The Government has today introduced legislation to establish the National Housing Finance and Investment Corporation (NHFIC). This legislation delivers on a key element of the Government's comprehensive housing affordability plan announced at the 2017-18 Budget to improve housing outcomes for all Australians.
The Corporation will operate two key activities:
- the National Housing Infrastructure Facility (Infrastructure Facility) which will be a $1 billion perpetual facility that will finance critical housing-related infrastructure to speed up the supply of new housing through the provision of loans and grants and the making of investments; and
- an affordable housing bond aggregator (Bond Aggregator) which will provide cheaper and longer-term finance to registered community housing providers.
The NHFIC will be overseen by an independent, skills-based Board, with the Chair and members appointed by the Government for terms of up to five years. The legislation enshrines the independence of the Board by ensuring all financing and investment decisions will be made by the Board.
To drive the best price outcome for community housing providers and provide certainty for investors, the Government is providing a legislative guarantee for the bonds issued by the Bond Aggregator.
The legislation also provides for a post implementation review three years after the commencement of the legislation to ensure that the Corporation is delivering on its intended benefits.
An exposure draft of the legislation was released for public consultation on 12 January 2018. Stakeholder feedback was broadly supportive of the legislation. Submissions received are available on the Treasury website.
The Government has also released for public consultation a draft of the Investment Mandate which outlines the Government's expectations for the NHFIC.
The Investment Mandate accompanies the NHFIC legislation by providing further details on the functions of the NHFIC, including outlining eligible projects and recipients of support, financing mechanisms and lending criteria. The Investment Mandate also authorises the NHFIC to provide support to registered community housing providers to develop their financial and management capabilities.
Providing the details of the NHFIC's operations in the Investment Mandate allows the legislative framework to be flexible and nimble to adjust to the needs of community housing providers and other recipients of financial support. It allows refinements to be made, within the scope permitted by the legislation, to ensure the NHFIC can continue to support better housing outcomes.
The Government invites interested parties to make a submission on the draft Investment Mandate and associated draft explanatory statement by Friday, 9 March 2018. The consultation materials may be accessed here.