The Minns Government’s key election promise to make it easier to move into rented accommodation amid the cost of living crisis has been quietly postponed.
Australia’s first portable bond scheme was announced as part of Labor’s package of rental reforms in the lead-up to the 2023 state election.
This initiative enables the digital transfer of security deposits from one property to another, easing the financial stress on renters of having to come up with another security deposit before their old property is returned.
NSW Rental Commissioner Trina Jones told the ABC in August 2024. The government at the time was looking for a vendor to “bring this scheme online” for rollout in late 2025.
Now, Ms Jones said that although “significant progress” had been made, the scheme would not be available to renters until “sometime” this year.
“We are currently in the process of essentially refurbishing the existing rental bond online system to enable a portable rental bond scheme,” she told the ABC.
”It’s something completely new, it’s never been done before, so when you blaze a new path there are inevitably challenges and we’re overcoming them.”
Trina Jones said the introduction of the portable bond scheme would happen “sometime” in 2026. (ABC News: Timothy Alwood)
Mr Jones said New South Wales had $2 billion in rental bonds and up to 600,000 transactions a year, and as a result the new system required “a number of tests”.
”[The scheme] A simple interface on the front [but] It’s a very technical job on the back end,” she said.
Although the law for transferring bonds between properties was technically enacted in 2018, the Minns government has committed $6.6 million to a new online system in 2023.
The NSW Rent Commissioner, a role created as part of the state’s election manifesto, was tasked with overseeing this and other promised rent reforms.
The reforms include making “no-cause” evictions illegal, banning rent bidding, and banning the rejection of pets in rental applications without a valid reason.
Most of the changes took effect last May.
Anurak Chantivong said IT construction may “not proceed” until early 2025 due to contracts signed by the previous government. (AAP: Dan Himbrecht )
Regulatory Improvement and Fair Trading Minister Anurak Chanthivong said the scheme would save thousands of renters when they move, but the government wanted to ensure “the back end of the new system is robust from day one”.
“The contract signed by the previous government means we cannot proceed with the IT buildout until early 2025,” he said in a statement.
“This system is complex and it is important to plan correctly so renters can have confidence that their money is safe and landlords know they can access their deposit if needed.
“We are working as quickly as possible to get the portable rental bond scheme up and running this year.”
more answers needed
NSW Green Party housing and homelessness spokesperson Jenny Leong questioned whether the injunction was more of a “political issue” than a “technical issue”.
She said further answers were needed as to why the project was stalled as renters continued to struggle under cost of living pressures.
“The reality is you can’t just announce something and not deliver it,” she says.
”If you just make an announcement or praise yourself, but don’t actually implement reforms, you won’t be evaluated.”
Jenny Leung questions why the plan is taking so long to roll out. (ABC News: Ursula Malone)
Mr Leon said the portable bond scheme was an important election promise and should not have taken this long to implement.
He said the Minns government spent more time sharing announcements on social media than “delivering on the promises we made years ago.”
“We hope this will alleviate some of the pressure on renters during this extremely stressful time,” she said.
Mixed reception from peak body
NSW Tenants Union chief executive Leo Patterson-Ross told the ABC he suspected the slow rollout was due to “reform fatigue”.
He said while he wanted portable bonds to become a reality “as soon as possible”, there was uncertainty about how the new system would operate.
He said: “We have seen media releases celebrating that we are implementing a portable bond scheme. … We needed more communication about how long we expected it to take and how long we thought it would take to implement.”
Leo Patterson Ross speculated that the slow rollout was due to “reform fatigue”. (ABC News: Greg Bigelow)
Patterson-Ross said the scheme was first proposed in 2018 in response to private lenders offering bond loans, but affordability had been an issue even then.
According to 2022 statistics from the Tenants Association, the average moving cost, excluding security deposit, can cost $4,500. Leo Patterson estimated that amount is now likely to be around $5,000.
“Having to move and put up a second deposit is a real burden on people, especially when most people (about 60%) get their full deposit back,” he said.
The average move can cost more than $4,500, according to the New South Wales Tenants Union. (ABC News: Monish Nand)
The Real Estate Institute of New South Wales (REINSW) has been vocal in its opposition to portable bond schemes.
The Peak Property Group previously recommended that landlords should be able to decide whether to participate if the new system is implemented.
REINSW chief executive Tim McKibbin declined to comment directly on the delay, but said he was unhappy with the consultation process.
Mr McKibbin said that although there had been “considerable lobbying” for the portable bond scheme since May 2023, it felt like the peak body had been largely unheard.
He said one of their concerns revolved around the amount of paperwork that would potentially be required.
“So far there hasn’t been much detail about how it will work, but the government believes it will make no difference to landlords and property managers,” he said.