Inquiry into the National Housing Finance Intermediary Corporation

Similar documents
Summary of consultation feedback:

National Housing Infrastructure Facility Consultation: Cbus Infrastructure Submission

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES

JOINT SUBMISSION BY. Draft Taxation Determination TD 2016/D4

The content of this submission addresses only sections 1, 2, 3, 7, 9, and 11 of the FOS Proposed Terms of Reference Changes consultation paper.

Submission to the Inquiry into the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015

'In Australia' Special Conditions for Tax Concession Entities

This submission responds to the Exposure Drafts and the Explanatory Material to the Exposure Drafts for the Superannuation (Objective) Bill 2016.

We have no comments on The Income and Corporation Taxes (Electronic Communications) (Amendment) Regulations.

In Confidence. Office of the Minister of Commerce and Consumer Affairs Chair, Cabinet Economic Growth and Infrastructure Committee

Re: Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017

FEDERAL BUDGET

Bar Council response to the Claims Management Regulation Consultation: Cutting the costs for consumers Financial Claims consultation paper

A Guide to Segregation

Demand Management Incentive Scheme

DRAFT TAXATION DETERMINATION TD 2013/D7

Petroleum Legislation Amendment Bill 2018

HONG KONG SOCIETY OF ACCOUNTANTS SUPPLEMENTARY PAPER TO THE HIGH COURT REGISTRY ON OFFICE HOLDERS REMUNERATION

King IV Sector Supplements - Public Commenting

Proposed hybrid mismatch rules: impact on Australian securitisation industry

BILL: PROTECTING YOUR SUPER PACKAGE

DEUTSCHER DERIVATE VERBAND DDV. And EUROPEAN STRUCTURED INVESTMENT PRODUCTS ASSOCIATION EUSIPA. Joint Position Paper. on the

Listing Rule amendments Company policies on trading windows and blackout periods

ASIC Enforcement Review Industry codes in the financial sector. Submission by Financial Ombudsman Service Australia August 2017

Corporate Collective Investment Vehicle SUBMISSION TO TREASURY

Borrowing. guide. Simple, affordable business & investment loans. First mortgage secured, maximum LVRs apply. Borrow from $250,000 to $4 million

Class Ruling Income tax: scrip for scrip roll-over Caledonia group reorganisation: Caledonia Small Caps No. 2 Trust

Proposed exemption to enable dual-language product disclosure statements

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES

Re: AIST submission in response to the Insurance in Superannuation Code of Practice and associated Consultation Paper October 2017

Thomsons Lawyers recommendations. Key points in more detail: Permitted use of accommodation bonds. Offences for an approved provider

Property: a panacea for pension funds?

July Anne Hampshire Head of Research & Advocacy Level 9, 117 Clarence Street GPO Box Sydney NSW 2001

TREASURY LAWS AMENDMENT (NATIONAL HOUSING AND HOMELESSNESS AGREEMENT) BILL 2017 SUBMISSION TO SENATE ECONOMICS LEGISLATION COMMITTEE

Tax Deductible Gift Recipient Reform Opportunities - Discussion Paper Submission by Arts Law Centre of Australia

The Charity Commission s new public benefit guidance what do charities need to know?

A definition of charity: consultation paper

RE: SUBMISSION ON THE STAPLED STRUCTURES INTEGRITY MEASURES PROPOSAL PAPER

LGNSW response to the Exposure Draft of the Cemeteries and Crematoria Bill 2013 September 2013

Consultation Paper Indirect clearing arrangements under EMIR and MiFIR

BRIEFING PAPER FOR OVERVIEW AND SCRUTINY COMMITTEE- IMPLICATIONS OF THE SUMMER BUDGET ON THE HOUSING REVENUE ACCOUNT

Building a Better Tomorrow

Endeavour Energy Regulatory proposal Submission to the AER Issues Paper August 2018

INQUIRY INTO MINERAL RESOURCE RENT TAX BILL 2011 AND RELATED BILLS

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES

Comments upon Draft Guidance Note 7 Issued by the Fair Work Ombudsman

Regulation of Retirement Income Streams Review

Housing Alliance Potential Changes to the Investment Framework for Credit Unions Consultation Paper CP109

COMMISSION DELEGATED REGULATION (EU) No /.. of

Exposure draft improving the small business CGT concessions

Exposure draft - Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Power) Bill 2018

Australia introduces Bill for stapled structures, nonconcessional. other foreign investor changes. Executive summary

TAXATION (NEUTRALISING BASE EROSION AND PROFIT SHIFTING) BILL

BEFORE THE PENNSYLVANIA HOUSE CONSUMER AFFAIRS COMMITTEE

Stressing the Stress Test: The Importance of Strong Mortgage Underwriting

On behalf of the Public Affairs Executive (PAE) of the EUROPEAN PRIVATE EQUITY AND VENTURE CAPITAL INDUSTRY

Guide to Risk and Investment - Novia

National Consumer Credit Protection Bill 2009 and National Consumer Credit Protection (Transitional and Consequential Provisions) Bill 2009

We would like to thank you for the opportunity to provide feedback on the draft Code and would be happy to discuss our comments.

Tax Alert April 2010 DIVISION 7A USE OF ASSETS

COMMENT LETTER 7 RECEIVED FROM PROPERTY INSTITUTE OF NEW ZEALAND

Implementing measures on the Alternative Investment Fund Managers Directive: CESR call for evidence

EXTENDING UNFAIR CONTRACT TERMS (UCT) PROTECTIONS TO GENERAL INSURANCE CONTRACTS

May 2018 CONSULTATION CONCLUSIONS CAPITAL RAISINGS BY LISTED ISSUERS

GST on offshore hotel bookings legislation Submission of Accommodation Association of Australia

Guideline. Financial assurance for petroleum titles. Core concepts. N GL1381 Revision No 4 March 2015

Submission form. Consultation on PRSA charges

PwC International Business Reorganisations Network

Allocation mechanism for Gold3 License (October 2016)

Preliminary comments. 1 June Australian Charities and Not-for-profits Commission GPO Box 5108 Melbourne VIC By

Implementation - Sustaining the Superannuation Contribution Concession

NSW GOVERNMENT JUNE 2001

Public consultation. on a draft Addendum to the ECB Guide on options and discretions available in Union law. Explanatory memorandum

INQUIRY INTO THE SUPERANNUATION LEGISLATION AMENDMENT (TRUSTEE OBLIGATIONS AND PRUDENTIAL STANDARDS) BILL 2012

Submission to the Review of Energy Efficiency Programs for Low Income Households

SUBMISSION TO PRIMARY PRODUCTION SELECT COMMITTEE FISHERIES (FOREIGN CHARTER VESSELS AND OTHER MATTERS) AMENDMENT BILL

Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018

Re: Senate Inquiry - Credit and financial services targeted at Australians at risk of financial hardship

Comments on Public Discussion Draft: Clarification of the Meaning of Beneficial Owner in the OECD Model Tax Convention

SUBMISSION. The Zero Carbon Bill. A submission by Local Government New Zealand to the Ministry for the Environment

Submission to the. Senate Finance and Public Administration Committee. on the

Submission to the Australian Consumer Law Review

Research to inform a fundamental review of social housing allocations policy

MTA EMPLOYMENT RELATIONS FACT SHEET

DIRECTIVE ON CREDIT AGREEMENTS FOR CONSUMERS RELATING TO RESIDENTIAL IMMOVABLE PROPERTY. Public Consultation September 2014

Phoenix Life Assurance Limited. Principles and Practices of Financial Management

Budget Summary. Tuesday, 8 May 2018

Proposed guidance on substantial product holder disclosures

Remaking ASIC class orders on time-sharing schemes. Financial Ombudsman Service Australia Submission January 2017

Retirement Housing Law Reviews: An Australia-wide Perspective

SOUTH CAMBRIDGESHIRE DISTRICT COUNCIL HOUSING REVENUE ACCOUNT (HRA) REFORM CONSULTATION

PilchConnect submission to the Treasury Consultation Paper: Better targeting of NFP tax concessions

CONSULTATION DRAFT, 31/01/18. Guidance by the Charity Commissioner on the Operation of the Charities (Jersey) Law 2014

Submission to the Senate Inquiry into the Major Bank Levy Bill 2017

Cbus Submission - The affordable housing bond aggregator

Performance Budgeting in Australia

Consultation Paper. FSB Principles for Sound Residential Mortgage. Underwriting Practices

Taxation/2004 Volume 153/Issue 3962, 17 June 2004/Articles/A Brave New World? - Taxation, 17 Jun 2004, 298. Taxation. Taxation, 17 Jun 2004, 298

Consultation: Proposed exemption for same class offers of ASX/NZX-quoted financial products

June 20, 2011 ADVOCACY CENTRE FOR THE ELDERLY. Submission Contacts

Transcription:

Submission on behalf of the Community Housing Industry Inquiry into the National Housing Finance Intermediary Corporation March 2018 Contact: Ms Peta Winzar Executive Director Community Housing Industry Association Peta.winzar@communityhousing.com.au

Clause Clause 2. Commencement Clause 4. Definitions Comment We understood the mandate was to be tabled in Parliament (although not as a disallowable instrument); please satisfy our curiosity about the reference in the draft IM to registration of the IM, rather than tabling. The description of Registered community housing providers in the Explanatory Memorandum is too narrow, vis, are registered with State and Territory governments to provide accommodation services for social housing and manage public housing on behalf of those governments. Providers also own their own stock of housing, which they offer to tenants with modest incomes at below-market rents. We suggest adjusting the description in the Explanatory Memorandum to reflect that used on the website of the National Regulatory Scheme for Community Housing that is, that registered providers of community housing... includes social and affordable housing, indigenous community housing providers (ICHOs) and other specialist housing providers. The key issue is that they are registered. Clause 10. Commercial approach Clause 11. AHBA initial reserve While we understand the general intent of this clause, much of the reason for introducing the AHBA is precisely because the community housing projects which will be funded are not commercial. By definition, build to rent product for lower income tenants will have much tighter margins than market build to rent products. Projects which would fail a standard commerciality test may nonetheless be sound investments for a community housing organisation which is not seeking to make a profit, or which is less vulnerable to the cycle of the housing market because it measures its return over several decades rather than over the short term. The capacity to allocate up to $150 million to provide a warehousing facility is welcomed. We understand the government s desire to have these funds returned to government, as soon as practicable, however we question whether the target date of 2023 is achievable. If the AHBA needs to accumulate a buffer of the same scale before 2023 for its ongoing warehousing operations,

then it will presumably do this though a surcharge on borrowers and via the return on investing all or part of this initial reserve over the next five years. If CHOs borrow $500m through the AHBA over each of the next five years, a 6% surcharge on all borrowing would be needed at accumulate $150m by the end of year 5. This would effectively preclude borrowing through the AHBA. Even if the returns from investing the funds for various periods were to reduce the surcharge to 2% (plus the Commonwealth s cost of borrowing), using the AHBA would be unlikely to stack up. We would welcome the opportunity to discuss the proposed borrowing cost structure with you, together with any modelling which has been undertaken of how the warehousing facility could be repaid to government. Clause 15. Limits on grants and capacity building contracts We believe that the proposed $1.5m limit on the capacity building contracts will prove insufficient to meet its objective. We appreciate that capacity building was not initially a core component of the NHFIC and welcome its later inclusion. We also understand that these funds are drawn from the allocation first set aside for infrastructure grants. However, the amount proposed is quite small in comparison to the broader aim of generating CHO borrowing of more than $1 billion over the next five years. We would welcome the opportunity to work with Treasury to confirm the likely demand for services and develop some guidelines for allocating this pool of funding. We suggest this component of the NHFIC s activity be monitored closely over the first few years of operation to assess both take up and the effectiveness of advice provided. Clause 16 (2). Eligibility for loans Clause 17. Financing mechanism We would welcome the opportunity to review the proposed eligibility criteria which must be satisfied by registered community housing providers, or classes of providers, under sub-clause 16(2). The requirement that security for any loan be at least commensurate with existing security arrangements with Commercial Financiers is problematic in two respects. First, it is unclear why the AHBA would seek to impose security requirement which are more rigorous than those required by Commercial Financiers. Second, it is unclear what exactly is meant by this clause. We suggest that

either the IM be expanded to provide further guidance on the type of security which will be sought, or more detailed policy guidance on this aspect be prepared over the next few months. Clause 19. Matters to be considered We would welcome further policy detail on the matters canvassed in this clause, for example, on how creditworthiness of applicants will be assessed, what boundaries may be set in relation to the purpose of the loan, and how the factors listed in clause 19 will be weighted in considering applications for borrowing. In relation to sub-clause 19(c), the other relevant factor is the terms on which private finance is available. In relation to sub-clause 19 (g), we agree that it is important to know how the AHBA-sourced finance will complement, leverage or support other government initiatives, however we would be concerned if this subclause were used to preclude financing of a stand-alone project which does not also involve other government contribution or activity. Clause 21. Risk level Clause 26. Concessions Clause 32. Transparency We would welcome the opportunity to be involved in developing the investment risk evaluation process (subclause 21(b)). We suggest that it would be useful to document the sector-wide history of defaults/absence of defaults over the past decade to assist in calculating a realistic risk profile of the sector. Specifically, this may help develop an appropriate risk evaluation process for the community housing operators build-to-hold product, which will be quite different from a build-to-sell product with its well-documented construction risk. (The absence of good data to evaluate risk of buy-to-hold product is not just a community housing issue but has also been raised by developers looking to raise funds to build to rent in Australia) Sub-clause (3), which proposes contract terms to ensure that the NHIF doesn t extend greater concessions than necessary, does not appear to add anything to sub-clause (2) which limits the concessions to the minimum required.... This clause should also set out the NHFIC s reporting requirements in relation to the AHBA, including the total amount of borrowing sought, the borrowers, terms, and

amounts involved. In relation to reporting on the NHIF, we suggest that both successful and unsuccessful bids be reported on, in the interests of transparency. Clause 34. Guaranteed liabilities We suggest lifting the guarantee cap to $3 billion as a way of signalling to the investor market the Government s strong commitment to both the NHIF and the AHBA borrowings.