House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)

Chapter 8 - Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

National Housing Finance and Investment Corporation Bill 2018 and National Housing Finance and Investment Corporation (Consequential Amendments and Transitional Provisions) Bill 2018

8.1 These Bills are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

8.2 The object of these Bills is to establish the National Housing Finance and Investment Corporation (NHFIC) to improve housing outcomes for Australians. This commitment was announced as part of the Government's Reducing Pressure on Housing Affordability plan in the 2017-18 Budget. The Bill to gives effect to the Government's commitment to establish a new corporate Commonwealth entity, the NHFIC.

8.3 The NHFIC will have broad functions that enable it to administer:

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a $1 billion National Housing Infrastructure Facility which will help to finance critical infrastructure to increase the stock of housing, particularly affordable housing, and to bring forward the supply of such housing; and

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an Affordable Housing Bond Aggregator which will improve the efficiency of financing for Community Housing Providers (CHPs), enabling them to improve housing outcomes for their clients. CHPs are non-government organisations, generally not-for-profit organisations, which provide subsidised housing for people on a very low, low or moderate income or for people with additional needs.

8.4 The NHFIC will be governed by an independent, skills-based, part-time Board consisting of a Chair and between four and six other voting members, responsible for decision making and the efficient and effective performance of the NHFIC's functions. A non-voting observer may also be appointed to attend and participate in Board meetings. The observer is a Ministerial appointed Commonwealth officer, whose appointment is made by exception and on a time-limited basis.

8.5 The Government will set its expectations about the performance of the NHFIC's functions in an Investment Mandate (a non-disallowable legislative instrument), which must be issued by the Minister. The Investment Mandate may include directions about such matters as strategies and policies which the Board must observe, decision-making criteria, and risk and return on investments. The Investment Mandate may not, however, direct the NHFIC in relation to specific investments.

8.6 The NHFIC will be subject to the requirements relating to corporate Commonwealth entities in the PGPA Act, including reporting requirements. The NHFIC will need to include certain additional detail in its annual report, including the particulars of any changes to the Investment Mandate and a summary of activities undertaken pursuant to its key function.

8.7 The operation of the primary Bill will be reviewed three years after its commencement.

8.8 The NHFIC Consequential and Transitional Provisions Bill makes consequential amendments to the ADJR Act and the FOI Act to support the operation of the NHFIC. These consequential amendments:

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Provide an exemption from the requirement to provide reasons for decision under section 13 of the ADJR Act. This will ensure that the NHFIC is not required to provide reasons for decisions relating to its activities such as decisions to provide, or not to provide, financial or other assistance to particular entities. Information considered by NHFIC when making a decision is likely to be complex, commercially sensitive and/or provided in confidence. In order to produce a meaningful statement of reasons it would inevitably need to refer to such information. This exemption will ensure the efficient administration of the NHFIC and is consistent with the exemption afforded to the Export Finance and Insurance Corporation.

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Provide an exemption for the NHFIC from the operation of the FOI Act in relation to documents in respect of its commercial activities. This ensures the NHFIC can protect commercially sensitive information, and is similar to the exemption that applies on the commercial activities of the Export Finance Insurance Corporation, NBN Co and other entities, such as Indigenous Business Australia. The exemption makes it transparent in the FOI Act that the commercial activities of the NHFIC are not covered by that Act, and supports the integrity of the operations of the NHFIC.

8.9 It is intended that the Investment Mandate will direct NHFIC in relation to the publication of information about its decisions (subject to commercial confidentiality).

Human rights implications

8.10 These Bills engage the right to an adequate standard of living, including adequate food, clothing and housing, and to the continuous improvement of living conditions, recognised in Article 11 of the International Covenant on Economic, Social and Cultural Rights.

8.11 Improving housing outcomes for Australians, which is the object of these Bills, enhances these human rights.

Conclusion

8.12 These Bills are compatible with human rights as it supports the right to adequate housing by advancing the improvement of housing outcomes.

8.13 These Bills do not raise any other human rights issues.

1 Further details on the NHFIC were also provided for in the 2017-18 MYEFO.

2 The concept of finance refers to both loans and provision of financial assistance to a State or Territory, referenced in NHFIC's functions (section 8 of the Bill).

3 Australian Treaties Library on the AustLII website - http://www.austlii.edu.au