Senate

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)

General outline and financial impact

Housing Australia Future Fund

This section has been prepared by the Department of Finance.

Outline

The HAFF Bill would give effect to the Government's decision to establish the HAFF to create a funding source to support and increase social and affordable housing, as well as other acute housing needs including, but not limited to, housing improvements to meet the particular needs of Indigenous communities and housing services for women, children and veterans.

Date of effect

The amendments in the HAFF Bill commence on a single day to be fixed by Proclamation or 6 months after the HAFF Bill receives Royal Assent, whichever occurs first.

Proposal announced

The measure was announced in the 2022-23 October Budget as part of the Safer and More Affordable Housing measure. The HAFF Bill would give effect to the Government's 2022 election commitment to establish the $10 billion HAFF to fund the delivery of 30,000 social and affordable homes and allocate an additional $330 million to acute housing needs over the HAFF's first five years.

Financial impact

The initial credit to the HAFF would have no impact on the underlying cash and fiscal balances.

Positive interest earnings of the HAFF would have a positive impact on the underlying cash and fiscal balances. Costs incurred by the Future Fund Board would have a negative impact on the underlying cash and fiscal balances. Payments in relation to social housing, affordable housing or acute housing needs would have a negative impact on the underlying cash and fiscal balances.

Human rights implications

The HAFF Bill promotes the protection of human rights through positively engaging several human rights, including the right to an adequate standard of living and the right to social services. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

There are no compliance costs associated with this measure.

Creating a National Housing Supply and Affordability Council

Outline

The Housing Council Bill establishes the Council as an independent statutory advisory body to inform the Commonwealth's approach to housing policy by delivering independent advice to the Government on options to improve housing supply and affordability across the housing spectrum.

Date of effect

The amendments in the Housing Council Bill commence on 1 July 2023.

Proposal announced

The measure was announced in the 2022-23 October Budget as part of the Safer and More Affordable Housing measure to give effect to the Government's 2022 election commitment to establish the Council to support the Government to develop housing supply and affordability policy through research and advice.

Financial impact

The measure is estimated to have a negative impact of $15.2 million in underlying cash balance over the four years from 2022-23 to establish the Council, and is estimated to have a negative impact of $4.4 million in the underlying cash balance following the four year period.

All figures in this table represent amounts in $m, rounded to the nearest $0.1m each year.

Human rights implications

The Housing Council Bill promotes the protection of human rights through positively engaging the right to an adequate standard of living and the right to social services. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

There are no compliance costs associated with the establishment of the Council.

Housing Australia

Outline

Schedule 1 to the Amendment Bill amends the NHFIC Act by replacing references to the NHFIC with 'Housing Australia' to reflect the NHFIC's transition to be known as Housing Australia.

Date of effect

Schedule 1 to the Amendment Bill will commence on the day after the end of the 14 day period, which begins the day the Amendment Bill receives Royal Assent.

Proposal announced

The measure was announced in the 2022-23 October Budget as part of the Safer and More Affordable Housing measure to give effect to the Government's 2022 election commitment to establish Housing Australia by renaming the NHFIC.

Financial impact

The measure is estimated to decrease receipts by $0.5 million over the four years from 2022-23, to establish Housing Australia, by renaming and increasing the activities of NHFIC to deliver the Government's social and affordable housing programs, in addition to the appointment of two additional members for the Board of Housing Australia.

All figures in this table represent amounts in $m, rounded to the nearest $0.1m each year.

Human rights implications

Schedule 1 to the Amendment Bill does not raise human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

There are no compliance costs associated with the establishment of Housing Australia.

Housing Australia functions

Outline

Schedule 2 to the Amendment Bill amends the Housing Australia Act to streamline the functions and simplify the constitutional basis of the Act, improving the readability and operation of these provisions. This Schedule also introduces an annual review mechanism to allow the Government to closely monitor the activities of the NHIF and assess the effectiveness of these activities in furthering the Government's objectives of increasing and accelerating the supply of new social and affordable housing.

Date of effect

Part 1 of Schedule 2 to the Amendment Bill will commence immediately after the commencement of Schedule 1 to the Amendment Bill.

Part 2 of Schedule 2 to the Amendment Bill will commence either immediately after the commencement of Schedule 1 or immediately after the commencement of Schedule 4 to the Amendment Bill (whichever occurs later). However, Part 2 of Schedule 2 will not commence at all if Schedule 4 to the Amendment Bill does not commence so that the amendments apply after the HAFF Act commences.

Proposal announced

The measure was announced in the 2022-23 October Budget as part of the Safer and More Affordable Housing measure to give effect to the Government's 2022 election commitment to broaden the remit of the NHIF to directly support new social and affordable housing in addition to financing critical housing infrastructure.

Financial impact

Nil.

Human rights implications

Schedule 2 to the Amendment Bill promotes the protection of human rights by positively engaging the right to an adequate standard of living. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

There are no compliance costs associated with this measure.

Extension of Commonwealth guarantee

Outline

Schedule 3 to the Amendment Bill amends the Housing Australia Act to implement the Government response to Recommendation 6 of the NHFIC Review, extending the Commonwealth guarantee of the liabilities of Housing Australia to apply to contracts entered into until 30 June 2028 and providing that the Commonwealth guarantee cannot be revoked earlier than 1 July 2028. This Schedule recognises the importance of the Bond Aggregator and Housing Australia's role in continuing to offer community housing providers low-cost finance and longer tenor finance.

Date of effect

This Schedule will commence immediately after the commencement of Schedule 1 to the Amendment Bill.

Proposal announced

This Schedule implements Recommendation 6 of the NHFIC Review announced on 16 December 2021.

Financial impact

Nil.

Human rights implications

Schedule 3 to the Amendment Bill promotes the protection of human rights by positively engaging the right to an adequate standard of living. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

There are no compliance costs associated with this measure.

Consequential matters arising from the Housing Australia Future Fund Act 2023

This section has been prepared by the Department of Finance.

Outline

Schedule 4 to the Amendment Bill makes a number of consequential amendments to the Housing Australia Act and other legislation (the ATSILSFF Act, the COAG Reform Fund Act, the DCAF Act, the DRF Act, the FDF Act, the Future Fund Act and the MRFF Act) to enable the effective operation of the HAFF from commencement.

Date of effect

This Schedule will commence at the same time as the HAFF Act. However, the Schedule will not commence at all if the HAFF Act does not commence.

Proposal announced

This Schedule relates to the establishment of the HAFF, which was announced as part of the Safer and More Affordable Housing measure in the October 2022-23 Budget.

Financial impact

Nil.

Human rights implications

Schedule 1 to the Amendment Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

There are no compliance costs associated with this measure.