Senate Economics Legislation Committee Report Released

The Senate Economics Legislation Committee tabled their report on the Housing Australia Future Fund and related bills yesterday afternoon (read the full report here). The report, and particularly the contents of the dissents, will inform the proposed amendments to the legislation and ultimately whether the crossbench senators agree to pass the legislation.

The report mostly outlined the details of the legislation and the operations of the HAFF. Only one major procedural concern was raised by the Scrutiny of Bills Committee and is not strictly relevant to the legislation’s debate.

The report outlined the extensive submissions received and the outcomes of their public hearing. The committee noted the general support from organisations like National Shelter, Master Builders Australia, the HIA, CHIA and PowerHousing of the HAFF as “an opportunity to address the shortfall in the support of affordable housing in Australia”.

The consultation process highlighted the scale of the shortfall and the need to scale the HAFF to meet this challenge. For instance, the Grattan Institute proposed scaling the fund to $20bn and increasing the target to 60,000 homes. Other suggestions included strengthening the project objectives, defining key terms (including affordable housing) and setting out specific allocations to Indigenous Australians and regional areas.

Consultants expressed concerns about the $500m cap on disbursements from the fund—that the cap was too low, it not being indexed to inflation, or both. A floor on disbursement was raised as more appropriate target to ensure the delivery of social and affordable housing investment. Evidence provided from Treasury and the Department of Finance was dismissive of indexing the cap on disbursement or providing a floor on disbursements.

Dissents

The Liberal-National Coalition, the Greens, Senator Thorpe and Senator Pocock provided dissents to the report from the Economics Committee. Addressing these dissents will be an important part of securing the legislation’s passage through the Senate.

The Coalition’s dissent emphasised the inflationary impact of the HAFF’s $10bn investment, along with concerns about the partnership between the Government and super funds. They also raised concern that the investment mandate had not yet been released, and the difficulty in assessing the effectiveness of the HAFF without seeing it. The Coalition explicitly recommended against the passage of the Housing Australia Future Fund Bill 2023.

The Greens

The Greens’ dissent included various concerns about the scale of the HAFF and the mechanism it used to deliver social and affordable housing. Recommendations include:

  • Guaranteeing a minimum amount for housing investment.
  • Investing directing into social and affordable housing delivery rather than through the Future Fund.
  • Increasing the investment to $5bn per annum.
  • Setting a target for 10% of all housing stock to be social housing by 2050.
  • Doubling the rate of Commonwealth Rent Assistance and imposing national rent controls.
  • Investing $1bn over five years into First Nations housing.
  • Releasing the Investment Mandate immediately.
  • Amending any cap on disbursements to be indexed to inflation.
  • Bringing forward the review of the HAFF to occur within two years on commencement, and every two years subsequently.
  • Define affordable housing as, “rental housing, provided in perpetuity, which costs no more than 30 per cent of income for the bottom 40 per cent of households, by income.”
  • Requiring the Boards of the Supply Council and Housing Australia to include representation from, “the social housing and homelessness sectors, First Nations, low-income households, persons with lived experience of homelessness and social housing residence, and persons with disabilities.”
  • The beneficiaries of HAFF funding should be limited to governments and not-for-profit organisations.
  • Housing delivered by the HAFF should meet a minimum 8-star energy efficiency rating and LHA silver standard.

Senator Thorpe

Senator Thorpe’s dissent echoed many of the point made by the Greens. Some additional recommendations provided by the Senator include:

  • Prioritise new dwellings under a $1bn commitment to First Nations housing to be owned and maintained by Aboriginal and Torres Strait Islander Community-Controlled Housing Organisations (ATSICCHOs).
  • Build the capacity of the ATSICCHO sector.
  • Review the scope of the Closing the Gap target regarding reducing overcrowding.
  • Establish a First Nations advisory group.
  • Establish a mechanism to support democratically controlled co-operative housing.
  • Establish a co-investment scheme for community housing tenants to have the option of taking over ownership.

Senator Pocock

Senator Pocock also provided a lengthy list of recommendations. These include:

  • Increase the initial investment of the HAFF from $10bn to $20bn.
  • Provide an explicit provision for the Government to scale up the HAFF as required.
  • Provide investors certainty by maintaining the real capital value of the fund and underwriting availability payments.
  • Remove the cap on disbursements, or at least annually index it to CPI.
  • Bring the first review of the HAFF to occur as soon as possible after 1 July 2026.
  • Require at least one member of the Supply Council to be an Aboriginal or Torres Strait Islander and at least one member with an expertise in expertise in specialist disability accommodation, social housing and homelessness.
  • Provide a specific portion of new housing supply for Aboriginal or Torres Strait Islander people.
  • Remove the requirement that the staff assisting the Supply Council be ‘employees at the Department’.
  • Require the Supply Council to also report on the National Plan for Homelessness and provide an annual report on the National Plan for Housing.
  • The approval process for payment from the HAFF should occur with explicit advice from Housing Australia.
  • Reinstate NHFIC’s research functions.
  • Address the concern from the Scrutiny of Bills Committee.