Revised Explanatory Memorandum
(Circulated by authority of the Minister for Housing, Minister for Homelessness and Minister for Small Business, the Hon Julie Collins MP and the Minister for Finance, Senator the Hon Katy Gallagher)Chapter 6: Consequential matters arising from the Housing Australia Future Fund Act 2023
This section has been prepared by the Department of Finance.
Outline of chapter
6.1 Schedule 4 to the Amendment Bill makes a number of consequential amendments to other legislation to enable the effective operation of the HAFF from commencement. It is necessary to ensure the smooth functioning of the HAFF Bill.
6.2 The HAFF Bill establishes the HAFF as a dedicated investment fund to provide a funding source to support and increase social housing and affordable housing, as well as other acute housing needs including, but not limited to, housing improvements in Indigenous communities and housing services for women, children and veterans.
6.3 The consequential amendments made in Schedule 4 to the Amendment Bill support the establishment of the HAFF in that they:
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- extend the Future Fund Board's duties to manage the HAFF; and
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- allow for amounts to be transferred between the HAFF and the Future Fund to allow for proper apportioning of common expenses incurred by the Future Fund Board in managing the HAFF, the Future Fund, the FDF, the ATSILSFF, the MRFF, the DRF, and the DCAF.
6.4 Schedule 4 to the Amendment Bill also makes consequential amendments to:
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- broaden the purpose of the Housing Australia Special Account to allow the payment of grants and loans in relation to acute housing needs, social housing and affordable housing; and
- allow payments in relation to acute housing needs, social housing and affordable housing to be channelled through the COAG Reform Fund.
6.5 Schedule 4 to the Amendment Bill amends the ATSILSFF Act, the COAG Reform Fund Act, the DCAF Act, the DRF Act, the FDF Act, the Future Fund Act, the MRFF Act and the Housing Australia Act.
Detailed explanation of new law
Commencement
6.6 Clause 2 of the Amendment Bill provides that the Schedule 4 to the Amendment Bill commences at the same time as the HAFF Act but Schedule 4 would not commence at all if the HAFF Act does not commence.
General Amendments
6.7 Schedule 4 to the Amendment Bill makes amendments to several Acts as a result of the establishment of the HAFF.
Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018
6.8 Item 1 inserts new paragraph 16(a)(iaa) in the ASTILSFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the ATSILSFF can be met from the ATSILSFF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.9 Item 2 inserts new paragraph 16(b)(iaa) in the ASTILSFF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the ASTILSFF can be met from the ASTILSFF Special Account to the extent that such insurance premiums do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.10 Item 3 inserts new paragraph 16(c)(iaa) in the ASTILSFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the ASTILSFF can be met from the ASTILSFF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
COAG Reform Fund Act 2008
6.11 Item 4 inserts Note 2AD before Note 3 to subsection 5(2) of the COAG Reform Fund Act, to reflect that an amount originating in the HAFF may be transferred to the COAG Reform Fund. This note would mirror Note 2A, Note 2AA, Note 2AB and Note 2AC that refer to the ability to transfer amounts originating in the DCAF, MRFF, FDF and DRF to the COAG Reform Fund.
6.12 Item 5 inserts into the COAG Reform Fund Act a new paragraph 7(1)(bad), before paragraph 7(1)(d), to recognise that grants from the HAFF to States and Territories are channelled through the COAG Reform Fund. The HAFF Act requires that payments to States and Territories through the COAG Reform Fund are bound by the terms and conditions of a written agreement and are therefore exempt from the terms and conditions set out in this section.
6.13 Item 6 inserts Note 1AD before Note 3 to subsection 7(3) to reflect that the channelling of grants to States and Territories from the HAFF through the COAG Reform Fund is subject to the provisions of the HAFF Act.
DisabilityCare Australia Fund Act 2013
6.14 Item 7 inserts new paragraph 16(a)(ib) in the DCAF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.15 Item 8 inserts new paragraph 16(b)(ib) in the DCAF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the DCAF can be met from the DCAF Special Account to the extent that such insurance premiums do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.16 Item 9 inserts new paragraph 16(c)(ib) in the DCAF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the DCAF can be met from the DCAF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
Disaster Ready Fund Act 2019
6.17 Item 10 inserts new paragraph 16(a)(ia) in the DRF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the DRF can be met from the DRFF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.18 Item 11 inserts new paragraph 16(b)(ia) in the DRF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the DRF can be met from the DRFF Special Account to the extent that such insurance premiums do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.19 Item 12 inserts new paragraph 16(c)(ia) in the DRF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the DRF can be met from the DRF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
Future Drought Fund Act 2019
6.20 Item 13 inserts new paragraph 17(a)(iib) in the FDF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the FDF can be met from the FDF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.21 Item 14 inserts new paragraph 17(b)(iib) in the FDF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the FDF can be met from the FDF Special Account to the extent that such insurance premiums do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.22 Item 15 inserts new paragraph 17(c)(iib) in the FDF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the FDF can be met from the FDF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
Future Fund Act 2006
6.23 Item 16 amends the note to section 4 of the Future Fund Act. The amended note confirms that the Future Fund Board has additional functions under the HAFF Act.
6.24 Item 17 inserts definitions for HAFF, HAFF Special Account, Housing Minister, Social Services Minister and Veterans' Affairs Minister in the Future Fund Act. These expressions are defined by reference to the HAFF Act.
6.25 Item 18 amends Note 2A to section 13 of the Future Fund Act. The amended note explains that Schedule 2A to the Future Fund Act is about transfers of amounts from the Future Fund to the other investment funds managed by the Future Fund Board, including the HAFF.
6.26 Item 19 inserts new paragraph 28(5)(bac) and Item 20 inserts new paragraph 28(5)(gb) in the Future Fund Act. The effect of these amendments is to allow the same person to be engaged as an investment manager for more than one investment fund managed by the Future Fund Board, including the HAFF.
6.27 Item 21 amends the note to section 33 of the Future Fund Act. The amended note explains that the Future Fund Board has additional functions under other legislation, including the HAFF Act.
6.28 Item 22 inserts new subparagraph 35(b)(iiib) in the Future Fund Act. This amendment provides that the Future Fund Board has the functions conferred on the Future Fund Board by the HAFF Act.
6.29 Item 23 inserts new paragraph 55(3)(bb) in the Future Fund Act. This amendment provides that the Future Fund Board's reporting obligations in relation to the Future Fund do not include its separate reporting obligation to the responsible Ministers under the HAFF Act.
6.30 Item 24 inserts new paragraph 63(1)(cb) in the Future Fund Act, and Item 25 inserts new paragraph 63(2)(abb) in the Future Fund Act. These amendments ensure that neither a Future Fund Board member nor the Chair of the Future Fund Board breaches civil or criminal obligations under the Future Fund Act by performing an act that the Future Fund Board member or Chair is required to perform under the HAFF Act.
6.31 Item 26 inserts new subsection 81(1DB) and Item 27 inserts new subsection 81(2DB) in the Future Fund Act. These amendments require that the annual report prepared by the Chair of the Future Fund Board include a report on the performance of investments of the HAFF and the amounts debited from the HAFF for purposes allowed under the HAFF Act. This is consistent with arrangements for the other investment funds managed by the Future Fund Board.
6.32 Item 28 inserts new paragraph 81(4)(dab) in the Future Fund Act. The effect of this amendment is to include the Housing Minister, the Social Services Minister and the Veterans' Affairs Minister in the list of Ministers to whom the nominated Minister must give a copy of the annual report given to the nominated Minister under section 46 of the PGPA Act.
6.33 Item 29 inserts new paragraph 83B(1)(dab) in the Future Fund Act. The effect of this amendment is to allow the Future Fund Board to delegate its power to engage investment managers for purposes in connection with the HAFF to the Chair of the Future Fund Board or a SES employee in the Agency.
6.34 Item 30 inserts new subparagraph 84(1)(b)(iiab) and Item 31 inserts new subparagraph 84(1)(b)(viib) in the Future Fund Act. The effect of these amendments is to provide that any amount of money received by the Future Fund Board must be credited to the Future Fund Special Account if none of the legislation for the other investment funds managed by the Future Fund Board requires the amount to be credited to those other Funds.
6.35 Item 32 inserts new subsection 84(4AB) in the Future Fund Act. The effect of this amendment is to allow the nominated Minister to provide a written direction to the Future Fund Board requiring an amount credited to the Future Fund Special Account under subsection 84(1) of the Future Fund Act to be debited from the Future Fund Special Account and credited to the HAFF Special Account.
6.36 Item 33 inserts a new reference to '(4AB)' in paragraph 84(5)(b) of the Future Fund Act. The effect of this amendment is to provide that if an amount is credited to the Future Fund Special Account under subsection 84(1) of the Future Fund Act, the sum of one or more amounts specified under new subsection 84(4AB) must not exceed the amount of the credit.
6.37 Item 34 inserts a new reference to '(4AB)' in subsection 84(6) of the Future Fund Act. The effect of this amendment is to declare that a written direction made under new subsection 84(4AB) is not a legislative instrument. This is consistent with the status of other written directions that can be made by the nominated Minister under subsections 84(1A), 84(4A), 84(4AA), 84(4B) and 84(4C) for the transfer of amounts to other special accounts as provided for under those subsections.
6.38 Items 35, 36 and 37 amend paragraphs 2(2)(a), 2(2)(b) and 2(2)(c) of Schedule 2 of the Future Fund Act to make reference to certain provisions of the HAFF Act. The effect of these amendments is to provide that the purposes of the Future Fund Special Account include debits by the Future Fund Board to pay bank account expenses, insurance premiums and costs relating to the management of the HAFF.
6.39 Item 38 adds a reference to the HAFF in Clause 1 of Schedule 2A of the Future Fund Act. Clause 1 of Schedule 2A provides a simplified outline of the Schedule.
6.40 Item 39 adds new section 5B to Schedule 2A to the Future Fund Act. New section 5B would allow the nominated Minister under the Future Fund Act to require, by writing, the reversal of a debit from the HAFF to meet bank account, insurance premium or other costs relating to the HAFF. This reversal is to be effected by debiting the Future Fund Special Account and crediting the HAFF Special Account. The reversal amount cannot exceed the amount originally debited from the HAFF Special Account. The nominated Minister's written direction is declared not to be a legislative instrument. Directions of this type are administrative in character because they are merely the application of a legal power in a particular case (i.e. they do not determine or alter the content of the law itself).
Housing Australia Act 2018
6.41 Item 40 replaces 'Purpose' in the heading to section 47C of the Housing Australia Act with 'Purposes' as Schedule 4 to the Amendment Bill expands the purposes of the Housing Australia Special Account to include making payments to Housing Australia.
6.42 Item 41 replaces existing subsection 47C(1) of the Housing Australia Act to reflect the expansion of the purposes of the Housing Australia Special Account to include making payments to Housing Australia, in addition to the existing purpose of making loans to Housing Australia.
6.43 Item 42 inserts a new subsection 47C(2A) which sets out that the payments made to Housing Australia may be used to make grants or loans in relation to acute housing needs, social housing and affordable housing.
6.44 The note inserted by Item 42 explains that subsection 47C(2A) provides Housing Australia with the function to apply payments from the Commonwealth to provide grants or loans in relation to acute housing needs, social housing and affordable housing. This means that the Housing Australia Investment Mandate Direction may include instructions on how the Housing Australia applies those payments.
6.45 New subsection 47C(2B) at Item 42 would prohibit Housing Australia from making a grant or a loan under paragraph (1)(b) from being made before 1 July 2023.
6.46 Item 43 amends subsection 47C(3) of the Housing Australia Act to omit the reference to subsection (2) and substitute a reference to both subsections (2) and (2A).
Medical Research Future Fund Act 2015
6.47 Item 44 inserts new subparagraph 19(a)(ic) in the MRFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in establishing and operating bank accounts related to the MRFF can be met from the MRFF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.48 Item 45 inserts new subparagraph 19(b)(ic) in the MRFF Act. The effect of this amendment is to provide that the cost of insurance incurred by the Future Fund Board in relation to the MRFF can be met from the MRFF Special Account to the extent that such insurance premiums do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.
6.49 Item 46 inserts new subparagraph 19(c)(ic) in the MRFF Act. The effect of this amendment is to provide that expenses incurred by the Future Fund Board in relation to managing the MRFF can be met from the MRFF Special Account to the extent that such expenses do not relate to any other investment funds managed by the Future Fund Board, including the HAFF.