and maintenance expenditure are required to maintain services. As well as priority repairs and maintenance of existing infrastructure, funding was made available from Royalties for Regions for the construction of a new power station at Jigalong and funding of an emergency replacement program for 12 replacement and 17 signifi cant repairs to community water tanks. In 2014-15, the Offi ce of the Auditor General issued a report on the delivery of essential services to remote Aboriginal communities. Findings and recommendations in the report have highlighted opportunities to improve the administration of the RAESP service, which the Authority accepts and will implement.
96 Housing Authority Transforming our organisation We will continue the transformation of our organisation. Highlights 2014 – 2015 > Create broader organisational capability and capacity to deliver the Authority’s strategic direction. Delivering core system reforms Graduate Program Aboriginal Trainee Program Leadership programs Workforce and Diversity Plan released Change Management E-Handbook Award winning Building staff capability housingconnecting the dots agency Transform Graduate Program Aboriginal Trainee Program Premier’s Awards Stimulate Leadership programs Overall & Developing the Economy diversity of Capture Workforce and Diversity Plan released – Shared Equity Program housing benefits for Change Management E-Handbook supply affordable Graduate Program World Prix d’ Excellence Award housing connecting the dots Best master-planned community Aboriginal Trainee Program – Ellenbrook Leadership programs Transform Workforce and Diversity Plan released Auscontact Awards Contact Centre of the Year Maximise Change ManagementPremier’s E-HandbookAwards – 31-81 FTE Overall & Developing the Economy benefits for IPAA Achievements Awards connecting– theShared dots Equity Program social Best Practice in Collaboration Transform housing – Remote Community Swimming World Prix d’ Excellence Award Pool Program Best master-planned community – Ellenbrook Premier’s Awards Overall & Developing the Economy Auscontact– Shared Equity Awards Program Contact Centre of the Year – 31-81 FTE World Prix d’ Excellence Award IPAA Achievements Awards Best master-planned community Best Practice in Collaboration – Ellenbrook – Remote Community Swimming Pool Program Auscontact Awards Contact Centre of the Year – 31-81 FTE Annual Report 2014 – 15 97 IPAA Achievements Awards Best Practice in Collaboration – Remote Community Swimming Pool Program We are transforming how we go about our business as we We couldn’t do what we do without our people. Supporting them strive to become a world-class housing agency. Our systems as we change and successfully transition to new ways of working and practices of the past need to evolve as we keep pace with is important. Investing in our leadership and staff capability changing demand for our products and services. enables us to have the right skills for now and in the future. We also value diverse backgrounds, skills and contributions The Authority has a proud history of innovating with new market of our employees as we create an inclusive working environment. products, policy settings, services and procurement practices. Innovation is embraced across the organisation from our corporate The rewards of our transformation are already evident with a functions to frontline service and is essential to our future success. number of accolades across industry and the government sector. Our services and products and the way we deliver them is The Authority will continue to strive to be an innovative, strategy changing. Through transforming the way we engage with driven and agile organisation that responds to demands of the stakeholders we can make better policy decisions and infl uence time as we enable more Western Australians to have a place to housing outcomes. call home. Our business systems and processes will evolve and change. Transforming our digital technology capability enables us to design systems for the future, creating effi ciencies for staff, customers and contractors. Supported by change processes, business practices are aligned to new systems.
98 Housing Authority Our journey so far Delivering the Affordable Housing Strategy and our Strategic Plan For those who are capable of transition, public housing should be 2020 has required us to change how we do business. a pathway and not a destination. As a result we now more actively review the circumstances of tenants who under-occupying public The primary change has been to broaden our focus beyond narrowly- housing or earning too much income to remain eligible, and assist targeted public housing and work across the housing continuum them to transition to alternative accommodation. to address affordability for low to moderate income households. This has required the Authority to develop new policy settings, We have made major changes to how we manage tenancies and new products and services and new forms of procurement. maintain our residential properties, including more frequent and robust property inspections, centralised maintenance services The 2009 Social Housing Taskforce noted that ‘the scale of the… through head contractors and disruptive behaviour management. affordable housing challenge [is] too great for government to tackle Our customer service at our public offi ces and through our award- on its own.’ It advocated for government to more actively partner winning call centre has improved our public communication. We have with the private and not-for-profi t sectors to leverage their respective also used online channels such as the internet and social media, strengths and deliver a greater number and wider range of affordable along with better responsiveness in the news media. housing options. These changes in market role; policy products and services; and In response, the Authority has sought to extend and deepen its stakeholder and customer relationships have required considerable relationships with the private and not-for-profi t sectors, as well as change in the ‘back-room’ of our business. For example, we have Commonwealth, State and local governments. For example we have invested in new, modern business systems such as Housing Assets sought greater levels of cooperation with the private sector to fi nance Geospatial Information System (HAGIS), our digital geospatial and build housing, through joint ventures and other partnerships. information system. HAGIS replaced a dispersed network of We have sought to grow the capacity of the community housing manually-updated paper and cloth property maps. It provides an sector by providing it with rental stock to generate revenue and build integrated online spatial view and real-time property information economies of scale. The Authority has worked to foster engagement datasets, including for construction and land development works with the Affordable Housing Strategy through relationships with peak in progress. bodies and thought leaders. We have also invested heavily in building the capacity of our staff and The Authority continues to have a strong focus on providing a ‘housing leadership and have striven to improve our governance, including safety net’ for the most vulnerable members of the community, planning, reporting and risk management. including seniors, victims of domestic violence, struggling families and people with major physical or mental health issues. However, unmet demand, limited stock and high costs are requiring us to divert demand for public housing into more sustainable options and re-prioritise public housing for those most in need, for the duration of their need.
Annual Report 2014 – 15 99 Our business Partnerships and engagement Stakeholder engagement The Authority is focussed on leveraging the strengths of its partners During 2014-15 the Authority continued to support and work with a to deliver affordable home ownership and rental housing, deepening wide range of stakeholders in the housing sector. The Authority is a their engagement with the Affordable Housing Strategy, and building corporate member and/or sponsor of a range of industry associations capacity in the housing market to innovate and transform. such as the Urban Development Institute of Australia and the Housing Housing Industry Forecasting Group Industry Association. The Authority is an active participant in industry events and forums to build engagement with the Affordable Housing Comprising key industry and State Government agencies, the Housing Strategy and better respond to concerns and trends in the sector, Industry Forecasting Group continued to be a reliable source of including the Partnership Forum between the State Government housing supply information for Western Australia. This group provides and not-for-profi t sector. valuable consensus based forecasts on supply trends to policy makers The Authority is also a corporate member or sponsor of organisations and industry through its twice yearly reports. In 2014-15, the Authority such as Leadership Western Australia and the Institute of Public and the Department of Planning continued to jointly fund and provide Administration Australia, through which it engages thought leaders the secretariat function of the group. Reports are made available to and policy makers with the Affordable Housing Strategy. the public.
100 Housing Authority New peak body arrangements Interagency agreements The Authority continued to support the growth of community housing The Authority works with other government agencies to coordinate as part of the Affordable Housing Strategy. As part of its extensive services and exchange information on matters ranging from law community consultation, the Authority appointed in 2014-15 a enforcement and community safety to support for mental illness successful tenderer to provide leadership and build capability in the and prevention of cruelty to animals. Total agencies involved through community housing sector. Under a fi ve year tender valued at nearly Memorandum of Understanding in operation at 30 June 2015 were 16, $4 million, Shelter WA will provide a single voice on the issue of with two more under development for 2015-16. affordable housing and represent the needs of low to moderate In 2014-15, we renewed and extended a Memorandum of income earners. Shelter WA will provide policy advice, stakeholder Understanding with the Department of Health to facilitate and engagement and infl uence services for the housing sector. In support research using de-identifi ed data. This agreement enables February 2015, Shelter WA launched an online platform to help researchers to incorporate relevant housing information into projects coordinate various not-for-profi t groups and agencies delivering and enables us to initiate projects using other agencies’ data while housing services. preserving the confi dentiality of clients. In 2014-15, we reviewed and extended a Memorandum of Understanding with the Royal Society for Prevention of Cruelty to Animals, replacing an existing agreement developed in 2004. This introduced protocols for where there is an urgent need to gain entry to premises leased by the Authority to help prevent cruelty to animals.
Annual Report 2014 – 15 101 Improving the way we do things To achieve our vision, we are transforming how our clients, The Authority continued to work towards implementing a range contractors, service providers and staff experience our systems. of commercial systems related to the management of its finances, We are not starting from scratch, but building on the many things projects, assets and contracts. Under the Axiom program, Microsoft we already do well. Dynamics AX will replace outdated systems that have become expensive and difficult to maintain. The new system, due to During the year, our biggest information system, Habitat, was progressively come online in 2015-16, will provide reliable information launched. Habitat is a tenancy management system, billing system that will help make informed decisions about business activities and reporting system. We will use it to administer and manage more ranging from individual purchases to major project investments. than 40,000 residential tenancies per annum. Habitat replaced an aging and unsupported tenancy management system called Caretaker Customer service improvement which had been developed in the 1980s. More than 1,500 employees were trained in Habitat with detailed training packages provided to As part of its transformation process, the Authority has also focussed frontline offices who used Habitat daily. We also provided extensive on improving efficiency and effectiveness in its customer service. change management support to help staff move from the old to the As well as maintaining face-to-face client contact at our offices new system. state-wide, the Authority has also invested in the last few years building a high-quality call centre to provide better quality and Improvements were also made to our corporate record-keeping responsiveness to tenants and the public. The Housing Direct call system so that documents and information flow freely between centre operates around the clock every day of the year, in order to systems, improving efficiency through automated processes. Large deal with urgent repairs to properties and field public complaints volumes of Habitat-generated letters are saved through automated about potentially disruptive behaviour by tenants. The call centre processes and stored for employees to view anytime anywhere. is a key tool in our centralised property maintenance contracts. Over time, the digital files are expected to become the main source of information for employees.
102 Housing Authority Innovation
Housing Direct contacts connecting the dots
The Authority’s Innovation Program works to inspire ideas from 91% employees across the organisation. By engaging and supporting employees to develop and implement their ideas, the program 9% helps nurture a culture of innovation by providing opportunities for employees on personal and professional levels to develop leadership, project management, negotiation and communication skills. During 2014-15, Housing Direct handled 198,027 inbound calls and This engagement with employees has resulted in hundreds of ideas 18,727 online forms. This represents an average of 600 enquiries for improved products and services, as well as creating opportunities on every day of the year. The average waiting time experienced by for business efficiencies across the agency through the investigation maintenance callers was 9.48 minutes. Staff are highly trained and and adoption of new technologies. An example of employee innovation sensitive to the challenge of dealing with a very diverse client base has included managed document services: an optimised print and community concerns about tenant behaviour. solution delivering efficiencies by reducing print device numbers Housing Direct continued to be recognised as a leader in Australian and waste. An idea to generate new affordable housing designs has call centres. This year it was recognised at the 2014 Auscontact resulted in [design]ability: a competition open to tertiary students Contact Centre of the Year Awards, where the Authority was the winner across Western Australia to design innovative housing solutions. of the category for call centres with 31 to 80 full-time employees. The Authority is also a key supporter of innovation across the Western Australia public sector and is an active member of the Western Australian Public Sector Innovation Leadership Group. By supporting and facilitating collaboration between Western Australian public agencies, the Authority’s Innovation Program is helping develop a culture of innovation and entrepreneurship across many government sectors.
Annual Report 2014 – 15 103 Awards Outcomes
2014 Premier’s Award for 2015 FIABCI (The International 2014 Auscontact Awards Public Sector Excellence Real Estate Federation) World Prix d'Excellence Award 2014 Contact Centre Overall Award of the Year (WA) Best Master-planned Community Shared equity Expression Housing Authority of Interest Program Ellenbrook In partnership with Developing the Economy LWP Property Group Investment Shared equity Expression Syndicate of Interest Program
104 Housing Authority 2014 UDIA(WA) Awards for Excellence 2015 Institute of Public Administration Australia Judges’ Award Sustainable Urban Development (WA) Achievement Awards South Hedland New Living – In partnership Foyer Oxford – In partnership with the with JAXON Pty Ltd Foyer Oxford Consortium Department of Fisheries Award Master-Planned Development Urban Water Excellence Policy Practitioner Brighton – In partnership with Satterley Osprey Village – In partnership with of the Year Property Group Fleetwood and HAS Group Tania Loosley-Smith, Residential Development Over Housing Authority 250 Lots Best Practice in Collaboration The Village at Wellard – In partnership between Government and with Peet Limited Non-Government Organisations Remote Community Swimming Pool Program In partnership with The Royal Life Saving Society WA Inc
Annual Report 2014 – 15 105 Our people The Authority employs 1,689 employees (1,570 full time equivalents) across more than 30 locations around the State. Our employees are critical to organisational success and positive outcomes for clients. The profi le of our workforce shows our diversity. Implementing the Affordable Housing Strategy and our Strategic Plan 2020 has required us to change how we work. We have built new capability in our workforce in project management, change management and stakeholder management, and sought to enhance the skills of our leadership group. We are also strongly focussed on recruiting new talent, developing and retaining employees, enhancing a positive culture and fostering agility in individuals and the organisation. We are committed to reconciliation with Aboriginal and Torres Strait Islander peoples and to embrace diversity in our workforce.
Regionally based workforce Employee age profile Gascoyne Goldfields – Esperance Wheatbelt 5.3% Great Southern South West 19.4% 23.9% 1 in 5 regionally based Pilbara Kimberley 28.1% 23.3% 77% Peel Mid West
16-24 years 25-34 years 35-44 years 45-54 years 55-64 years
106 Housing Authority Embracing diversity, culture and inclusion Workforce planning and diversity
4% Staff are Workforce planning is about providing suffi cient and sustainable Aboriginal Australian capability and capacity in our staff to deliver now and in the future. The Workforce and Diversity Plan 2014-2017 was implemented during the year through a number of initiatives that connect business 11% Staff from strategy with an inclusive people strategy. The plan is current and
culturally diverse 32% backgrounds future focused, identifying actions the Authority will take to build Staff with a capability and capacity to deliver its business outcomes. disability Females in positions level 7 We value, embrace and are committed to creating a diverse and and above inclusive workplace. The Authority’s key mechanism to realise this goal is its diversity strategies which aim to increase representation of and support for Aboriginal and Torres Strait Islander people, people with disability and women in senior management. We are committed to having open and inclusive employment 1,689 practices, which enables attraction and retention of talented people STAFF from all groups within the community. Measures from the plan are supported by the Reconciliation Action Plan.
Annual Report 2014 – 15 107 During the year to further equity and diversity objectives we: >>trained equity and diversity contact officers to provide employees with at least one in each region. >>reviewed human resource policies through an agility project to ensure the policies have flexibility, equity and diversity built into their practices. >>allocated two Aboriginal graduate positions to promote youth and support the recruitment of Aboriginal and Torres Strait Islanders’ in the Graduate Program.
108 Housing Authority Reconciliation The Authority is working towards building positive relationships Sponsorship of NAIDOC with Aboriginal and Torres Strait Islander people. During 2014-15 The Authority continued for a second year, its sponsorship of the Male the Authority participated in a variety of events to celebrate and and Female Elder of the Year Awards at the 2015 National Aborigines build better partnerships with Aboriginal people and communities. and Islanders Day Observance Committee (NAIDOC) Perth Awards. The Authority supported important landmark events such as Sponsorship of these awards provides an opportunity for the Authority NAIDOC, Sorry Day and Reconciliation Week. The Authority has to acknowledge and celebrate the vital role that elders play in a Reconciliation Action Plan Committee and a dedicated team Aboriginal families and communities. who promote initiatives of the Aboriginal Employment Strategy. The Authority celebrated NAIDOC Week with a flag raising ceremony An ongoing Reconciliation initiative is an Aboriginal Art Program at its head office and hosted events at several regional offices to mark established to acknowledge the importance of local culture and the occasion. Employees hosted an outdoor activity celebrating land Aboriginal people as traditional custodians of the land. Artworks and sea connection with a Dreamtime story by the swan. Another day are to be progressively located in the public foyers of offices of events had stalls providing information and answering questions throughout the State. on affordable housing options. Volunteers from the Authority also participated in community events including the Jacaranda Community Centre NAIDOC Family Day and the Town of Bassendean and Derbarl Yerrigan Health Service NAIDOC Family Day.
Annual Report 2014 – 15 109 Aboriginal Employment Strategy Aboriginal cultural awareness The Authority continued to implement its Aboriginal Employment The Authority provides Aboriginal Cultural Awareness training Strategy 2014-2017 as it works towards an increase in the through the Public Sector Commission’s Sharing Culture online representation of Aboriginal and Torres Strait Islanders in the training and face-to-face training. To date 82 per cent of employees workforce and at all levels. The Aboriginal Employment Strategy have completed the training. All new employees are required to places a strong emphasises on the need to create a supportive and complete the online training in the fi rst month of their employment. culturally inclusive working environment, where Aboriginal and To support cultural awareness there are also Aboriginal Cultural Torres Strait Islander people feel valued. Protocols that provide guidance on how to show respect for the In 2014-15 the Authority has been implementing initiatives from traditional owners of this land. the fi ndings of an employee satisfaction survey. The survey was conducted in 2014 to seek feedback from Aboriginal and Torres Strait Islander employees so that initiatives in the Aboriginal Employment Strategy were aligned to employee value. A formal mentoring program is offered at the Authority where Aboriginal employees can be a mentor or a mentee to share their knowledge and experiences.
110 Housing Authority Attracting and retaining Recruiting and retaining talented people are integral to the Innovative recruitment Authority’s business strategy. The Authority is trialling innovative and agile solutions in the practical delivery of public sector human resource management Profile of workforce (by level) as part of its transformation. A pilot program to recruit Customer Service Offi cers in the Perth 17% 18% metropolitan area produced a shared pool of suitable applicants with strong customer service skills. Results of the pilot and related 13% initiatives were evaluated during 2014-15 and identifi ed cost savings 21% and more streamlined processes could be achieved.
19% 12%
Level 1 & 2 Level 3 Level 4 Level 5 Level 6 Level 7
Annual Report 2014 – 15 111 Aboriginal traineeships The Authority is a lead agency in the Public Sector Commission’s Aboriginal Traineeship program. Currently four Aboriginal trainees are working towards completion of their traineeships at the Authority’s head offi ce and in regional locations while 15 trainees have been offered permanent employment. During the 12 month program, trainees study for either a Certifi cate II or III in Government and are provided with an Aboriginal mentor who provides support and cultural security. Upon successfully completing the program all trainees are offered a permanent position and further study of either a Certifi cate III or IV in Government. School based traineeships The Authority continues to participate in the Public Sector Commissioner’s School Based Traineeship Program and is currently employing two school-based trainees in its metropolitan offi ces.
Trainee
112 Housing Authority Graduate program Are you a high-performing graduate who would like make a difference?
We invite you to join our team and help us to make a difference in the lives of Western Australians through the provision of affordable housing. Our graduate program helps university graduates to kick start their government career by providing experience in real world settings. The program provides access to income, training and development, and opportunities to work on different projects to gain broad experience. More than 180 applicants applied for the Authority’s 2015 graduate intake. It is a two-year program and has currently nine graduates in progress, of which six were appointed in 2015. Two graduate positions have been designated for Aboriginal and Torres Strait Islanders as part of the Aboriginal Employment Strategy.
Graduates
Annual Report 2014 – 15 113 Developing capabilities Developing our leaders The Authority is dedicated to providing a learning environment The Authority has a strong commitment to leadership and employee in which employees can broaden their skills and develop future development. Leadership programs have been developed that capabilities to achieve their goals. commence with individual development to transformational leadership. Leadership programs offered in 2014-15 included Foundation of Leadership, Future Leadership and Transformation Leadership. More than 200 staff took part in these programs during 2014-15. Women in leadership The Women in Leadership program provides development 97% employees completed opportunities including skills workshops, attendance at conferences, accountable and ethical decision making inspirational speaker sessions, discussion forums and training. training These opportunities further the advancement of women as part
94% employees in identified of creating an equitable and inclusive environment for women to areas undertook disability progress into leadership positions. awareness training 93% leaders developed In 2014-15 148 employees attended the various Women in Leadership sessions.
82% employees completed Aboriginal cultural awareness training
114 Housing Authority Learning and development Mentoring The Authority’s learning and development programs enable employees Mentoring is a collaborative learning relationship where employees to develop their capabilities in order to meet current and future demands. shared their skills, knowledge and experience with another person The Authority employs a ‘70:20:10’ learning strategy to provide active and provided a safe and trusted space for development. In 2014-15 the learning through on-the-job learning, tasks and problem solving formal mentoring program completed its fi rst year with 51 mentors (70 per cent); coaching, mentoring and peer learning (20 per cent); and mentees graduating. The program is also offered to Aboriginal and formal training, workshops and seminars (10 per cent). and Torres Strait Islander employees who can be a mentor or a mentee to share their knowledge. Currently there are four mentors During 2014-15 corporate training programs focussed on strategic and three mentees who participate in the program. skills required for the future in line with the Workforce and Diversity Plan 2014-2017. These included specifi c opportunities related Corporate induction to change management and project management. A series of masterclasses aimed at increasing the capability of employees The Authority provides new employees with a comprehensive engaged in different parts of a change initiative on how to drive corporate induction including a full-day session that provides or respond to change. employees with the opportunity to engage with the Corporate Executive, become familiar with the vision, mission and values of the Authority and understand how their role fi ts within the organisation. During 2014-15, 262 metropolitan and regional employees attended a Corporate Induction session. Attendee surveys show very high levels of satisfaction with the program and an increased understanding of the business model of the Authority, its journey of change and strategic direction and increased sense of belonging to the organisation.
Annual Report 2014 – 15 115 “It is a bit of a turnaround – we are among the youngest and we have had the opportunity to help some of the more ABORIGINAL experienced staff!” When asked what helped them become TRAINEES EXCEL more confi dent in using the new tenancy management system, it seems practice SNAPSHOT really does make perfect. “I spent a lot of time making notes on the processes during the training period, and by having it in my own words, it really Being the new kid on the block can helped me remember what I needed to sometimes be diffi cult, but for the do,” Ms Kickett said. Authority’s recent Aboriginal Traineeship Program graduates, Shelby Meola “We adapted quickly to the new system and Marlee Kickett, it has been an because we spent a lot of time using easy transition. the simulations and training materials, plus we’re required to use it more in our The graduates are now working as daily work, compared to some of our Customer Service Offi cers in the colleagues who are out in the fi eld more,” Authority’s Fremantle regional offi ce as Ms Meola added. some of the youngest and newest members there. “It’s great to be able to help out other staff members and I was really proud Since joining the regional offi ce, they when I was recently asked by the have also endeared themselves to the Regional Manager of the Fremantle team by demonstrating a high level of offi ce to accept the role of being a expertise in the agency’s new Housing formal local user expert.” Tenancy Management System – Habitat. “Following the switch to Habitat in November 2014, Marlee and I, along with other specially trained ‘local user experts,’ have become the go-to girls for troubleshooting any issues as staff navigate the new system and learn all the ins and outs,” Ms Meola said.
116 Housing Authority SIGNIFICANT ISSUES IMPACTING THE AUTHORITY This section provides information on current and emerging signifi cant issues and trends impacting the Authority’s operations.
Annual Report 2014 – 15 117 Our environment Housing affordability is an issue that continues to demand a strong The example above assumes a deposit of 10 per cent against the response from Government. Despite strong growth in residential mortgage, but doesn’t consider the length of time needed to save the construction in the 2014 calendar year, there remains an enduring deposit. Based on seasonally adjusted household disposable income shortage in supply at the affordable end of the market. per head per week, it is estimated that a single person paying market rent would have just $50 a week for living costs, while a couple with Rising vacancy rates in the private rental market and a stabilising two children just $550. This would leave both groups below the median house price may provide relief for some; however, the poverty line and no opportunity to save for a deposit. proportion of the market that is affordable to low and moderate income households remains chronically undersupplied. Seniors too are being affected by the lack of affordable and appropriate housing. It is estimated that by 2055 the proportion Between the December quarter of 2013 and the same period in 2014, of people aged over 65 will more than double and there is concern the average house price in Perth dropped by nearly two per cent, about the number of older home owners who will enter retirement median weekly rent dropped by four per cent and the rental vacancy with large outstanding debts. Further, as the population ages the rate increased almost one per cent. During the same period, however, incidence of disability will increase demand for services and housing. the number of homes listed for sale that were affordable to a household on a very low income (less than 50 per cent of median) The Authority will continue to work in partnership across government was less than two per cent, and the number of affordable rentals and with the private and not-for-profi t sectors to deliver solutions to actually decreased from seven to fi ve per cent. address the constant demand for affordable, housing. Even households on a moderate income could only afford to purchase a property valued at around $404,000. This is far less than the median Perth house price of $535,000 (REIWA March 2015 quarter preliminary fi gures), less than the lower quartile house price of $430,000 and includes only 22 per cent of the houses and units available on the market.
118 Housing Authority Signifi cant issues and commitments Land and affordable housing supply Affordable home In 2015-16, the Authority, through its land development activities, ownership opportunities intends to produce 2,436 housing lots including 1,682 lots developed Home ownership outcomes are supported through the SharedStart with joint venture partners. Signifi cant land development supports shared equity home loan initiative. It is anticipated the initiative will be affordable, public and community housing throughout metropolitan continued in 2015-16. SharedStart loans are linked to a construction and regional areas. Our role in land development remains clearly expression of interest process that, subject to favourable market targeted at the lower price end of the market with at least 80 per cent conditions, enables us to procure newly built homes in bulk from of lots to be sold below the median price and at least 30 per cent in the market at discounted prices. The discount gained becomes the the lower price quartile of the market. Authority’s equity share in the properties.
Through the State Government’s Affordable Housing Strategy, Since 2011, SharedStart has assisted 1,113 lower income households we continue to work with the private and not-for-profi t sectors to to purchase an entry-level home via Authority co-ownership and a increase the diversity and supply of affordable housing options and to Keystart home loan and created about $91 million in assets for the take pressure off the social housing system. Innovative partnerships, State in the form of equity in co-owned properties. Low to moderate procurement and construction methods have already delivered income earners are benefi ting from government co-ownership, 20,000 new affordable homes as at the end of June 2015, exceeding which signifi cantly reduces their mortgage costs. the State Government’s minimum target of 20,000 new affordable SharedStart is part of a broader Affordable Housing supply initiative housing opportunities by 2020. As the directions and outcomes in the that has fi nanced and delivered 1,864 entry-level properties into published 10 year strategy are still current, a renewed higher growth the market since 2011, with an average price well below the lowest target of 30,000 has been set to maintain momentum into the future. quartile house price of $405,000.
Annual Report 2014 – 15 119 Although expenditure will be adjusted down by $50 million in Of the $270.25 million, $244.77 million has been approved for 2015-16 due to current record high building activity, the $145 million 11 projects located in Karratha, Port Hedland, Onslow, Newman program will continue in 2015-16 and will commence a further and the Avon Valley. These 11 projects are expected to provide 448 entry-level homes. 702 housing opportunities. Concurrently in 2015-16, the pilot phase of the Public Housing Stock NRAS is a Commonwealth Government initiative and an important Redevelopment Strategy will be completed. This will result in the part of the Affordable Housing Strategy 2010-20. With State redevelopment of 200 sites to deliver at least 500 new affordable Government funding support, it has been successful in helping homes, fi nanced via a $55 million, three-year loan facility. This strategy low to moderate income owners access discounted private rental will expand in support of the Social Housing Investment Package. properties, with more than 2,500 NRAS dwellings delivered to date in Western Australia. However, the Commonwealth’s decision not Affordable rental supply to proceed with the allocation of incentives means that Western Australia will deliver at least 1,500 fewer discounted private rental The Authority has been working to deliver service worker properties than the 7,000 approved by the State. The revised total accommodation in regional communities under the Affordable to be delivered by 30 June 2016 is 5,308. Housing Strategy and Royalties for Regions – Housing for Workers initiative. This includes targeted interventions such as key and service Social housing worker housing and employment-related accommodation to ensure that key and essential services are maintained in regional areas. Social Housing Investment Package These initiatives ensure that businesses and non-government To complement the broader initiatives of the Affordable Housing organisations are able to attract and retain qualifi ed and experienced Strategy and build on the 4,500 social homes delivered to date under the employees to maintain quality services. Strategy, a new Social Housing Investment Package will provide 1,000 The Royalties for Regions – Housing for Workers initiative will additional social housing dwellings during 2015-16 and 2016-17. By commit $270.25 million over eight years (2011-12 to 2018-19) to 30 June 2017, the package will halve the number of seniors and families provide affordable, available and appropriate housing for key workers with children who are on the priority waiting list for social housing. in regional Western Australia.
120 Housing Authority The $560 million package will use $85 million of the Authority’sland, Consistent with the State Government’s Affordable Housing Strategy, along with $452 million of land and housing development expenditure an important reform in the 2015-16 Budget is the continuing move and $23 million in operating costs. The package estimates to deliver towards a standard rent for public housing of 25 per cent of gross up to 1,500 homes, including 1,000 additional social homes (that household income. Rent for all new tenants will be set at the standard includes leasing private rental stock), replacing existing underused 25 per cent rate. The rent for existing tenants will be adjusted social homes with new social housing stock and making available incrementally with a maximum rent increase of $12 per week in additional general housing supply to the market. 2015-16. This is expected to generate additional revenue of $59 million to 2018-19, which will be reinvested into social housing programs Public housing and meet the Authority’s Asset Investment Program savings target. The State Government has invested $12 million over four years to 2015-16 to support the implementation of its Disruptive Behaviour Diversifying social housing Management Strategy for public housing. The funding has enabled In 2014-15, the Government committed $3.4 million to the Authority 35 additional specialist employees to be employed in regional and to construct homes for Mental Health Commission clients with severe country areas. The dedicated resources manage and investigate and persistent mental illness and complex care needs. The overall tenancy complaints from the public and ensure public housing $55 million investment over four years will deliver 116 homes to tenants who engage in disruptive behaviour are held accountable. enable people to live in the community. In 2014-15, a four-year electrical safety device program was initiated. The Authority will receive $33 million over three years for the West The program will ensure publicly-owned housing stock have compliant Kimberley Transitional Housing program. This initiative will deliver electrical safety devices installed, including residual current devices up to 60 new houses in Broome (40) and Derby (20) to facilitate the and smoke alarms. transition of selected Indigenous tenants from public housing to independent housing options. The transitional housing project is a joint venture between the Kimberley Development Commission and the Authority.
Annual Report 2014 – 15 121 Housing and essential services for remote In addition, $4.6 million will be provided to Horizon Power for Aboriginal communities the operational cost of continuing to deliver services to remote communities under the Aboriginal and Remote Community Power As part of its commitment to supporting outcomes for people in Supply program. remote communities, the State Government has also committed to a range of initiatives. The Authority continues to exceed its NPARIH asset investment targets and is on track to deliver against current commitments. Funding through RAESP maintains essential services infrastructure In 2014-15 we continue to exceed our targets with 69 new houses in specifi ed remote communities throughout the State. The provision completed and 92 refurbishments completed during the year. of essential services presents signifi cant challenges in small isolated locations, as does the continuing withdrawal of Commonwealth National Partnership Agreements funding for capital upgrades and replacement of ageing infrastructure. The Authority will receive $30 million per annum until 2016-17 to The Commonwealth Government has expressed its desire to continue the provision of water, wastewater and power maintenance redefi ne the respective roles of States and the Commonwealth services under RAESP. and has announced a broad review of housing and homelessness programs within the context of the Council of Australian Governments In line with the Commonwealth Government’s withdrawal from key led White Paper on Reform of the Federation. To the extent that the areas of service delivery, and with effect from 1 July 2015, the State Commonwealth seeks to review its existing funding commitments Government will take over responsibility for Municipal and Essential in order to clarify roles and reduce overlap between different levels Services delivery from the Commonwealth. Municipal and Essential of government, there may be implications for future funding and the Services are delivered to 163 Aboriginal communities with more than sustainability of current programs. 11,000 residents. In 2015-16, almost $26 million will be spent on key services that will include power, water, sewerage and other services that would generally be provided by local governments in remote locations.
122 Housing Authority State Government asset sale program Head offi ce relocation As part of the 2015-16 State Budget the Government announced a The Authority’s East Perth premises is nearing the end of its useful strategy to reduce debt over time by pursuing an orderly program life and is no longer adequate to house our head offi ce staff. The of asset sales. The Government has identifi ed the following Authority Authority considers a modern head offi ce would enable the better assets for further investigation as part of the second tranche of the delivery of services and provide a more appropriate workplace for asset sales program: staff. The Government has launched a formal process to investigate the options for moving government offi ce accommodation to > securitisation of part of Keystart’s loan book Fremantle and stated that at this stage the Authority would be likely > a portfolio of Government Regional Offi cers’ Housing stock. to move to Fremantle from its East Perth premises. The Government announced as part of its communications around the 2015-16 State Budget that its land asset sales program could include the sale of the current site of the Authority’s head offi ce.
Annual Report 2014 – 15 123 This page has been left intentionally blank
124 Housing Authority DISCLOSURES AND LEGAL COMPLIANCE This section contains the audited Financial Statements and Key Performance Indicators, other fi nancial disclosures, and reports on compliance with various legislative requirements and Government policy requirements.
Annual Report 2014 – 15 125 126 Housing Authority Housing Auditor General’sAuditor opinion
Auditor General
INDEPENDENT AUDITOR’S REPORT
To the Parliament of Western Australia
HOUSING AUTHORITY
Report on the Financial Statements I have audited the accounts and financial statements of the Housing Authority.
The financial statements comprise the Statement of Financial Position as at 30 June 2015, the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows of the Authority and the consolidated entity for the year then ended, and Notes comprising a summary of significant accounting policies and other explanatory information.
Director General’s Responsibility for the Financial Statements The Director General is responsible for keeping proper accounts, and the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the Treasurer’s Instructions, and for such internal control as the Director General determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility As required by the Auditor General Act 2006, my responsibility is to express an opinion on the financial statements based on my audit. The audit was conducted in accordance with Australian Auditing Standards. Those Standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Authority’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the Director General, as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion In my opinion, the financial statements are based on proper accounts and present fairly, in all material respects, the financial position of the Housing Authority and the consolidated entity at 30 June 2015 and its financial performance and cash flows for the year then ended. They are in accordance with Australian Accounting Standards and the Treasurer’s Instructions.
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7th Floor Albert Facey House 469 Wellington Street Perth MAIL TO: Perth BC PO Box 8489 Perth WA 6849 TEL: 08 6557 7500 FAX: 08 6557 7600
Report on Controls I have audited the controls exercised by the Housing Authority during the year ended 30 June 2015.
Controls exercised by the Housing Authority are those policies and procedures established by the Director General to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions.
Director General’s Responsibility for Controls The Director General is responsible for maintaining an adequate system of internal control to ensure that the receipt, expenditure and investment of money, the acquisition and disposal of public and other property, and the incurring of liabilities are in accordance with the Financial Management Act 2006 and the Treasurer’s Instructions, and other relevant written law.
Auditor’s Responsibility As required by the Auditor General Act 2006, my responsibility is to express an opinion on the controls exercised by the Housing Authority based on my audit conducted in accordance with Australian Auditing and Assurance Standards.
An audit involves performing procedures to obtain audit evidence about the adequacy of controls to ensure that the Authority complies with the legislative provisions. The procedures selected depend on the auditor’s judgement and include an evaluation of the design and implementation of relevant controls.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my qualified audit opinion.
Basis for Qualified Opinion Controls over payments to maintenance contractors were inadequate. The Authority did not have adequate controls in place to be satisfied that maintenance work orders had been appropriately incurred and certified before payment. While the Authority had an inspection regime in place up to 31 October 2014 to provide oversight over the approval and certification of maintenance work orders, this was discontinued from November 2014 following the implementation of a new system, Habitat.
Qualified Opinion In my opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the controls exercised by the Housing Authority are sufficiently adequate to provide reasonable assurance that the receipt, expenditure and investment of money, the acquisition and disposal of property, and the incurring of liabilities have been in accordance with legislative provisions during the year ended 30 June 2015.
Report on the Key Performance Indicators I have audited the key performance indicators of the Housing Authority for the year ended 30 June 2015.
The key performance indicators are the key effectiveness indicators and the key efficiency indicators that provide information on outcome achievement and service provision.
Director General’s Responsibility for the Key Performance Indicators The Director General is responsible for the preparation and fair presentation of the key performance indicators in accordance with the Financial Management Act 2006 and the Treasurer’s Instructions and for such controls as the Director General determines necessary to ensure that the key performance indicators fairly represent indicated performance.
Annual Report 2014 – 2014 15 Report Annual Page 2 of 3
127 128 Housing Authority Housing
Auditor’s Responsibility As required by the Auditor General Act 2006, my responsibility is to express an opinion on the key performance indicators based on my audit conducted in accordance with Australian Auditing and Assurance Standards.
An audit involves performing procedures to obtain audit evidence about the key performance indicators. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the key performance indicators. In making these risk assessments the auditor considers internal control relevant to the Director General’s preparation and fair presentation of the key performance indicators in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the relevance and appropriateness of the key performance indicators for measuring the extent of outcome achievement and service provision.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion In my opinion, the key performance indicators of the Housing Authority are relevant and appropriate to assist users to assess the Authority’s performance and fairly represent indicated performance for the year ended 30 June 2015.
Independence In conducting this audit, I have complied with the independence requirements of the Auditor General Act 2006 and Australian Auditing and Assurance Standards, and other relevant ethical requirements.
Matters Relating to the Electronic Publication of the Audited Financial Statements and Key Performance Indicators This auditor’s report relates to the financial statements and key performance indicators of the Housing Authority for the year ended 30 June 2015 included on the Authority’s website. The Authority’s management is responsible for the integrity of the Authority’s website. This audit does not provide assurance on the integrity of the Authority’s website. The auditor’s report refers only to the financial statements and key performance indicators described above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements or key performance indicators. If users of the financial statements and key performance indicators are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial statements and key performance indicators to confirm the information contained in this website version of the financial statements and key performance indicators.
COLIN MURPHY AUDITOR GENERAL FOR WESTERN AUSTRALIA Perth, Western Australia 11 September 2015
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Financial Statements Certifi cation of Financial Statements Housing Authority Financial Statements for the year ended 30 June 2015. The accompanying fi nancial statements of the Housing Authority and the accompanying consolidated Financial Statements have been prepared in compliance with the provisions of the Financial Management Act 2006, from proper accounts and records, to present fairly the fi nancial transactions for the fi nancial year ending 30 June 2015 and the fi nancial position as at 30 June 2015. At the date of signing, we are not aware of any circumstances which would render the particulars included in the Financial Statements misleading or inaccurate.
Paul Whyte Lorne O’Mara Acting Chief Executive Offi cer Chief Finance Offi cer
9 September 2015 9 September 2015
Annual Report 2014 – 15 129 130 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015
Consolidated Parent
Note 2015 2014 2015 2014 $000 $000 $000 $000 Income Sales 7 466,724 451,003 430,907 432,757 Rental revenue 8 448,468 447,784 448,468 447,784 Commonwealth grants and contributions 9 204,550 313,059 204,550 313,059 Interest revenue 10 217,000 195,240 110,813 109,071 Developers' contributions 9 9,514 9 9,514 Other gains 11 26,062 11,694 95,746 86,357 Total Income 1,362,813 1,428,294 1,290,493 1,398,542
Expenses Cost of sales 7 310,897 246,298 277,563 240,579 Rental expenses 13 356,936 384,968 356,936 384,968 Community support expense 14 160,848 191,521 160,848 191,521 Employee benefits expense 15 136,623 128,618 136,003 128,198 Supplies and services 16 40,202 41,369 35,160 37,717 Depreciation & amortisation expense 17 146,486 137,376 145,288 136,255 Finance costs 18 156,212 149,107 156,209 149,132 Share of net losses of associate - 18,043 - - Accommodation expenses 19 13,571 14,113 12,522 13,185 Loss on disposal of non-current assets 12 16,115 17,947 16,100 17,947 Other expenses 20 137,101 135,527 120,747 119,163 Total Expenses 1,474,991 1,464,887 1,417,376 1,418,665 Loss before grants and subsidies from State Government (112,178) (36,593) (126,883) (20,123) Grants and subsidies from State Government 9 90,730 87,923 90,730 87,923 Gain (Loss) for the period (21,448) 51,330 (36,153) 67,800
Other Comprehensive income Remeasurements of defined benefit liability 38 (1,523) (386) (1,523) (386) Changes in asset revaluation surplus 41 366,460 683,393 366,467 683,400 Total other comprehensive income 364,937 683,007 364,944 683,014 Profit (Loss) Attributable to: Consolidated Entity (21,375) 47,789 - - Non-controlling interest 50 (73) 3,541 - - (21,448) 51,330 - - Total comprehensive income attributable to: Consolidated Entity 343,562 734,337 - - Non-controlling interest 50 (73) 3,541 - - 343,489 737,878 - - TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 343,489 734,337 328,791 750,814
Refer Note 6 'Schedule of income and expenses by service' The Statement of Comprehensive Income should be read in conjunction with the accompanying notes. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015
Consolidated Parent
Note 2015 2014 2015 2014 $000 $000 $000 $000 ASSETS Current Assets Cash and cash equivalents 21 271,991 243,669 224,650 207,291 Inventories 22 382,080 307,174 365,604 267,179 Loans and receivables 23 971,343 883,083 105,635 113,095 Other current assets 25 35,096 40,709 41,901 59,318 Non-current assets classified as held for sale 26 34,668 233 34,668 233 Other financial assets 27 200,107 200,026 - 19,350 Total Current Assets 1,895,285 1,674,894 772,458 666,466
Non-current Assets Inventories 22 569,935 573,116 556,801 559,987 Loans and receivables 23 3,282,398 2,930,118 4,115,590 3,675,593 Deferred income tax asset 24 - 1,650 - - Other financial assets 27 24 24 37,374 18,024 Rental properties 28 13,280,271 12,883,168 13,280,271 12,883,168 Community Housing properties 29 918,309 976,590 918,309 976,590 Shared Equity properties 30 600,453 584,067 600,453 584,067 Other properties 31 128,408 133,943 128,408 133,943 Plant & equipment 32 8,184 8,218 5,840 5,284 Buildings under construction 33 89,649 165,410 89,649 165,410 Intangible assets 35 33,455 23,384 32,273 22,196 Total non-current Assets 18,911,086 18,279,688 19,764,968 19,024,262 TOTAL ASSETS 20,806,371 19,954,582 20,537,426 19,690,728
LIABILITIES Current Liabilities Payables 36 101,027 149,345 100,687 140,473 Borrowings 37 337,403 322,450 337,403 321,150 Provisions 38 58,447 55,990 58,447 55,990 Other current liabilities 39 32,127 37,969 26,926 33,738 Total Current Liabilities 529,004 565,754 523,463 551,351
Non-current Liabilities Payables 36 554 554 554 554 Borrowings 37 4,963,465 4,542,996 4,963,465 4,542,996 Provisions 38 12,264 13,976 12,264 13,976 Total non-current Liabilities 4,976,283 4,557,526 4,976,283 4,557,526 TOTAL LIABILITIES 5,505,287 5,123,280 5,499,746 5,108,877 NET ASSETS 15,301,084 14,831,302 15,037,680 14,581,851
EQUITY
Contributed equity 40 2,239,906 2,194,201 2,239,906 2,194,201 Reserves 41 10,018,748 9,652,288 10,018,015 9,651,548 Retained earnings 42 3,040,286 2,985,741 2,779,759 2,736,102 Total Equity attributable to the Consolidated Entity 15,298,940 14,832,230 15,037,680 14,581,851 Non-controlling interest 50 2,144 (928) - - TOTAL EQUITY 15,301,084 14,831,302 15,037,680 14,581,851
- The Statement of Financial Position should be read in conjunction with the accompanying notes. Annual Report 2014 – 2014 15 Report Annual 131 132 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2015
Consolidated Parent
Note 2015 2014 2015 2014 $000 $000 $000 $000
Balance of equity at start of period 14,832,230 13,880,674 14,581,851 13,610,284
CONTRIBUTED EQUITY 40 Balance at start of period 2,194,201 2,059,354 2,194,201 2,059,354 Transactions with owners in their capacity as owners: Capital contribution 3,360 113,183 3,360 113,183 Other contributions by owner 51,246 22,364 51,246 22,364 Distributions to owners (8,901) (700) (8,901) (700) Balance at end of period 2,239,906 2,194,201 2,239,906 2,194,201
RESERVES 41 Balance at start of period 9,652,288 8,968,895 9,651,548 8,968,148 Profit from asset revaluation 457,205 781,410 457,205 781,410 Impairment loss on rental properties (9,405) (12,104) (9,405) (12,104) Transfer to retained earnings (81,340) (85,913) (81,333) (85,906) Balance at end of period 10,018,748 9,652,288 10,018,015 9,651,548
RETAINED EARNINGS 42 Balance at start of period 2,985,741 2,852,425 2,736,102 2,582,782 Transfer from reserves 81,340 85,913 81,333 85,906 Movement in equity attributable to Consolidated Entity (3,897) - - - Gain (Loss) for the period (22,898) 47,403 (37,676) 67,414 Balance at end of period 3,040,286 2,985,741 2,779,759 2,736,102
Balance of equity at end of period 15,298,940 14,832,230 15,037,680 14,581,851
The Statements of Changes in Equity should be read in conjunction with the accompanying notes. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2015
Consolidated Parent Note 2015 2014 2015 2014 $000 $000 $000 $000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts Commonwealth grants and contributions 204,550 313,059 204,550 313,059 Rental receipts 448,916 453,364 448,916 453,364 Interest received 224,418 198,644 112,212 101,706 Inventory receipts on sales 473,597 436,397 433,211 422,709 Other receipts 27,178 15,920 99,174 94,120 GST receipts on sales 1,082 3,148 1,082 3,148 GST receipts from taxation authority 42,094 48,513 42,094 46,975 Developers contributions 9 9,514 9 9,514
Payments Employee benefits (107,158) (108,271) (107,158) (108,271) Accommodation (12,522) (13,185) (12,522) (13,185) Supplies & services (82,086) (85,739) (59,497) (47,812) Finance costs (159,915) (161,917) (160,082) (161,750) Purchase and development of inventory (398,732) (342,801) (380,501) (309,035) GST payments on purchases (71,663) (72,891) (70,707) (72,891) GST payments to taxation authority - - - - Rental property payments (373,202) (385,503) (373,202) (385,503) Other payments (210,470) (247,536) (189,755) (268,141) Net cash used in operating activities 43 6,096 60,716 (12,176) 78,007
CASH FLOWS FROM INVESTING ACTIVITIES Receipts Proceeds from the sale of non-current physical assets 119,550 101,657 119,550 101,657 Home loan repayments received 912,820 750,243 3 - Proceeds on obtaining control of associate - 6,197 - - Other investing receipts - 3 55,000 125,003 Payments Purchase of non-current physical assets 44 (174,354) (303,271) (173,674) (302,613) New home loans advanced (1,359,365) (1,138,475) - (23) Other investing payments - (1,950) (495,000) (525,000) Net cash used in investing activities (501,349) (585,596) (494,121) (600,976)
CASH FLOWS FROM FINANCING ACTIVITIES Receipts Proceeds from borrowings WA Treasury Corporation 512,500 580,900 512,500 580,900 Payments Repayment of borrowings from WA Treasury Corporation (119,034) (198,009) (119,034) (198,009) Commonwealth Government (15,145) (14,769) (15,145) (14,769) Net cash used in financing activities 378,321 368,122 378,321 368,122
CASH FLOWS FROM STATE GOVERNMENT Capital contribution 3,360 113,183 3,360 113,183 Royalties for Regions Fund 51,246 12,964 51,246 12,964 Proceeds from grants 90,730 87,923 90,730 87,923 Net cash provided by State Government 145,336 214,070 145,336 214,070 Net increase in cash and cash equivalents 28,404 57,312 17,360 59,223 Cash and cash equivalents at the beginning of the period 443,685 386,373 207,281 148,058 CASH AND CASH EQUIVALENTS AT THE END OF PERIOD 43 472,089 443,685 224,641 207,281
The Statement of Cash Flows should be read in conjunction with the accompanying notes. Annual Report 2014 – 2014 15 Report Annual 133 134 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
1. Australian Accounting Standards
General
The Housing Authority (the "parent entity") and controlled entities financial statements for the year ended 30 June 2015 have been prepared in accordance with Australian Accounting Standards. The term 'Australian Accounting Standards' includes Standards and Interpretations issued by the Australian Accounting Standard Board (AASB).
The Housing Authority has adopted any applicable, new and revised Australian Accounting Standards from their operative dates.
Early adoption of standards
The Consolidated Entity cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 ʻApplication of Australian Accounting Standards and Other Pronouncementsʼ. No Australian Accounting that have been issued or amended (but not operative) have been early adopted by the Housing Authority for the annual reporting period ended 30 June 2015.
2. Summary of significant accounting policies
(a) General statement
The Housing Authority is a not-for-profit entity that prepares general purpose financial statements in accordance with the Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB as applied by the Treasurerʼs instructions. Several of these are modified by the Treasurer's Instructions to vary application, disclosure, format and wording.
The Financial Management Act 2006 and the Treasurerʼs instructions impose legislative provisions that govern the preparation of financial statements and take precedence over Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB.
Where modification is required and has had a material or significant financial effect upon the reported results, details of that modification and the resulting financial effect are disclosed in the notes to the financial statements.
(b) Basis of preparation
The financial statements have been prepared on the accrual basis of accounting using the historical cost convention, modified by the revaluation of land and buildings, and certain financial instruments which have been measured at fair value. The accounting policies adopted in the preparation of the financial statements have been consistently applied throughout all periods presented unless otherwise stated. The financial statements are presented in Australian dollars and all values are rounded to the nearest thousand dollars ($'000) or, in certain cases, to the nearest dollar.
(c) Basis of consolidation
The reporting entity comprises the Authority and controlled entities included in note 2(d).
The consolidated financial statements have been prepared by combining the financial statements of all entities that comprise the Consolidated Entity, being The Housing Authority (the "parent entity") and its controlled entities, in accordance with AASB 127 “Consolidated and Separate Financial Statements” and modified by Treasurer's Instruction 1105. Consistent accounting policies have been applied and all inter-entity balances, transactions and unrealised profits arising within the Consolidated Entity are eliminated in full.
Subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from the date on which control is transferred out of the group. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(d) Legal form of controlled entities
(i) The Keystart Housing Scheme includes a trust and company structure set up to enable funds to be raised through the Housing Authority at competitive rates and on lent to Keystart borrowers for the purchasing of owner occupied homes. The structure comprises of: - The Keystart Housing Scheme Trust established by a Deed of Trust in the State of Western Australia, dated 5 April 1989 with Keystart Loans Ltd (a special purpose nominal capital company) as trustee and the Authority is the sole beneficiary of the trust. Keystart Scheme Management Pty Ltd has been appointed as Manager. - Keystart Support Trust - A special purpose trust used to provide financial support to the Scheme if required. The Housing Authority is the sole beneficiary of this trust. - Keystart Bonds Ltd - A special purpose nominal capital company being the Issuer with KPMG Financial Advisory Services (Australia) Pty Ltd (replacing Oakvale Capital Ltd) as treasury advisor. - Keystart Support Pty Ltd - A special purpose nominal capital company as trustee of the support trust. The manager is Keystart Scheme Management Pty Ltd. - Keystart Support (Subsidiary) Pty Ltd - A special purpose nominal capital company created to assist Keystart Support Pty Ltd in its obligations.
Keystart Scheme Management Pty Ltd - A special purpose nominal capital company created to provide management services to the Keystart Trustee and group of companies. All of these Keystart trusts and companies have been established in the State of Western Australia. The financial transactions for these entities have no effect on the net profit of the Housing Authority. The Housing Authority provides a support arrangement to the structure through the Support Trust.
(ii) Homeswest Loan Scheme Trust - A special purpose Trust established by a Trust Deed in the State of Western Australia dated 19 September 1995 to operate as an agent for the Housing Authority's home loan schemes. In its capacity as agent, the Trust receives advances for the purpose of providing mortgages to Western Australians. The Housing Authority is the sole beneficiary of the Trust, and Keystart Loans Ltd is the trustee of the Trust.
(iii) Goldmaster Enterprises Pty Ltd - A property development company to assist the Housing Authority achieve its objectives. The Authority has equity interest of 87.18% and effective control via representation on the Board of this company, effective 27 August, 2014 Annual Report 2014 – 2014 15 Report Annual 135 136 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(e) Ownership interest
The Housing Authority is the instigator of the Keystart Housing Scheme and has effective control over the whole structure either directly or indirectly through various agreements which constitute the structure and to which it is a party. The Board of Directors of the Keystart group of companies comprise one Director from the Housing Authority and seven directors from the private sector.
The Housing Authority is a shareholder in Goldmaster Enterprises Pty Ltd and comprises two directors from the Government of Western Australia and one from the private sector.
The ownership interest held by the Housing Authority in the companies is as follows: Keystart Bonds Ltd : 100% of the total shareholding Keystart Loans Ltd : 100% of the total shareholding Keystart Support Pty Ltd : 100% of the total shareholding Keystart Support (Subsidiary) Pty Ltd: 100% of the total shareholding Keystart Scheme Management Pty Ltd: 100% owned by Keystart Loans Ltd Goldmaster Enterprises Pty Ltd: 87.18% owned by the Housing Authority.
Controlled entities and contribution to retained earnings. Contribution to Investment Percentage Consolidated Entity shares Name owned result ($000) at cost ($000) 2015 2014 2015 2014 2015 2014 Goldmaster Enterprises Pty Ltd 87.18 54.5 37,350 18,000 Profit/(loss) (570) 1,518 Keystart Bonds Ltd 100 100 Nil Nil - - Keystart Loans Ltd 100 100 Nil Nil - - Keystart Support Pty Ltd 100 100 Nil Nil - - Keystart Support (Subsidiary) Pty Ltd 100 100 Nil Nil - - Keystart Housing Scheme Trust (Loss)/Profits 11,278 (6,211) Transfer from Reserve 7 7 Keystart Support Trust Nil Nil Homeswest Loan Scheme Trust Nil Nil
The Housing Authority is obligated to the Scheme in that it has given various representations and obligations to investors or other creditors to the extent that it will meet cash shortfalls and losses from the Scheme. Funding for Keystart is through the Housing Authority with no borrowings outstanding through Keystart Bonds Ltd. The Housing Authority's obligations to the various participants are contained in a Support Agreement of the Scheme. No subsidies were required from the Housing Authority for the 2014-15 financial year. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(f) Property, plant and equipment
Capitalisation/expensing of assets
Items of property, plant and equipment costing $5,000 or more are recognised as assets and the cost of utilising assets is expensed (depreciated) over their useful lives. Items of property, plant and equipment costing less than $5,000 are immediately expensed direct to the Statement of Comprehensive Income (other than where they form part of a group of similar items which are significant in total).
Initial recognition and measurement
Property, plant and equipment are initially recognised at cost.
For items of property, plant and equipment acquired at no cost or for nominal cost, the cost is the fair value at the date of acquisition.
Subsequent measurement
Subsequent to initial recognition as an asset, the revaluation model is used for the measurement of land, buildings and historical cost for all other property, plant and equipment. Land and buildings are carried at fair value less accumulated depreciation (buildings only) and accumulated impairment losses. All other items of property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Where market-based evidence is available, the fair value of land and buildings is determined on the basis of current market values determined by reference to recent market transactions. When buildings are revalued by reference to recent market transactions, accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount.
Additions to non-current physical assets are measured at cost and are considered to represent fair value. less than one year old are measured at construction cost, which is considered to represent fair value, plus land at fair value.
Land and buildings are independently valued annually by the Western Australian Land Information Authority (Valuation Services) and recognised annually to ensure that the carrying amount does not differ materially from the asset's fair value at the end of the reporting period.
When buildings are revalued, the accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount.
Rental properties represent the properties acquired or constructed for public housing. They also include State owned properties leased to State Government departments for Government employees housing.
Community Housing properties include properties acquired under the Commonwealth and State programs of Crisis Accommodation and Community Housing and Joint Charity Properties.
Shared Equity properties represent the equity in dwellings constructed or purchased under the Shared Equity Scheme. Under the scheme the Housing Authority and the purchaser are co-owners of the properties constructed or purchased as Tenants in Common with the purchaser having total occupation of the dwelling. Annual Report 2014 – 2014 15 Report Annual 137 138 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
Other Properties includes offices and commercial properties which are owned or are leased from various organisations and individuals.
Derecognition
Upon disposal or derecognition of an item of property, plant and equipment and infrastructure, any revaluation surplus relating to that asset is transferred to retained earnings.
Asset revaluation reserve
The asset revaluation reserve is used to record increments and decrements on the revaluation of non-current assets on a class of assets basis.
Depreciation and amortisation
All non-current assets having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits. Land is not depreciated. Depreciation for the Consolidated Entity's assets is calculated on a straight line basis, using rates which are reviewed annually.
Major depreciation rates are: 2015 2014
Rental properties 2% 2% Community Housing properties 2% 2% Shared Equity properties 3% 3% Other properties - Commercial properties 2% 2% - Office properties 5% 5% Plant & equipment 10% - 50% 10% - 50% Intangible assets 20% - 50% 20% - 50%
Works of art controlled by the Authority are classified as property, plant and equipment. These are anticipated to have indefinite useful lives. Their service potential has not, in any material sense, been consumed during the reporting period and consequently no depreciation has been recognised
Land is not depreciated.
(g) Buildings under construction
Buildings under construction are recorded at cost which includes all costs directly related to specific constructions plus capitalised administration charges incurred in connection with these activities.
(h) Inventories
Current Inventories are measured at the lower of cost or net realisable value. Costs includes the cost of acquisition/development and other capitalised costs. After development is completed, other holding charges are expensed as incurred.
Non-current inventories consists of both broad hectare land and lots under development, excluding lots available for external sale (current inventory), which are valued at acquisition cost plus capitalised costs. Developed lots on which dwellings are subsequently constructed by the Housing Authority are transferred to the stock of Rental properties at fair value as determined by the Valuer General at the date of practical completion. The difference between this valuation and the cost of the land transferred to Rental properties represents a revaluation increment which is brought to account as an increase in the asset revaluation reserve.
Work in progress for house and land packages are classified as non - current whilst they are being constructed and reclassified as current when they are available for sale. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(h) Inventories (continued)
Joint Operations
The Housing Authority has interests in joint arrangements that are joint operations. A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. A joint operation is a joint arrangement whereby the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Housing Authority recognises its interests in the joint operations by recognising the assets it controls and the liabilities that it incurs in respect of the joint arrangements. The Housing Authority also recognises the expenses that it incurs and its share of the income that it earns from the sale of goods and services by the joint operations. Joint operations land represents the Housing Authority's equity in Joint operations land development projects. Development costs represent the agreed proportion of development costs incurred plus capitalised costs. Land owned by the Housing Authority is shown at cost plus capitalised costs. Details of the Housing Authority's interests are set out in note 22.
(i) Loans and receivables
Receivables are recognised at original invoice amount less an allowance for any uncollectible amounts (i.e. impairment). The collectability of receivables is reviewed on an ongoing basis and any receivables identified as uncollectable are written-off against the allowance account. The allowance for uncollectable amounts is raised when there is objective evidence that the Consolidated Entity will not be able to collect the debts. The carrying amount is equivalent to fair value. These debts are due for settlement within 30 days with the exception of the following receivable categories.
Receivables land - are carried at nominal amounts. Sales and receivables are recognised once the debtor has obtained financing and the sale has become unconditional. Land sales are on a 30 day term once the sale has become unconditional. Receivables rent from tenants - are carried at nominal amounts due less any provision for impairment. Rent receivable is due weekly in advance. Receivables rental bonds - are carried at nominal amounts due less any provision for impairment. Rental bond assistance receivables represent advances made to qualifying persons for the purpose of renting properties external to the Housing Authority. Each advance is repayable in minimum fortnightly payments of $15 for loans granted prior to 1 July 2009 and $25 per fortnight for loans granted from 1 July 2009 with remaining balance being collectable on vacation of property unless an arrangement is entered into to repay over time.
Loans
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The collateral held for these loans is by a registered mortgage held over the property.
Recognition and derecognition Financial assets that are carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the Statement of Comprehensive Income. Loans and receivables are initially recognised at fair value. Transaction costs, including loan origination expenses, are included in the measurement of all loans and advances. The loan origination fees are being amortised in equal instalments over the average life of the loans. Regular way purchases and sales of financial assets are recognised on trade date, which is the date on which the Consolidated Entity commits to purchase or sell the assets.
Financial assets are derecognised when the right to receive cash flows from the financial assets have expired or have been transferred and the Consolidated Entity has transferred substantially all the risks and rewards of ownership.
Subsequent measurement Loans and receivables are carried at amortised cost using the effective interest method.
Financial assets at fair value through profit and loss are subsequently carried at fair value. Gains or losses arising from changes in fair value of the 'financial assets at fair value through profit or loss' category are presented in the Statement of Comprehensive Income in the period in which they arise.
Fair value The fair value of the financial assets traded in active markets is based on quoted market prices at the Statement of Financial Position date. If the market for a financial asset is not active (and for unlisted securities), the Consolidated Entity establishes fair value by using valuation techniques. These include the use of recent armʼs length transactions, reference to other instruments that are substantially the same, discounted
Annual Report 2014 – 2014 15 Report Annual cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs. 139 140 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(i) Loans and receivables (continued)
Impairment of loans The Consolidated Entity assesses at the end of the reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. In case of loans and receivables, an allowance for impairment is made when there is objective evidence that the loan will not be collectable. When a receivable is impaired, the Consolidated Entity reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument and continues unwinding the discount as interest income.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the Statement of Comprehensive Income within 'Doubtful Debts expenseʼ. When a loan or advance is uncollectable, it is written off against the allowance account for loans and advances. Subsequent recoveries of amounts previously written off are credited against 'Doubtful Debts expense' in the Statement of Comprehensive Income.
(j) Derivative financial instruments and hedging
There were no derivative financial instruments related to the Consolidated Entity in the current financial year.
(k) Intangible assets
Computing software and development
Capitalisation/expensing of assets
Acquisition of intangible assets costing less than $5,000 are expensed in the year of acquisition. Where software is an integral part of the related hardware, it is treated as property, plant and equipment. Where the software is not an integral part of the related hardware, it is treated as an intangible asset.
Intangible assets are initially recognised at cost. For assets acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.
Costs associated with the acquisition and development of computer systems and software are amortised from the commencement of live production of the system. Development costs are deferred to future periods to the extent that future economic benefits, are expected beyond any reasonable doubt, to be equal to or exceed those costs. Deferred costs are amortised, from the commencement of live production of the system, on a straight line basis over the period of their expected benefit.
Amortisation for intangible assets with finite useful lives is calculated for the period of the expected benefit (estimated useful life which is reviewed annually) on the straight line basis. All intangible assets controlled by the consolidated entity have a finite useful life and zero residual value. The expected useful lives for each class of intangible asset are: 2015 2014 Computing software 20% - 50% 20% - 50% Computing development 20% 20%
(l) Other financial assets
(a) Deposits at call
The fair values of the Bank bills are determined using generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued) (l) Other financial assets (continued)
(c) Parent Financial Statements The investments in subsidiaries and associate are accounted for in the parent financial statements at cost. The Housing Authority recognises dividends from the subsidiaries and associate when its right to receive the dividend is established.
Investments in associate are tested for any indication of impairment at the end of the reporting period. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the investment is considered impaired and is written down to the recoverable amount and an impairment loss is recognised.
(d) Consolidated Financial Statements
(i) The investment in associates is accounted for in the consolidated view of the financial statements using the "Equity" method of accounting after initially being recognised at cost. Any goodwill is included in the carrying amount of the investment.
The Housing Authority's share of its associate's post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post- acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from the associate are recognised as a reduction in the carrying amount of the investment.
When the Housing Authority's share of losses in the associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Housing Authority does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Housing Authority and its associates are eliminated to the extent of the Housing Authority's interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the associate have been changed where necessary to ensure consistency with the policies adopted by the Consolidated Entity.
(ii) The investment in subsidiary is accounted for in the consolidated financial statements in accordance with AASB 127. In preparing consolidated financial statements, the financial statements of the parent and the subsidiaries have been combined line by line by adding together like items of assets, liabilities, equity, income and expenses. In order that the consolidated financial statements present financial information about the Consolidated Entity as that of a single economic entity:
(a) the carrying amount of the parentʼs investment in each subsidiary and the parentʼs portion of equity of each subsidiary are eliminated.
(b) minority interests in the profit or loss of consolidated subsidiaries for the reporting period are identified; and
(c) minority interests in the net assets of consolidated subsidiaries are identified separately from the parent shareholdersʼ equity in them. Minority interests in the net assets consist of: (i) the amount of those minority interests at the date of the original combination calculated in accordance with AASB 3 - Business Combinations and (ii) the minorityʼs share of changes in equity since the date of the combination.
(m) Non-current assets held for sale
Non-current assets held for sale are recognised at the lower of carrying amount or fair value less costs to sell and are disclosed separately in the Statement of Financial Position. Assets classified as held for sale are not depreciated or amortised. Annual Report 2014 – 2014 15 Report Annual 141 142 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(n) Impairment of assets
Property, plant and equipment and intangible assets are tested for any indication of impairment at the end of each reporting period. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an impairment loss is recognised. Where an asset measured at cost is written down to recoverable amount, an impairment loss is recognised in profit or loss. Where a previously revalued asset is written down to recoverable amount, the loss is recognised as a revaluation decrement in other comprehensive income. As the Consolidated Entity is a not-for-profit entity, unless a specialised asset has been identified as a surplus asset, the recoverable amount is the higher of an assetʼs fair value less costs to sell and depreciated replacement cost.
The risk of impairment is generally limited to circumstances where an assetʼs depreciation is materially understated, where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or expiration of the asset's future economic benefits and to evaluate any impairment risk from falling replacement costs.
Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment at the end of each reporting period irrespective of whether there is any indication of impairment
The recoverable amount of assets identified as surplus assets is the higher of fair value less costs to sell and the present value of future cash flows expected to be derived from the asset. Surplus assets carried at fair value have no risk of material impairment where fair value is determined by reference to market-based evidence. Where fair value is determined by reference to depreciated replacement cost, surplus assets are at risk of impairment and the recoverable amount is measured. Surplus assets at cost are tested for indications of impairment at the end of each reporting period.
(o) Payables
Payables are recognised when the Consolidated Entity becomes obliged to make future payments as a result of a purchase of assets or services at the amounts payable. The carrying amount is equivalent to fair value, as they are generally settled within 30 days with the exception of the following classes of payables.
Payables land deposits - are recognised on receipt of cash. When the sale becomes unconditional the Housing Authority retains the deposit as part of the sale process. Payables construction retention monies - are repaid upon 100% completion of the contract with 2.5% withheld to satisfactory completion of maintenance agreement. Payables rental bonds - tenant bonds are payable on the tenant vacating the premises. The ultimate amount to be paid is dependent upon the condition of the property upon the tenant vacating, but is not more than the carrying amount of the liability. Payables water consumption - liabilities are recognised for amounts to be paid in the future for water usage. Liabilities are settled on 90 day terms.
(p) Borrowings
All borrowings are initially recognised at fair value, being the net proceeds received. Subsequent measurement is at amortised cost using the effective interest rate method. Interest is charged as an expense as it accrues. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(q) Income
Revenue recognition
Revenue is recognised and measured at the fair value of consideration received or receivable. Revenue is recognised for the major business activities as follows:
(i) Rental property revenue The Housing Authority charges rents in accordance with section 30 of the Housing Act. The basis for the amount of rent to be charged is determined from market rent information received from the Valuer General and due consideration to regional rental markets. Rental property revenue represents the net rental revenue which consists of market rents less vacancies, concessions and rental subsidies granted throughout the year. Rental income is recognised on a straight-line basis over the lease term.
(ii) Sales Revenue from land sales is recognised when the contract for sale becomes unconditional.
(iii) Grants, donations, gifts and other non-reciprocal contributions. Revenue is recognised at fair value when the Consolidated Entity obtains control over the assets comprising the contributions, usually when cash is received. Other non-reciprocal contributions that are not contributions by owners are recognised at their fair value. Contributions of services are only recognised when a fair value can be reliably determined and the services would be purchased if not donated.
Royalties for Regions funds are recognised as revenue at fair value in the period in which the Housing Authority obtains control over the funds. The Housing Authority obtains control of the funds at the time the funds are deposited into the Housing Authority's bank account.
(iv) Interest Interest income is recognised as interest accrues using the effective interest rate method.
Gains
Realised and unrealised gains are usually recognised on a net basis. These include gains arising on the disposal of non-current assets.
(r) Insurance
In accordance with Treasurer's Instruction 812 the Housing Authority maintains an appropriate level of insurance cover for insurable risks.
Effective from 1 July 2004 the Housing Authority has adopted a policy of not insuring its residential property assets as it is considered uneconomical. As part of the Housing Authority's ongoing risk management process a comprehensive analysis of the Housing Authority's risk exposure to its residential property assets was completed during 2012. The Housing Authority's residential property assets continue to remain not insured as it is considered uneconomical. The Housing Authority's other insurance programs continue to be a combination of insurance policies provided by commercial insurance providers and the Western Australian Government's RiskCover Fund. As per Treasurerʼs Instruction 825, Insurance is complemented by a comprehensive approach to Risk Management and prudent management policies and practices. Annual Report 2014 – 2014 15 Report Annual 143 144 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(s) Provisions
Provisions are liabilities of uncertain timing or amount. The Housing Authority only recognises a provision where there is a present legal, equitable or constructive obligation as a result of a past event and when the outflow of resources embodying economic benefits is probable and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate.
(i) Employee benefits
All annual leave and long service leave provisions are in respect of employees' services up to the end of the reporting period.
Annual leave
Annual leave is not expected to be settled wholly within 12 months after the end of reporting period and is therefore considered to be other long term employee benefitsʼ. The annual leave liability is recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.
When assessing expected future payments consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions, as well as the experience of employee departures and periods of service. The expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows
The provision for annual leave is classified as a current liability as the Housing Authority does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
Long service leave
Long service leave is not expected to be settled wholly within 12 months after the end of the reporting period is recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.
When assessing expected future payments consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions, as well as the experience of employee departures and periods of service. The expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Unconditional long service leave provisions are classified as current liabilities as the Housing Authority does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of reporting period. Pre-conditional and Conditional long service leave provisions are classified as non-current liabilities because the Housing Authority has an unconditional right to defer the settlement of the liabilities until the employee has completed the requisite years of service. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(s) Provisions (continued)
Superannuation
The Government Employees Superannuation Board (GESB) and other fund providers administer public sector superannuation arrangements in Western Australia in accordance with legislative requirements. Eligibility criteria for membership in particular schemes for public sector employees vary according to commencement and implementation dates.
Eligible employees contribute to the Pension Scheme, a defined benefit pension scheme closed to new members since 1987, or the Gold State Superannuation Scheme (GSS), a defined benefit lump sum scheme closed to new members since 1995.
Employees commencing employment prior to 16 April 2007 who were not members of either the Pension Scheme or the GSS became non-contributory members of the West State Superannuation Scheme (WSS). Employees commencing employment on or after 16 April 2007 became members of the GESB Super Scheme (GESBS). From 30 March 2012, existing members of the WSS or GESBS and new employees have been able to choose their preferred superannuation fund provider. The Authority makes contributions to GESB or other fund providers on behalf of employees in compliance with the Commonwealth Governmentʼs Superannuation Guarantee (Administration) Act 1992. Contributions to these accumulation schemes extinguish the Authorityʼs liability for superannuation charges in respect of employees who are not members of the Pension Scheme or GSS.
The Pension Scheme and the pre-transfer benefit for employees who transferred to the GSS are defined benefit schemes. These benefits are wholly unfunded and the liabilities for future payments are provided at the end of the reporting period. The liabilities under these schemes have been calculated separately for each scheme annually by external actuaries using the projected unit credit method.
The expected future payments are discounted to present value using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.
The GSS, the WSS and the GESBS Scheme, where the current service superannuation charge is paid by the Authority to the GESB, are defined contribution schemes. The liabilities for current service superannuation charges under the GSS Scheme, the WSS Scheme, and the GESBS Scheme are extinguished by the concurrent payment of employer contributions to the GESB.
The GSS is a defined benefit scheme for the purposes of employees and whole-of-government reporting. However, from an agency perspective, apart from the transfer benefits, it is a defined contribution plan under AASB 119.
(ii) Other
Employment on-costs
Employment on-costs, including workersʼ compensation insurance and payroll tax, are not employee benefits and are recognised separately as liabilities and expenses when the employment to which they relate has occurred. Employment on-costs are included as part of the Authorityʼs ʻOther expenses' and the related liability is included in Employment on-costs provision.
Development levies
Is a provision calculated on lots sold and community projects representing fencing and landscaping incentives for first home buyers to purchase Housing Authority land. The provision represents the estimated liability at balance sheet date for future claims by the purchasers against the Housing Authority.
(t) Accrued salaries
Accrued salaries represent the amount due to staff but unpaid at the end of the financial year. Accrued salaries are settled within a fortnight of the financial year end. The Authority considers the carrying amount of accrued salaries to be equivalent to its fair value. Annual Report 2014 – 2014 15 Report Annual 145 146 Housing Authority Housing
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2. Summary of significant accounting policies (continued)
(u) Borrowing costs
Borrowing costs are expensed when incurred and represents the total finance costs in the Statement of Comprehensive Income.
(v) Superannuation expense
Superannuation expense is recognised in the Statement of Comprehensive Income in profit or loss for defined contribution plans, including the concurrent payment of employer contributions to the GSS scheme, as and when the contributions fall due.
For defined benefit plans (the Pension Scheme and the pre-transfer component of the GSS), changes in the defined benefit obligation are recognised in the Statement of Comprehensive Income either in profit or loss, or other comprehensive income as follows: (i) profit or loss: current service cost; past service cost; and interest cost. (i) other comprehensive income: actuarial gains and losses.
(w) Leases
The Housing Authority has entered into a number of operating lease arrangements for buildings and vehicles where the lessors effectively retain the majority of the risks and benefits incidental to ownership of the items held under the operating leases. Equal instalments of the lease payments are charged to the Statement of Comprehensive Income over the lease term, as this is representative of the pattern of benefits to be derived from the leased property.
(x) Rental expenses
Expenses incurred relating to the Housing Authority's owned or leased rental properties are accounted for in the Rental expenses line of the Statement of Comprehensive Income. These expenses which directly relate to the Rental Program include maintenance, rates, insurance expenses and renovations and improvements.
(y) Comparative figures
Comparative figures are, where appropriate, reclassified to be comparable with the figures presented in the current financial year.
(aa) Segment Information
The Consolidated Entity's operations are divided into four specific services. These are: Rental Housing - providing access to affordable rental accommodation for low to moderate income Western Australians; Government Regional Officers' Housing - providing access to rental accommodation for government employees in regional areas; Home Loans - providing realistic home ownership opportunities for low to moderate income Western Australians provided by the Housing Authority and through its Keystart Housing Scheme; Land and Housing Supply - affordable housing sales and provision of low to medium priced subdivided land for sale. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(ab) Financial Instruments
In addition to cash, the Consolidated Entity has three categories of financial instruments:
Loans and receivables Financial liabilities Financial assets at fair value through profit and loss
These have been disaggregated into the following classes:
Financial Assets Cash and cash equivalents Loans and receivables Short term deposits
Financial Liabilities Payables WATC borrowings Commonwealth borrowings
Initial recognition and measurement of financial instruments is at fair value which normally equates to the transaction cost or the face value. Subsequent measurement is at amortised cost using the effective interest rate method. The Consolidated Entity does not enter into financial instruments for speculative purposes.
The fair value of short-term receivables and payables is the transaction cost or the face value because there is no interest rate applicable and subsequent measurement is not required as the effect of discounting is not material.
Keystart
The entity's activities expose it to a variety of financial risks; market risk (including interest rate risk), credit risk and liquidity risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the entity. The entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis (specifically VaR - Value at Risk model) in the case of interest rate risk and ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by the Treasury Committee under policies approved by the Keystart Board of Directors. The Treasury Committee identifies, evaluates and hedges financial risks in close co-operation with the entityʼs operating units. The Keystart Board provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, use of non-derivative financial instruments and investment of excess liquidity.
Market Risk
Keystart (i) Interest rate risk
Borrowings issued at short term rates expose the entity to interest rate risk if changes to rates are not passed on to customers. Borrowings issued at fixed rates expose the entity to fair value interest rate risk. The entityʼs policy is to hedge (i.e. fix) a portion of its borrowings portfolio within the following hedge ratio limits of total liabilities:
HEDGE RATIO LIMITS BM Min Max BM = Benchmark 0-1 Year 55% 0% 70% 1-2 Years 20% 0% 30% 2-3 Years 10% 0% 20% 3+ Years 0% 0% 15%
The ratio of hedging applied is calculated with reference to the borrowings only, and does not factor the loan assets held by the entity.
During the financial year ending 30 June 2015 and the prior financial year, there were no hedges used by the Trust. Borrowings were denominated in Australian Dollars. Annual Report 2014 – 2014 15 Report Annual 147 148 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued)
(ab) Financial Instruments (continued) (ii) Summarised sensitivity analysis
The Consolidated Entity uses VaR Analysis to measure its sensitivity to movements in interest rates. VaR models are designed to measure market risk in a normal market environment. The VaR risk measure estimates the potential loss in profit over a given holding period for a specific confidence level. The VaR methodology is a statistically defined, probability - based approach that takes into account market volatilities as well as risk diversification by recognising offsetting positions and correlations between products. The main risk arises where the Consolidated Entity cannot pass on changes in borrowing interest rates to its loan receivables. The VaR for the Consolidated Entity is traditionally low because the Consolidated Entity is able to pass on changes in its borrowing interest rates. Based on a 99% confidence level and a 250 day observation period, the VaR for Keystart was favourable at 0.38% of its capital at 30 June 2015 (2014: 0.22%)
The limitation of the VaR model is that historical data may not provide the best estimates of the risk factor changes in the future and may fail to capture the risk of possible extreme adverse market movements which have not occurred in past calculations.
2015 Historical VaR (99%, 20 day) By risk type Average Minimum Maximum Year End $'000 $'000 $'000 $'000
Total VaR Exposure 460 262 1,082 1082 2014 Historical VaR (99%, 20 day) By risk type Average Minimum Maximum Year End $'000 $'000 $'000 $'000
Total VaR Exposure 612 221 1,056 582
Credit Risk Exposure The Consolidated Entity's maximum exposures to credit risk at reporting date in relation to each class of recognised financial asset is the carrying amount of those assets as indicated in the Statement of Financial Position. The Consolidated Entity's credit risk is spread over a significant number of parties and is concentrated only to the extent of the WA residential market. The Consolidated Entity is therefore not materially exposed to any particular individual party or group of parties.
The Consolidated Entity's maximum credit risk exposure in relation to these is as follows:
The Consolidated Entity minimises concentrations of credit risk in relation to loans and advances by undertaking transactions with a number of borrowers, within specified maximum limits based upon the assessment of each borrower's ability to service a mortgage. The Consolidated Entity concentrates 100% of its lending to purchase of residential real estate within Western Australia. Security is provided to the Consolidated Entity through a mortgage over the property.
The maximum exposure to credit risk at reporting date is the higher of the carrying value and fair value of each class of receivables. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
2. Summary of significant accounting policies (continued) (ab) Financial Instruments (continued)
Keystart Credit risk arises from transactions that give rise to actual, contingent or potential claims against any borrower or counterparty.
Credit risk is managed on a group basis through having prudential lending policies to mitigate borrower risk. This includes having maximum Debt Servicing Ratios and strict income verification procedures. In addition to these credit policies, Keystart maintains adequate provisions for bad and doubtful debts and capital adequacy ratios to manage the effects of any losses. Counterparty credit risk arises from cash and cash equivalents, loans and receivables and deposits with banks and financial institutions including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ʻAʼ are accepted. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. Counterparties must have Standard and Poorʼs long term rating of at least “A+” for any derivative transaction executed and “A” (or better) for authorised investments.
Housing Authority In relation to other receivables (including rental and bond debtors), the Housing Authority has a minimal credit risk due to the receivables debt being spread across a number of debtors exceeding 45,000. The collectability of rental receivables is reviewed on an ongoing basis in accordance with the Housing Authority's policy and procedure manuals. These policy and procedure manuals are reviewed by Management on a regular basis.
Liquidity Risk The Consolidated Entity is exposed to liquidity risk in respect of its payable, accrued employee expenses and government borrowings, in that the Consolidated Entity needs to be able to pay these amounts when they fall due. The Consolidated Entity has implemented and maintains robust cash management practices, including day-to-day monitoring and regular liquidity reporting to the Accountable Officer. These practices ensure cash resources are adequate to meet future commitments.
Keystart Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the Treasury Committee aims at maintaining flexibility in funding by keeping committed credit lines available. Management monitors rolling forecasts of the entityʼs liquidity reserve on the basis of expected cash flow.
For the purpose of the Statement of Cash Flows, cash and cash equivalents assets comprise cash on hand and short-term deposits with original maturities of three months or less that are readily convertible to a known amount of cash and which are subject to insignificant risk of changes in value.
(ac) Capitalisation policy
The cost of non-current assets constructed by the Housing Authority includes the cost of all materials used in construction, direct labour costs incurred on the project during construction and an appropriate proportion of overheads.
(ad) Income tax
The parent entity and its subsidiary, Keystart Housing Scheme Trust, are income tax exempt bodies. Goldmaster Pty Ltd is a tax paying entity. Current income tax is the tax on the current period's taxable income based on the applicable income tax rate adjusted for changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates when the assets are expected to be recovered or liabilities settled. No deferred tax asset or liability is recognised in relation to temporary differences if they arose in a transaction , other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. Annual Report 2014 – 2014 15 Report Annual 149 150 Housing Authority Housing
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2. Summary of significant accounting policies (continued)
(ae) Contributed equity
AASB Interpretation 1038 ʻContributions by Owners Made to Wholly-Owned Public Sector Entitiesʼ requires transfers in the nature of equity contributions to be designated by the Government (the owner) as contributions by owners (at the time of, or prior to transfer) before such transfers can be recognised as equity contributions. Capital contributions (appropriations) have been designated as contributions by owners by TI 955 ʻContributions by Owners made to Wholly Owned Public Sector Entitiesʼ and have been credited directly to Contributed Equity. Transfer of net assets to/from other agencies are designated as contributions by owners where the transfers are non-discretionary and non-reciprocal.
(af) Assets and services received free of charge or for nominal cost
Assets or services received free of charge or for nominal cost, that the Authority would otherwise purchase if not donated, are recognised as income at the fair value of the assets services where they can be reliably measured. A corresponding expense is recognised for services received. Receipts of assets are recognised in the Statement of Financial Position
Assets or services received from other State Government agencies are separately disclosed under Income from State Government in the Statement of Comprehensive Income 3. Disclosure of changes in accounting policy and estimates.
Initial application of an Australian Accounting Standard
The Housing Authority has applied the following Australian Accounting Standards effective for annual reporting periods beginning on or after 1 July 2014 that impacted the Housing Authority.
Int 21 Levies This Interpretation clarifies the circumstances under which a liability to pay a government levy imposed should be recognised. There is no financial impact for the Authority at reporting date.
AASB 10 Consolidated Financial Statements This Standard, issued in August 2011, supersedes AASB 127 Consolidated and Separate Financial Statements and Int 112 Consolidation – Special Purpose Entities, introducing a number of changes to accounting treatments. The adoption of the new Standard has no financial impact for the Authority.
AASB 11 Joint Arrangements This Standard, issued in August 2011, supersedes AASB 131 Interests in Joint Ventures, introduces new principles for determining the type of joint arrangement that exists, which are more aligned to the actual rights and obligations of the parties to the arrangement. There is no financial impact for the Housing Authority as the new standard continues to require the recognition of the Authorityʼs share of assets and share of liabilities for the unincorporated joint operation.
AASB 12 Disclosure of Interests in Other Entities This Standard, issued in August 2011, supersedes disclosure requirements in AASB 127 Consolidated and Separate Financial Statements, AASB 128 Investments in Associates and AASB 131 Interests in Joint Ventures. There is no financial impact.
AASB 127 Separate Financial Statements This Standard, issued in August 2011, supersedes AASB 127 Consolidated and Separate Financial Statements removing the consolidation requirements of the earlier standard whilst retaining accounting and disclosure requirements for the preparation of separate financial statements. There is no financial impact.
AASB 128 Investments in Associates and Joint Ventures This Standard supersedes AASB 128 Investments in Associates, introducing a number of clarifications for the accounting treatments of changed ownership interest. The adoption of the new Standard has no financial impact for the Authority as it does not hold investments in associates and joint ventures. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
AASB 1031 Materiality This Standard supersedes AASB 1031 (February 2010), removing Australian guidance on materiality not available in IFRSs and refers to guidance on materiality in other Australian pronouncements. There is no financial impact.
AASB 1055 Budgetary Reporting This Standard requires specific budgetary disclosures in the general purpose financial statements of not-for-profit entities within the General Government Sector. The Authority will be required to disclose additional budgetary information and explanations of major variances between actual and budgeted amounts, though there is no financial impact.
AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards [AASB 1, 2, 3, 5, 7,101, 107, 112, 118, 121, 124, 132, 133, 136, 138, 139, 1023 & 1038 and Int 5, 9, 16 & 17] This Standard gives effect to consequential changes arising from the issuance of AASB 10, AASB 11, AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures. There is no financial impact for the Authority.
AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities [AASB 132] This Standard adds application guidance to AASB 132 to address inconsistencies identified in applying some of the offsetting criteria, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net settlement. There is no financial impact.
AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets This Standard introduces editorial and disclosure changes. There is no financial impact.
AASB 2013-4 Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting [AASB 139] This Standard permits the continuation of hedge accounting in circumstances where a derivative, which has been designated as a hedging instrument, is novated from one counterparty to a central counterparty as a consequence of laws or regulations. The Authority does not routinely enter into derivatives or hedges, therefore there is no financial impact.
AASB 2013-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities – Control and Implementation Guidance for Not-for-Profit Entities – Control and Structured Entities [AASB 10, 12 & 1049] The amendments, issued in October 2013, provide significant guidance in determining whether a not-for-profit entity controls another entity when financial returns are not a key attribute of the investorʼs relationship. The Standard has no financial impact in its own right, rather the impact results from the adoption of the amended AASB 10.
AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments Part B of this omnibus Standard makes amendments to other Standards arising from the deletion of references to AASB 1031 in other Standards for periods beginning on or after 1 January 2014. It has no financial impact.
AASB 2014-1 Amendments to Australian Accounting Standards Part A of this Standard consists primarily of clarifications to Accounting Standards and has no financial impact for the Authority. Part B of this Standard has no financial impact as the Authority contributes to schemes that are either defined contribution plans, or deemed to be defined contribution plans. Part C of this Standard has no financial impact as it removes references to AASB 1031 Materiality from a number of Accounting Standards.
AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities This Standard relieves not-for-profit public sector entities from the reporting burden associated with various disclosures required by AASB 13 for assets within the scope of AASB 116 that are held primarily for their current service potential rather than to generate future net cash inflows. It has no financial impact. Annual Report 2014 – 2014 15 Report Annual 151 152 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
3. Disclosure of changes in accounting policy and estimates. (continued)
Future impact of Australian Accounting Standards not yet operative
The Housing Authority cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 ʻApplication of Australian Accounting Standards and Other Pronouncementsʼ. Consequently, the Housing Authority has not applied early any of the following Australian Accounting Standards that have been issued that may impact the Housing Authority. Where applicable, the Housing Authority plans to apply the following Standards from their application date. Operative for reporting periods beginning on/after
AASB 9 Financial Instruments - This Standard supersedes AASB 139 Financial Instruments: 1 Jan 2018 Recognition and Measurement, introducing a number of changes to accounting treatments. The mandatory application date of this Standard is currently 1 January 2018 after being amended by AASB 2012-6, AASB 2013-9, and AASB 2014-1 Amendments to Australian Accounting Standards. The Authority has not yet determined the application or the potential impact of the Standard.
AASB 15 Revenue from Contracts with Customers - This Standard establishes the principles that 1 Jan 2017 the Authority shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The Authority has not yet determined the application or the potential impact of the Standard.
AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 1 Jan 2018 2010) [AASB 1, 3, 4,5,7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Int 2, 5, 10, 12, 19 & 127] This Standard makes consequential amendments to other Australian Accounting Standards and Interpretations as a result of issuing AASB 9 in December 2010. The mandatory application date of this Standard has been amended by AASB 2012-6 and AASB 2014-1 to 1 January 2018. The Authority has not yet determined the application or the potential impact of the Standard.
AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, 1 Jan 2015 Materiality and Financial Instruments. Part C of this omnibus Standard defers the application of AASB 9 to 1 January 2017. The application date of AASB 9 was subsequently deferred to 1 January 2018 by AASB 2014-1. The Authority has not yet determined the application or the potential impact of AASB 9.
AASB 2014-1 Amendments to Australian Accounting Standards. 1 Jan 2015 Part E of this Standard makes amendments to AASB 9 and consequential amendments to other Standards. It has not yet been assessed by the Authority to determine the application or potential impact of the Standard.
AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of 1 Jan 2016 Interests in Joint Operations [AASB 1 & 11] The Authority establishes Joint Operations in pursuit of its objectives and does not routinely acquire interests in Joint Operations. Therefore, there is no financial impact on application of the Standard.
AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable 1 Jan 2016 Methods of Depreciation and Amortisation [AASB 116 & 138] The adoption of this Standard has no financial impact for the Authority as depreciation and amortisation is not determined by reference to revenue generation, but by reference to consumption of future economic benefits.
AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 1 Jan 2017 This Standard gives effect to the consequential amendments to Australian Accounting Standards (including Interpretations) arising from the issuance of AASB 15. The Authority has not yet determined the application or the potential impact of the Standard.
AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 1 Jan 2018 (December 2014) This Standard gives effect to the consequential amendments to Australian Accounting Standards (including Interpretations) arising from the issuance of AASB 9 (December 2014). The Authority has not yet determined the application or the potential impact of the Standard.
AASB 2014-8 Amendments to Australian Accounting Standards arising from AASB 9 1 Jan 2015 (December 2014) – Application of AASB 9 (December 2009) and AASB 9 (December 2010) [AASB 9 (2009 & 2010)] This Standard makes amendments to AASB 9 Financial Instruments (December 2009) and AASB 9 Financial Instruments (December 2010), arising from the issuance of AASB 9 Financial Instruments in December 2014. The Authority has not yet determined the application or the potential impact of the Standard. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
3. Disclosure of changes in accounting policy and estimates. (continued) Operative for Future impact of Australian Accounting Standards not yet operative (continued) reporting periods beginning on/after
AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in 1 Jan 2016 Separate Financial Statements [AASB 1, 127 & 128] This Standard amends AASB 127, and consequentially amends AASB 1 and AASB 128, to allow entities to use the equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements. The Authority has not yet determined the application or the potential impact of the Standard.
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets 1 Jan 2016 between an Investor and its Associate or Joint Venture [AASB 10 & 128] This Standard amends AASB 10 and AASB 128 to address an inconsistency between the requirements in AASB 10 and those in AASB 128 (August 2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The Authority has application or the potential impact of the Standard.
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to 1 Jan 2016 Australian Accounting Standards 2012–2014 Cycle [AASB 1, 2, 3, 5, 7, 11,110, 119, 121, 133, 134, 137 & 140] These amendments arise from the issuance of International Financial Reporting Standard Annual Improvements to IFRSs 2012–2014 Cycle in September 2014, and editorial corrections. The Authority has not yet determined the application or the potential impact of the Standard.
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: 1 Jan 2016 Amendments to AASB 101 [AASB 7, 101, 134 & 1049] This Standard amends AASB 101 to provide clarification regarding the disclosure requirements in AASB 101. Specifically, the Standard proposes narrow-focus amendments to address some of the concerns expressed about existing presentation and disclosure requirements and to ensure entities are able to use judgement when applying a Standard in determining what information to disclose in their financial statements. There is no financial impact.
AASB 2015-3 Amendments to Australian Accounting Standards arising from the 1 July 2015 Withdrawal of AASB 1031 Materiality This Standard completes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and Interpretations, allowing that Standard to effectively be withdrawn. There is no financial impact.
AASB 2015-6 Amendments to Australian Accounting Standards – Extending Related Party 1 July 2016 Disclosures to Not-for-Profit Public Sector Entities [AASB 10, 124 & 1049] The amendments extend the scope of AASB 124 to include application by not-for-profit public sector entities. Implementation guidance is included to assist application of the Standard by not-for-profit public sector entities. There is no financial impact.
4. Key sources of estimation uncertainty
Key estimates and assumptions concerning the future are based on historical experience and various other factors that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.
Defined benefit superannuation plans In determining the Housing Authorityʼs ultimate cost of its defined benefit superannuation plans, actuarial assumptions are required to be made. The principal actuarial assumptions used are disclosed in note 38 ʻProvisionsʼ.
Long service leave liability Several estimations and assumptions used in calculating the Authorityʼs long service leave provision include expected future salary rates, discount rates, employee retention rates and expected future payments. Changes in these estimations and assumptions may impact on the carrying amount of the long service leave provision. The principal actuarial assumptions used are disclosed in note 38 ʻProvisionsʼ. Annual Report 2014 – 2014 15 Report Annual 153 154 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Depreciation and amortisation The depreciation and amortisation rates for the Consolidated Entity have been reviewed. The estimation of the useful lives of assets has been based on historical experience with the retention and disposal of assets. Refer to note 2 (f) for depreciation rates.
Revaluation The revaluation of the Housing Authority's assets is undertaken by the Western Australian Land Information Authority annually. Valuation estimates for financial reporting purposes are determined under the accounting concept of fair value. Fair value is defined as 'the amount for which the asset could be exchanged or a liability settled, between knowledgeable, willing parties at an arms length transaction'. It is based on the assumption that the Housing Authority is a going concern without the need or intention to liquidate or wind up its operations or undertake a transaction on adverse terms.
5 Judgements made by management in applying accounting policies The preparation of financial statements requires management to make judgements about the application of accounting policies that have significant amounts recognised in the financial statements. The Housing Authority evaluates these judgements regularly.
Joint Operations The Housing Authority has entered into a number of joint arrangements for the development of land holdings. The Housing Authority with other parties have rights to the assets, and obligations for the liabilities, relating to the arrangement. Accordingly, the Housing Authority has classified its interests in joint arrangements as joint operations. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
6. Schedule of income and expenses by service
2015 CONSOLIDATED 2014 Land and Rental Government Home Housing Elimination Total Rental Government Home Land Elimination Total Housing Regional Officers' Loans Supply Housing Regional Officers' Loans Housing Housing $000 $000 $000 $000 $000 $000 INCOME Note $000 $000 $000 $000 $000 $000 Revenue 95 15 - 482,479 - 482,589 Sales 7 100,699 77 - 363,104 - 463,880 - - - - (15,865) (15,865) Intersegment sales - - - - (12,877) (12,877) 223,865 224,409 2 192 - 448,468 Rental revenue 8 210,786 236,801 2 195 - 447,784 204,550 - - - - 204,550 Commonwealth grants and contributions 9 313,059 - - - - 313,059 3,118 2,980 216,038 (5,136) - 217,000 Interest revenue 10 (1,201) 2,177 193,464 800 - 195,240 - - - 9 - 9 Developers contributions 9,514 - - - - 9,514 18,843 8 4,707 2,504 - 26,062 Other revenues 11 6,837 3 3,796 1,058 - 11,694 450,471 227,412 220,747 480,048 (15,865) 1,362,813 Total revenue 639,694 239,058 197,262 365,157 (12,877) 1,428,294 Gains - - 2,888 81 - 2,969 Gain on the disposal of non-current assets 12 - - 5,032 - - 5,032 - - 2,888 81 - 2,969 Total gains - - 5,032 - - 5,032 450,471 227,412 223,635 480,129 (15,865) 1,365,782 Total income 639,694 239,058 202,294 365,157 (12,877) 1,433,326
EXPENSES 64 22 - 310,811 - 310,897 Cost of sales 7 101,935 90 - 144,273 - 246,298 221,642 135,072 - 222 - 356,936 Rental expenses 13 239,131 145,679 - 158 - 384,968 160,846 - - 2 - 160,848 Community support expense 14 191,520 - 1 - - 191,521 108,217 13,133 4,153 11,120 - 136,623 Employee benefits expense 15 103,428 11,614 3,373 10,203 - 128,618 26,207 257 5,912 7,826 - 40,202 Supplies and services 16 31,108 367 4,476 5,418 - 41,369 119,460 16,985 8,346 1,695 - 146,486 Depreciation & amortisation expense 17 112,555 16,504 7,918 399 - 137,376 19,752 9,744 118,872 7,844 - 156,212 Finance costs 18 21,432 10,094 109,276 8,305 - 149,107 - - - - - Share of net losses of associate 18,043 - - - - 18,043 11,384 14 1,072 1,101 - 13,571 Accommodation expenses 19 12,273 84 959 797 - 14,113 12,320 6,749 15 - - 19,084 Loss on the disposal of non-current assets 12 18,348 4,548 - 83 - 22,979 81,238 219 21,083 34,561 - 137,101 Other expenses 20 95,818 1,093 18,854 19,762 - 135,527 761,130 182,195 159,453 375,182 - 1,477,960 Total expenses 945,591 190,073 144,857 189,398 - 1,469,919 Profit/(loss) before grants and subsidies (310,659) 45,217 64,182 104,947 (15,865) (112,178) from government (305,897) 48,985 57,437 175,759 (12,877) (36,593) 90,730 - - - - 90,730 Grants and subsidies from government 9 87,923 - - - - 87,923 Profit/(loss) after grants and subsidies (219,929) 45,217 64,182 104,947 (15,865) (21,448) from government (217,974) 48,985 57,437 175,759 (12,877) 51,330 - - 73 - 73 Non-controlling interest (3,541) - - - (3,541) (219,929) 45,217 64,182 105,020 (15,865) (21,375) Profit/(loss) for the period (221,515) 48,985 57,437 175,759 (12,877) 47,789
* Affordable housing revenue and expenses were moved from Rental Housing to Land and Housing Supply in 2014/15
Annual Report 2014 – 15 155 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
6. Schedule of income and expenses by service ( continued )
2015 THE HOUSING AUTHORITY 2014 Land and Rental Government Home Housing Elimination Total Rental Government Home Land Elimination Total Housing Regional Officers' Loans Supply Housing Regional Officers' Loans Housing Housing $000 $000 $000 $000 $000 $000 INCOME Note $000 $000 $000 $000 $000 $000 Revenue 95 15 - 446,662 446,772 Sales 7 82,453 77 - 363,104 - 445,634 - - - - (15,865) (15,865) Intersegment sales - - - - (12,877) (12,877) 223,865 224,409 2 192 - 448,468 Rental revenue 8 210,786 236,801 2 195 - 447,784 204,550 - - - - 204,550 Commonwealth grants and contributions 9 313,059 - - - - 313,059 3,118 2,980 108,859 (4,144) - 110,813 Interest revenue 10 4,767 2,177 101,327 800 - 109,071 - - -9 - 9 Developers contributions 9,514 - - - - 9,514 18,843 8 74,437 2,458 - 95,746 Other revenues 11 5,187 3 80,109 1,058 - 86,357 450,471 227,412 183,298 445,177 (15,865) 1,290,493 Total revenue 625,766 239,058 181,438 365,157 (12,877) 1,398,542 Gains - 2,888 81 - 2,969 Gain on the disposal of non-current assets 12 5,032 - 5,032 - - 2,888 81 - 2,969 Total gains - - 5,032 - - 5,032 450,471 227,412 186,186 445,258 (15,865) 1,293,462 Total income 625,766 239,058 186,470 365,157 (12,877) 1,403,574
EXPENSES 64 22 - 277,477 - 277,563 Cost of sales 7 96,216 90 - 144,273 - 240,579 221,642 135,072 - 222 - 356,936 Rental expenses 13 239,131 145,679 - 158 - 384,968 160,846 - - 2 - 160,848 Community support expense 14 191,520 - 1 - - 191,521 108,217 13,133 3,533 11,120 - 136,003 Employee benefits expense 15 103,428 11,614 2,953 10,203 - 128,198 26,207 257 870 7,826 - 35,160 Supplies and services 16 31,108 367 824 5,418 - 37,717 119,460 16,985 7,153 1,690 - 145,288 Depreciation & amortisation expense 17 112,553 16,504 6,799 399 - 136,255 19,752 9,744 118,869 7,844 - 156,209 Finance costs 18 21,432 10,094 109,301 8,305 - 149,132 11,384 14 23 1,101 - 12,522 Accommodation expenses 19 12,273 84 31 797 - 13,185 12,320 6,749 - - - 19,069 Loss on the disposal of non-current assets 12 18,348 4,548 - 83 - 22,979 81,238 219 6,831 32,459 - 120,747 Other expenses 20 95,388 1,093 2,920 19,762 - 119,163 761,130 182,195 137,279 339,741 - 1,420,345 Total expenses 921,397 190,073 122,829 189,398 - 1,423,697 Profit/(loss) before grants and subsidies (310,659) 45,217 48,907 105,517 (15,865) (126,883) from government (295,631) 48,985 63,641 175,759 (12,877) (20,123) 90,730 - - - 90,730 Grants and subsidies from government 9 87,923 - - - 87,923 (219,929) 45,217 48,907 105,517 (15,865) (36,153) Gain/(loss) for the period (207,708) 48,985 63,641 175,759 (12,877) 67,800
* Affordable housing revenue and expenses were moved from Rental Housing to Land and Housing Supply in 2014/15
156 Housing Authority THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 7. Trading profit 2015 2014 2015 2014 $000 $000 $000 $000 Sales Joint operations land 164,657 193,159 164,657 193,159 Land 68,638 131,611 68,638 131,611 House and land packages 233,429 126,233 197,612 107,987 466,724 451,003 430,907 432,757 Less cost of land sold Joint operations land 66,285 81,639 66,285 81,639 Land 42,974 62,217 42,974 62,217 House and land packages 201,638 102,442 168,304 96,723 310,897 246,298 277,563 240,579 Trading Profit 155,827 204,705 153,344 192,178
8. Rental revenue
Rental properties 438,086 440,742 438,086 440,742 Rental amenities 3,818 3,580 3,818 3,580 Commercial properties 6,552 3,444 6,552 3,444 Community Housing properties 12 18 12 18 Total rental revenue 448,468 447,784 448,468 447,784
9. Commonwealth and State grants
Commonwealth grants and contributions Aboriginal housing 83,484 191,712 83,484 191,712 Commonwealth rental grants 107,286 102,778 107,286 102,778 Crisis accommodation & Community Housing 13,780 14,463 13,780 14,463 Commonwealth FAHCSIA - 4,106 - 4,106 Total Commonwealth grants 204,550 313,059 204,550 313,059
State grants and subsidies Department of Treasury 74,583 25,377 74,583 25,377 Department of Planning/WA Planning Commission - 200 - 200 Department of Premier and Cabinet - 1,413 - 1,413 Department of Child Protection and Family Support - 250 - 250 Royalties for Regions-Regional Infrastructure and Headworks Account 8,447 40,678 8,447 40,678 Disability Services Commission 4,400 9,787 4,400 9,787 Mental Health Commission 300 2,200 300 2,200 Shire of Halls Creek - 5,437 - 5,437 Kimberley Development Commission - 2,250 - 2,250 Metropolitan Redevelopment Authority - 331 - 331 Landcorp 3,000 - 3,000 - Total State grants 90,730 87,923 90,730 87,923
10. Interest revenue
Loan interest Keystart secured mortgage advances 205,485 179,734 - - 205,485 179,734 - - The Housing Authority loan schemes ------Total Loan Interest 205,485 179,734 - -
Other interest Interest on cash at bank 5,374 4,455 5,374 4,432 Interest on investments 5,256 6,583 104,554 94,180 Interest other 885 4,468 885 10,459 Total other interest 11,515 15,506 110,813 109,071 Total interest revenue 217,000 195,240 110,813 109,071 Annual Report 2014 – 2014 15 Report Annual 157 158 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 11. Other gains 2015 2014 2015 2014 $000 $000 $000 $000
Bad debts recovered 765 724 765 724 Conveyancing fees 2,426 2,428 2,426 2,428 Dividends - - 71,996 78,200 Income tax (note 23) - 1,650 - - Other revenue 22,871 6,892 20,559 5,005 Total other revenues 26,062 11,694 95,746 86,357
12. Net gain/(loss) on disposal of non-current assets
Proceeds from the disposal of non-current assets Rental properties 63,838 67,197 63,838 67,197 Community Housing properties 1,413 2,008 1,413 2,008 Shared Equity properties 55,019 57,206 55,019 57,206 Plant & equipment 568 (204) 568 (204) 120,838 126,207 120,838 126,207 Carrying amount of non-current assets disposed Rental properties 80,719 89,857 80,719 89,857 Community Housing properties 4,074 1,743 4,074 1,743 Shared Equity properties 52,142 52,162 52,142 52,162 Plant & equipment 18 392 3 392 136,953 144,154 136,938 144,154 Net loss (16,115) (17,947) (16,100) (17,947)
The cost on disposal of rental properties includes the value of properties demolished of $7.093 million (2014: $25.325 million).
13. Rental expenses
Maintenance expenses 89,013 95,176 89,013 95,176 Debt collection expenses 1,232 1,256 1,232 1,256 Estate management expenses 9,303 10,645 9,303 10,645 General expenses 17,497 26,404 17,497 26,404 Insurance expenses 9,194 11,749 9,194 11,749 Rates expenses 85,095 75,882 85,095 75,882 Renovations & improvements 45,873 52,295 45,873 52,295 Demolition costs 70 234 70 234 Non cancellable operating leases: - Rental properties 99,659 111,327 99,659 111,327 Total rental expenses 356,936 384,968 356,936 384,968
14. Community support expense
Aboriginal Housing (a) 152,927 184,545 152,927 184,545 Community Housing (b) 7,914 6,975 7,914 6,975 Mortgage and rental assistance program - cash assistance 7 171 Total community support expense 160,848 191,521 160,848 191,521
(a) Aboriginal housing community support consists of expenses incurred in the provision of remote Indigenous community housing and support programmes including capitalised administration of $25.49million (2014: $28.29 million). (b) Community Housing support consists of expenses incurred in the provision of housing undertaken by community groups. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 2015 2014 2015 2014 15. Employee benefits expense $000 $000 $000 $000
Salaries & wages (a) 150,701 142,557 150,081 142,137 Superannuation - defined contribution plans (b) 12,422 12,826 12,422 12,826 Superannuation - defined benefit plans (Note 38) 1,987 231 1,987 231 165,110 155,614 164,490 155,194 Less Credits: Administration capitalised 25,890 25,521 25,890 25,521 Recoups 2,597 1,475 2,597 1,475 Total credits 28,487 26,996 28,487 26,996 Total employee benefits expenses 136,623 128,618 136,003 128,198
(a) Included in Salaries & Wages are voluntary severances of $4.677 million which were offered to employees during the financial year.
(b) Defined contribution plans include West State, Gold State, GESB and other eligible funds. Employment on-costs expenses, such as workersʼ compensation insurance, are included in note 20 ʻOther expensesʼ. Employment on-costs liability is included at note 38 ʻProvisionsʼ.
16. Supplies and services
Other personnel costs 8,220 8,804 8,220 8,804 Travel 2,404 3,342 2,404 3,342 Stationery & supplies 1,166 1,145 882 859 Communication 5,113 4,851 4,982 4,712 Other costs & expenses 20,141 20,146 16,027 17,288 External and Internal Audit fees 959 791 446 422 Motor vehicles 1,051 1,317 1,051 1,317 39,054 40,396 34,012 36,744 Lease expenses Non cancellable operating leases: - Motor vehicles 1,148 973 1,148 973 1,148 973 1,148 973 Total supplies and services 40,202 41,369 35,160 37,717
17. Depreciation and amortisation expense
Depreciation Rental properties 120,605 114,270 120,605 114,270 Community Housing properties 9,262 10,286 9,262 10,286 Shared Equity properties 7,027 6,742 7,027 6,742 Other properties 1,447 1,387 1,447 1,387 Plant & equipment 2,357 2,528 1,636 1,843 Amortisation Intangible assets 5,311 1,727 5,311 1,727 Other assets 477 436 - - Total depreciation and amortisation expense 146,486 137,376 145,288 136,255
18. Finance costs
Interest expense 156,209 149,132 156,209 149,132 Finance charges 3 (25) - - Total finance costs 156,212 149,107 156,209 149,132
19. Accommodation expenses
Office rental & accommodation 8,007 8,548 7,968 8,520 Lease expenses Non cancellable operating Office properties leases 5,564 5,565 4,554 4,665 Total accommodation expenses 13,571 14,113 12,522 13,185 Annual Report 2014 – 2014 15 Report Annual 159 160 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 20. Other expenses 2015 2014 2015 2014 $000 $000 $000 $000
Doubtful debts expense 11,378 12,211 6,979 8,308 Fees - Keystart 13,812 12,057 - - Grants & subsidies 818 661 818 661 Land expenses 13,185 17,554 13,185 17,554 Loan scheme expenses 1,369 1,070 5,365 1,070 Write down of assets classified as held for sale 431 536 431 536 Employee on costs 9,950 10,202 9,950 10,202 Other expenses 56,222 29,092 54,083 28,688 Assets transferred to Community Housing (a) 29,936 52,144 29,936 52,144 Total other expenses 137,101 135,527 120,747 119,163
(a) As at 30 June 2015, the Housing Authority transferred 38 property assets valued at $7.63 million (2014: 224 property assets valued at $52.14 million) to Community Housing Organisations in accordance with Commonwealth Stimulus funding requirements. An additional property valued at $23 million was expensed as a grant to a Community Housing Organisation.
21. Cash and cash equivalents
Cash at bank - operational 178,368 125,769 131,027 89,391 Cash advances 910 910 178,377 125,779 131,036 89,401 Restricted cash: Rental tenants bonds 15,189 15,349 15,189 15,349 Joint operations cash 31,590 31,752 31,590 31,752 Remote Indigenous housing 3,950 6,105 3,950 6,105 Royalties for Regions Fund 42,885 64,684 42,885 64,684 93,614 117,890 93,614 117,890 Total cash and cash equivalents 271,991 243,669 224,650 207,291
Rental Tenants Bonds represents bond monies received by the Housing Authority from rental clients. These funds are held in trust in accordance with the Residential Tenancies Act. Joint Operations Cash is restricted for the use of joint operations operations and is controlled by the respective management groups. Unspent funds for Royalties for Regions are committed to projects and programs in WA regional areas. The Housing Authority is a property manager for remote Indigenous communities and does not have ownership of these properties. The cash held represents unspent funds for these properties.
22. Inventories
Current Land held for sale at cost (note 2(h)) current Cost of acquisition and development 228,025 168,439 211,607 168,439 Capitalised rates, taxes, administration and interest 1,320 1,584 1,320 1,584 229,345 170,023 212,927 170,023 Joint operations land at cost (note 2 (h)) 71,347 65,132 71,347 65,132 House and land packages for sale 81,388 72,019 81,330 32,024 Total current inventories 382,080 307,174 365,604 267,179
Non-current Land held for sale at cost (note 2(h)) non - current Cost of acquisition and development 380,788 432,314 367,654 432,314 Capitalised rates, taxes, administration and interest 6,618 7,077 6,618 7,077 387,406 439,391 374,272 439,391 House and land packages construction in progress 93,674 54,020 93,674 40,891 Joint operations land at cost (a) 88,855 79,705 88,855 79,705 Total non-current inventories 569,935 573,116 556,801 559,987 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
22. Inventories (Continued)
(a) The Housing Authority enters into joint operations for the development of land holdings. Listed below are current joint operations
Butler The Housing Authority holds a 46.8% interest in an incorporated joint operation with Butler Land Pty Ltd for the development of land at the Brighton estate. The incorporated joint operation is named Ocean Springs Pty Ltd. The principal place of business is in Western Australia. The Housing Authority contributes development costs and receives revenues on the basis of the interest held in the joint operation.
Dalyellup Beach The Housing Authority holds a 50% interest in an incorporated joint operation with Home Satterley Dalyellup Pty Ltd for the development of land at Dalyellup Beach, Bunbury. The incorporated joint operation is named Dalyellup Beach Pty Ltd. The principal place of business is in Western Australia The Housing Authority contributes developmentcosts and receives revenues on the basis of the interest held in the joint operation.
Ellenbrook The Housing Authority holds a 47.1% interest in an incorporated joint operation with Sanwa Vines Pty Ltd - subsequently transferred to a syndicate of companies for the development of land at Ellenbrook. The incorporated joint operation is named Ellenbrook Management Pty Ltd. The principal place of business is in Western Australia The Housing Authority contributes development costs and receives revenues on the basis of the interest held in the joint operation.
Wandina The Housing Authority holds a 50% interest in an incorporated joint operation with Springdale Holdings Pty Ltd for the development of land at Wandina, Geraldton. The incorporated joint operation is named Seacrest Corporation Pty Ltd. The principal place of business is in Western Australia The Housing Authority contributes development costs and receives revenues on the basis of the interest held in the joint operation.
Oyster Harbour The Housing Authority holds a 50% interest in an unincorporated joint operation with Lowe Pty Ltd for the land at the Oyster Harbour Estate, Bayonet Head, Albany. The principal place of business is in Western Australia. The Housing Authority contributes development costs and receives revenues on the basis of the interest held in the joint operation.
Wellard The Housing Authority holds an interest in an unincorporated joint operation with Peet Southern JV Ltd for the development of Housing Authority land in Wellard. The Housing Authority contributes the land and the participant contributes the funds for the development of the land. The Housing Authority receives a 10% land payment on the sale of each lot and 80% share in the profits. The principal place of business is in Western Australia.
Banksia Grove The Housing Authority holds an interest in an unincorporated joint operation with Banksia Grove Development Nominees Pty Ltd for the development of its land at Banksia Grove. The Housing Authority contributes the land and the participant contributes the funds for the development of the land. The Housing Authority receives a 35% land payment on the sale of each lot and 40% share in the profits. The principal place of business is in Western Australia
Brookdale The Housing Authority holds a 50% interest in an unincorporated joint operation with Stockland WA Development Pty Ltd for the development of land at Brookdale. The Housing Authority contributes development costs and receives revenues on the basis of interest held in the joint operation. The principal place of business is in New South Wales.
Harrisdale The Housing Authority holds an interest in an unincorporated joint operation with Cedar Woods Properties Harrisdale Pty Ltd for the development of its land at Harrisdale. The Housing Authority contributes the land and the participant contributes the funds for the development of the land. The Housing Authority receives a 30% land payment on the sale of the lots, a 10% land payment on the sale of built form products and a 66.6% share in the profits. The principal place of business is in Western Australia.
Beeliar The Housing Authority holds an interest in an unincorporated joint operation with Beeliar Partnership Pty Ltd for the development of its land at Beeliar. The Housing Authority contributes the land and the participant contributes the funds for the development of the land. The Housing Authority receives a 33% land payment on the sale of each lot and 50% share in the profits. The principal place of business is in Western Australia.
Golden Bay Estate The Housing Authority holds an interest in an unincorporated joint operation with Peet Golden Bay Pty Ltd for the development of its land at Golden Bay Estate. The Housing Authority contributes the land and the participant contributes the funds for the development of the land. The Housing Authority receives a 50% land payment on the sale of each lot and 50% share in the profits. The principal place of business is in Western Australia. Annual Report 2014 – 2014 15 Report Annual 161 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
22. Inventories (Continued) JOINT OPERATIONS 2015 Butler Dalyellup Ellenbrook Wandina Oyster Golden Bay Brookdale Beeliar Harrisdale Wellard Banksia Total Beach Harbour Estate Grove
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 CURRENT ASSETS Cash and cash equivalents 21 14,327 2,581 7,622 2,131 452 704 3,773 - - - - 31,590 Receivables 23 2,945 2,782 3,493 36 - 652 249 - - - - 10,157 Inventories 22 20,549 7,058 34,298 - 2,861 4,552 2,029 - - - - 71,347 Other current assets 25 - - 269 ------269 37,821 12,421 45,682 2,167 3,313 5,908 6,051 - - - - 113,363
NON-CURRENT ASSETS Receivables 23 530 - - 60 ------590 Office Equipment 32 288 7 13 51 -----359 Buildings 31 817 69 184 ------1,070 Development costs (1) 22 9,762 14,017 4,256 2,550 2,926 1,056 15,119 - - - 49,686 11,397 14,093 4,453 2,610 2,926 1,107 15,119 - - - - 51,705 Total assets 49,218 26,514 50,135 4,777 6,239 7,015 21,170 - - - - 165,068
CURRENT LIABILITIES Payables 36 6,775 1,638 1,191 24 94 3,959 113 - - - - 13,794 Other Liabilities 39 - - - 2,028 ------2,028 Provisions 38 - - 741 60 - 519 280 - - - - 1,600 6,775 1,638 1,932 2,112 94 4,478 393 - - - - 17,422 NON-CURRENT LIABILITIES Payables and Interest-bearing liabilities 36 530 - 24 ------554 530 - 24 ------554 Total liabilities 7,305 1,638 1,956 2,112 94 4,478 393 - - - - 17,976 NET ASSETS 41,913 24,876 48,179 2,665 6,145 2,537 20,777 - - - - 147,092
Land (1) 22 1,797 - 1,911 206 7,268 12,045 6,203 - 1,026 3,679 5,034 39,169
1. The total of development costs ($49.686 million) and Authority land ($39.169 million) represents the total ($88.855 million) joint operations land.
162 Housing Authority THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
22. Inventories (Continued) JOINT OPERATIONS 2014 Butler Dalyellup Ellenbrook Wandina Oyster Golden Bay Brookdale Beeliar Harrisdale Wellard Banksia Total Beach Harbour Estate Grove
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 CURRENT ASSETS Cash and cash equivalents 21 12,780 2,531 9,707 672 24 6,038 - - - - 31,752 Receivables 23 5,461 2,045 8,905 19 15 3 - - - - 16,448 Inventories 22 17,737 6,738 35,767 29 3,596 1,265 - - - - 65,132 Other current assets 25 - - 335 250 -----585 35,978 11,314 54,714 720 3,885 7,306 - - - - 113,917 NON-CURRENT ASSETS Receivables 23 530 - - 60 ------590 Office Equipment 32 4 - 28 ------32 Buildings 31 329 223 231 ------783 Development costs (1) 22 11,307 12,524 5,909 3,468 3,020 14,517 - - - 50,745 12,170 12,747 6,168 3,528 3,020 14,517 - - - - 52,150 Total assets 48,148 24,061 60,882 4,248 6,905 21,823 - - - - 166,067
CURRENT LIABILITIES Payables 36 6,990 1,118 4,787 33 272 254 - - - - 13,454 Other Liabilities 39 - - - 142 - 2,090 - - - - 2,232 Provisions 38 2,481 427 2,800 153 - 558 - - - - 6,419 9,471 1,545 7,587 328 272 2,902 - - - - 22,105 NON-CURRENT LIABILITIES Payables and Interest-bearing liabilities 36 530 - 24 ------554 530 - 24 ------554 Total liabilities 10,001 1,545 7,611 328 272 2,902 - - - - 22,659 NET ASSETS 38,147 22,516 53,271 3,920 6,633 18,921 - - - - 143,408
Land (1) 22 2,171 - 2,304 245 7,908 4,313 - 1,026 4,561 6,432 28,960
1. The total of development costs ($50.745 million) and Authority land ($28.960 million) represents the total ($79.705 million) joint operations land.
Annual Report 2014 – 15 163 164 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 2015 2014 2015 2014 23. Loans and receivables $000 $000 $000 $000
Current General 22,905 24,407 27,601 24,277 Loans to homebuyers 880,099 792,619 - - Joint operations receivables 10,157 16,448 10,157 16,448 Rental and Lease bonds 23,070 20,302 23,070 20,302 Rents from tenants and other rents 42,723 33,549 42,723 33,549 Commercial organisations (a) - 2,966 9,695 25,727 978,954 890,291 113,246 120,303 Less provision for impairment 7,611 7,208 7,611 7,208 Total receivables current 971,343 883,083 105,635 113,095
A provision for impairment loss is recognised when there is objective evidence that an individual receivable is impaired.
Reconciliation of changes in the allowances for impairment of receivables
Carrying amount at start of period 7,208 6,005 7,208 6,005 Charge for the period 6,979 8,308 6,979 8,308 Amounts written off during the period (6,576) (7,105) (6,576) (7,105) Impairment losses reversed during the period - - - - Carrying amount at end of period 7,611 7,208 7,611 7,208
An impairment loss of $6.979 million (2014: $8.30 million) has been recognised by the Housing Authority.
Current receivables individually determined as impaired at the end of the reporting period: Carrying amount before deducting any impairment loss 235 370 235 370 Impairment loss (235) (370) (235) (370) - ---
(a) The loans to Commercial Organisations includes loan facilities provided to Goldmaster Enterprises of $21.7 million. As at 30 June 2015 the $21.7 million loan has been fully drawn. The interest rate is 4.48%. At balance date $12.164 million has been repaid. The raising of interest has been deferred from 1 February 2015 until 30 September 2015.
Non current Non-current loans and advances Keystart preferential shares (a) - - 4,115,000 3,675,000 Loans to homebuyers (b) 3,294,349 2,938,573 - 3 Less provision for impairment 12,541 9,045 - - 3,281,808 2,929,528 4,115,000 3,675,003 Joint operations receivables 590 590 590 590
Total receivables non current 3,282,398 2,930,118 4,115,590 3,675,593
Provision for impairment loss As at 30 June 2015, loans to homebuyers with a nominal value of $1 million (2014:$2.249 million) were impaired and written off against provision for impairment following disposal of mortgaged property. The amount of the provision was $12.5 million (2014: $9.0 million). The individually impaired receivables are mainly due to property abandonment and voluntary property surrender.
The creation and release of the provision for impaired receivables has been included in doubtful debts expenses in the Statement of Comprehensive Income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
23. Loans and receivables (Continued) Consolidated Parent 2015 2014 2015 2014 $000 $000 $000 $000
Movement in Provisions for Impairment
Carrying amount at start of period 9,045 7,297 - - Charge for the year 4,400 3,903 - - Amounts written off (904) (2,155) - - Carrying amount at end of period 12,541 9,045 - -
Ageing analysis of receivables past due but not impaired at the end of the reporting period
Not more than 3 months 196,218 160,251 13,283 8,301 More than 3 months but less than 6 months 5,783 4,815 5,783 4,815 More than 6 months but less than 1 year 9,163 7,882 9,163 7,882 More than 1 year 16,637 13,566 16,637 13,566 227,801 186,514 44,866 34,564
All loans and advances are reviewed and graded according to the anticipated level of credit risk. The classification adopted is described below:
Outstanding balance on loans for which collateral will be repossessed
Balance 21,056 9,825 - - Provision for impairment (2,287) (1,559) - - 18,769 8,266 - -
Interest foregone on repossessed loans 809 557 - -
A Safety Net Scheme is offered to clients who require assistance because of changes in their financial situation. In most cases, assistance is granted for short terms under twelve months and the loans are regularly monitored and reviewed. The table shows the position as at the end of the financial period.
Number 2015 Number 2014
161 39,823 126 30,460 161 39,823 126 30,460 Annual Report 2014 – 2014 15 Report Annual 165 166 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
23. Loans and receivables (continued)
(a) Keystart preferential shares The Western Australian Treasury Corporation has provided the Housing Authority with a $5,000 million loan facility to fund Keystart Loans Ltd. The Housing Authority has purchased redeemable preference shares in Keystart Loans Ltd to the same value as the drawn down loan facility as security over the funds. The terms and conditions of the shares reflect the terms and conditions of the loan facility. Keystart Loans Ltd. meets all principal, interest and other costs associated with the facility. To date $4,115 million (June 2014 $3,675 million) of this facility has been drawn down.
(b) Loans to Homebuyers (a) Interest rate risk
Refer to note 2 (ab) for an analysis of the Consolidated Entityʼs exposure to interest rate risk in relation to loan and other receivables. Summarised analysis of the sensitivity of loan and other receivables to interest rate is illustrated in note 2 (ab).
(b) Fair value and credit risk
Current loan and other receivable Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value
Consolidated Parent 2015 2014 2015 2014 $ʼ000 $ʼ000 $ʼ000 $ʼ000 The fair values and carrying values of non-current receivables are as follows: Loan and receivables - fair value 4,167,390 3,726,665 - 3
Credit Risk
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above. (Refer to note 2 (ab) for more information on the risk management policy of the Consolidated Entity).
(c) Collateral held
Collateral is in the form of registered first mortgages over residential properties in Western Australia purchased with the proceeds of loans from Keystart. The parties granting the mortgage must be the same as the Keystart borrowers.
Terms and conditions associated with the use of collateral are such that should a borrower breach the terms and conditions of their mortgage, Keystart has the facility to recover all or part of the outstanding exposure by;
(a) exercising its rights under the mortgage, including the power of sale and (b) exercising any rights available under law.
The collateral held as security for loans that are past due or impaired is in the form of mortgaged residential property.
Consolidated Parent 2015 2014 2015 2014 $ʼ000 $ʼ000 $ʼ000 $ʼ000 Fair value of collateral obtained in terms of the exercising of rights under the mortgages 22,698 11,572 - -
Repossessed Loans Mortgagee sales are considered as the last resort in relation to continually defaulting borrowers. The execution of the mortgagee sales must comply with the National Consumer Protection Credit Act 2009 and National Credit Code, where appropriate.
Repossessed collateral is sold at best possible market price, with any surpluses being returned to the borrowers concerned. Any shortfalls are written-off against allowance. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 2015 2014 2015 2014 24. Deferred Income Tax asset $ʼ000 $ʼ000 $ʼ000 $ʼ000 For Goldmaster Pty Ltd
(a) Components of tax benefit comprises: Current tax (expense)/ benefit (311) 989 - - Deferred tax (expense)/benefit: - - - current year - (39) Previously unrecognised taxable differences - 500 Previously unrecognised tax losses in prior years - 200 Write down of deferred tax (1,339) - (1,650) 1,650 - -
(b) Deferred tax Deferred tax relates to the following: Deferred tax assets/ liabilities Recognised tax losses - 1,189 - - Provison for impairment of land - 500 - - Accrued expenses - 58 - - Interest expense capitalised in inventories - (97) - - - 1,650 - -
(c) Numerical reconciliation of income tax expense to the prima facie tax payable:
Accounting profit/(loss) before income tax 1,080 (3,168) - -
Prima facie tax payable on profit/(loss) at 30% 324 (950) - - Add/(less) tax effect of: Current year taxable differences not recognised (13) - - - Previously unrecognised taxable differences - (500) - - Previously unrecognised tax losses - (200) Write down of deferred tax 1,339 - -- Income tax expense/(benefit) 1,650 (1,650) - -
The Goldmaster directors have considered the probability of taxable profits arising in the near future is remote and therefore have determined not to recognise any deferred tax assets relating to unused tax losses.
The company estimates it has accumulated income tax losses of $24.919 million (2014 $25.957 million). The benefit of these losses and timing difference will only be obtained if:
The company derives future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the loss to be realised;
The company continues to comply with the conditions for deductibility imposed by law; and
No changes to tax legislation adversely affect the Company in realising the benefit from the deduction for the loss. Annual Report 2014 – 2014 15 Report Annual 167 168 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 2015 2014 2015 2014 25. Other current assets $000 $000 $000 $000 Accrued revenue Interest on cash at bank 1,657 907 1,657 907 Debenture sinking fund interest - - - 10,430 Keystart other assets - - - - Accrued housing sales 25,187 7,674 25,184 7,674 Interest Keystart investments - - 6,808 8,740 26,844 8,581 33,649 27,751 Prepayments Insurance premiums 25 22 25 22 Lease rentals 7,227 8,569 7,227 8,569 Development proposals 731 22,391 731 22,391 Joint operations 269 585 269 585 Sales commission - 561 - - 8,252 32,128 8,252 31,567 Total other current assets 35,096 40,709 41,901 59,318
26. Non-current assets classified as held for sale
Opening Balance Rental properties 233 4,227 233 4,227 Assets reclassified as held for sale Rental properties 53,547 25,345 53,547 25,345 Less impairment 431 536 431 536 53,116 24,809 53,116 24,809 Total assets classified as held for sale Rental properties 53,349 29,036 53,349 29,036 Less assets sold Rental properties 18,681 28,803 18,681 28,803 Closing balance Rental properties 34,668 233 34,668 233
These properties are the Housing Authority's New Living and Redevelopment programs properties that form part of the rental property class that are marketed and available for immediate sale in accordance with AASB 5. Assets held for sale are held at fair value less selling costs. Information on fair value measurements are provided in Note 34. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
27. Other financial assets
Current Deposits at call (a) 200,107 200,026 - - Debentures - - - 19,350 Total current other financial assets 200,107 200,026 - 19,350
Non - current investments Ellenbrook Management Pty Ltd Shares (b) 24 24 24 24 Goldmaster Enterprises Pty Ltd Shares (b) - - 37,350 18,000 Total non - current other financial assets 24 24 37,374 18,024
(a) The fair values of the short term deposits are determined using generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions. (i) Risk exposure - Information about the Consolidated Entity's exposure to market risk, credit risk and liquidity risk is provided in note 2 (ab) (ii) Impairment - Financial assets are assessed for indicators of impairment regularly. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after initial recognition of the financial asset the recoverability of the investment has been impacted.
(b) Interest is held in the following companies:
Dividends Value of Principal Types of Percentage of each received shares at Name activities shares share class held $000 cost '$000 2015 2014 %% Ellenbrook Management Pty Ltd Real estate Ord 47.14 47.14 Nil 24 development Goldmaster Enterprises Pty Ltd shares Property Ord 87.18 54.5 Nil 37,350 development Annual Report 2014 – 2014 15 Report Annual 169 170 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 28. Rental properties 2015 2014 2015 2014 Rental properties at fair value $000 $000 $000 $000 Improvements 5,806,935 6,038,997 5,806,935 6,038,997 Land 7,376,179 6,738,853 7,376,179 6,738,853 13,183,114 12,777,850 13,183,114 12,777,850 Less accumulated depreciation 4,308 3,529 4,308 3,529 13,178,806 12,774,321 13,178,806 12,774,321 Leasehold improvements at cost 4,482 4,482 4,482 4,482 Less accumulated depreciation 444 166 444 166 4,038 4,316 4,038 4,316 Vacant land at fair value 97,427 104,531 97,427 104,531 Total Rental properties 13,280,271 12,883,168 13,280,271 12,883,168
29. Community Housing properties
Crisis accommodation properties at fair value Improvements 83,136 80,817 83,136 80,817 Land 141,451 125,874 141,451 125,874 224,587 206,691 224,587 206,691 Community Housing properties at fair value Improvements 243,496 266,404 243,496 266,404 Land 243,285 229,587 243,285 229,587 486,781 495,991 486,781 495,991 Joint charity projects at fair value Improvements 176,483 245,801 176,483 245,801 Land 19,835 18,738 19,835 18,738 196,318 264,539 196,318 264,539 Indigenous urban housing at fair value Improvements 4,585 4,417 4,585 4,417 Land 6,233 5,854 6,233 5,854 10,818 10,271 10,818 10,271 918,504 977,492 918,504 977,492
Less accumulated depreciation: Crisis accommodation 44 69 44 69 Community Housing (325) 242 (325) 242 Joint charity projects 476 591 476 591 Indigenous urban housing - - - - 195 902 195 902 Total Community Housing properties 918,309 976,590 918,309 976,590
30. Shared Equity properties
Shared Equity properties at fair value Improvements 244,163 240,528 244,163 240,528 Land 356,821 344,201 356,821 344,201 600,984 584,729 600,984 584,729 Less accumulated depreciation: 531 662 531 662 Total Shared Equity properties 600,453 584,067 600,453 584,067 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 31. Other properties 2015 2014 2015 2014 $000 $000 $000 $000 Other properties at fair value Offices Improvements 13,947 10,335 13,947 10,335 Land 42,957 42,984 42,957 42,984 56,904 53,319 56,904 53,319 Commercial Improvements 7,261 6,724 7,261 6,724 Land 8,719 7,183 8,719 7,183 15,980 13,907 15,980 13,907 Indigenous assets Improvements 12,537 17,046 12,537 17,046 Land 1,595 1,595 1,595 1,595 14,132 18,641 14,132 18,641 Joint operations buildings 1,826 1,387 1,826 1,387 88,842 87,254 88,842 87,254 Less accumulated depreciation: Offices 3 (14) 3 (14) Commercial 10 57 10 57 Indigenous assets 241 29 241 29 Joint operations buildings 756 604 756 604 1,010 676 1,010 676 87,832 86,578 87,832 86,578 Leasehold improvements at cost 4,823 4,218 4,823 4,218 Less accumulated depreciation: 2,604 2,153 2,604 2,153 2,219 2,065 2,219 2,065 Vacant land at fair value 38,357 45,300 38,357 45,300 Total other properties 128,408 133,943 128,408 133,943
32. Plant and equipment
Plant & equipment at cost Air conditioning 2,329 2,383 2,329 2,383 Commercial vehicles 113 113 113 113 Computing facilities & equipment 19,486 17,806 15,329 13,704 Furniture & fittings 2,478 2,454 371 371 Office machines & equipment 2,854 3,225 2,744 3,053 Joint operations office equipment 478 140 478 140 Works of art 42 38 42 38 Transportable buildings 1,572 1,572 1,572 1,572 Plant & equipment 147 125 106 106 29,499 27,856 23,084 21,480 Less accumulated depreciation: Air conditioning - 1,250 1,205 1,250 1,205 Commercial vehicles - 113 113 113 113 Computing facilities & equipment 15,581 14,307 12,546 11,719 Furniture & fittings 1,233 988 310 301 Office machines & equipment 2,421 2,640 2,328 2,487 Joint operations office equipment 119 108 119 108 Transportable buildings 472 157 472 157 Plant & equipment 126 120 106 106 21,315 19,638 17,244 16,196 Total plant and equipment 8,184 8,218 5,840 5,284 Annual Report 2014 – 2014 15 Report Annual 171 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
33. Property, plant and equipment reconciliation
2015 CONSOLIDATED 2014
Rental Community Shared Other Plant & Buildings Total Rental Community Shared Other Plant & Buildings Total Properties Housing Equity Properties Equipment under Properties Housing Equity Properties Equipment under Properties Properties Construction Properties Properties Construction $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 12,883,168 976,590 584,067 133,943 8,218 165,410 14,751,396 Carrying amount at start of period 12,116,742 842,822 559,199 143,005 6,202 189,167 13,857,137 67,601 3,403 26,554 10,782 2,245 87,294 197,879 Additions 246,848 5,780 36,170 31,416 4,438 197,126 521,778 160,987 8,533 2,763 (9,228) - (163,055) Transfers 187,486 45,450 5,750 (17,803) - (220,883) - (76,168) (29,434) (52,561) - (602) - (158,765) Disposals (87,556) (53,188) (52,881) (10,371) (1,431) - (205,427) (53,547) - -- - - (53,547) Classified as held for sale (25,345) --- - - (25,345) (9,405) - -- - - (9,405) Impairment of property ( c) (12,104) --- - - (12,104) 427,254 (31,652) 46,317 (5,488) - - 436,431 Revaluation increments(decrements) (a) 570,972 145,961 42,234 (11,053) - - 748,114 (119,619) (9,131) (6,687) (1,601) (1,677) - (138,715) Depreciation (113,875) (10,235) (6,405) (1,251) (991) - (132,757) 13,280,271 918,309 600,453 128,408 8,184 89,649 15,025,274 Carrying amount at end of period 12,883,168 976,590 584,067 133,943 8,218 165,410 14,751,396
2015 PARENT 2014
Rental Community Shared Other Plant & Buildings Total Rental Community Shared Other Plant & Buildings Total Properties Housing Equity Properties Equipment under Properties Housing Equity Properties Equipment under Properties (b) Properties Construction Properties Properties Construction $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 12,883,168 976,590 584,067 133,943 5,284 165,410 14,748,462 Carrying amount at start of period 12,116,742 842,822 559,199 143,005 3,044 189,167 13,853,979 67,601 3,403 26,554 10,782 2,206 87,294 197,840 Additions 246,848 5,780 36,170 31,416 3,976 197,126 521,316 160,987 8,533 2,763 (9,228) - (163,055) - Transfers 187,486 45,450 5,750 (17,803) - (220,883) - (76,168) (29,434) (52,561) - (602) (158,765) Disposals (87,556) (53,188) (52,881) (10,371) (1,431) (205,427) (53,547) - -- - - (53,547) Classified as held for sale (25,345) --- - - (25,345) (9,405) - -- - - (9,405) Impairment of property ( c) (12,104) --- - - (12,104) 427,254 (31,652) 46,317 (5,488) - - 436,431 Revaluation increments(decrements) (a) 570,972 145,961 42,234 (11,053) - - 748,114 (119,619) (9,131) (6,687) (1,601) (1,048) - (138,086) Depreciation (113,875) (10,235) (6,405) (1,251) (305) - (132,071) 13,280,271 918,309 600,453 128,408 5,840 89,649 15,022,930 Carrying amount at end of period 12,883,168 976,590 584,067 133,943 5,284 165,410 14,748,462
Depreciation includes adjustments on disposal of assets in addition to the depreciation expense for the year.
(a) Independent valuations of land and buildings are provided annually by the Western Australian Land Information Authority (Valuation Services) and recognised with sufficient regularity to ensure that the carrying amount does not differ materially from the asset's fair value at the end of the reporting period. Information on fair value measurements is provided in Note 34
(b) Community Housing Properties disposals include the transfer of properties to community housing organisations. totalling $29.936 million ( 2014:$52.144 million ), see note 19.
(c) Recognised in the Statement of Comprehensive Income. Where an asset measured at cost is written-down to recoverable amount, an impairment loss is recognised in profit or loss. Where a previously revalued asset is written down to recoverable amount, the loss is recognised as a revaluation decrement in other comprehensive income.
172 Housing Authority THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
34. Fair value measurements
Assets measured at fair value: Level 1 Level 2 Level 3 Fair value at the end of period 2015 $'000 $'000 $'000 $'000 Non-current assets classified as held for sale (Note 26) - 34,668 - 34,668 Land (Note 28, 29, 30 and 31) - 8,332,859 - 8,332,859 Buildings and improvements (Note 28, 29, 30 and 31) - 6,588,325 - 6,588,325
- 14,955,852 - 14,955,852
2014 $'000 $'000 $'000 $'000 Non-current assets classified as held for sale (Note 26) - 233 - 233 Land (Note 28, 29, 30 and 31) - 7,664,700 - 7,664,700 Buildings and improvements (Note 28, 29, 30 and 31) - 6,906,687 - 6,906,687
- 14,571,620 - 14,571,620
There were no transfers between Levels 1, 2 and 3 during the current and previous periods.
Valuation techniques to derive Level 2 fair values Level 2 fair values of non-current assets held for sale, Land and Buildings are derived using the market approach. Market evidence of sales prices of comparable land and buildings in close proximity is used to determine price per square metre. Non-current assets held for sale have been written down to fair value less costs to sell. Fair value has been determined by reference to market evidence of sales prices of comparable assets.
Valuation processes
There were no changes in valuation techniques during the period.
Fair value for restricted use land is based on market value, by either using market evidence of sales of comparable land that is unrestricted less restoration costs to return the site to a vacant and marketable condition (low restricted use land) or, comparison with market evidence for land with low level utility (high restricted use land).
Consolidated Parent 2015 2014 2015 2014 35. Intangible assets $000 $000 $000 $000
Computing software at cost 9,558 7,051 6,662 4,686 Less accumulated amortisation 4,282 2,858 2,568 1,622 5,276 4,193 4,094 3,064 Computing development at cost 36,526 20,006 36,526 20,006 Less accumulated amortisation 8,347 874 8,347 874 28,179 19,132 28,179 19,132 Borrowing costs 777 777 - - Less accumulated amortisation 777 718 - - - 59 - - Total intangible assets 33,455 23,384 32,273 22,196
Intangible assets reconciliation Carrying amount at start of period 23,384 13,648 22,196 12,286 Additions 19,476 13,219 18,496 12,239 Disposals 3,108 602 3,108 602 Amortisation expense (6,465) (2,881) (5,311) (1,727) Carrying amount at end of period 33,287 24,588 32,273 23,400
Assets with a value of $6.84 million relating to the development of the Axiom project are not yet available for use. Once development is finalised and the system is in production, these assets will begin to be amortised. Annual Report 2014 – 2014 15 Report Annual 173 174 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 36 Payables 2015 2014 2015 2014 $000 $000 $000 $000 Current Contractors retention monies 11,072 12,472 11,072 12,472 Joint operations creditors 13,794 13,454 13,794 13,454 Rental properties water consumption 3,389 4,515 3,389 4,515 Rental tenants bonds 15,189 15,349 15,189 15,349 Trade creditors 57,583 103,555 57,243 94,683 Total current payables 101,027 149,345 100,687 140,473
Also included in trade creditors are the unspent funds associated with the Indian Ocean Territories (IOT) service delivery arrangements as per the following: 2015 2014
Amounts carried forward from previous financial year. 61,381 41,717 Payments made by the Commonwealth for IOT services. - 44,500 Cost of services. 30,708 24,836 Construction paid - - Amounts carried forward to following financial year. 30,673 61,381
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.
Non - current Joint operations creditors 554 554 554 554 Total non-current payables 554 554 554 554
37 Borrowings
Current WA Treasury Corporation 321,878 306,009 321,878 306,009 Commonwealth advances 15,525 15,141 15,525 15,141 St George Bank - 1,300 - - Total current borrowings 337,403 322,450 337,403 321,150 Non - current WA Treasury Corporation 4,509,219 4,135,496 4,509,219 4,135,496 Commercial loan 62,276 - 62,276 - Commonwealth advances 391,970 407,500 391,970 407,500 Total non-current borrowings 4,963,465 4,542,996 4,963,465 4,542,996 Total borrowings 5,300,868 4,865,446 5,300,868 4,864,146
The fair values for WATC borrowings have been calculated by Western Australian Treasury Corporation, based on market valuations. The State Nominated and Commonwealth advances have been calculated using a discount rate of 2.89% which is the Commonwealth bond rate. (June 2014 3.54%).
Commercial loan is a $62.276 million liability payable to Westpac. The liabilty is for construction costs for the Osprey Key Workers Village project.
Consolidated Total carrying amount Aggregate Net Fair Value 2015 2014 2015 2014 $000 $000 $000 $000 Borrowings - WATC 4,831,097 4,441,505 4,852,128 4,469,314 Commercial Loan 62,276 - 73,687 - Borrowings - Commonwealth advances 407,495 422,641 489,909 461,667 St George Bank 1,300 1,300 - 1,300 5,302,168 4,865,446 5,415,724 4,932,281
Parent Total carrying amount Aggregate Net Fair Value 2015 2014 2015 2014 $000 $000 $000 $000 Borrowings - WATC 4,831,097 4,441,505 4,852,128 4,469,314 Commercial loan 62,276 - 73,687 - Borrowings - Commonwealth advances 407,495 422,641 489,909 461,667 5,300,868 4,864,146 5,415,724 4,930,981
Borrowings - WATC are variable rate borrowings and repayable when due. Fixed rate borrowings are subject to interest payments only with the full loan being due on maturity. Borrowings - Commonwealth Advances are fixed rate borrowings and repayable on an annual basis with final instalments being due between July 2014 and June 2042. Commercial loan is with Westpac and is a interest only variable rate borrowing repayable in full by June 2029. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 38 Provisions 2015 2014 2015 2014 $000 $000 $000 $000 Current Employee benefits provision Annual leave (a) 15,721 13,500 15,721 13,500 Long service leave (b) 17,076 12,238 17,076 12,238 Superannuation (d) 21,748 22,543 21,748 22,543 54,545 48,281 54,545 48,281 Other provisions Employment on-costs (c ) 2,302 1,290 2,302 1,290 Joint operations provisions 1,600 6,419 1,600 6,419 Total current provisions 58,447 55,990 58,447 55,990
Non - Current Employee benefits provision Long service leave (b) 7,919 9,597 7,919 9,597
7,919 9,597 7,919 9,597 Other provisions Employment on-costs (c ) 554 1,096 554 1,096 Development levies (note 2s(ii)) 3,791 3,283 3,791 3,283 Total non-current provisions 12,264 13,976 12,264 13,976
(a) Annual leave liabilities have been classified as current as there is no unconditional right to defer settlement for at least 12 months after the reporting period. Assessments indicate that actual settlements of the liabilities is expected to occur as follows:
Within 12 months of the end of the reporting period 9,930 7,963 9,930 7,963 More than 12 months after the end of the reporting period 5,791 5,537 5,791 5,537 15,721 13,500 15,721 13,500
(b) Long service liabilities have been classified as current where there is no unconditional right to defer settlement for at least 12 months after the end of the reporting period. Assessments indicate that actual settlements of the liabilities is occur as follows:
Within 12 months of the end of the reporting period 6,353 6,181 6,353 6,181 More than 12 months after the end of the reporting period 18,641 15,654 18,641 15,654 24,994 21,835 24,994 21,835
(c ) The settlement of annual and long service leave liabilities gives rise to the payment of employment on-costs including workersʼ compensation insurance. The provision is the present value of expected future payments. The associated expense, apart from the unwinding of the discount(finance cost), is included at note 20 ʻOther expensesʼ.
(d ) Defined benefit superannuation plans The superannuation liability has been established from data supplied by the Government Employees Superannuation Board.
Movements in the present value of the defined benefit obligations in the reporting period were as follows: Pension Scheme Pre-transfer benefit - Gold State scheme 2015 2014 2015 2014 $000 $000 $000 $000 Liability at start of period 17,798 19,525 4,745 4,863 Included in surplus/(deficit) Current service cost Past service cost - - - - Interest cost 620 625 162 156 620 625 162 156 Annual Report 2014 – 2014 15 Report Annual 175 176 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
38 Provisions (continued) Pension Scheme Pre-transfer benefit - Gold State scheme 2015 2014 2015 2014 Included in Other Comprehensive Income: $000 $000 $000 $000 Remeasurement loss/(gain) recognised: -Actuarial (gains)/loss arising from: demographic assumptions - - - - financial assumptions 1,266 (432) 173 (70) experience adjustments 67 111 17 5 1,333 (321) 190 (65)
Benefits paid (1,963) (2,031) (1,137) (209) (1,963) (2,031) (1,137) (209)
Liability at end of period 17,788 17,798 3,960 4,745
Fair value of Scheme assets The Authority holds no assets in Gold State Super for current employees to support the transferred benefits. Hence there are no fair value and no asset allocation of scheme assets, no financial instruments issued by the employer, no assets used by the employer and no asset-liability matching strategies
Significant actuarial assumptions at the reporting date;
Assumptions to determine start of the year defined benefit obligation and 2015 2014 defined benefit cost for the current year. Discount rate 3.69% 3.38% Future salary increases 5.00% 5.00% Future pension increases 2.50% 2.50%
Assumptions to determine defined benefit obligation at the valuation date. Discount rate 2.74% 3.69% Future salary increases 4.00% 5.00% Future pension increases 2.50% 2.50%
At 30 June 2015, the weighted-average duration of the defined benefit obligation was: Pension Scheme 8.3 years; Gold State Scheme 4.9 years The Pension Scheme and the pre-transfer benefit for the GSS expose the Authority to actuarial risks, such as salary risk and interest rate risk. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, holding all other assumptions constant
Sensitivity analysis Defined benefit obligation Base case -0.5% +0.5% Gold State scheme $000 $000 $000 Discount rate (0.5% movement) 3,960 4,057 3,867 Future salary growth (0.5% movement) 3,960 3,867 4,036
Pension scheme Discount rate (0.5% movement) 17,788 18,533 17,099 Future pension growth (0.5% movement) 17,788 17,093 18,532 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
38 Provisions (continued)
Employer funding arrangements for the defined benefit plans (i) The Pension Scheme and the pre-transfer benefit for the GSS in respect of individual plan participants are settled by the Authority on their retirement. Funding requirements are based on invoices provided to the Authority by GESB that represent the cost of benefits paid to members during the reporting period. (ii) Employer contributions of $1,919,000 (2014: $2,000,000) are expected to be paid to the Pension Scheme in the subsequent annual reporting period. (iii) Employer contributions of $568,000 (2014: $710,000) are expected to be paid to the Gold State Superannuation Scheme in the subsequent annual reporting period. Consolidated Parent 2015 2014 2015 2014 $000 $000 $000 $000 Movements in other provisions Employment on-costs 2,856 2,386 2,856 2,386 Carrying amount at start of period 2,386 1,912 2,386 1,912 Additional provisions recognised 9,024 8,155 9,024 8,155 Payments (8,554) (7,681) (8,554) (7,681) Carrying amount at end of period 2,856 2,386 2,856 2,386
Development levies 3,791 3,283 3,791 3,283 Carrying amount at start of period 3,283 2,155 3,283 2,155 Additional provisions recognised 1,541 2,237 1,541 2,237 Payments (1,033) (1,109) (1,033) (1,109) Carrying amount at end of period 3,791 3,283 3,791 3,283
Joint operations provisions 1,600 6,419 1,600 6,419 Carrying amount at start of period 6,419 9,919 6,419 4,917 Additional provisions recognised 2,113 4,968 2,113 4,968 Payments (6,932) (3,466) (6,932) (3,466) Carrying amount at end of period 1,600 11,421 1,600 6,419
39 Other liabilities
Current Accrued expenses: Administrative & general expenses 21,384 26,631 16,183 22,854 21,384 26,631 16,183 22,854 Joint operations liabilities 2,028 2,232 2,028 2,232 Unearned income 8,715 9,106 8,715 8,652 Total current other liabilities 32,127 37,969 26,926 33,738
40 Contributed equity
The Western Australian Government holds the equity interest in the Authority on behalf of the community. Equity represents the residual interest in the net assets of the Authority. The asset revaluation surplus represents that portion of equity resulting from the revaluation of non-current assets.
Balance at start of period 2,194,201 2,059,354 2,194,201 2,059,354
Contributions by owners Capital contributions 3,360 113,183 3,360 113,183 Other contributions by owner Royalties for Regions Fund - Regional Infrastructure and 51,246 12,964 51,246 12,964
Headworks Account Transfer of net assets from other agencies Department of Lands - 9,400 - 9,400 Department of Training & Workforce Development - - Total contributions by owners 54,606 135,547 54,606 135,547
Transfer of net assets to other agencies WA Health (8,901) (160) (8,901) (160) Department of Training & Workforce Development - (540) - (540) Total distributions to owners (8,901) (700) (8,901) (700)
Balance at end of period 2,239,906 2,194,201 2,239,906 2,194,201 Annual Report 2014 – 2014 15 Report Annual 177 178 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 2015 2014 2015 2014 41 Reserves $000 $000 $000 $000
(i) Asset revaluation reserve Balance brought forward from prior period 9,651,548 8,968,148 9,651,548 8,968,148 Transferred to retained earnings (81,333) (85,906) (81,333) (85,906) Revaluations during the period 457,205 781,410 457,205 781,410 Impairment loss on Rental Properties (9,405) (12,104) (9,405) (12,104) Closing balance 10,018,015 9,651,548 10,018,015 9,651,548
Revaluations recognised during the year were in respect of: Rental properties - current 431,251 563,465 431,251 563,465 Community Housing properties - current (31,652) 145,961 (31,652) 145,961 Shared Equity properties - current 46,322 42,228 46,322 42,228 Other properties - current (1,231) (282) (1,231) (282) Land transferred to Rental properties 3,110 30,038 3,110 30,038 447,800 781,410 447,800 781,410 Transferred to retained earnings Revaluation amount of rental properties - sold (55,512) (42,011) (55,512) (42,011) Revaluation amount of rental properties - demolished (12,179) (29,237) (12,179) (29,237) Revaluation amount of Community Housing properties - sold (2,306) (3,486) (2,306) (3,486) Revaluation amount of other properties - sold - (230) - (230) Revaluation amount of Shared Equity properties - sold (11,336) (10,942) (11,336) (10,942) (81,333) (85,906) (81,333) (85,906)
The asset revaluation reserve is used to record increments and decrements on the revaluation of non-current assets, as described in accounting policy note 2(f).
(ii) Interest Assistance Lowstart reserve Balance brought forward from prior year 740 747 - - Transfer to retained profits (7) (7) - - Closing balance 733 740 - -
Total reserves 10,018,748 9,652,288 10,018,015 9,651,548
42 Retained earnings
Opening balance 2,985,741 2,852,425 2,736,102 2,582,782 2,985,741 2,852,425 2,736,102 2,582,782 Transfer from asset revaluation reserve upon disposal 81,333 85,906 81,333 85,906 Transfer from Interest Assistance Lowstart reserve 7 7 - - Movement in equity attributable to Consolidated Entity (3,897) - - - Net profit/(loss) for the year (22,898) 47,403 (37,676) 67,414 Total retained earnings 3,040,286 2,985,741 2,779,759 2,736,102 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 43 Notes to the Statement of Cash Flows 2015 2014 2015 2014 $000 $000 $000 $000 Reconciliation of cash
Cash at the end of the year is shown in the Statement of Cash Flow as:
Cash at bank - operational 178,368 145,769 131,027 89,391 Deposits at call 200,107 200,026 - - Rental tenants bonds 15,189 15,349 15,189 15,349 Joint operations cash 31,590 31,752 31,590 31,752 Remote Indigenous communities 3,950 6,105 3,950 6,105 Royalties for Regions Fund 42,885 44,684 42,885 64,684 472,089 443,685 224,641 207,281
Reconciliation of cash flows from operations with profit for the period
Net Profit (21,448) 51,330 (36,153) 67,800 Non - cash items: Depreciation & amortisation expense 146,487 137,376 145,288 136,255 Doubtful debts expense 6,979 12,211 6,979 8,308 Loss on disposal of non-current assets 19,611 17,947 16,100 17,947 Cash items: Grants & subsidies from government (90,730) (87,923) (90,730) (87,923) (Increase)/decrease in assets: Receivables 94,836 60,408 86,991 65,737 Inventories (140,667) (139,175) (164,208) (111,789) Other assets 4,314 (13,569) (476) (9,840) Deferred tax assets 1,650 (1,650) - - Decrease in Investments in associates - 18,034 - - Increase/(decrease) in liabilities: Provisions (24,908) (20,731) (24,908) (20,731) Payables 38,459 47,688 76,472 35,011 Net GST payments (28,487) (21,230) (27,531) (22,768) Net cash flows (used in) provided by operating activities 6,096 60,716 (12,176) 78,007
44 Purchase of non-current physical assets
Buildings under construction 118,733 196,317 118,733 196,317 Computing facilities & equipment 17,044 13,729 16,489 13,174 Office machines & equipment 324 995 199 892 Transportable building - 1,572 - 1,572 Properties 38,253 90,658 38,253 90,658 Total purchase of non-current physical assets 174,354 303,271 173,674 302,613
45 Remuneration of the accountable authority and senior officers
Remuneration of members of the accountable authority The number of members of the accountable authority whose total of fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year, falls within the following bands: 2015 2014 $60,001 - $70,000 1 - $490,001 - $500,000 1 1
$000 $000
Base remuneration and superannuation 502 525 Annual leave & long service leave accruals 42 (56) Other benefits 20 22 Total remuneration of the member of the accountable authority 564 491
The total remuneration includes the superannuation expense incurred by the Housing Authority in respect of members of the accountable authority. There are no members of the accountable authority who are currently members of the Pension Scheme. Annual Report 2014 – 2014 15 Report Annual 179 180 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
45 Remuneration of the accountable authority and senior officers (Continued)
Remuneration of senior officers The number of senior officers other than senior officers reported as members of the accountable authority, whose total of fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year fall within the following bands: 2015 2014 $ 50,001 - $60,000 2 - $ 60,001 - $70,000 - - $ 70,001 - $80,000 - $ 80,001 - $90,000 1 - $ 90,001 - $100,000 1 - $160,001 - $170,000 - - $170,001 - $180,000 1 $180,001 - $190,000 1 $190,001 - $200,000 2 3 $200,001 - $210,000 - - $210,001 - $220,000 1 - $220,001 - $230,000 - - $230,001 - $240,000 1 -
$000 $000
Base remuneration and superannuation 1,260 734 Annual leave & long service leave accruals 14 14 Other benefits 33 29 The total remuneration of senior officers 1,307 777
The total remuneration includes the superannuation expense incurred by the Authority in respect of senior officers reported as members of the accountable authority. The increase is due to the greater number of senior officers acting in higher positions compared to previous years. There are no senior officers presently employed who are currently members of the Pension Scheme.
Consolidated Parent 46 Remuneration of auditor 2015 2014 2015 2014 $000 $000 $000 $000 Remuneration paid or payable to the Auditor General in respect of the audit for the current financial year is as follows:
Auditing the accounts, controls, financial statements and key 434 411 310 304 performance indicators. 434 411 310 304 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
Consolidated Parent 47 Commitments for expenditure 2015 2014 2015 2014 $000 $000 $000 $000 At June 30 2015 the expenditure commitments being contracted capital expenditure additional to the amounts reported in the financial statements, are payable as follows:
(a) Capital expenditure commitments Capital expenditure commitments, being contracted capital expenditure additional to the amounts reported in the financial statements, are payable as follows: Within 1 year 252,126 229,444 252,126 213,601 Later than 1 year & not later than 5 years 2,118 1,853 2,118 1,853 Later than 5 years - --- 254,244 231,297 254,244 215,454 The capital commitments include amounts for the following: Dwelling construction & upgrades 64,667 96,733 64,667 96,733 Land development and redevelopment 15,698 16,999 15,698 16,999 Crisis accommodation program 11,586 8,959 11,586 8,959 Joint operations land development 12,743 10,894 12,743 10,894 New living 137 226 137 226 Local Government & Community Housing programs 27 314 27 314 Commitments in Goldmaster - 8,428 - - Affordable Housing 149,386 81,329 149,386 81,329 254,244 223,882 254,244 215,454 (b) Loan advance commitment Approved loans not yet fully disbursed 435,197 503,795 - - 435,197 503,795 - - Loan advance commitment includes the following: Loans to Home Buyers 435,197 503,795 - - 435,197 503,795 - -
Expenditure commitments increased by $38.782 million (excluding Loans to Homebuyers) from the previous year.
Committed carryover for Construction of Houses decreased from the previous year due to funded projects from 2013-14 being completed or nearing completion in 2014-15. Also there were fewer units commenced in 2014-15.
Key Service Workers and GROH committed carryover has decreased due to a lower number of commencements in 2014-15 compared to 2013-14, together with projects from the previous financial year being completed by the end of 2014-15 for the Key Service Workers program.
Capital commitments for Remote Village Construction has increased due to the commencement of a two year program from 2014-15, still progressing therefore resulting in increased unpaid commitments.
Committed carryover for Land Development and Redevelopment has decreased from the previous year. This is mainly due to the transfer of Golden Bay projects to the Joint Venture program and the completion of a number of civil works contracts with Jindowie developments. This has been largely offset by new development contracts entered into in 2014-15 for Kwinana projects.
There has been an increase in Crisis Accommodation capital commitments due to a majority of units commencing in the last quarter of the financial year and several projects that commenced earlier, requiring extension of construction periods
Committed carryover for Joint venture projects is higher in comparison to the prior year due to the addition of Golden Bay, where contracts have commenced thus increasing commitments. Also, Oyster Harbour and Brookdale have increased their commitments to fund further developments.
New Living Development commitments have decreased due to the majority of land developments being completed prior to 2014-15 and new expenditure delayed due to the lack of recycled water to commence landscaping works for the Osprey Estate.
Capital Commitments for Community Housing has decreased due to fewer commencements in 2014-15 compared to 2013-14. Housing Authority, in collaboration with the Community Housing sector will continue to provide and sustain social housing in the State. Annual Report 2014 – 2014 15 Report Annual 181 182 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
47 Commitments for expenditure (continued)
The higher carry over commitments of $149.38 million for the Affordable Housing Construction Program was due to delays in commencements forecasted in early 2014-15 ; coupled with long construction time frames resulting in a number of projects not reaching completion by 30th June 2015.
Capital Commitments for Loans to Homebuyers has decreased by $68.60 million. Lower approval volumes due to reduced eligibility criteria have resulted in the decrease carryover of loan amounts available for borrowers to draw down.
Consolidated Parent (c) Non cancellable operating lease commitments 2015 2014 2015 2014 $000 $000 $000 $000 Commitments in relation to leases contracted for at the end of the reporting period but not recognised in the financial statements as liabilities are payable as follows: Rental property leases: Lease commitments on non cancellable operating leases are: Within 1 year 58,001 69,581 58,001 69,581 Later than 1 year & not later than 5 years 44,855 62,560 44,855 62,560 Later than 5 years 348 687 348 687 103,204 132,828 103,204 132,828 Motor vehicle leases: Lease commitments on non cancellable operating leases are: Within 1 year 841 782 841 782 Later than 1 year & not later than 5 years 592 642 592 642 1,433 1,424 1,433 1,424 Office property leases: Lease commitments on non cancellable operating leases are: Within 1 year 5,097 4,826 4,286 4,074 Later than 1 year & not later than 5 years 5,814 7,586 4,973 6,020 Later than 5 years 136 158 136 158 11,047 12,570 9,395 10,252 48 Contingent liabilities
Contaminated sites Under the Contaminated Sites Act 2003, the Housing Authority is required to report known and suspected contaminated sites to the Department of Environment Regulation (DER). In accordance with the Act, DER classifies these sites on the basis of the risk to human health, the environment and environmental values. Where sites are classified as contaminated - remediation required or possibly contaminated – investigation required, the Housing Authority may have a liability in respect of investigation or remediation expenses. There are three sites that have been identified as 'Contaminated - Remediation Required'.
The Housing Authority have identified seven other suspected contaminated sites of which five sites had been listed as requiring further investigations and two other sites awaiting classification. The Authority is unable to assess the likely outcome of the classification process, and accordingly, it is not practicable to estimate the potential financial effect or to identify the uncertainties relating to the amount or timing of any outflows. Whilst there is no possibility of reimbursement of any future expenses that may be incurred in the remediation of these sites, the Housing Authority may apply for funding from the Contaminated Sites Management Account to undertake further investigative work or to meet remediation costs that may be required.
Litigation in progress The Housing Authority has been joined in legal actions involving asbestos related illness. The estimated value of these claims against the Housing Authority is $950,000 (2014: $320,000). Liability is being denied and any legal claim will be defended. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
49 Supplementary financial information
(a) Write offs. Bad Debts written off by the Accountable Authority in the year ended 30 June 2015 totalled $6,575,783 (2014: $7,105,545) Bad Debts recovered during the year ended 30 June 2015 totalled $764,530 (2014: $724,042)
(b) Losses to the Housing Authority through thefts, defaults or other causes: Cashier shortage incurred for the year ended 30 June 2015 was nil. (2014: nil). Reportable thefts in the year ended 30 June 2015 was $50 (2014: nil). Amounts recovered during the year ended 30 June 2015 was nil (2014: nil)
(c) Gifts of public property In the year ended 30 June 2015 the Housing Authority made no gifts of public property.
50. Non - controlling interests Goldmaster Consolidated Parent 2015 2014 2015 2014 $000 $000 $000 $000
Opening Equity for non-controlling interest (928) (4,469) - - Non-controlling profit ending 30 June 2015 (73) 3,541 Movement in equity attributable to Consolidated Entity 3,897 Other changes to non-controlling interest (752) - - Total non-controlling interest 2,144 (928) - -
51 Related parties Keystart, a fully owned subsidiary is financed by the Housing Authority. The Housing Authority purchases preferential shares from Keystart at rates and conditions that mirror the loans that the Housing Authority obtains from the Western Australian Treasury Corporation. The following transactions/balances are eliminated on the consolidation of Keystart:
Note 2015 2014 $000 $000 Preferential shares 23 4,115,000 3,675,000 Interest revenue 10 104,554 94,181 Dividend 11 71,996 72,800 Other current assets 25 6,807 8,740 Recovery of salaries 15 159 135 Other expenses 20 3,996 -
Goldmaster, a controlled subsidiary entity is financed by the Housing Authority. The Housing Authority has provided three loans to Goldmaster for the development of property in Cockburn. One loan has been fully paid in 2014/15. The following transactions/balances are eliminated on the consolidation of Goldmaster:
Note 2015 2014 $000 $000 Interest revenue 10 992 5,991 Other financial assets 26 37,750 19,350 Loans and receivables 23 15,003 27,798 Other current assets 25 - 10,430
52. Events occurring after the end of the reporting period
The Housing Authority had no adjusting or non-adjusting events after the end of the reporting period. Annual Report 2014 – 2014 15 Report Annual 183 184 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures
Financial instruments held by the Consolidated Entity are cash and cash equivalents, other financial assets, loans to homebuyers, loans to commercial organisations, loans to local and statutory parties, State Nominated borrowings, WATC borrowings, Commonwealth Advances, rental deposits and tenant bonds.
The carrying amounts of each of the following categories of financial assets and financial liabilities at the balance sheet date are as follows:
Consolidated Parent 2015 2014 2015 2014 $000 $000 $000 $000 (i) Financial Assets Cash and cash equivalents 178,368 125,769 131,027 89,391 Restricted cash and cash equivalents 93,614 117,890 93,614 117,890 Other financial assets - deposits at call 200,107 200,026 - - - debentures - - - 19,350 - other assets 24 24 37,374 18,024 Receivables - Keystart preference shares - - 4,115,000 3,675,000 - general 3,509 11,380 8,205 11,250 - land debtors 19,562 29,832 19,562 29,832 - rent from tenants and other 37,048 28,274 37,048 28,274 - rental and lease bonds 21,370 18,602 21,370 18,602 - loans to homebuyers 4,161,907 3,722,147 - 3 - loans to commercial organisations - 2,966 9,695 25,727 Other current assets 26,844 8,581 33,649 27,751 Total financial assets 4,742,353 4,265,491 4,506,544 4,061,094
(ii) Financial Liabilities Borrowings - WATC 4,818,921 4,425,455 4,818,921 4,425,455 - Commercial loan 62,276 - 62,276 - - Commonwealth advances 407,495 422,641 407,495 422,641 Payables - general 83,003 130,035 82,663 121,163 - rental deposits and tenant bonds 15,189 15,349 15,189 15,349 - rental property water consumption 3,389 4,515 3,389 4,515 Other current liabilities 21,384 26,631 16,183 22,854 Total financial liabilities 5,411,657 5,024,626 5,406,116 5,011,977 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued )
Interest Rate Risk The following table represents a summary of the interest rate sensitivity of the Consolidated Entity's financial assets and liabilities at the end of the reporting period on the profit for the period and equity for a 1% change in interest rates. It is assumed that the change in interest rates is held constant throughout the reporting period. The Consolidated Entity's exposure to market interest rates relates primarily to the Consolidated Entity's long term debt obligations. CONSOLIDATED Interest rate risk -1% +1% Carrying amount Profit Equity Profit Equity 2015 $000 $000 $000 $000 $000 (i) Financial Assets Cash and cash equivalents 178,368 (1,784) (1,784) 1,784 1,784 Restricted cash and cash equivalents 93,614 (936) (936) 936 936 Deposits at call 200,107 (2,001) (2,001) 2,001 2,001 Loans to homebuyers 4,161,907 (41,619) (41,619) 41,619 41,619
(ii) Financial Liabilities Borrowings - WATC floating 4,523,760 45,238 45,238 (45,238) (45,238) - WATC fixed * 295,161 - - - - - Commercial loan 62,276 623 623 (623) (623) - Commonwealth advances * 407,495 - - - - Total Increase/(Decrease) (479) (479) 479 479
Interest rate risk -1% +1% Carrying amount Profit Equity Profit Equity 2014 $000 $000 $000 $000 $000 (i) Financial Assets Cash and cash equivalents 125,769 (1,258) (1,258) 1,258 1,258 Restricted cash and cash equivalents 117,890 (1,179) (1,179) 1,179 1,179 Deposits at call 200,026 (2,000) (2,000) 2,000 2,000 Loans to homebuyers 3,722,147 (37,221) (37,221) 37,221 37,221 Loans to commercial organisations 2,966 (30) (30) 30 30
(ii) Financial Liabilities Borrowings - WATC floating 3,445,000 34,450 34,450 (34,450) (34,450) - WATC fixed * 980,455 - - - - - Commonwealth advances * 422,641 - - - - Total Increase/(Decrease) (7,238) (7,238) 7,238 7,238
* Commonwealth Advances and WATC (fixed) are fixed interest loans that are not affected by interest rates. Annual Report 2014 – 2014 15 Report Annual 185 186 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued )
PARENT Interest rate risk -1% +1% Carrying amount Profit Equity Profit Equity 2015 $000 $000 $000 $000 $000 (i) Financial Assets Cash and cash equivalents 131,027 (1,310) (1,310) 1,310 1,310 Restricted cash and cash equivalents 93,614 (936) (936) 936 936 Debentures - 0 0 0 0 Keystart preference shares 4,115,000 (41,150) (41,150) 41,150 41,150 Loans to commercial organisations 9,695 (97) (97) 97 97
(ii) Financial Liabilities Borrowings - WATC floating 4,523,760 45,238 45,238 (45,238) (45,238) - WATC fixed * 295,161 - - - - - Commercial loan 62,276 623 623 (623) (623) - Commonwealth advances * 407,495 - - - - Total Increase/(Decrease) 2,368 2,368 (2,368) (2,368)
Interest rate risk -1% +1% Carrying amount Profit Equity Profit Equity 2014 $000 $000 $000 $000 $000 (i) Financial Assets Cash and cash equivalents 89,391 (894) (894) 894 894 Restricted cash and cash equivalents 117,890 (1,179) (1,179) 1,179 1,179 Debentures 19,350 (194) (194) 194 194 Keystart preference shares 3,675,000 (36,750) (36,750) 36,750 36,750 Loans to commercial organisations 25,727 (257) (257) 257 257
(ii) Financial Liabilities Borrowings - WATC floating 3,445,000 34,450 34,450 (34,450) (34,450) - WATC fixed * 980,455 - - - - - Commonwealth advances * 422,641 - - - - Total Increase/(Decrease) (4,824) (4,824) 4,824 4,824
* Commonwealth Advances and WATC (fixed) are fixed interest loans that are not affected by interest rates. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued)
Credit Risk Ageing analysis of financial assets
CONSOLIDATED Past due but not impaired
More than More than Not past due 3 months 6 months Impaired Carrying and not Not more less than less than More than financial Amount impaired than 3 months 6 months 1 year 1 year assets $000 $000 $000 $000 $000 $000 $000
2015
Cash and cash equivalents 178,368 178,368 ----- Restricted cash and cash equivalents 93,614 93,614 ----- Other financial assets - deposits at call 200,107 200,107 ------other assets 24 24 ----- Receivables * - general 3,509 2,896 305 99 179 30 - - land debtors 19,562 18,630 - - - 932 - - rent from tenants and other 37,048 4,322 12,111 4,769 7,463 8,383 498 - rental lease bonds 21,370 18,386 867 915 1,521 (319) 108 - loans to homebuyers 4,161,907 3,978,972 182,935 - - -- Other current assets 26,844 26,844 ----- Total financial assets 4,742,353 4,522,163 196,218 5,783 9,163 9,026 606
2014
Cash and cash equivalents 125,769 125,769 ----- Restricted cash and cash equivalents 117,890 117,890 ----- Other financial assets - debentures ------deposits at call 200,026 200,026 ------other assets 24 24 ----- Receivables * - general 11,380 10,542 191 68 542 37 - - land debtors 29,832 28,899 1 63 - 869 - - rent from tenants and other 28,274 4,834 7,442 4,090 6,455 5,453 - - rental lease bonds 18,602 16,456 667 594 885 -- - loans to homebuyers 3,722,144 3,570,194 151,950 - -- - loans to commercial organisations 2,966 2,966 ------loans to local and statutory organisations 3 3 ----- Other current assets 8,581 8,581 ----- Total financial assets 4,265,491 4,086,184 160,251 4,815 7,882 6,359 -
* Ageing of past due but not impaired values are inclusive of allowance for impairment. These provisions are netted against past due items greater than 1 year.
Annual Report 2014 – 15 187 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued)
Credit Risk Ageing analysis of financial assets
PARENT Past due but not impaired
More than More than Not past due 3 months 6 months Impaired Carrying and not Not more less than 6 less than More than financial Amount impaired than 3 months months 1 year 1 year assets $000 $000 $000 $000 $000 $000 $000
2015
Cash and cash equivalents 131,027 131,027 ----- Restricted cash and cash equivalents 93,614 93,614 ----- Other financial assets - debentures ------shares in Goldmaster Enterprises Pty Ltd 37,350 37,350 ------other assets 24 24 ----- Receivables * - general 8,205 7,592 305 99 179 30 - - land debtors 19,562 18,630 - - - 932 - - rent from tenants and other 37,048 4,322 12,111 4,769 7,463 8,383 498 - rental lease bonds 21,370 18,386 867 915 1,521 (319) 108 - loans to homebuyers ------loans to commercial organisations 9,695 9,158 - - -- - Keystart preference shares 4,115,000 4,115,000 ----- Other current assets 33,649 33,649 ----- Total financial assets 4,506,544 4,468,752 13,283 5,783 9,163 9,026 606
2014
Cash and cash equivalents 89,391 89,391 ----- Restricted cash and cash equivalents 117,890 117,890 ----- Other financial assets - debentures 19,350 19,350 ------shares in Goldmaster Enterprises Pty Ltd 18,000 18,000 - other assets 24 24 ----- Receivables * - general 11,250 10,412 191 68 542 37 - - land debtors 29,832 28,899 1 63 - 869 - - rent from tenants and other 28,274 4,834 7,442 4,090 6,455 5,453 - - rental lease bonds 18,602 16,456 667 594 885 -- - loans to homebuyers 3 3 ------loans to commercial organisations 25,727 25,727 ------Keystart preference shares 3,675,000 3,675,000 ----- Other current assets 27,751 27,751 ----- Total financial assets 4,061,094 4,033,737 8,301 4,815 7,882 6,359 -
* Ageing of past due but not impaired values are inclusive of allowance for impairment. These provisions are netted against past due items greater than 1 year.
188 Housing Authority THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued )
Liquidity risk and interest rate exposure
Interest rate exposure and maturity analysis of financial assets and financial liabilities
CONSOLIDATED Interest rate exposure Contractual Maturity Dates Weighted Total Average Fixed Variable Non- Within 1 - 2 2 - 3 3 - 4 4 - 5 More than Adjustment for carrying Effective Interest Interest Interest 1 year years years years years 5 years discounting amount Interest Rate Rate Rate Bearing 2015 % $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
(i) Financial Assets Cash and cash equivalents 2.54% - 178,368 - 178,368 ------178,368 Restricted cash and cash equivalents 2.70% - 93,614 - 93,614 ------93,614 Other financial assets - deposits at call 2.71% - 200,107 - 200,107 ------200,107 - other assets - - 24 - - - - - 24 - 24 Receivables - general *** - - 3,509 3,509 ------3,509 - land debtors *** - - 19,562 19,562 ------19,562 - rent from tenants and other - - 37,048 37,048 ------37,048 - rental and lease bonds *** - - 21,370 21,370 ------21,370 - loans to homebuyers 5.16% - 4,161,907 ------4,161,907 - 4,161,907 Other current assets *** - - 26,844 26,844 ------26,844 Total financial assets - 4,633,996 108,357 580,422 - - - - 4,161,931 - 4,742,353
(ii) Financial Liabilities Borrowings ------WATC 3.43% 295,161 4,523,760 - 2,144,760 461,523 1,129,538 52,548 741,876 602,786 314,110 4,818,921 - Commercial loan 4.50% - 62,276 - 2,802 2,802 2,802 2,802 2,802 87,498 39,232 62,276 - Commonwealth advances 4.56% 407,495 --33,800 33,436 33,150 32,825 32,411 469,411 227,538 407,495 Payables - general * *** - - 83,003 83,003 ------83,003 - rental deposits and tenant bonds ** *** - - 15,189 15,189 ------15,189 - rental property water consumption *** - - 3,389 3,389 ------3,389 Other current liabilities *** - - 21,384 21,384 ------21,384 Total financial liabilities 702,656 4,586,036 122,965 2,304,327 497,761 1,165,490 88,175 777,089 1,159,695 580,880 5,411,657
* Payables general includes an amount of $ 537,159 (2014 $851,903) for estate improvements. These funds are committed for various groups across the State. The repayments of these funds is based on the property market activity within each area. The maturity is not date based and cannot be forecast. ** Rental deposits and tenant bonds are repayable only when the tenant vacates the rental property. The full amount owing is not necessarily the amount that will be paid on vacation as this money can be offset against any outstanding rental payments or other payments that are outstanding. *** Not applicable for non-interest bearing financial assets and liabilities
Annual Report 2014 – 15 189 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued )
Liquidity risk and interest rate exposure
Interest rate exposure and maturity analysis of financial assets and financial liabilities
CONSOLIDATED Interest rate exposure Contractual Maturity Dates Weighted Total Average Fixed Variable Non- Within 1 - 2 2 - 3 3 - 4 4 - 5 More than Adjustment for carrying Effective Interest Interest Interest 1 year years years years years 5 years discounting amount Interest Rate Rate Rate Bearing 2014 % $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
(i) Financial Assets Cash and cash equivalents 2.74% - 125,769 - 125,769 ------125,769 Restricted cash and cash equivalents 2.82% - 117,890 - 117,890 ------117,890 Other financial assets - deposits at call 2.83% - 200,026 - 200,026 ------200,026 - other assets - - 24 - - - - - 24 - 24 Receivables - general *** - - 11,380 11,380 ------11,380 - land debtors *** - - 29,832 29,832 ------29,832 - rent from tenants and other - - 28,274 28,274 ------28,274 - rental and lease bonds *** - - 18,602 18,602 ------18,602 - loans to homebuyers 5.14% 3 3,722,147 ------3,722,147 - 3,722,147 - loans to commercial organisations 4.48% 2,966 - - 2,966 ------2,966 Other current assets *** - - 8,581 8,581 ------8,581 Total financial assets 2,969 4,165,832 96,693 543,320 - - - - 3,722,171 - 4,265,491
(ii) Financial Liabilities Borrowings - WATC 3.23% 980,455 3,445,000 - 1,434,549 1,626,014 537,897 1,236,873 292,968 6,343,386 7,046,232 4,425,455 - Commonwealth advances 4.57% 422,641 - - 34,088 33,777 33,421 33,129 32,797 501,943 246,514 422,641 Payables - general * *** - - 130,035 130,035 ------130,035 - rental deposits and tenant bonds ** *** - - 15,349 15,349 ------15,349 - rental property water consumption *** - - 4,515 4,515 ------4,515 Other current liabilities *** - - 26,631 26,631 ------26,631 Total financial liabilities 1,403,096 3,445,000 176,530 1,645,167 1,659,791 571,318 1,270,002 325,765 6,845,329 7,292,746 5,024,626
* Payables general includes an amount of $ 851,903 (2013 $799,221) for estate improvements. These funds are committed for various groups across the State. The repayments of these funds is based on the property market activity within each area. The maturity is not date based and cannot be forecast. ** Rental deposits and tenant bonds are repayable only when the tenant vacates the rental property. The full amount owing is not necessarily the amount that will be paid on vacation as this money can be offset against any outstanding rental payments or other payments that are outstanding. *** Not applicable for non-interest bearing financial assets and liabilities
190 Housing Authority THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued )
Liquidity risk and interest rate exposure
Interest rate exposure and maturity analysis of financial assets and financial liabilities
PARENT Interest rate exposure Contractual Maturity Dates Weighted Total Average Fixed Variable Non- Within 1 - 2 2 - 3 3 - 4 4 - 5 More than Adjustment for carrying Effective Interest Interest Interest 1 year years years years years 5 years discounting amount Interest Rate Rate Rate Bearing 2015 % $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
(i) Financial Assets Cash and cash equivalents 2.70% - 131,027 - 131,027 ------131,027 Restricted cash and cash equivalents 2.70% - 93,614 - 93,614 ------93,614 Other financial assets - other assets - - 37,374 - - - - - 37,374 - 37,374 Receivables - general *** - - 8,205 8,205 ------8,205 - land debtors *** - - 19,562 19,562 ------19,562 - rent from tenants and other *** - - 37,048 37,048 ------37,048 - rental and lease bonds *** - - 21,370 21,370 ------21,370 - loans to homebuyers ------loans to commercial organisations 4.48% 9,695 - - 9,695 ------9,695 - Keystart preference shares 2.29% 655,000 3,460,000 - 1,730,000 375,000 1,060,000 - 700,000 250,000 - 4,115,000 Other current assets *** - - 33,649 33,649 ------33,649 Total financial assets 664,695 3,684,641 157,208 2,084,170 375,000 1,060,000 0 700,000 287,374 - 4,506,544
(ii) Financial Liabilities Borrowings - WATC 3.43% 295,161 4,523,760 - 2,144,760 461,523 1,129,538 52,548 741,876 602,786 314,110 4,818,921 - Commercial loan 4.50% - 62,276 - 2,802 2,802 2,802 2,802 2,802 87,498 39,232 62,276 - Commonwealth advances 4.56% 407,495 --33,800 33,436 33,150 32,825 32,411 469,411 227,538 407,495 Payables - general * *** - - 82,663 82,663 ------82,663 - rental deposits and tenant bonds ** *** - - 15,189 15,189 ------15,189 - rental property water consumption *** - - 3,389 3,389 ------3,389 Other current liabilities *** - - 16,183 16,183 ------16,183 Total financial liabilities 702,656 4,586,036 117,424 2,298,786 497,761 1,165,490 88,175 777,089 1,159,695 580,880 5,406,116
* Payables general includes an amount of $ 537,159 (2014 $851,903) for estate improvements. These funds are committed for various groups across the State. The repayments of these funds is based on the property market activity within each area. The maturity is not date based and cannot be forecast. ** Rental deposits and tenant bonds are repayable only when the tenant vacates the rental property. The full amount owing is not necessarily the amount that will be paid on vacation as this money can be offset against any outstanding rental payments or other payments that are outstanding. *** Not applicable for non-interest bearing financial assets and liabilities
Annual Report 2014 – 15 191 THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
53. Financial instrument disclosures (continued )
Liquidity risk and interest rate exposure
Interest rate exposure and maturity analysis of financial assets and financial liabilities
PARENT Interest rate exposure Contractual Maturity Dates Weighted Total Average Fixed Variable Non- Within 1 - 2 2 - 3 3 - 4 4 - 5 More than Adjustment for carrying Effective Interest Interest Interest 1 year years years years years 5 years discounting amount Interest Rate Rate Rate Bearing 2014 % $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
(i) Financial Assets Cash and cash equivalents 2.82% - 89,391 - 89,391 ------89,391 Restricted cash and cash equivalents 2.82% - 117,890 - 117,890 ------117,890 Other financial assets - debentures 40.00% 19,350 - - 19,350 ------19,350 - other assets - - 18,024 - - - - - 18,024 - 18,024 Receivables - general *** - - 11,250 11,250 ------11,250 - land debtors *** - - 29,832 29,832 ------29,832 - rent from tenants and other *** - - 28,274 28,274 ------28,274 - rental and lease bonds *** - - 18,602 18,602 ------18,602 - loans to homebuyers 5.38% 3 ------3 - 3 - loans to commercial organisations 4.48% 25,727 - - 25,727 ------25,727 - Keystart preference shares 2.79% 230,000 3,445,000 - 1,015,000 1,075,000 275,000 960,000 - 350,000 - 3,675,000 Other current assets *** - - 27,751 27,751 ------27,751 Total financial assets 275,080 3,652,281 133,733 1,383,067 1,075,000 275,000 960,000 - 368,027 - 4,061,094
(ii) Financial Liabilities Borrowings - WATC 3.23% 980,455 3,445,000 - 1,434,549 1,626,014 537,897 1,236,873 292,968 6,343,386 7,046,232 4,425,455 - Commonwealth advances 4.57% 422,641 - - 34,088 33,777 33,421 33,129 32,797 501,943 246,514 422,641 Payables - general * *** - - 121,163 121,163 ------121,163 - rental deposits and tenant bonds ** *** - - 15,349 15,349 ------15,349 - rental property water consumption *** - - 4,515 4,515 ------4,515 Other current liabilities *** - - 22,854 22,854 ------22,854 Total financial liabilities 1,403,096 3,445,000 163,881 1,632,518 1,659,791 571,318 1,270,002 325,765 6,845,329 7,292,746 5,011,977
* Payables general includes an amount of $ 851,903 (2013 $799,221) for estate improvements. These funds are committed for various groups across the State. The repayments of these funds is based on the property market activity within each area. The maturity is not date based and cannot be forecast. ** Rental deposits and tenant bonds are repayable only when the tenant vacates the rental property. The full amount owing is not necessarily the amount that will be paid on vacation as this money can be offset against any outstanding rental payments or other payments that are outstanding. *** Not applicable for non-interest bearing financial assets and liabilities
192 Housing Authority THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
54 Special Purpose Account
Municipal and Essential Services Account To hold the balance of the Commonwealth Government's final funding for the provision of municipal and essential services to remote Aboriginal communities in Western Australia. An amount of $90M shall be credited to the account in 2015/16.
EXPLANATORY STATEMENT OF FINANCIAL RESULTS
55(a). COMPARISONS OF ESTIMATES 2014-15 AND ACTUAL OPERATING RESULTS FOR 2014-15
Section 40 of the Financial Management Act 2006 requires The Housing Authority to prepare annual budget estimates. Treasurer's Instruction 945 requires an explanation of significant variations between these estimates and actual results. Significant variations are considered to be those greater/less than $10 million or 10% greater/less than the budgeted amount. Budget Actual Variation $000 $000 $000 1. Revenues have varied by the following:
* Sales 623,769 430,907 (192,862) Sales were 30.77% below budget due a slowing down of the market. There were delays in Affordable Housing sales, as a result of increased construction timeframes along with falling metropolitan property prices. Land sales were also below budget due to the softening market. Some anticipated englobo land sales didn't occur and internal transfers of land to the Affordable Housing program were also delayed.
* Rental revenue 477,667 448,468 (29,199) Rental revenue was 6% below budget due to the lower GROH rental income due to the reduction of rental prices in the north west.
* Commonwealth Grants and Contributions Commonwealth Grants is 28.97% below budget due to NPARIH Funding of $87 287,996 204,550 (83,446) million being delayed until 2015-16.
* Interest revenue 150,260 110,813 (39,447) Interest Revenue is 23.87% below budget due to reduced Keystart interest as a result of the size of the loan portfolio during the financial year, combined with a slight drop in the interest rate. Keystart interest is fully offset under Finance Costs.
* Other Revenues The 61.2% increase in Other Revenue is attributed to an increased Keystart 59,396 95,746 36,350 dividend and higher than expected tax recoveries mainly relating to prior years.
* Developers' contributions 8,000 9 (7,991) This relates to the Chevron contribution towards GROH properties which was delayed due to availability of titles from Landcorp.
* Other gains 7,990 (16,100) (24,090) The reduction in gains is due to the sale of ex-rental and GROH properties below book value due to the weakening of the property market.
2. Expenses have varied by the following:
* Cost of sales 460,981 277,563 (183,418) Cost of Sales is below budget by 39.41%. This is a combination of reduced property sales and lower land redevelopment costs due to delays to land development in Hedland and other redevelopment projects not proceeding as expected. Annual Report 2014 – 2014 15 Report Annual 193 194 Housing Authority Housing
THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
55(a). COMPARISONS OF ESTIMATES 2014-15 AND ACTUAL OPERATING RESULTS FOR 2014-15 (continued)
Budget Actual Variation $000 $000 $000
* Rental Expense 381,703 331,391 (50,312) The reduction in rental expense is mostly as a result of lower GROH rental prices being charged across the Pilbara region due to the economic downturn in the Pilbara. In addition, maintenance expenditure was lower mostly as a result of higher tenant liability being recovered as a result of enhanced identification and recording.
* New Living 42,377 25,545 (16,832) Improvement expenditure of properties for sale is lower than budget due to the slow demand for properties in South Hedland, making purchase a less attractive option. Expenditure on land development is also down due to the slow market in South Hedland.
* Community Support Aboriginal Community Village Infrastructure support expenditure is lower than 231,566 160,848 (70,718) anticipated due to the 2014-16 bid undergoing protracted negotiations. This has caused delays in commencing the planned work activities as anticipated for 2014-15.
* Grants and Subsidies 1,364 818 (546) Expenditure below budget due to funding for Planning for Aboriginal Communities for 2014-15 not being paid.
* Finance costs 195,924 156,209 (39,715) Interest Revenue is below budget as a result of the budgeted loan portfolio balance not being reached, due to higher discharges than expected, and lower approvals for the SharedStart program. Interest rates to borrowers were also lower than budgeted due to an environment of low interest rates. Keystart finance costs are fully offset under Interest revenue.
* Depreciation and amortisation 132,806 145,289 12,483 The 9.40% increase is due to an additional $7 million for depreciation of rental properties and an extra $6 million for increased amortisation of computing development costs.
* Other expenses 89,563 119,926 30,363 Other expenditure increases of 31.90% were due to an increase in Development Management Agreement commission and fees of $9 million and an increase $9 million in management fees for Key Service Worker facility not in the budget.
3. Grants and subsidies from State Government 80,013 90,730 10,717 In 2014-15 the Housing Authority received $3.3 million funding from Landcorp for 6 dwellings to be built in Waardi and $4.4 million for Respite Port Hedland and WA NDIS in Busselton that were not included in the budget. THE HOUSING AUTHORITY AND CONTROLLED ENTITIES
55(b). COMPARISONS OF ACTUAL OPERATING RESULTS FOR 2014-15 WITH THOSE OF THE PRECEDING YEAR
Details and reasons for significant variations between actual operating results for 2014-15 and the preceding year are detailed below. Significant variations are considered to be those greater/less than $10 million or 10% greater/less than the actual amount for the preceding year. Actual Actual Variation 2015 2014 1. Revenues have varied by the following: $000 $000 $000
* Commonwealth grants and contributions 204,550 313,059 (108,509) Commonwealth grants and contributions have decreased by $108.509 million. Funding under the National Partnership Agreement for remote Indigenous communities decreased by $108.22 million mainly due to NPARIH Funding of 87million being delayed until 2015-16.
* Developers' contributions 9 9,514 (9,505) Developers' contributions decreased by $9.50 million due to Community Housing contributions to current construction projects diminishing by $2.38 million and BHP contributing $7.00 million for a Keyworker Project last financial year.
* Other gains 95,746 86,357 9,389 Other gains increased by $9.90 million. This is due mainly due to an increase in the amount of GST recovered for previous years.
2. Expenses have varied by the following:
* Cost of sales 277,563 240,579 36,984 Cost of sales increased by $36.98 million due to an increase of $71.58 million in the cost of House and Land packages sold including One on Aberdeen and a decrease of $34.60 million on cost of land sold.
* Rental expenses 356,936 384,968 (28,032) Rental expenses decreased by $28.03 million mainly due to increases of $4.9 million in rental property maintenance and $9 million in rental property rates, offset by a decrease of $11.67million in properties leased by Government Regional Officers Housing, a decrease in the Hardship Efficiency program of $3.89 million, a reduction in property improvements of $4.57 million and a reduction in insurance costs of $2.56 million.
* Community support expenses 160,848 191,521 (30,673) Aboriginal Community Village Infrastructure support expenditure is lower than anticipated due to the 2014-16 bid undergoing protracted negotiations. This has caused delays in commencing the planned work activities as anticipated for 2014-15. Annual Report 2014 – 2014 15 Report Annual 195 Key Performance Indicators Certifi cation of Key Performance Indicators I hereby certify that the key performance indicators are based on proper records, are relevant and appropriate for assisting users to assess the Housing Authority’s performance, and fairly represent the performance of the Housing Authority and its subsidiary for the fi nancial year ended 30 June 2015.
Paul Whyte Acting Chief Executive Offi cer Accountable Authority
9 September 2015
196 Housing Authority Key Performance Indicators Outcome: Housing eligible Western Australians The Authority primarily contributes to the following government goal: Eligibility for public rental housing and for home loans is determined by assessable income limits and other eligibility criteria. > Goal 3: Results-Based Service Delivery–greater focus on The opportunity to purchase the Authority’s land, priced in the low achieving results in key service delivery areas for the benefi t to moderate price bracket, is available to all Western Australians. of all Western Australians. In addition, the Authority makes available loans to cover the cost of The Authority seeks to enhance the quality of life and wellbeing of security bonds so that income-eligible applicants can access housing all people throughout Western Australia by satisfying the basic need in the private rental market. for shelter. In the wider context, affordable, available and appropriate It is a key strategy of the Authority to ease the pressure on the waiting housing assists in contributing to positive social outcomes in health, list for public housing by expanding the range and diversity of housing education and employment. The Authority contributes to Goal 3 by products and services for people on low to moderate incomes. providing housing through its rental housing, home fi nance, home Varying alternatives will provide new entry points for clients as well ownership, and land development activities for eligible Western as new and evolving options that support their transition along the Australians who may not otherwise be able to obtain housing. housing continuum as their circumstances improve. Through the provision of Government Regional Offi cers’ Housing, the Authority also provides government employees with suitable and appropriate housing in regional and remote areas to support the delivery of public services such as education and policing.
Annual Report 2014 – 15 197 Effectiveness indicator 1 The extent to which the Housing Authority is responsive to the housing needs of eligible Western Australians This indicator measures the Authority’s capacity to respond to expressed unmet housing demand. It is calculated as the ratio of the total number of units of housing assistance provided each year, to the number on the waiting list at 30 June of the previous year. The higher the ratio, the greater the assistances provided in relation to expressed unmet demand. Housing assistances comprise: people housed from the waiting list into public housing or community housing options; bond assistance loans; new home loans; and land sales (lower quartile). The Authority’s public rental housing waiting list is used to represent total expressed unmet housing demand, as the other forms of housing assistance do not have a waiting list.
Ratio of the number of units of housing assistance per annum to the number Actual Target on the waiting list at the start of the reporting period 1.00 2010-11 2011-12 2012-13 2013-14 2014-15 2014-15 Total housing assistances 1 16,555 13,796 14,577 16,824 17,022
0.75 Public rental waiting list at 24,136 23,411 22,871 21,121 20,013 June previous financial year 2
0.50 Ratio 0.69 0.59 0.64 0.80 0.85 0.84 Ratio
1 For 2014-15 the total units of housing assistance comprise (2013-14 result indicated within brackets): 0.25 number of people (applications) allocated from the waiting list into community housing options: 227 (404); number of new home loans approved: 3,420 (3,974); number of Housing Authority (including Joint Venture partner) land sales below $189,000a: 516 (598); number of new public rental occupations: 0.0 2,720 (2,920); number of bond assistance loans approved: 10,139 (8,928). 2010-11 2011-12 2012-13 2013-14 2014-15 a The benchmark cut-off for the lower end of the market ($189,000) lower quartile is derived from the Real Estate Institute of Western Australia’s Market Update Report (March Quarter 2015), which contains the Ratio Target final December Quarter 2014 lower quartile. The report provides the lower quartile for Western Australia (State) residential land sales, (2010-11=$172,000; 2011-12=$168,000; 2012 13=$175,000, 2013-14=$175,000). Excluded from the lower quartile lot sales are multiple sales to the same person; lots over 1,000 square Comment on performance: metres; sales to companies or other government departments; and internal transfers. The ratio (0.85) of assistances provided to demand was higher than the 2 The total number of applications recorded on the public rental waiting list varies over time as applicants’ eligibility changes. Applications may be withdrawn from the waiting list if applicants fail to meet ongoing Target (0.84). During 2014-15 there was a higher than anticipated number eligibility requirements or re-instated if they are later considered eligible. The number of applications of bond assistance loans provided. A reduction in rental prices and the to calculate this indicator is based on the waiting list as at 30 June in the previous financial year. increase in the vacancy rate in the private rental market has resulted in a higher number of applications for bond assistance loans.
198 Housing Authority Effectiveness indicator 2 Waiting times for accommodation – applicants housed This indicator measures the Authority’s capacity to provide public rental housing to eligible applicants who are on the waiting list. Waiting times for accommodation measures the time between an applicant being listed on the waiting list and when they are housed. The greater the capacity to meet demand, the shorter the waiting time. The waiting time indicator includes properties that are head leased to community housing providers. The graph indicates the waiting times of all applicants housed during the year in terms of average and median.
Waiting times for accommodation – applicants housed average and median in weeks The table below illustrates the distribution of wait times for 160 applicants housed.
120 2010-11 (%) 2011-12 (%) 2012-13 (%) 2013-14 (%) 2014-15 (%) 1 month 14.08 12.19 14.47 11.88 6.47 80 1 – 12 months 22.07 21.18 21.90 21.03 21.76 Weeks 1 – 3 years 34.34 30.17 27.44 28.12 29.38 40 3 – 5 years 19.11 20.73 18.24 18.08 19.49 5+ years 10.40 15.73 17.96 20.89 22.90 0 2010-11 2011-12 2012-13 2013-14 2014-15 Comment on performance: 2010-11 2011-12 2012-13 2013-14 2014-15 The average wait time for accommodation (158 weeks) was higher than the Average 113 131 132 146 158 Target (139 weeks), while the median (125 weeks) was consistent with the Median 91 111 98 114 125 Target (125 weeks). Target Average 139 Fewer public housing properties becoming available for rent during the year Target Median 125 resulted in an increase in the wait time. The waiting times for applicants housed were also higher due to the Authority allocating housing to a larger percentage of applicants who had waited longer compared to the prior year. Factors influencing the time an applicant may wait to be housed include the area in which housing is being sought, turnover of properties in the region, the type of accommodation required, the applicant’s place on the waiting list and whether they have a priority housing need.
Annual Report 2014 – 15 199 Effectiveness indicator 3 The extent to which the Government Regional Officers’ Housing is responsive to the provision of housing to meet the needs of eligible Western Australian government employees This indicator measures the capacity to provide accommodation in response to requests from government departments. This is calculated as supply divided by demand and is presented as a percentage. Supply is represented by the number of properties allocated to departments at the end of the financial year. Demand is calculated by adding the number of properties allocated to departments to the number of unmet accommodation requests from departments at the end of the financial year.
Percentage of demand met Supply and demand 98 Actual Target 2010-11 2011-12 2012-13 2013-14 2014-15 2014-15 96 Supply 5,099 5,213 5,235 5,054 5,014
94 Demand 5,332 5,439 5,554 5,308 5,188 Percentage of demand met 96% 96% 94% 95% 97% 95% Percentage 92
90 2010-11 2011-12 2012-13 2013-14 2014-15 Actual Target
Comment on performance: The percentage of demand met (97 per cent) was higher than the Target (95 per cent). The Authority met 97 per cent of requests in 2014-15 to provide government employees with suitable and appropriate housing in regional and remote areas supporting the delivery of public services. Overall, supply reduced slightly compared to the prior year due to lower demand. Decreases in demand were experienced in the Pilbara, Midwest/Gascoyne and Southwest regions.
200 Housing Authority Efficiency indicators: The Authority provides four major services: rental housing, home loans, residential land and housing supply, and Government Regional Officers’ Housing.
Service 1: Rental Housing This Service contributes to the Authority’s outcome by providing eligible Western Australians with:
>>public rental housing; >>community housing managed properties: rental properties managed by not-for-profit housing companies, community organisations, housing associations, and local governments through the Authority’s joint venture and community housing and crisis accommodation programs; >>rental housing for key workers in regional Western Australia; and >>properties for remote Aboriginal communities.
Annual Report 2014 – 15 201 Effi ciency indicator 1
Operating cost per rental property Operating cost per rental property $17,500 The operating cost per rental property measures the cost effi ciency of
rental housing, and is calculated by dividing the total cost of the Service $15,000 (total expenses) by the total number of rental properties. The total operating cost of the Rental Housing Service comprises: $12,500
> administration costs (employee benefi ts, supplies and services, $10,000 and accommodation);
> rental expenses; $7,500 2010-11 2011-12 2012-13 2013-14 2014-15 > fi nance costs; > depreciation and amortisation; 2010-11 2011-12 2012-13 2013-14 2014-15 > other expenses; and 2014 – 2015 Target $16,256 Operating cost per rental property $12,539 $14,670 $14,766 $15,419 $14,750 > community support (includes the repair and maintenance of infrastructure, as well as power, water and wastewater in Indigenous communities and town reserves, which cannot be directly attributed Comment on performance: to a property). The operating cost per rental property ($14,750) was lower than the Target ($16,256). A slowing of market conditions in South Hedland resulted in a Expenses relating to community housing managed properties are borne reduction in expenditure for the refurbishment of former public housing by both the Authority and the community housing organisations. properties for sale.
202 Housing Authority Service 2: Home Loans This Service contributes to the Authority’s outcome by providing home Operating cost per current loan account ownership schemes for eligible applicants. $3,000 Effi ciency indicator 2 $2,000 Operating cost per current loan account The operating cost per current loan account measures the cost effi ciency $1,000 in home ownership products and services. It is calculated by dividing the total cost of the Service (total expenses) by the total number of loans (Keystart and other loan products). $0 2010-11 2011-12 2012-13 2013-14 2014-15 The total operating cost of the Home Loans Service comprises: 2010-11 2011-12 2012-13 2013-14 2014-15 > administration costs (employee benefi ts, supplies and services, 2014 – 2015 Target $1,576 and accommodation); Operating cost per current loan account $1,575 $1,845 $2,078 $1,972 $1,996 > depreciation and amortisation; and > other expenses. Comment on performance: Keystart fi nance costs for loan advances to clients are excluded as The operating cost per current loan account ($1,996) was higher than borrowing costs are incurred and borne by clients and do not relate to Target ($1,576). A reduction in Keystart’s approved borrowing limit meant the resources required to approve and process loan applications and the targeted levels of new lending were not achieved, resulting in a lower manage loan accounts. number of current loans compared to the Target.
Annual Report 2014 – 15 203 Service 3: Land and Housing Supply This Service contributes to the Authority’s outcome by developing land for housing and providing housing for sale to the market. Effi ciency indicator 3 Operating cost per lot developed
This indicator measures the cost effi ciency of the Authority’s land Operating cost per lot developed development activities. It is calculated by dividing the total cost of the $30,000
land component of the Service by the number of lots or dwelling unit $25,000 equivalents developed. $20,000 The Authority’s land development activities include joint venture partnerships, urban development, urban renewal and urban $15,000 redevelopment. $10,000 The total operating cost of the land supply component of the Land and Housing Supply Service comprises: $5,000 2010-11 2011-12 2012-13 2013-14 2014-15 > administration costs (employee benefi ts, supplies and services, 2010-11 2011-12 2012-13 2013-14 2014-15 and accommodation); 2014 – 2015 Target $20,188 > depreciation and amortisation; Operating cost per lot developed $18,389 $19,841 $24,367 $18,552 $17,268 > fi nance costs; > rental expenses; and Comment on performance: > other expenses. The operating cost per lot developed ($17,268) was lower than the Target ($20,188). This was primarily due to higher estimated movement in land inventory costs considered in the Target compared to the actual movements during the year, and an increase in production of lots through the Joint Venture program. The number of lots developed in 2014-15 was higher than anticipated due to higher than anticipated market demand.
204 Housing Authority Effi ciency indicator 4 Operating cost per property sold
This indicator measures the cost effi ciency in supplying housing for purchase Actual Target by home buyers. It is calculated by dividing the total expenses of the housing 2014-15 2014-15 supply component of the Service by the number of properties sold. Operating cost per property sold 1 $22,025 $17,423 2 The Authority has a number of programs which supply housing to the 1 Prior year comparative data is not available as this indicator is reported for the fi rst time in 2014-15. market including house and land sales, affordable housing programs 2 This effi ciency indicator was approved by the Acting Deputy Under Treasurer in December 2014. In including the SharedStart shared equity program and other housing built accordance with the Treasurer’s Instruction, the Authority is required to publish Key Performance Indicator targets. The 2014-15 Target was set in the Housing Authority’s 2015-16 State Budget Papers for sale through the Authority’s development activities. through the 2014-15 Estimated Actual. This disclosure was made in the State Budget Papers.
The total operating cost for the housing supply component of the Land Comment on performance: and Housing Supply Service comprises: The operating cost per property sold ($22,025) was higher than the Target > administration costs (employee benefi ts, supplies and services, ($17,423) due to previously unaccounted fi nance costs and fewer than and accommodation); anticipated property sales. > depreciation and amortisation; > fi nance costs; > rental expenses; > community support; and > other expenses. This is a new indicator reported for the fi rst time.
Annual Report 2014 – 15 205 Service 4: Government Regional Offi cers’ Housing This Service contributes to the Authority’s outcome by providing government employees with suitable and appropriate housing in regional and remote areas to support the delivery of public services such as education and policing. Effi ciency indicator 5
Operating cost per property Operating cost per property $40,000 This indicator measures the cost effi ciency of providing Government Regional Offi cers’ Housing. It is calculated by dividing the total cost of the Service $35,000 (total expenses) by the total number of properties at the end of the year. $30,000 The total operating costs of the Government Regional Offi cers’ Housing $25,000 Service comprise: > administration costs (employee benefi ts, supplies and services, $20,000
and accommodation); $15,000 > depreciation and amortisation; 2010-11 2011-12 2012-13 2013-14 2014-15
> fi nance costs; 2010-11 2011-12 2012-13 2013-14 2014-15 > rental expenses; and 2014 – 2015 Target $34,770 > other expenses. Operating cost per property $26,522 $29,520 $31,151 $32,703 $30,771
Comment on performance: The operating cost per property ($30,771) was lower than the Target ($34,770) primarily due to declining rents in the Pilbara market. Savings were also made on maintenance costs and redirected into construction to provide additional properties in regional areas where it is diffi cult to lease stock from the market.
206 Housing Authority Ministerial directives No ministerial directives were received during 2014-15. Two rent increases related to the treatment of Family Tax Benefi ts were applied in 2014-15 with a change in the formula for income Other fi nancial disclosures based rent calculations to bring the amount of benefi t assessable for rent up to a fl at 15 per cent. Act of grace payments This is in keeping with the policy decision to harmonise public housing As at 30 June 2015, there were no act of grace payments recorded. rents in Western Australia to 25 per cent of income and is consistent with most other jurisdictions. Pricing policies – Rent The fi rst stage being an increase to 11 per cent on 14 September Rent charged to tenants is determined by the Authority and 2014 with a further increase to the full 15 per cent implemented on approved by the Minister for Housing under section 30(1) of the 15 June 2015. Housing Act 1980. Capital projects Public housing rents are determined based on households’ capacity to pay. Tenants who remain eligible for public housing are required to In accordance with Treasurer’s Instruction 903(13) (ii), the Authority pay either 25 per cent of assessable household income in rent or the identifi es the projects that remain ongoing at the end of the fi nancial notional market rent of the property, whichever is the lower amount. year (Table 5) and the projects completed during the year (Table 6). Market rents were set according to locality based indices determined Explanations have been provided for variations for actual expenditure by the Valuer General’s Offi ce in 2013-14. that differ by more than $2 million and 10 per cent greater/less than the estimated cost.
Annual Report 2014 – 15 207 Table 5: Summary of capital works projects in progress in 2014-15(1) (continued) Project Expected year Estimated cost Estimated total Variance Explanation of signifi cant variance of completion to complete cost of project from previous fi nancial year (’000) (’000) (’000) (’000) Acute Homeless Shelter (3) 2015-16 $1,987 $5,434 NA Additional Housing Stock Program – 2016-17 $7,369 $8,000 – Disability Services Commission Affordable housing – 2016-17 $22,044 $24,085 $3,085 Additional costs offset by accrued interest. Hamilton Precinct (5) Disability services 2015-16 $4,357 $32,413 $4,317 This relates to reinvestment of funding that was originally to be returned to Disability Services Commission as well as carried over balances from Young People in Residential Age Care and Respite. Disability Services Commission – 2015-16 $1,560 $1,600 NA ‘My Way’ Busselton allocation (4) Disability Services Commission – 2016-17 $2,799 $2,800 NA Port Hedland Respite (4) Domestic violence accommodation 2015-16 $1,805 $2,000 – Country Rental Housing Stock 2015-16 $3,302 $7,500 – Government Regional Offi cers’ 2016-17 $6,986 $7,000 NA Housing – Onslow (3) Mental health, National Partnerships 2015-16 $1,353 $2,500 NA Agreement – Broome sub-acute (3)
208 Housing Authority Table 5: Summary of capital works projects in progress in 2014-15(1) (continued) Project Expected year Estimated cost Estimated total Variance Explanation of signifi cant variance of completion to complete cost of project from previous fi nancial year (’000) (’000) (’000) (’000) Non-government organisation 2017-18 $34,040 $54,500 – housing – Stage 2 (5) Royalties for Regions – Exmouth (4] 2015-16 $8,462 $8,820 NA [5)
Royalties for Regions – 2015-16 $3,000 $25,060 NA Government Regional Offi cers’ Housing Social Housing Boost (4) Royalties for Regions – 2018-19 $25,483 $25,483 – Housing for Workers Royalties for Regions – 2015-16 $1,346 $7,687 $2,251 A second funding allocation was received Kimberley Housing Project to deliver additional units. Royalties for Regions – 2016-17 $14,414 $33,000 – West Kimberley Transitional Housing Social Housing Boost 2015-16 ($1,199) $132,900 – Social housing – 2017-18 $5,482 $12,800 – Mental health care units Social housing – 2015-16 $1,699 $57,985 – Mental Health Commission Stimulus Stage 3 2018-19 $43,347 $56,158 –
Notes: (1) The table includes all programs with defi ned funding sources. (2) Table 5 does not include ongoing programs that contain multiple projects without one specifi c completion date, which are internally funded based on Corporate Executive approved allocation of funding. (3) This is a project reported for the fi rst time in 2014-15 and was reclassifi ed from an ongoing project to a fi xed term project. (4) This was a new project which commenced in 2014-15. (5) This project forms part of the Royalties for Regions – Housing for Workers initiative.
Annual Report 2014 – 15 209 Table 6: Summary of capital works projects completed in 2014-15(1)(2) Program Total cost Variance from previous Explanation of project fi nancial year (’000) (’000) Affordable housing – Newman Housing (3) $6,600 – Land – Acquisition (Government Regional Offi cers’ Housing) $2,475 $2,475 Royalties for Regions – Indigenous visitor hostels $10,641 ($1,017) Royalties for Regions – Junctions (3) ($20,000) Project cancelled. Funding returned to the Department of Regional Development. Royalties for Regions – Trainee/Apprentice Hostel Program $19,191 ($3,059) Balance of funding reallocated to cover operational running costs. Social housing – Disability services $95,723 $72 The increase relates to contributions by community housing organisations for additional components of the project.
Notes: (1) The table includes all programs with defi ned funding sources. (2) Table 6 does not include ongoing programs that contain multiple projects without one specifi c completion date, which are internally funded based on Corporate Executive approved allocation of funding. (3) This project forms part of the Royalties for Regions – Housing for Workers initiative.
210 Housing Authority Employment and industrial relations The same matter was subject to three applications – specifi cally with the Public Service Arbitrator, the Full bench and the Public Our staffi ng profi le Service Appeals Board under the provisions of the Industrial At the close of the fi nancial year, 1,689 employees were employed by Relations Act 1979. All three applications where dismissed. the Authority or 1,570 full-time equivalent employees (Table 7). One matter lodged in 2012-13 with the Western Australian Industrial
Table 7: Authority’s employment profi le from 2012-13 to 2014-15 Relations Commission – Public Service Arbitrator remains active, 2012-13 2013-14 2014-15 which the Department of Commerce, Labour Relations Division, is now the respondent for. A notice of discontinuance was received in Permanent full-time 1,067 1,130 1,190 August 2014. There are no outstanding actions in that jurisdiction. Permanent part-time 116 88 96 Contract full-time and part-time 317 338 275 One application was lodged with the Equal Opportunity Commission Seconded in 9 12 4 under the provision of the Equal Opportunity Act 1984. Subsequent to conciliation, that matter was referred to the Commissioner for review Seconded out 2 6 5 and was dismissed. There is no further action in that jurisdiction. Total Full Time Equivalents 1,511 1,574 1,570 Voluntary Redundancy Industrial relations As part of the whole of Government initiative to reduce the size of the The Authority has a Joint Consultative Committee in place with the sector the Authority ran two voluntary severance schemes (VSS) in Civil Service Association which meets bi-monthly to address 2014-15 funded by the Authority. The fi rst and second VSS resulted in employment and industrial relations matters. 70 employees accepting an offer of redundancy. These redundancies There have been no matters involving the Industrial Magistrates will reduce agency salaries by approximately $8 million per annum Court in 2014-15. One application has been lodged with the Western into the future. A third VSS process was run during 2014-15 and will Australian Industrial Relations Commission. be fi nalised in 2015-16.
Annual Report 2014 – 15 211 Governance Disclosures Subsidiaries The Authority is the instigator of the Keystart Housing Scheme and has effective control over the whole structure either directly or indirectly through various agreements which constitute the structure and to which it is a party. The Board of Directors of the Keystart group of companies comprise one Director from the Authority and fi ve directors from the private sector. The majority ownership interest held by the Authority in Keystart is as follows: > Keystart Bonds Ltd: 100 per cent of the total shareholding > Keystart Loans Ltd: 100 per cent of the total shareholding > Keystart Support Pty Ltd: 100 per cent of the total shareholding > Keystart Support (Subsidiary) Pty Ltd: 100 per cent of the total shareholding > Keystart Scheme Management Pty Ltd: 100 per cent owned by Keystart Loans Ltd.
212 Housing Authority Director’s indemnity insurance The Authority is the majority shareholder in Goldmaster Enterprises In 2014-15, the Authority paid insurance premiums in respect of the Pty Ltd with 88 per cent ownership. The board comprises two Authority’s directors’ and offi cers’ liability and legal expenses for directors from the Authority and one from the private sector. current and former directors and offi cers, including executive offi cers, of the Authority. The Authority also holds minority interests in the following incorporated entities: The insurance contracts cover: costs and expenses incurred by the relevant offi cers in defending proceedings, whether civil or criminal and > Ocean Springs Pty Ltd: 46.8 per cent whatever their outcome; and other liabilities that may arise from their > Dalyellup Beach Pty Ltd: 50 per cent position, with the exception of conduct involving a wilful breach of duty > Ellenbrook Management Pty Ltd: 47.1 per cent or improper use of information or position to gain a personal advantage. > Seacrest Corporation Pty Ltd: 50 per cent. Litigation in progress In addition, the Authority holds interests in other non-incorporated entities and joint ventures (Further information is available in the The value of legal actions and claims against the Authority involving Financial Statements). asbestos related illnesses is estimated at $210,000. Liability is being denied in each matter and the proceedings defended. In addition, legal proceedings and claims against the Authority that do not involve asbestos related illnesses are valued at about $15,000.
Annual Report 2014 – 15 213 Insurance In accordance with Treasurer’s Instruction 812, the Authority maintains The Authority’s other insurance programs are a combination of an appropriate level of insurance cover for insurable risks. Effective insurance policies provided by commercial insurance providers and from 1 July 2004, the Authority has adopted a policy of not insuring the State Government’s RiskCover fund. As per Treasurer’s Instruction its residential property assets as it is considered uneconomical. 825, insurance is complemented by a comprehensive approach to risk As part of the Authority’s ongoing risk management processes, management and prudent management policies and practice. a comprehensive review of the Authority’s policy of not insuring its residential property was completed during 2012. As a result the Contracts with senior offi cers Authority’s residential property assets are generally uninsured as In accordance with the Treasurer’s Instruction 903 (14(iii)), senior it is considered uneconomical to do so. offi cers of the Authority are required to disclose particulars, other The Authority does, however, insure: than normal contracts of employment of service, of any interest in any existing or proposed contract which a senior offi cer; or a fi rm > residential properties related to employment-related of which a senior offi cer is a member; or an entity in which a senior accommodation (non-Government Regional Offi cers’ Housing) offi cer has a substantial fi nancial interest, has made with the agency > key worker villages or any subsidiary body, related body or affi liated body of the agency. > residential property constructed by the Authority under the At the date of reporting, no senior offi cers had declared any interests Affordable Housing Strategy for sale to private individuals. in existing or proposed contracts with the Authority other than normal contracts of employment of service. The Authority is currently assessing the economic viability of insuring its larger multi-unit residential property assets.
214 Housing Authority Other legal requirements Advertising Disability Access and Inclusion Plan In accordance with section 175ZE of the Electoral Act 1907, the Outcomes Authority incurred expenditure in advertising, direct mail and media The Authority is committed to ensuring its functions, facilities, advertising. Total expenditure for 2014-15 was $1,168,770 (Table 8). services and employment opportunities are accessible and inclusive Table 8: Advertising expenditure for 2014-15 for people with disability, their families and carers. The Disability Category Amount Services Act 1993 requires that Public Authorities develop and Advertising Agencies $331,744 implement a Disability Access and Inclusion Plan (DAIP) detailing the overarching strategies that will be undertaken by the Authority Rare $260,831 in support of the access and inclusion outcomes specifi ed by the Vinten Browning $2,057 Disability Services Commission. Trilogy $68,856 Market Research Organisations Nil An updated DAIP for 2013-2017 was lodged with Disability Services Polling Organisations Nil Commission (the Commission) in January 2014. The DAIP includes an outcome committing to provide people with disability with the same Direct Mail Organisations $217,829 opportunities as other people to obtain and maintain employment Fuji Xerox $217,829 with the Authority. The revised DAIP was deemed compliant with the Media Advertising Agencies $619,197 requirements of the Act by the Commission. Carat $228,979 OMD $292,502 A DAIP Working Group was also established, with representation across the agency to develop and monitor an internal action plan Adcorp $97,716 to implement DAIP strategies.
Annual Report 2014 – 15 215 Progress implementing the internal action plan is reviewed quarterly Outcome 2: People with disability have the same opportunities as other by the Authority’s Corporate Executive. people to access the buildings and other facilities of the Authority. In 2014-15, the Authority undertook the following initiatives to deliver > Refurbished a number of offi ces which now include facilities access and inclusion outcomes for its employees and customers: such as accessible front counters, ACROD parking, accessible pathways, and automatic sliding doors. Outcome 1: People with disability have the same opportunities as other people to access the services of, and any events organised by, Outcome 3: People with disability receive information from the the Authority. Authority in a format that will enable them to access the information as readily as other people are able to access it. > Developed a DAIP fact sheet for employees that provide guidance on disability access and inclusion contract management related > Created posters to display in prominent locations around matters, including clauses, in relation to contractors who provide offi ces, informing visitors of the availability of information services on behalf of the Authority. in alternative formats. > Included a disability access and inclusion clause and reporting > Promoted National Relay Service information on service delivery requirements in new contracts for goods and services and brochures and sourced information for display in offi ces; community services procurements, which requires contractors > Commenced a review of the communication strategy to facilitate to abide by the Authority’s DAIP. greater access and inclusion for employees and clients. > 94 per cent of employees from identifi ed areas have undertaken > Raised awareness among employees of the Authority’s Disability disability awareness training. Access and Inclusion Plan and events such as Disability Awareness Week through internal promotion.
216 Housing Authority Recordkeeping Plan Outcome 5: People with disability have the same opportunity as other A review of the Authority’s Recordkeeping Plan commenced during the people to make a complaint to the Authority. last fi nancial year. The State Records Commission formally granted the Authority an extension to December 2015 to submit a revised > Maintained a feedback page on the Authority’s website and Recordkeeping Plan. As part of the Recordkeeping Plan all policies assistance is provided if required; are being reviewed to specify a higher focus on digital recordkeeping. > Commenced a review of the complaints management and feedback process which will identify accessibility issues. During 2014-15, the Authority conducted 22 reviews of its business classifi cation scheme. The Retention and Disposal Schedule was Outcome 6: People with disability have the same opportunities as reviewed and approved by the State Records Advisory Committee other people to participate in any public consultation by the Authority in April 2015 and is scheduled to be tabled before the State Records > An internal consultation guide was created as a reference to Commission in August 2015. A further 24 reviews were conducted assist employees to consider access and inclusion issues when on record security. conducting consultation to ensure people with disability are given In addition to these reviews the Authority integrated its business every opportunity to participate. systems (Habitat and Online Maintenance) with its recordkeeping Outcome 7: People with disability have the same opportunities as and information management system (HP TRIM). This automated other people to obtain and maintain employment within the Authority. the creation of fi les and the digital capture of correspondence and supporting documents. The results have been signifi cant with an > Disseminated information on the DAIP at Corporate Inductions, annual estimated 550,000 documents and 30,000 fi les created along with information on equity and inclusiveness. without human intervention. > Panel recruitment and interview skills training were tailored to the Recordkeeping training is required to be completed by all employees. Authority’s needs, and include information on DAIP outcomes and Training initiatives and materials are reviewed regularly to comply requirements, how to run inclusive processes and relevant legislation. with relevant legislation and standards. All new employees are enrolled in training within a month of commencing.
Annual Report 2014 – 15 217 Existing employees are enrolled in all new modules as they Table 9: Outcomes for Recordkeeping course completions are implemented. Course Completions In progress Total Due to the geographical locations of our offi ces, induction training Business Classifi cation 42% 4% 46% is provided through the online training suite. The outcomes of the Recordkeeping awareness training 69% 4% 73% Authority’s Recordkeeping and information management training Recordkeeping awareness 38% 7% 45% suite for this period are detailed in Table 9. refresher training TRIM Essentials 66% 4% 70% Recordkeeping information, policies and procedures are also Housekeeping (Recordkeeping 42% 4% 46% available on the intranet for employees use. The effectiveness of the in the Authority) induction program in addressing employee roles and responsibilities is regularly reviewed to ensure compliance with the State Records Act 2000.
218 Housing Authority Compliance with public sector standards and ethical codes In accordance with section 31(1) of the Public Sector Management Act > Affi rmed employees’ understanding of the Authority’s Code 1994, the Authority complied with the Public Sector Standards and of Conduct and related legislation and policies, in line with the Western Australian Public Sector Code of Ethics. Policies and Commissioner’s Instruction No.8 – Codes of Conduct and integrity procedures designed to ensure such compliance (including the training, through high participation in the online Accountable Authority’s Code of Conduct) were in place and appropriate internal and Ethical Decision Making training, achieving a 97 per cent assessments were conducted. completion rate (as at 30 June 2015). Activities undertaken by the Authority relating to ensuring compliance > Strengthened employees’ understanding of the Authority’s with Public Sector Standards, the Western Australian Public Sector Code of Conduct and related legislation and policies through high Code of Ethics and the Authority’s Code of Conduct in 2014-15: participation in the classroom based Integrity Framework training, achieving a 87 per cent completion rate (as at 30 June 2015). > Provided information and training on the Authority’s Code of Conduct and the Western Australian Public Sector Code of Ethics One breach of the Employment Standard was received in 2014-15 and to new employees as part of the induction program. following assessment was referred to the Public Sector Commission for review. That matter was dismissed.
Annual Report 2014 – 15 219 Government policy requirements Occupational safety, health and injury management Our commitment Consultation mechanisms The Authority recognises that the health and safety of its employees Management and employees are committed to effective workplace is of prime importance in all aspects of its planning and operations. consultation, with the opportunity for employees to fully participate Additionally management is conscious of the Authority’s duty to in any decisions which impact on their working life and environment. provide adequate information, training and supervision to assist The Authority has elected occupational safety and health in the provision of a safe working environment. Representatives and Committees in locations across the State. In the event of a workplace injury the Authority ensures that injury The Authority’s well established Occupational Safety and Health management is implemented in accordance with the requirements Policy Committee consists of a senior management representative, of the Workers’ Compensation and Injury Management Act 1981 and management representatives and health and safety representatives. the Code of Practice: Occupational Safety and Health in the Western The Committee meets on a quarterly basis and provides an Australian Public Sector. The Authority has an Injury Management appropriate forum for the discussion and resolution of high level System which is compliant with the requirements of the Act and the policy issues and reviews occupational safety and health incidents, Code of Practice. policy and business procedures. The Committee is underpinned The Authority’s Health and Safety Policies and Procedures are available by an extensive network of local Occupational Safety and Health to employees on the Health and Safety page of the Authority’s intranet Committees, which represent each regional offi ce location across the site. This function continues to be a priority within the Authority. State. The Authority’s Corporate Executive, managers and employees are committed to an objective of continuous improvement in the quality of workplace occupational health and safety.
220 Housing Authority Safety audit A WorkSafe Plan audit of the Authority’s occupational safety and During the year, in response to a report by the Offi ce of the health management system was completed in 2011. Auditor General into asbestos, a state-wide retraining exercise was undertaken to ensure that employees conducting inspections An independent audit of the Authority’s systems for Service Delivery are considered competent as defi ned by WorkSafe. frontline offi cers was completed during 2014-15. The recommendations from that review have been accepted by the Authority’s Corporate The Authority’s Health and Wellness Program continues to deliver Executive and a project proposal has now been completed. A project positive outcomes for employees and all offi cers continue to have team has also been dedicated to this initiative in order to deliver the access to the Employee Assistance Program at no cost. key initiative arising out of those recommendations. The Authority continues its commitment to occupational safety and Workers’ compensation and injury management health, which included progression of the Service Delivery frontline The Authority provides injury management support, including return to safety project during the year to improve employees safety. Tailored work plans for injured employees, in accordance with the requirements occupational safety and health training for managers with end of line of the Workers’ Compensation and Injury Management Act 1981. supervisory responsibility with emphasis on statutory requirements Fourteen claims were received in 2014-15. The Authority’s was also fi nalised during the year. performance is presented in Table 10.
Annual Report 2014 – 15 221 Table 10: Occupational safety, health and injury management performance Measure Actual results Results against target 2012-13 2013-14 2014-15 Target Comment on result Number of fatalities 0 0 0 0 Target achieved. Lost time injury and/or disease 0.92 0.89 0.89 Zero or 10% improvement Target was not achieved due incidence rate on previous 3 years to an increase in the number of psychological stress claims. Lost time injury and/or disease 0.07 0.21 0 Zero or 10% improvement Target achieved. severity rate on previous 3 years Percentage of injured workers Greater than 80% return Target achieved. return to work within: to work within 26 weeks 13 weeks 50% 50% 100% 26 weeks 78% 50% 100% Percentage of managers 71% 90% 60% Greater than or equal to 80% Target was not achieved due to trained in occupational safety employee turnover. The number of and health and injury scheduled training courses over the management next year is to increase to improve the compliance rate.
222 Housing Authority Substantive Equality The Authority is committed to ensuring that substantive equality Internal Audit principles are refl ected appropriately in its policies, procedures In accordance with the requirements of the Financial Management and practices in accordance with the State Government’s Policy Act 2006, the Management Review and Audit Branch operates as Framework for Substantive Equality. The Policy Framework aims an independent appraisal unit within the Authority. to achieve substantive equality in the Western Australian public sector by addressing and eliminating systemic discrimination in In addition to the internal audit services, there is also scope for the the provision of public sector services and promoting sensitivity branch to undertake management reviews as permitted under this to the different needs of client groups. Act. This has broadened the focus of internal audit to include strategic and operational risks as well as business improvement. The Authority has established a Substantive Equality Committee to provide advice on the implementation of the Policy Framework Comprehensive audit plans that address core business activities and for Substantive Equality and this year further developed an internal key strategic business risks are developed annually and contribute action plan to support the integration of substantive equality to the Authority’s control framework. The audit function helps the principles into all business practices. Authority promote mechanisms that encourage a culture that is conscious of risk, control and process; assists the Authority in its Audit drive for business improvement and the achievement of its objectives; Audit Committee and assesses enabling systems and technology. The Audit Committee is a fi ve member committee comprised of The approved audit plan for the 2014-15 encompassed 15 reviews members of the Corporate Executive. The Committee was established addressing corporate governance, operational, compliance, fi nancial, to assist the Accountable Authority (the Chief Executive Offi cer) to information systems, probity and risk assessments. discharge his responsibilities under section 53 of the Financial Management Act 2006.
The Offi ce of the Auditor General and the Executive Director Business Services are invited to attend as observers. The Committee met three times during 2014-15.
Annual Report 2014 – 15 223 Delegation of Authority The Risk Management Committee (Committee) consisting of senior management representatives, observers and technical advisors, Authority to undertake transactions under the Housing Act 1980, is provides oversight of the risk management process and works conferred on the Accountable Authority (the Chief Executive Offi cer) to ensure that appropriate risk identifi cation and risk mitigation or the Minister for Housing in most circumstances. processes are in place across all divisions. The Committee is also responsible for regularly reviewing, monitoring and where Section 13 of the Act, however, allows the Accountable Authority appropriate, providing advice to the Corporate Executive regarding to delegate any of its powers or functions under the Act. Through signifi cant risks to the Authority. delegation, the Chief Executive Offi cer does not need to be approached for approval of many essentially administrative In accordance with the Committee’s oversight role it reviewed quarterly matters associated with day-to-day operations and activities. corporate risk register reports. Risks that were considered to represent major risk exposures, along with the actions taken in relation to them, A delegation framework and a comprehensive register exist to record were submitted for information to the Corporate Executive. formal delegations that empower offi cers to approve and negotiate matters on behalf of the Authority. The Committee reviewed and updated the corporate risk appetite, expressed in the form of the strategic, operational and project Risk management risk reference tables, with the recommendations endorsed by the Corporate Executive. The Committee reviewed corporate risk The Chief Executive Offi cer is accountable for ensuring that the register reports covering operational and project risks to ensure Authority appropriately identifi es and manages its risk and is that operational and project risk owners monitored their risks by supported in this by the Corporate Executive. The Authority has in reviewing the effectiveness of current risk controls and progress place a risk management framework consisting of a risk management of treatment actions. policy, a risk management committee, the risk appetite in the form of risk reference tables, a risk management implementation plan and the corporate risk register.
224 Housing Authority Risk assessments were undertaken on a range of corporate and Crisis management resources remain in place for use as and business unit projects, in order to ensure project objectives/ when required at the Authority’s head offi ce and the alternate deliverables were achieved. metropolitan venue. During 2014-15 the Corporate Executive commenced a review The Authority reviewed the security protocols at all offi ce locations of current strategic risks and identifi cation of emerging risks. following the raising of the National Counter-Terror Alert, with some minimal changes made to tighten mailroom deliveries. Business continuity planning The Authority maintained participative representation on both the In accordance with Public Sector Commissioner’s Circular 2009-19 Recovery and Community Engagement sub committees of the State and the Authority’s Business Continuity Policy, during 2014-15 Emergency Management Committee. Various State Government business continuity plans for the network of regional offi ces, area WESTPLANS were reviewed and the Authority responded to the State offi ces and Head Offi ce business units were reviewed to update the Emergency Management Committee 2014 Capability Preparedness alternate continuity sites, critical employee lists and internal/external Report, in which the Warmun Community recovery project was contact details. featured as a case study. The importance of business continuity planning was highlighted The Authority undertook its annual preparatory actions in accordance by two separate incidences of water damage to metropolitan with its responsibilities as a support agency under the State Government offi ce locations during the year, with the responses reinforcing WESTPLAN – Heatwave and also reviewed and updated internal the requirement for effective coordination and communications. regional cyclone response plans. In accordance with business continuity plans, some employees were temporarily deployed to alternate workplaces and there was minimal interruption to delivery of internal and external services.
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226 Housing Authority APPENDICES This section contains the glossary, description of key functions, housing statistics and contact details and offi ce locations.
Annual Report 2014 – 15 227 Appendix 1: Glossary
AHURI Australian Housing and Urban Research Institute CBD Central Business District DAIP Disability Access and Inclusion Plan NAIDOC National Aborigines and Islanders Day Observance Committee NPARIH National Partnership Agreement on Remote Indigenous Housing NRAS National Rental Affordability Scheme RAESP Remote Area Essential Services Program REIWA Real Estate Institute of Western Australia STEP Support and Tenant Education Program
228 Housing Authority Appendix 2: Authority’s key functions
Functions Target group Land development People on very low, low and moderate incomes Our residential land supply across the State is principally delivered through our joint ventures with the private sector as well as urban renewal and infi ll projects undertaken by the Authority. We supply land for entry-level housing in the market and for government social programs including social housing. A signifi cant proportion of the Authority’s revenue supports delivery of our social outcomes (public housing). Affordable housing construction People on very low, low and moderate incomes Affordable housing is delivered to the market through innovative and market transforming procurement and construction techniques and partnerships with the private sector. Diversity of housing across the continuum is the main focus from homelessness to home ownership with products ranging from single homes, to lifestyle villages, to large-scale apartment developments. Home ownership People on low and moderate incomes The Authority ensures home ownership remains an attainable aspiration for people > Keystart (moderate incomes) usually fi rst homebuyers on low to moderate incomes who cannot raise a deposit to secure bank fi nance. > Shared equity (lower incomes) and other disadvantaged Products offered include shared equity. groups such as sole parents, Aboriginal people and people with disabilities Affordable private rentals People on low and moderate incomes Renters are assisted in the private rental market through a number of activities Investors in private rentals (NRAS) including bond loan assistance, discounted rentals through the NRAS which offers at least 20 per cent discount on market rent, and the Authority’s investment in affordable housing projects.
Annual Report 2014 – 15 229 Functions Target group Regional worker housing Government workers Workers providing essential services in regional and remote areas are assisted with Young adult Aboriginal apprentices and trainees accommodation through programs such as Government Regional Offi cers’ Housing Key and service workers including small business and and key worker initiatives. non-government organisations in targeted high cost locations Social housing People on very low to low incomes The most vulnerable and in need in our community are supported through social housing including public housing, community housing and transitional housing. Remote Indigenous housing and essential services Residents of remote Aboriginal communities and Housing, and essential services maintenance (power, water, sewerage) in remote town-based communities Aboriginal communities are delivered through a network of the Authority’s regional offi ces and contracted regional service providers. Policy, innovation and asset optimisation People on low to moderate incomes Driving delivery of the State’s Affordable Housing Strategy across private and the not-for-profi t sector . This includes reforming the social housing system to ensure it is fair and sustainable into the future, facilitating increased supply and diversity of well-located housing to better meet population needs at the affordable end of the market, working across government and with industry to streamline government processes and reduce barriers to market effi ciency and leveraging government roles and assets (land and housing) to catalyse investment for development that delivers social and economic benefi ts.
230 Housing Authority Appendix 3: Housing statistics
Table 11: Public housing rental statistics 2010-11 to 2014-15(1) (continued) 2010-11 2011-12 2012-13 2013-14 2014-15 Rental waiting list by customer type Family 11,710 11,359 10,198 9,174 7,875 Senior single 3,006 2,841 2,757 2,764 2,868 Senior couple 642 508 429 382 359 Singles 8,053 8,163 7,737 7,693 8,330 Pending assessment(2) 695 TOTAL 23,411 22,871 21,121 20,013 20,127 Rental waiting list by bedroom entitlement 2 Bedroom family 5,886 5,825 5,170 4,677 3,801 3 Bedroom family 4,048 3,821 3,405 3,123 2,649 4 Bedroom family 1,384 1,359 1,294 1,072 1,060 5+ Bedroom family 392 354 329 302 365 Senior single 3,006 2,841 2,757 2,764 2,868 Senior couple 642 508 429 382 359 Singles 8,053 8,163 7,737 7,693 8,330 Pending assessment (2) 695 TOTAL 23,411 22,871 21,121 20,013 20,127
Annual Report 2014 – 15 231 Table 11: Public housing rental statistics 2010-11 to 2014-15(1) (continued) 2010-11 2011-12 2012-13 2013-14 2014-15 New tenancies by customer type Family 1,960 1,748 1,518 1,656 1,579 Senior single 521 567 543 493 480 Senior couple 329 169 174 168 206 Single 507 675 633 603 455 TOTAL 3,317 3,159 2,868 2,920 2,720 Rental stock by bedroom number Bedsitter 130 119 82 78 N/A 1 bedroom 8,518 8,654 8,771 8,825 8,986 2 bedroom 11,198 11,304 11,332 11,361 11,360 3 bedroom 13,077 13,023 12,875 12,730 12,625 4 bedroom 2,966 2,979 2,975 2,976 2,964 5+ bedroom 650 670 679 698 709 TOTAL 36,539 36,749 36,714 36,668 36,644
232 Housing Authority Table 11: Public housing rental statistics 2010-11 to 2014-15(1) (continued) 2010-11 2011-12 2012-13 2013-14 2014-15 Rental stock by dwelling type House 12,314 12,193 13,827 13,701 11,868 Duplex 4,629 4,639 4,592 4,581 4,592 Medium/high-density (3) 19,596 19,917 18,295 18,386 20,184 TOTAL 36,539 36,749 36,714 36,668 36,644
Notes: (1) All stock numbers relate to public housing dwellings only. (2) These applications are pending assessment of bedroom entitlement. (3) Medium/high-density: Townhouses, fl ats and apartments.
Annual Report 2014 – 15 233 Table 12: Construction, spot purchases and refurbishments in 2014-15 (1)(2)(3)(4) Housing Construction and Spot Purchase Completed Refurbishments Completed Public rental housing New Living (retained properties) General rental 241 Refurbishments 173 Community housing general 32 Sub total 173 Community Disability Housing Program 53 Aboriginal housing Joint venture 0 Aboriginal housing – communities refurbishments 92 House and land for sale 53 Indigenous community housing organisations refurbishments 5 Sub total 379 Sub total 97 Aboriginal housing Community housing Aboriginal housing – communities 100 Community Housing Program 0 Sub total 100 Crisis Accommodation Program 3 Community housing State Community Housing Investment Program 0 Community Housing Program 0 Sub total 3 Crisis Accommodation Program 12 TOTAL 273 State Community Housing Investment Program 0 GRAND TOTAL 1,691 Sub total 12 Notes: (1) Community Housing General includes units transferred or earmarked for transfer Affordable housing to community housing organisations. Some units originally designated as General Affordable housing 752 Rental in previous years’ Annual reports, can change to Community Housing General, as the specific use is finalised. The distribution between General Rental Sub total 752 and Community Housing General is subject to possible further changes. Workers housing (2) Aboriginal housing communities construction includes units in Aboriginal communities as well as units for employment-related accommodation Government Regional Officers’ Housing 89 and visitors centres (includes caretaker quarters for Visitors Centre. (3) Figures include activity from all funding sources including Commonwealth Key worker housing 86 and State Stimulus packages. Sub total 175 (4) Construction and spot purchase commencement and completion figures include units that have been transferred between programs. TOTAL 1,418
234 Housing Authority Appendix 4: Our offices
Head Office South Metropolitan Victoria Park Goldfields 99 Plain Street Fremantle 269 Albany Highway Kalgoorlie East Perth 6004 42 Queen Street Victoria Park 6100 Unit 1-2/84-90 Brookman Street Tel: (08) 9222 4666 Fremantle 6160 Tel: (08) 9350 3700 Kalgoorlie 6430 Toll free: 1800 093 325 Tel: (08) 9432 5300 Tel: (08) 9093 5200 Great Southern Metropolitan offices Kwinana Albany Esperance North Metropolitan 2 Stidworthy Way 131 Aberdeen Street 92 Dempster Street Mirrabooka Kwinana 6167 Albany 6330 Esperance 6450 8 Sudbury Road Tel: (08) 9411 9500 Tel: (08) 9845 7144 Tel: (08) 9072 3000 Mirrabooka 6061 Mandurah Katanning Mid West Tel: (08) 9345 9655 11 Pinjarra Road 6 Daping Street Geraldton City Office Mandurah 6210 Katanning 6317 Union Bank Building 605 Wellington Street Tel: (08) 9583 6100 Tel: (08) 9891 1800 201 Marine Terrace Perth 6000 Geraldton 6530 South East Metropolitan South West Tel: (08) 9476 2444 Tel: (08) 9923 4444 Cannington Bunbury Joondalup 17 Manning Road 22 Forrest Avenue Carnarvon Unit 4/7 Wise Street Cannington 6107 Bunbury 6230 30 Robinson Street (Corner of Collier Pass Tel: (08) 9350 3244 Tel: (08) 9792 2111 Carnarvon 6701 and Wise Street) Tel: (08) 9941 6500 Armadale Busselton Joondalup 6027 Shop 2a, Armadale Suite 1A, 9 Harris Road Meekatharra Tel: (08) 9404 3300 Shopping Centre Busselton 6280 Main Street Midland Jull Street (Cnr Third Road) Tel: (08) 9781 1300 Meekatharra 6642 21 Old Great Northern Highway Armadale 6112 Tel: (08) 9956 5000 Manjimup Midland 6056 Tel: (08) 9391 1600 Unit 10, 30-32 Rose Street Tel: (08) 9250 9191 Manjimup 6258 Tel: (08) 9771 7800
Annual Report 2014 – 15 235 Pilbara West Kimberley Government Regional Offi cers’ Keystart/Country Housing South Hedland Broome Housing Central Offi ce Authority Cnr Brand and Tonkin Streets Frederick Street 203 Nicholson Road 2 Brook Street South Hedland 6722 Broome 6725 Shenton Park 6008 East Perth 6892 Tel: (08) 9160 2800 Tel: (08) 9158 3600 Tel: (08) 9286 6000 Toll Free (metro): 1300 578 278 Karratha Derby Toll Free: 1800 644 708 Toll Free (country): 1800 158 200 3-5 Welcome Road 16-22 Loch Street Kalgoorlie Website: www.keystart.com.au Karratha 6714 Derby 6728 Units 1-2/84-90 Brookman Street Email: [email protected] Tel: (08) 9159 1700 Tel: (08) 9158 4000 Kalgoorlie 6430 Tel: (08) 9093 5200 East Kimberley Wheatbelt Kununurra Northam Karratha 16 Coolibah Drive McIver House 3-5 Welcome Road Kununurra 6743 5 Elizabeth Place Karratha 6714 Tel: (08) 9166 5100 Northam 6401 Tel: (08) 9159 1700 Halls Creek Tel: (08) 9690 1900 South Hedland Lot 72 and 73 Merredin Cnr Brand and Tonkin Street Great Northern Highway 27 Mitchell Street South Hedland 6722 Halls Creek 6770 Merredin 6415 Tel: (08) 9160 2800 Tel: (08) 9168 9300 Tel: (08) 9081 3800 Narrogin Government Building 11-13 Park Street Narrogin 6312 Tel: (08) 9881 9400
236 Housing Authority
HOUSING AUTHORITY ANNUAL REPORT 2014 – 2015
Copies of this document are available in alternative formats upon request. 99 Plain Street, East Perth WA 6004 T 08 9222 4666 TTY 08 9476 2446 E [email protected] www.housing.wa.gov.au