Govt accused of using Homes Tasmania funding to house health workers

The state government has come under fire over its purchase of the Fountainside Hotel from the University of Tasmania. Here’s why.

The state government has purchased the Fountainside Hotel.

The government has been accused of using money for public housing to buy a Hobart hotel for $16.25m to provide accommodation for health workers.

In a social media post, Homes Tasmania revealed it had purchased the Fountainside Hotel in Hobart, “ensuring the 50-unit facility will continue to be available as health worker accommodation”.

“The move prevents a further squeeze on Hobart’s tight private rental market because the Department of Health does not need to secure rentals for staff and the facility will not return to tourism accommodation,” it said.

But Independent MP for Franklin David O’Byrne questioned why the government did not disclose that Homes Tasmania had bought the hotel when it announced the deal to buy Fountainside from the University of Tasmania.

Independent member for Franklin David O'Byrne after coming to an agreement with Premier Jeremy Rockliff to assist in forming government. Picture: Nikki Davis-Jones

“This is a pea and thimble trick and it’s exactly the kind of trick I said the government would play around the creation of Homes Tasmania, due to a lack of parliamentary and ministerial oversight,” he said.

“This clearly hasn’t happened by accident. This has been a deliberate decision action to mislead.”

Mr O’Byrne said it was a “furphy” to say purchasing Fountainside freed up accommodation elsewhere in Hobart.

“The government’s argument was the Homes Tasmania model would allow it to get a balance sheet to invest in more public housing — yet here is the government raiding the coffers of Homes Tasmania to prop up another portfolio,” he said.

“Instead of working with the community sector to create more affordable housing, Homes Tasmania has actually removed 50 potential additional units by outbidding an affordable housing provider.

“The Health Department has previously stated publicly Fountainside was 80 to 90 per cent full throughout the period of the lease. This means the government’s purchase merely maintains the status quo.”

Colony 47 also bid for the hotel which it wanted to use to ease youth homelessness.

CEO Dianne Underwood said the organisation was still looking for “suitable properties and financial supporters to deliver a large scale supported youth accommodation facility in greater Hobart suitable premises”.

“We saw the building as the perfect facility for a groundbreaking new model of supported youth accommodation that would not only put a roof over the heads of vulnerable people but incorporate a range of wrap-around services, including pathways to employment and education,” she said.

“It is for the Government and Homes Tasmania to explain its vision and priorities for tackling the homelessness issue.”

The state government has purchased the Fountainside Hotel. Clark MP Madeleine Ogilvie, Minister for Housing and Planning Felix Ellis and Royal Hobart Hospital Director of Nursing Erin Smallbon speak to the media on site on Thursday, August 22, 2024.

A government spokeswoman said the Fountainside Hotel would house be provide key health workers from the Royal Hobart Hospital with housing “that would otherwise need to be sourced from the private rental market”.

“Securing Fountainside follows the purchase of a new 24-unit complex in Punchbowl, for the Launceston General Hospital’s key workers,” she said.

“Key worker accommodation for our nurses and doctors supports the government’s efforts to boost the number of health workers in our hospitals with almost 800 employed since April.”

Originally published as Govt accused of using Homes Tasmania funding to house health workers