1.1On 9 February 2023, the Senate referred the provisions of the Housing Australia Future Fund package of bills (HAFF bills) to the Senate Economics Legislation Committee (the committee) for inquiry and report by 22 March 2023. Thepackage of bills includes the:
Housing Australia Future Fund Bill 2023 (HAFF bill);
National Housing Supply and Affordability Council Bill 2023 (Council bill); and
Treasury Laws Amendment (Housing Measures No. 1) Bill 2023 (Amendment bill).
Background to the Housing Australia Future Fund
1.2In September 2022, the Productivity Commission’s final study report into the review of the National Housing and Homelessness Agreement (NHHA) was released. The report found the NHHA was 'ineffective' and had failed to 'improve access to affordable, safe and sustainable housing'.
1.3In response to these findings, the government outlined 'an ambitious housing reform agenda' aimed at increasing the supply and affordability of housing by establishing a National Housing Supply and Affordability Council (Council), and developing a National Housing and Homelessness Plan.
1.4The Minister for Housing, Homelessness, and Small Business, theHonJulieCollins MP (the minister), announced that government had 'unlocked' around $575 million in funding to begin working towards establishing a $10 billion Housing Australia Future Fund (HAFF), which would aim to create '30000 new social and affordable housing properties' around Australia.
1.5The government moved quickly to implement its housing reforms. On25October2022, it handed down the Federal Budget, which included the establishment of the National Housing Accord, outlined the government's intent to establish a 10-year National Housing and Homelessness Plan, and committed to promptly establishing the HAFF.
1.6On 19 December 2022, the government published an exposure draft of the HAFF legislation, and called for responses by 11 January 2023. Forty-fiveresponses were received.
1.7On 20 December 2022, the government announced the appointment of the interim Council, with operations commencing 1 January 2023. The interim Council is led by property developer, Mirvac's Chief Executive Officer, MsSusanLloyd-Hurwitz, and met for the first time on 28February2023.
1.8The legislation to formally establish the Council and the HAFF—comprising three bills to be considered as a package—was introduced into the House of Representatives on 9 February 2023. The bills were considered in detail by the House on 15 and 16 February 2023, where a number of amendments were moved, with most being disagreed to. Two amendments moved by independent members to the Council bill were agreed to, and the bills (as amended) were passed on 16 February 2023.
Functions and provisions of the bills
1.9The Parliamentary Library summarised the legislative structure of the package this way:
The Housing Australia Future Fund Bill 2023 will create a new Act.
The National Housing Supply and Affordability Council Bill 2023 will create a new Act.
The Treasury Laws Amendment (Housing Measures no. 1) Bill 2023 principally amends the National Housing Finance and Investment Corporation Act 2018 to rename the NHFIC and the Act to become Housing Australia and the Housing Australia Act 2018 respectively. To reflect this change it also consequentially amends:
Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018
COAG Reform Fund Act 2008
DisabilityCare Australia Fund Act 2013
Disaster Ready Fund Act 2019 (renamed the Emergency Response Fund Act 2019 by the Emergency Response Fund Amendment (Disaster Ready Fund) Act 2022)
Future Drought Fund Act 2019
Future Fund Act 2006
Medical Research Future Fund Act 2015.
Housing Australia Future Fund Bill 2023
1.10The HAFF bill would establish the HAFF in order to create a funding source to 'support and increase social and affordable housing'. The bill also seeks to support 'other acute housing needs', including those of Indigenous communities and housing services for women, children and veterans.
1.11Specifically, the bill would establish a 'dedicated investment vehicle' called the HAFF Special Account. Government would credit the HAFF Special Account with $10 billion 'as soon as praticable'. Expected returns on this investment would provide 'up to $500 million per year to support social and affordable housing', fund 'housing improvements in Indigenous communities', and fund an increase in 'housing services for women, children and veterans'. The government expects the HAFF to fund 30000 social and affordable homes and provide another $330million for 'acute housing needs' over the scheme's first five years.
1.12The estimated returns would allow the government to provide:
20 000 homes to provide social housing—4000 of which would be allocated to women and children leaving or experiencing domestic and family violence and older women on low incomes who are at risk of homelessness;
10 000 affordable homes for frontline workers like police, nurses and cleaners who kept us safe during the pandemic;
$200 million for the repair, maintenance and improvements of housing in remote Indigenous communities (noting that grants from the HAFF could also be made for housing needs in relation to non-remote Indigenous communities);
$100 million for crisis and transitional housing options for women and children leaving or experiencing domestic and family violence and older women on low incomes who are at risk of homelessness; and
$30 million to build housing and fund specialist services for veterans experiencing homelessness or at risk of homelessness.
1.13Decisions on how to invest the $10 billion allocation would be made by the Future Fund Board, guided by 'an investment mandate to enhance the Commonwealth's ability to make grants and transfers in relation to social housing, affordable housing or acute housing needs'. Earnings would be transferred into the HAFF Payments Special Account, on request of a 'designated minister', and used to make grants. Grants to a State or Territory government would be channelled through the COAG Reform Fund, Housing Australia would 'have primary responsibility' for delivering 30000 social and affordable homes over five years, 'leveraging its existing capability and relationships with the community housing sector, institutional investors and state and territory housing authorities'. Housing Australia would also be able to 'make grants and loans in relation to acute housing needs', including to state and territory authorities.
1.14The Housing Minister would be required to review the operation and impact of the HAFF 'at least' every five years to 'assess the extent to which the HAFF is improving housing outcomes for Australians'.
National Housing Supply and Affordability Council Bill 2023
1.15The Council bill would establish the National Housing Supply and Affordability Council 'as an independent statutory advisory body' which would 'inform the Commonwealth's approach to housing policy'. Its role would include providing independent advice to government on improving 'housing supply and affordability across the housing spectrum'.
Treasury Laws Amendment (Housing Measures No. 1) Bill 2023
1.16The Amendment bill has the following functions:
Schedule 1 seeks to rename the National Housing Finance and Investment Corporation (NHFIC), established by section 7 of the NHFIC Act 2018, by replacing references to the NHFIC with 'Housing Australia'.
Schedule 2 would amend the renamed 'Housing Australia Act' to 'streamline the functions and simplify the constitutional basis of the Act'; and introduce an annual review mechanism.
Schedule 3 seeks to amend the renamed Housing Australia Act to extend 'the Commonwealth guarantee of the liabilities of Housing Australia to apply to contracts entered into until 30 June 2028', and also provides that the Commonwealth guarantee 'cannot be revoked earlier than 1 July 2028'.
Schedule 4 would make a number of consequential amendments to the renamed Housing Australia Act, and other legislation, in order to 'enable the effective operation of the HAFF from commencement'.
1.17The HAFF and related bills credit $10 billion to a Housing Australia Future Fund Special Account. These funds are Commonwealth resources. The Council is expected to negatively impact on the underlying cash balance by $15.2 million over the years 2022–23 to 2025–26, with the annual costs expected to fall after that. The impact of the Amendment bill is expected to be a reduction in receipts which will impacts the underlying cash balance by approximately $0.5 million over the years 2022–23 to 2025–26.
Scrutiny Committee concerns
1.18The Scrutiny of Bills Committee (Scrutiny Committee) commented on the HAFF bills in March 2023. The Scrutiny Committee noted that subclause 11(2) of the HAFF bill 'provides that the responsible Ministers may determine additional specified amounts to credited into the Special Account', and subclause 11(3) exempts these determinations from the parliamentary disallowance process. In light of concerns about unnecessary exemption of delegated legislation from disallowance, the Scrutiny Committee requested advice on 'the exceptional circumstances that are said to justify exempting' the instrument from disallowance.
1.19Concerns were also raised around the bill's inclusion of a 'broad discretionary power to make an arrangement for granting financial assistance, including to the states and territories'. The Scrutiny Committee requested further advice as to:
how the criteria for the award of grants of financial assistance will be developed, noting that there is limited guidance on the face of the Housing Australia Future Fund Bill 2023 (HAFF Bill) as to how the power to make grants is to be exercised;
whether the HAFF Bill can be amended to include at least high-level guidance as to the terms and conditions on which financial assistance may be granted; and
whether the HAFF Bill can be amended to include a requirement that written agreements with the states and territories for grants of financial assistance made under subclause 18(3) are:
tabled in the Parliament within 15 sitting days after being made; and
published on the internet within 30 days after being made.
1.20A final observation made by the Scrutiny Committee in relation to the HAFF was that there may be scope for the bill to be amended 'to provide that a submission made by the Future Fund Board in accordance with paragraph 44(1)(b) must be tabled in both Houses of the Parliament within an explicitly stated timeline, for example, within 15 sitting days of the minister receiving a submission'.
Conduct of the inquiry
1.21The committee called for submissions by advertising the inquiry on its website and writing to a number of organisations and interested stakeholders and inviting them to make a submission.
1.22Submissions closed 23 February 2023. However, the committee continued to accept late submissions. In total, 25 submissions were received and published on the committee's website. A list of submitters is at Appendix 1.
1.23The committee conducted one public hearing, in Canberra and via videoconference, on 15 March 2023. A list of witnesses who gave evidence is atAppendix 2.
1.24The committee thanks all witnesses and submitters for their contributions to the inquiry.
Notes on references
1.25References in the report to the committee Hansard are to the proof committee Hansard. Page numbers may vary between the Proof Hansard and the final, OfficialHansard.
Structure of the report
1.26This report includes three chapters. This first chapter outlines the referral of the inquiry, background to the Housing Australia Future Fund, the functions and provisions of each of the three bills, conduct of the inquiry, acknowledgements and notes on references.
1.27Chapter 2 discusses broad stakeholder views on the housing package before focusing on the Housing Australia Future Fund Bill 2023.
1.28Chapter 3 considers evidence provided in relation to the housing Supply and Affordability Council Bill 2023 and the Treasury Laws Amendment (Housing Measures No. 1) Bill 2023.