4.1
This chapter addresses the following term of reference:
(g) what consideration has been given to understanding and addressing any financial impact to affected businesses and individuals.
4.2
The chapter includes:
a summary of evidence received in relation to the financial impacts on businesses and in relation to property values;
an overview of related impacts on community health that are, largely, connected with financial impacts;
an overview of claims that have been made for compensation to date;
a brief summary of financial impacts on state, territory and local governments that were identified by some participants;
the Government’s consideration of financial impacts to date; and
the Committee’s conclusions and recommendations.
Financial impacts reported by communities
4.3
The financial impact of PFAS contamination emanating from Defence bases, particularly on the communities surrounding RAAF Base Williamtown, Army Aviation Centre Oakey and RAAF Base Tindal, was a key area of concern and focus during the Committee’s inquiry.
4.4
The Committee received strong representations from community members who said that the Australian Government needs to take responsibility for a range of financial impacts , which can be divided into two categories:
impacts on businesses operating in affected areas, and
impacts on individuals, primarily in relation to property ownership.
Impacts on businesses
4.5
The Committee was given evidence about a range of financial impacts on businesses in PFAS-affected communities. Port Stephens Council, for example, told the Committee about a business survey it had conducted in the Williamtown investigation area in 2015. Over 50 per cent of respondents indicated that they had been impacted by PFAS contamination, of which over 25 per cent were ‘major or significant’ impacts. The Council provided the following example of a specific response to the survey:
As a result of the closure we were unable to harvest oysters from our finishing off oyster leases in the affected area during our prime sales period for approx. 5-6 weeks. This has caused loss of income and considerable expense. Because of the closure we were unable to move stock to other oyster leases resulting in a bank up of oysters on affected leases. Extra infrastructure was required to be built to cater for these oysters. We were also put into a position of having to sell semi mature stock at a lesser price from other oyster leases in order to keep our business operating.
4.6
Mrs Britt Osborne told the Committee that her business had, in 2015, invested $400 000 into a water park in the Williamtown area. Once news of the PFAS contamination broke, the business was unable to open the park. Mrs Osborne estimated that the business had lost around $120 000 as a result of not opening, in addition to the lost capital investment.
4.7
Mr Desmond Maslen told the Committee that his business installing environmental mooring systems continued to be affected by the PFAS contamination, due to the purchase of a property in Medowie six weeks before news broke of the RAAF Base Williamtown contamination. Mr Maslen reported that he had needed to drop the rent for the property by nearly two-thirds in order to attract a tenant. Being unable to sell or borrow against the property had reduced his ability of his business to raised money to fulfil contracts.
4.8
Mr Wayne Sampson told the Committee about the case of an investor who had arrived in the area intending to sell agricultural produce to the major supermarkets in an operation employing around 200 people. However, the business had now been for sale for three years without any interest from purchasers.
4.9
Ms Dianne Priddle told the Committee about the biosecurity risks that PFAS contamination could pose to the beef industry, and called for producers to be moved from their land ‘like for like’. The lack of current food standards for PFAS is considered further in Chapter 6.
4.10
Similar issues concerning the possibility of PFAS contamination in the food chain were raised by Mr Andrew Bartlett, a resident of Katherine, who said that he had chosen not to irrigate the mango trees on his farm during the dry season in order to minimise the exposure to PFAS from contaminated bore water.
4.11
Ms Priddle also told the Committee about the impact of PFAS contamination on own business as a stud producer. She and her partner had made a decision to stop using bore water in order to prevent further contamination, which meant they had to buy in hay and grain. The financial impact of these additional costs caused them to pull back on the genetic work they had previously done work using cattle embryos.
4.12
In Victoria, the Wetlands Environmental Taskforce Public Fund (the WET Trust) described the ‘immense financial impact’ of the contamination of its Heart Morass property with PFAS due to its proximity to the RAAF Base East Sale. It noted that the property had a Capital Improved Value of $2.278 million in a ‘pristine, uncontaminated state’ according to a 2018 property valuation notice issued by the local council. However, the WET Trust submitted that, in its current contaminated state, the property had zero commercial value as an asset on the Trust’s balance sheet. The WET Trust expressed its desire for restitution of the property to its uncontaminated state and for the Trust to be compensated for the economic loss to its asset.
Impacts on individuals
4.13
A large number of participants in the inquiry told the Committee about the impact that PFAS contamination in the Oakey, Williamtown, and Katherine areas has had on their financial situation, and called for more consideration of these matters by the Government.
4.14
The Coalition Against PFAS told the Committee that property prices had ‘plummeted’. It highlighted a report by the New South Wales Valuer General that property prices at Williamtown had, on average, decreased by at least 15 percent. However, it added that anecdotal evidence suggested that the ‘real decreases are likely to be much higher’ because:
Banks have refused to lend, for fear of insufficient valuations, and in some cases the “health and safety” risk of attending contaminated properties to conduct valuations.
The volume of property sales has decreased, and the average length on the market has increased significantly as properties become harder to sell.
Semi rural acreages are no longer fit for purpose, with no prospect of growing produce, running animals or hobby farming, or using bore water.
With no prospect of remediation in sight, the contamination as modelled by AECOM is to be present for decades to come.
4.15
The Coalition Against PFAS added that these reductions in values had created an ‘equity trap’:
Many of our constituents, particularly those with young children, desperately want to move out of the affected areas. But they cannot sell, and they cannot use contaminated property to raise finance to buy elsewhere.
4.16
These, and similar, financial impacts were evident in numerous individual submissions to the inquiry from community members. Due to their inability to sell their properties at a reasonable value or access their equity, community members reported being in a state of financial ‘limbo’, being ‘stuck’ on their properties, imprisoned, in ‘home detention’, and having ‘no way out’.
4.17
Mr Lester Schmidt, of Oakey, told the Committee that he had not even been able to obtain a valuation of his property, which he put down to the valuers being ‘afraid to put anything on paper regarding the contamination’.
4.18
Some property owners also told the Committee that the contamination had impacted their ability to attract tenants for investment properties.
4.19
Port Stephens Council reported that residents had received ‘mixed messages’ in relation to insurance, banking and mortgage issues:
Anecdotally, Council is aware that some insurance companies are advising residents that they would not be able to rebuild if something was happen to their dwelling while this uncertainty exists. Council has also had reports of lending authorities advising they wouldn’t enable properties within the contaminated area to be used as security at this time.
4.20
Many residents told the Committee that they lived in, or had moved to their area, for lifestyle reasons, but that this lifestyle was no longer possible due to the precautionary measures associated with the PFAS contamination. For example, Shirley Davis told the Committee that the main reason they had bought their Williamtown property was for a ‘rural lifestyle’ in which her family could grow their own fruit, vegetables and eggs; but due to the PFAS contamination they no longer kept any birds and could not eat their home grown produce.
4.21
A sample of the evidence provided by community members is provided in Box 4.1 below.
Box 4.1: Property-related financial impacts
[T]he PFAS contamination was announced shortly after we listed our property for sale, and we have had not a single expression of interest from a potential buyer. Furthermore, house prices all throughout the region have dropped dramatically—in fact our real estate agent informed us that owners are typically having to drop their prices by up to 35 percent in order to have a hope of selling. This means that we now find ourselves in the position of having a primary asset which we cannot sell for anywhere near what it is worth, and two mortgages to pay off simultaneously.
The value of the properties has dropped and the banks and financial institutions won’t lend money for purchasing properties in this area. Agents now tell us that people with cash are willing to buy as the properties are cheap, however, the price we would get if we did sell would not buy us anything anywhere.
When we moved from Katherine in April 2018 we had our house evaluated. We purchased in 2014 prior to the PFAS contamination knowledge. House prices were high and we spent $60,000 renovating. We have invested considerably in our property in Katherine north and have been told recently that our house is valued at less than we purchased it for, merely $330-345k. This has had a profound effect on our financial situation, especially living off one salary.
I cannot sell due to the contamination, I cannot afford to maintain the property and fix necessary repairs ie the leaking roof. Banks will not lend on properties in the area – I cannot even obtain a loan to make necessary repairs or updates. I do not have the freedom I am entitled to as an Australian citizen who worked hard, with my late husband, to pay off a home as it is fair to say the property is unsellable for a true value of what it would have sold for and finding a buyer is near impossible.
We are in financial dire straits. We are paying someone else’s mortgage to keep a roof over our heads and we cannot sustain this pressure upon our lives anymore. Here we sit. 5 years Later.
We have started property searching. Our property, being 32 acres, dual occupancy and two street frontage with the ability for major subdivision with DA consent, so close to beaches and the city we expected quite a large return for our land. However, our home and land is worthless. Recent Realestate agent appraisals indicate that there are NO buyers for this area due to the contamination and we would have to virtually give it away.
I cannot sell my home, I cannot move or conscionably let renters in, I cannot borrow against the property and no one can borrow to buy it from me. I cannot grow produce on rural zoned land. I am imprisoned by an act of environmental vandalism by a defence organisation chartered to protect me, and whose modus operandi is ‘do nothing’ off base.
My mother lived on Sansom Road until she became too ill to live at home anymore. It became necessary to move her to an aged care facility. We could not use her house (now worthless) as the bond required by the nursing home so money was taken from her savings to cover her costs. My mother passed away in mid April, at the age of 93, she spent the last years of her life worried about her home becoming worthless, her money being eaten up by nursing home fees and the drastic decline of the value of her Estate for her family members. This should not be how the last three years of an elderly person’s life should be spent.
The value of the property has been affected severely, and we are completely stuck financially. We can’t sell our investment at a loss, and we can’t sell the house we live in because the bank would take any profit to pay off the debt on the property in Salt Ash.
Our desired outcome from this and from the forced litigation that we are under is that we are duly compensated for our losses—our loss of property values, our loss of lifestyle, our loss of a safe and financially stable future and the loss of our ability to provide an inheritance of value to our son. We did not ask for this contamination in our lives. It has been forced upon us by a negligent and guilty polluter.
4.22
The New South Wales Valuer General provides ‘independent and impartial valuations for use by local government for land tax and rates, and for ensuring landholders are fairly compensated when land is compulsorily acquired’. Appearing before the Committee at a public hearing, the Deputy Valuer General, Mr Michael Parker, explained that a review—based on sales in the Williamtown management area before and after the announcement of the PFAS contamination—had determined that land values had reduced by 15 per cent in the 1 July 2016 valuing year, and were maintained at the same level at 1 July 2017. This compared with increases in land values outside the management area of between five and 10 per cent in 2016, and between six and 10 per cent in 2017 (depending on whether it was residential or rural land). The Deputy Valuer General also noted there had been a reduction in the volume of sales from an average of 16 per year previously, down to 10 per year in 2016 and 2017, and five in 2018 to date.
4.23
Mr Parker explained that while ‘contamination occurs around the state’, the PFAS contamination in the Williamtown area had an unusually broad impact, in that it had ‘affected more properties than normally would be the case’.
4.24
In contrast, at the Oakey public hearing, the Toowoomba Regional Council advised that it had not seen a reduction in the values assessment the Valuer General in that region. Several residents, however, individually expressed concern about depressed prices in the town and the difficulties of selling. One Oakey resident blamed ‘negative media stories’ for the slowdown in the local property market.
4.25
Similar concerns about the reduction in property values and ability to sell property, or use it for its intended purpose, were raised by residents of Katherine.
Related impacts on the community
4.26
The Coalition Against PFAS submitted that communities in affected areas faced ‘inevitable economic decline’ until the contamination is remedied:
Even businesses which do not use the land or water … struggle as a result of the contamination, because they can no longer attract staff, and tourists no longer wish to visit the area’.
4.27
Several residents also told the Committee that the PFAS issue had caused divisions in their communities. For example, Ms Jennifer Spencer told the Committee at Oakey:
We have become a for and against Defence community. We have social media groups, one of which I am an administrator, at war with each other. We have had people shouting at each other at meetings and threatening violence … We have had members of the community openly mocking and laughing at our suffering. We have had one delightful young lady telling us on an online forum to find a nice long rope and go to hang ourselves. We are being told that this is all our fault. We are being told to shut up and go away. We are told, ‘What are whinging about? Move away, cut your losses and get out of this town. You’re tainting the town.
4.28
Many community members also talked about the mental health impact that PFAS contamination had had on residents, including increases in stress, anxiety and depression. These impacts were often connected with financial stresses, and the lack of certainty about the future. A sample of evidence from community members is included in Box 4.2 below.
Box 4.2: Mental health of community members
Apart from forcing us to put our retirement on hold and increase the number of hours we work, this has caused us significant mental and emotional stress—something that is compounded by the fact that Defence was aware of PFAS contamination well before we invested so much in this property and used its projected value as the basis of buying another one.
How can I continue with this amount of anxiety, stress and depression? Why would the Australian Government let honest Australian citizens be in this position, people that worked hard and paid off their home, paid taxes and just wanted to live the life they were entitled to have – Freedom to live off their land, freedom to sell their property.
I struggle to do the basic day to day chores as I am constantly stressed , have trouble sleeping because of depression & can see no end in sight for our future.
The financial damage is enormous. The physical damage—the emotional damage is terrifying. I am so scared of what’s going to happen to my property, and I think: ‘How dare people put all of us in that position where we don’t know: "Hey, If you drop your value by 50 per cent you might sell it."‘ Well, no. I’ll die there if I have to.
You want to know how this makes us feel eve1y day since the RED ZONE has been made public? WELL We have never ever had any mental health issues in our 49 years of marriage—our ages are 74 and 78yrs and full pensioners watching our health decline over the past couple of years has been traumatic to say the least, kidney cancer diagnosed, heart attack x2 and the depression has been just hard daily to manage, so much so that unbeknown to each other suicide has been in each other’s thoughts thankfully we respect and care for each other too much to attempt anything this dramatic but sometimes it just feels as though it is the only answer as we feel so helpless.
We’ve actually had an instance where I’ve taken my wife away for a few days just to get her away from all of this, and all that happens is that when you come back you’re just thrown into the same thing, and it’s depressing straightaway. It’s like you’ve never been away.
4.29
The Williamtown and Surrounds Residents Action Group summarised the impact the PFAS contamination had had on its community as follows:
Before the community was aware of the contamination, the community was a thriving area, properties were sought after, property prices were increasing and many residents had dreams and aspirations of setting up or running businesses or raising families in their forever home or at the other end of the life cycle, getting ready to sell their family home, to down size and retire. All of which came to a grinding halt when the contamination finally became public.
Residents now are in a state or unrest and anxiousness, their economic future has been striped and they now live with the fear of possible health effects and the unknown. We have all chosen to live in this area for individual reasons, whether it is a business opportunity, a tree change, our dream home or the rural lifestyle. Whatever it be, the common theme is the location. A rural area close to the beach, half an hour to Newcastle, the Bay and Maitland, the acreage, the farm life and most importantly was the access to unlimited water, a feature that is a necessity with sandy soils. Now everything is uncertain, we have fallen out of love with our homes and have lived under a cloud of bureaucratic garbage for almost three years.
4.30
The Australian Government has established dedicated mental health and counselling support services for the communities of Williamtown, Oakey and Katherine. The Government’s submission notes that Primary Health Networks in each of these communities have been commissioned to provide face‑to‑face services, with telephone and online counselling services also available. However, elected representatives in Katherine advised the Committee that their community was still waiting for face-to-face services to be provided.
Claims for compensation
4.31
Across each community, residents called on the Australian Government to take responsibility for the financial impacts and to offer a solution to affected property owners.
4.32
The Coalition Against PFAS called for the Commonwealth Government to provide full compensation for losses suffered in affected communities, including in relation to property, businesses and compensation for emotional harm, stress and inconvenience.
4.33
Some residents were of the view that a program of voluntary land acquisition should be implemented. For example, Mr John Donahoo submitted that voluntary acquisition of affected properties was needed in order to provide hope to ‘tormented and distressed’ landowners. He indicated that the cost of such acquisition must first be quantified, and proposed a finance model that would allow for these costs to be distributed over a 15 year period. Mr Donahoo further recommended that Defence Housing Australia be used to implement the scheme, with some of the acquired land used to develop buffer zones adjacent to Defence bases as part of an Airfield Buffer Zone Policy.
4.34
Other residents emphasised the need for a range of compensatory options to suit differing individual circumstances. For example, Mr Craig Commens told the Committee in Oakey that there was no ‘one size fits all’ solution:
[T]here are some people who want to go now but can’t. There are others who might want to sell in a few years when they’ve retired. … There are a couple of old guys over the road from me, and they couldn’t care less. They’re retired, they’re elderly and they’re going to see the days out.
4.35
The Williamtown and Surrounds Residents Action Group emphasised that a range of options needed to be available to residents:
Even though there are similar themes within our area, we all need to be treated with respect and given options that suit the individual. An option must be given to start again in an equivalent position, there cannot be a one size fits all approach to Williamtown or the ever unfolding national issue.
Class actions
4.36
Class actions against the Department of Defence have been initiated on behalf of affected residents and businesses in the Oakey, Williamtown and Katherine investigation areas.
4.37
Dentons, the law firm representing the applicants in the Williamtown class action, endorsed comments by residents that ‘there is no single or neat solution’ and that there ‘needs to be a shift away from a highly adversarial response from the Commonwealth to genuine consultation with affect communities’. It noted that the Williamtown community had ‘felt compelled’ to commence proceedings against Defence in November 2016 due to ‘over a year of inaction from the Commonwealth in adequately responding to or attempting to remediate the damage cause by the contamination. It explained:
Generally, the class members (both residents and business owners in Williamtown and its surrounding areas) seek to be put into the position that they were in had the contamination not occurred, to the extent that money is able to compensate for that loss. Specifically, the class members seek monetary damages in the class action proceedings for loss and damage resulting from substantial and unreasonable interference with their rights or use of their property by Defence (otherwise known as nuisance), damages available pursuant to contravention by Defence of Commonwealth statutory regimes, and compensation arising from Defence breaching its duty of care owed to the residents and business owners of Williamtown. These claims are in addition to claims for inconvenience, distress and vexation, consequential upon the negligent infliction of damage to property.
4.38
Dentons wrote that any successful resolution of the class action would only provide monetary compensation to the economic claims pleaded by class members, but that ‘full and proper compensation and remediation extends well beyond mere monetary compensation that the class action can provide’.
4.39
The Australian Government noted the class actions in its submission, but considered that, as these matters were before the court, it would be inappropriate to comment further.
Non-litigated claims
4.40
The Australian Government advised that Defence had also received 33 non-litigated claims for compensation (increased to 37 by the time of the hearing on 14 September 2018), which were being handled in accordance with the Attorney-General’s Legal Services Directions 2017. It noted that all claims in relation to PFAS are ‘significant legal issues’ under these Directions and are ‘not to be settled without the agreement of the Attorney-General’.
4.41
In response to a question on notice, Defence advised that 19 of the 37 non-litigated claims were in relation to Williamtown. At the time of the response, two non-litigated claims, and two partial claims, had been resolved under existing Departmental policy initiatives. The remaining claims continued to be assessed.
State, territory and local government submissions
4.42
State and local governments also brought a range financial impacts to the Committee’s attention.
4.43
The New South Wales Government echoed concerns expressed by the affected residents in the Williamtown community that their property prices have decreased as a result of the PFAS contamination, and that, in many instances, financial institutions will not lend to people wanting to buy in the area and will not recognise equity in properties. The New South Wales Government considered that the Commonwealth’s statement that it was not considering a land purchase program as a result of PFAS contamination was ‘inconsistent with the “polluter pays” principle’. It recommended:
The Australian Government should consider appropriate compensation for property impacted by PFAS contamination emanating from Defence lands where remediation of the contaminated sites is not possible or is unviable.
4.44
The Northern Territory Government similarly submitted:
More resources need to be directed toward understanding and addressing any financial impact to affected businesses and individuals as the visibility on what is being done in this space is not clear.
4.45
The Government of South Australia submitted that it was ‘not specifically aware’ of any considerations of financial impacts to affected businesses and individuals in relation to the RAAF Base Edinburgh investigation area. However, it noted that the Salisbury Council had closed its ‘managed aquifer recharge’ scheme—which captures stormwater which is injected into the aquifer, retrieved and on sold to irrigators—due to the identification of PFAS in the water. This had impacted the Council’s recycled water business, potentially leading to a need for infrastructure upgrades to ensure the wetland system does not cause local flooding.
4.46
Toowoomba Regional Council told the Committee that, due PFAS contamination, it had lost the ability to use 750 megalitres of water per annum. It estimated the commercial value of this water at $1.5 million per year. To improve water security at Oakey, it was also considering building an additional reservoir at an estimated cost of $3 million, duplicating the single pipeline from Toowoomba at an estimated cost of $12 million, and/or accessing and treating an alternative bore field for Oakey also at an estimated cost of $12 million. The Council was considering its options in relation to any request for compensation from the Australian Government.
4.47
Port Stephens Council acknowledged that it had ‘limited ability and resources to effect significant measures’ to mitigate the financial impacts, but noted that it had provided a 50 per cent reduction in rates to affected residents and farmland in the Williamtown Management Area. The $90 293 cost of this measure in 2018–19 was being made up for by the remaining ratepayers in the area, who were paying an additional $2.71 per year.
4.48
The Port Stephens Council also noted that the PFAS contamination was having an impact on the future development of the area around Newcastle Airport. This included increasing costs of development ‘on the basis of additional resources for assessments and, in many cases, additional mitigation and controls required’, and uncertainty around the ability to conduct drainage works that are necessary for the full development of the Council’s Defence and Airport Related Enterprise Zone.
4.49
Although not related to a Defence site, Bathurst Regional Council submitted that it was seeking compensation from the Commonwealth Government for remediation works and for other costs associated with its investigation of PFAS contamination at Bathurst Regional Airport, which was operated by the Commonwealth until 1992.
Consideration by the Government
4.50
The Australian Government’s submission acknowledged concerns that had been raised about the impacts of PFAS contamination on businesses and individuals in investigation areas, including in relation to business losses, property values, and the measures required to be undertaken to live in accordance with the recommended precautionary measures.
4.51
The Government noted that a financial assistance package had been provided to eligible fishers and businesses affected by the temporary closure of waterways near the Williamtown investigation area in 2015. The package included an Income Recovery Subsidy for individuals, Business Assistance and Business Hardship Payments for businesses, and an additional Business Transition Payment in April 2016. Total financial assistance payments under the package amounted to $2.174 million. Free financial counselling was also available to affected businesses.
4.52
The submission stated the Government’s current position in relation to land purchases as follows:
Based on the knowledge and evidence available at this time, the Australian Government is not offering a land purchase program, as a result of PFAS contamination.
The Australian Government, through relevant Commonwealth departments will continue to review PFAS management practices and adjust its response as necessary, in accordance with any new evidence that arises.
4.53
The Government advised, however, that the PFAS Taskforce had met with key financial institutions in late 2017 to ‘gain a better understanding of the basis of the anecdotal reports’ in relation to loss of equity in property, financial institutions not lending against equity in property, and financial institutions not lending for property being purchased in investigation areas.
Financial institutions advised that there is no blanket policy on lending in PFAS-affected areas – assessment is on a case-by-case basis, however, the independent valuation reports are a key driver of risk assessment. Valuers have a key role, as they are required to reflect local market sentiment in their valuations.
4.54
The Government outlined a number of previous occasions in which Defence had engaged with financial institutions, valuation companies and peak bodies to discuss lending practices and policies. It explained that while ‘decisions on lending and valuations continue to remain commercial decisions for individual firms based on financial risk’ it had focused these engagements on ‘education and raising awareness about PFAS and the status of Defence’s environmental investigations’.
4.55
Defence explained further at a public hearing that, while it does not ‘track or record or have valuation information’ itself, it had been:
… seeking to ensure that valuers and lending institutions have available to them the best and most credible information available on the investigations, particularly the information that’s contained in the reports by our environmental consultants. So we have reached out to lending institutions and to valuers to ensure that they’re aware that these reports are available and to seek to update them on information so they’re not working off erroneous information or lack of information but have the information that is available to us in these environmental investigations and understand the health advice that is available.
4.56
At the public hearing in Canberra, the Department of the Environment and Energy provided the following response when asked about the assistance the Government could offer to residents who feel they are trapped in their properties due to an inability to sell or borrow against their property:
In developing responses to PFAS contamination, a number of principles underpin the approach that the Commonwealth has pursued with responses: fiscal responsibility; based on the best available science and information; risk appropriate; and manageable in the longer term. The extensive work that’s been undertaken by the government, particularly at particular sites, has informed views and decisions in this space, and it’s also informed the nature of the support that the government has provided to particular communities. In particular, we look at: the particular information that the government’s drawn on; outcomes of detailed site investigations; the very detailed human health and environmental health risk assessments that are undertaken; and the information and inputs that are obtained from community engagement from state and territory agencies and other Commonwealth bodies. All that information has been looked at by the Commonwealth and, based on the knowledge, information and evidence available at the time, the Australian government has not decided to implement a program of buybacks at this point.
Committee comment
4.57
The Committee acknowledges the anguish and stress experienced by many residents of areas affected by PFAS contamination—both due to uncertainties associated with the contamination event itself, but extended and made worse by the financial difficulties many have faced and the inability to move into unaffected areas. Many residents have reported feeling ‘trapped in their homes’ due to an inability to sell their property, or access their equity. Many have reported suffering from anxiety and depression due to their inability to change their situation. Many also reported increased divisions within their communities. Many have chosen to support class actions as a means of rectifying their financial circumstances.
4.58
Provision of mental health services will be an important ongoing part of the Australian Government’s response to communities affected by PFAS contamination. However, it is even more important that the underlying causes of the stress and anxiety being experienced by communities members are addressed as far as possible.
4.59
The Committee considers that the Australian Government needs to act swiftly to offer hope to property owners caught up by the PFAS crisis. The Committee received compelling evidence of instances where businesses and other property owners in PFAS contaminated areas have suffered demonstrated and quantifiable losses as a result of Defence’s use of PFAS‑based firefighting foams on its bases. The Committee therefore considers that, in addition to its responsibility to remediate contaminated land, the Australian Government bears a responsibility to provide financial compensation to these businesses and property owners.
4.60
The precise nature of the compensation scheme will require detailed consideration by the Government. However, the Committee considers that the scheme should prioritise the most seriously affected residents in the first instance, and that the scheme should be flexible enough to accommodate a variety of individual circumstances.
4.61
Importantly, given the current uncertainties as to the nature and extent of any health effects attributable to PFAS exposure, the compensation scheme should initially be limited to businesses and property-related losses. A person’s acceptance of an offer for compensation under this scheme should not preclude the person from a future claim in relation to any human health effects that may be found, as a result of future research, to be attributable to PFAS exposure.
Recommendation 5
4.62
The Committee recommends that the Australian Government assist property owners and businesses in affected areas for demonstrated, quantifiable financial losses associated with PFAS contamination that has emanated from Defence bases. Priority for compensation, including the possibility of buy backs, should in the first instance be given to the most seriously affected residents, including:
property owners who have suffered losses as a result of being unable to use their land for a specific purpose that it was intended for at the time of purchase;
persons who invested in land between the time that it was known by the Australian Government to be contaminated and the time of that contamination being made public; and
businesses and other owners of property in the most highly contaminated areas.
The compensation scheme should be flexible enough to accommodate a variety of individual circumstances.
Acceptance of an offer for compensation in respect of their property’s utility or value should not preclude the person from a future claim in relation to any human health effects that may be found, as a result of future research, to be attributable to PFAS exposure.
4.63
The Committee recognises the complex and difficult financial circumstances that many property owners find themselves in as a result of PFAS contamination in their area. The question of how, and whether, to access the compensation scheme will add another layer of complexity to these circumstances.
4.64
The Committee notes that there are other instances in which the Australian Government has provided free financial counselling services to individuals and businesses. For example, the Department of Agriculture and Water Resources’ Rural Financial Counselling Service provides ‘intensive, individualised support’ to primary producers and small rural businesses who are suffering financial hardship. The support available under that program includes help to identify financial and business options, negotiate with lenders, and develop an action plan; help accessing support payments; providing information about other assistance schemes; and referrals to other services.
4.65
The Committee recommends that a similar service be developed for property owners and businesses in PFAS contaminated areas. The support provided should be individually tailored to each person’s circumstances, and include:
information and advice in relation to the financial options available;
assistance with understanding and accessing (if eligible) the compensation scheme;
information and referrals in relation to other services available; and
assistance with navigating the process of selling their property, where desired, including discussions with valuers and lending instituations.
Recommendation 6
4.66
The Committee recommends that the Australian Government make available free, individualised case management and financial counselling services to those affected by PFAS contamination.