21 February 2023
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Philip
Hamilton
Politics and Public Administration
Section
Context
The Government’s Housing Legislative Package comprises three
Bills currently before the Parliament:
All three Bills have been referred to the Senate Economics
Legislation Committee for report
by 22 March 2023.
A major purpose of the Amendment Bill is to rename the National Housing
Finance and Investment Corporation Act 2018 (the NHFIC Act) as the Housing
Australia Act 2018, and rename the National
Housing Finance and Investment Corporation (NHFIC) as Housing Australia (HA). These and
other amendments are discussed in a Library Bills
Digest.
Complementing the Bills Digest, this Quick Guide provides an
overview of the NHFIC Act, and links to documents relating to the NHFIC.
Establishment of the NHFIC in 2018
The NHFIC Act commenced on 30 June 2018. Its main
purpose is to establish the NHFIC, with functions:
-
to make loans, investments and grants to improve, directly or
indirectly, housing outcomes
- to determine terms and conditions for such loans, investments and
grants
- to provide, to registered community housing providers, business
advisory services and other assistance in capacity building
- any other functions conferred on the NHFIC by the NHFIC Act or
any other Commonwealth law and
-
to do anything incidental or conducive to the performance of the
above functions.[1]
In relation to the first of those functions, this includes
making financial assistance grants to states and territories for that purpose,
under determined terms and conditions.[2]
Sources of information and commentary about the initial
development of the NHFIC include a Parliamentary
Library Bills Digest, and a report
of the Senate Economics Legislation Committee.
Amendments since 2018
An amendment Act in
November 2018:
-
required that, in appointing Board members, the Minister must
ensure Board members collectively have an appropriate balance of
qualifications, skills or experience, and at least one Board member has
appropriate qualifications, skills or experience in social or affordable
housing[3]
-
adjusted the timing of planned annual appropriations for the
purpose of the affordable housing bond aggregator, including through the
creation of the NHFIC Special Account (a special
account is a limited form of special appropriation)[4]
- provided for a statutory review two years after the NHFIC Act
commenced, rather than three (the review is discussed below)[5]
An amendment Act in October
2019:
-
implemented the First Home Loan Deposit Scheme, with an
associated expansion of the investment mandate to include the issuing of
guarantees
- established a new research function[6]
An amendment Act in June
2021 expanded the object of the NHFIC Act to include ‘assisting
earlier access to the housing market by single parents with dependants’.[7]
ANAO performance audit
In January 2021, the Australian National Audit Office (ANAO)
tabled in Parliament its performance audit report of the NHFIC. The ANAO’s
overall conclusion was:
The administration of NHFIC is partly effective. While NHFIC
has established administrative arrangements for five programs which align to
the NHFIC Act and the Investment Mandate, its implementation and
reporting does not clearly demonstrate that it is achieving its purpose to
‘improve housing outcomes’.[8]
Statutory review
Subsection 57(1) of the NHFIC Act requires a review of
the Act’s operation to be undertaken as soon as possible after 30 June 2020. In
addition, section 57A requires a review of NHFIC’s activities assisting
additional first home buyers to commence by 2021. A review
report, undertaken by Chris Leptos AO and
including 25 recommendations, was released in August 2021 fulfilling both
requirements.[9]
Chapter 1 surveyed ‘the social and affordable housing
challenge’. Chapter 2 reviewed the NHFIC Act’s achievements to date, and
Chapter 3 considered options to improve the NHFIC Act. The report
included 25 recommendations.
The report noted that ‘the NHFIC Act has been a
singularly significant and successful intervention by the Commonwealth’, but
also proposed some areas for improvement.[10]
The Affordable Housing Bond Aggregator has exceeded
initial expectations. … While NHFIC’s bond issuance has been generally
successful, further work is required to develop a self-sustaining market for
affordable housing bonds. …
Uptake of the National Housing Infrastructure Facility
has been slow and it has struggled to gain interest from eligible project
proponents. …
The size of the grants available under the Capacity
Building Program is too small to make a material difference to developing
the financial and management capability of the community housing sector. …
The limited evidence available indicates that the [First
Home Loan Deposit Scheme] FHLDS has mostly brought forward buyers who would
have entered the property market relatively soon, rather than buyers who would
have otherwise struggled to enter the market at all. …
NHFIC’s research function is too broad, and
consequently too shallow.[11]
[emphasis added]
In December 2021 the Coalition
Government’s response indicated that it supported 21 of the Review
recommendations in full or in principle. Subsequently, the Minister issued the
NHFIC Board with a Statement of Expectations (SOE) and the Board
responded with a Statement of Intent (SOI).
[1].
National
Housing Finance and Investment Corporation Act 2018, subsection 8(1).
[2].
NHFIC Act, subsection 8(2).
[3].
NHFIC Act, subsection 18(3).
[4].
NHFIC Act, sections 47A, 47B, 47C and 47D.
[5].
NHFIC Act, subsection 57(1).
[6].
National
Housing Finance and Investment Corporation Amendment Bill 2019 Explanatory
Memorandum, p. 5.
[7].
NHFIC Act, subsection 3(f).
[8].
Australian National Audit Office (ANAO), Administration
of the National Housing Finance and Investment Corporation, Audit
report, 28, 2020–21 (Canberra: ANAO, 2021), p. 8.
[9].
Australian Government, Statutory
review of the operation of the National Housing Finance and Investment
Corporation Act 2018, The Treasury, August 2021.
[10].
ibid., p. 3.
[11].
ibid., p. 32.
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