Renters should only have to pay bond once in their lifetime and could be earning thousands of dollars in interest, under a new proposal the McKell Institute is urging the federal government to consider.
A National Portable Bond Scheme, recommended by the McKell Institute in its new Rewarding Renters report, would allow renters to transfer their bond between leases rather than scrambling to come up with a second deposit before their previous one is refunded.
Under the National Portable Bond Scheme, renters would also earn interest on their bond which would potentially build a small financial safety net over time.
McKell Institute chief executive Edward Cavanough said the policy would relieve significant cost of living pressure and stress from renters and he is urging the government to take it to an election in which the vote of renters will be pivotal.
“Renters are under enormous financial strain and the current need to double-up on bonds to move often traps people in unsuitable housing,” Mr Cavanough said.
“A National Portable Bond Scheme would put real money back into the pockets of people who often desperately need it. We know the ‘Australian dream’ of property ownership is out of sight for many, yet our entire political class remains obsessed with the interests of homeowners. Renters are overlooked and treated as a minority or pitied for their inability to achieve homeownership.
“Renters need to be treated seriously with practical reforms that offer them real benefits today while laying the groundwork for long-term change.
“Right now, landlords and bond-holding authorities are the only people who benefit from the interest that accrues on rental bonds. That’s stupid and unfair. A National Portable Bond Scheme would ensure tenants are rewarded for their responsible tenancy and enjoy interest on the money they have paid.
“If people get an opportunity to move and improve their work, study or living conditions they shouldn’t be held back by our outdated and unnecessary bond system. Labor needs to have a serious think about what they do for renters, as these voters could decide the party’s fate at the upcoming election.”
By earning interest on their bonds, The McKell Institute estimates renters could accumulate up to $2,600 in interest over 10 years, which could provide much-needed emergency savings if required.
Contact details:
Lauren Ferri: 0422 581 506