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Treasury Laws Amendment (National Housing and Homelessness Agreement) Bill 2017

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2016-2017

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

Treasury Laws Amendment (National Housing and Homelessness Agreement) Bill 2017

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 (Circulated by authority of the

Treasurer, the Hon Scott Morrison MP)



Table of contents

Glossary.............................................................................................................. 1

General outline and financial impact............................................................ 3

Chapter 1               National Housing and Homelessness Agreement......... 5

 

 



The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation

Definition

Bill

Treasury Laws Amendment (National Housing and Homelessness Agreement) Bill 2017

COAG

Council of Australian Governments

FFR Act

Federal Financial Relations Act 2009

IGA

Intergovernmental Agreement on Federal Financial Relations

Minister

Refers to the Minister administering the FFR Act.

NAHA

National Affordable Housing Agreement

NHHA

National Housing and Homelessness Agreement

NPAH

Transitional National Partnership Agreement on Homelessness 2017-18

NSPP

National Specific Purpose Payment

States

Refers to the Australian States, the Australian Capital Territory and the Northern Territory



National Housing and Homelessness Agreement

This Bill amends the FFR Act to introduce new funding arrangements for Commonwealth support for housing and to address homelessness. The Bill establishes a funding framework to support improved outcomes across the housing spectrum. The Bill also repeals the NSPP for Housing Services.

Date of effect The new funding arrangements apply to payments made on or after 1 July 2018, in relation to primary housing agreements and associated supplementary housing agreements, and designated housing agreements entered into between the Commonwealth and the States both before and after that time.

The repeal of the NSPP for Housing Services applies to payments for the 2018-19 financial year and later financial years.

Proposal announced This proposal was announced in the 2017-18 Budget as ‘Reducing Pressure on Housing Affordability a new National Housing and Homelessness Agreement’.

Financial impact This measure is estimated to have the following financial impact over the forward estimates period:

2016-17

2017-18

2018-19

2019-20

2020-21

-

-

-$121.1m

-$125.1m

-$129.1m

- Nil

Human rights implications :  This Bill is compatible with human rights. See Statement of Compatibility with Human Rights — paragraphs 1.56 to 1.68.

Compliance cost impact Nil

 



Chapter 1          

National Housing and Homelessness Agreement

Outline of chapter

1.1                   This Bill amends the FFR Act to introduce new funding arrangements for Commonwealth support for housing and to address homelessness. The Bill establishes a funding framework to support improved outcomes across the housing spectrum. The Bill also repeals the NSPP for Housing Services.

1.2                   All legislative references in this Chapter, unless otherwise stated, are to the FFR Act.

Context of amendments

Operation of existing law

1.3                   The FFR Act appropriates funds and establishes payment arrangements in accordance with the federal financial relations framework agreed by the COAG in the IGA.

1.4                   As part of this framework, the Commonwealth provides payments to the States to support their efforts in delivering key services. These payments currently include health, education, skills and workforce development, community services, housing, Indigenous affairs, infrastructure and the environment.

1.5                   In some policy areas, these payments take the form of NSPPs — the NSPP for Skills and Workforce Development, the NSPP for Disability Services and the NSPP for Housing Services (sections 12 to 14 of the FFR Act).

1.6                   The States are required to spend funding received under each NSPP in the relevant sector, but the payments are otherwise unconditional. The NSPPs are ongoing and are indexed each year by growth factors determined by the Minister. The Minister determines how funding under the NSPPs is distributed among the States.

1.7                   The FFR Act also provides for a range of payments in accordance with other parts of the IGA and other agreements with the States, including:

•        GST revenue grants (sections 5 to 8 of the FFR Act);

•        national health reform payments (in relation to the National Health Reform Agreement) (section 15A of the FFR Act); and

•        national partnership payments (in relation to a wide range of National Partnership agreements) (section 16 of the FFR Act).

Existing Housing and Homelessness Agreements

1.8                   Currently, there are two separate agreements relating to housing and homelessness: the NAHA and NPAH. The NAHA and the initial NPAH were agreed to by the COAG on 29 November 2008 and came into force on 1 January 2009. The NPAH has been subject to several short-term extensions since 1 July 2013.

1.9                   The overarching objective of the NAHA is to ensure that all Australians have access to affordable, safe and sustainable housing that contributes to social and economic participation. The NAHA is a framework for improving outcomes for all Australians — for renters and home buyers, for those receiving housing assistance and for those who are experiencing or at risk of homelessness.

1.10               The NAHA is supported by the NSPP for Housing Services. This is an indexed ongoing payment to the States to be spent to provide housing and homelessness services (estimated to be $1.4 billion in the 2017-18 financial year). The funding arrangements do not require the States to match the Commonwealth funding that is provided.

1.11               States have budget flexibility to allocate the funds received under the NSPP for Housing Services to support the mutually agreed housing and homelessness outcomes outlined in the NAHA. There are no other conditions on the provision of this funding except that it is spent on housing services.

1.12               The current NPAH is a one-year transitional agreement for the 2017-18 financial year to enable continuation of NPAH funded homelessness services, focusing on women and children experiencing domestic violence and also on homeless youth. The funding of $117.2 million enables the Commonwealth and States to ensure that funding continues while new funding arrangements are being implemented.

1.13               A focus of the NPAH is to reduce homelessness levels across Australia. States retain budget flexibility around the mix of services to maximise efficiency and effectiveness. However, there are a number of requirements that States must meet to receive funding, such as matching Commonwealth funding, developing project plans and directing a certain amount of funding to priority outputs.

Commonwealth support for housing and homelessness

1.14               Under current arrangements, despite the Commonwealth outlay of around $9 billion since 2009, the 2016 COAG Report on Performance confirmed that three of four benchmarks set out in the current NAHA had not been achieved or were unlikely to be met.

1.15               In the 2017-18 Budget, the Government announced it would work with the States to reform the existing funding arrangements for housing and homelessness by establishing the NHHA. This is part of the Government’s comprehensive plan to improve housing outcomes for all Australians.

1.16               The Government announced that the NHHA would provide ongoing, indexed funding from the 2018-19 financial year and would combine funding currently provided under the NSPP and the NPAH. This includes providing additional funding of $375.3 million over three years from the 2018-19 financial year to fund homelessness support services. This ongoing and additional funding will provide certainty to frontline homelessness service providers.

1.17               Under the terms of the NHHA being negotiated with States to commence 1 July 2018, the Commonwealth intends that 100 per cent of NHHA funding to be distributed to States will be subject to a limited number of specific conditions set out in the FFR Act. The States will be required to demonstrate that they have met these conditions to receive funding. The conditions include:

•        having a current, credible housing strategy in place;

•        having a current, credible homelessness strategy in place; and

•        providing housing and homelessness information to enable the development and implementation of more transparent and consistent data collection and reporting across the housing spectrum.

1.18               States will be required to enter into a primary housing agreement (the NHHA) and a supplementary housing agreement with the Commonwealth to receive funding. Supplementary housing agreements outline how a State intends to implement their housing and homelessness strategies.

1.19               States will also continue to be required to match homelessness funding. However, the States will continue to have the flexibility to provide homelessness services from other funding provided under the NHHA.

Summary of new law

1.20               The amendments establish a framework for the Commonwealth to make payments to the States to support the delivery of programs, services and reforms with respect to housing (including affordable and social housing), homelessness and housing affordability matters by:

•        ceasing the NSPP for Housing Services; and

•        providing that these payments are made in accordance with a primary housing agreement, a supplementary housing agreement or a designated housing agreement.

1.21               The States must meet legislated conditions to receive Commonwealth funding under a primary housing agreement supported by a supplementary housing agreement. The proposed NHHA will be a primary housing agreement.

1.22               The Bill does not affect the operation of the NPAH. The NPAH will expire on 30 June 2018 under the terms of that agreement.

Comparison of key features of new law and current law

New law

Current law

Financial assistance for housing, homelessness and housing affordability matters is provided to the States under housing agreements.

Funding is conditional on a jurisdiction entering into:

•        a primary housing agreement and a supplementary housing agreement — satisfying legislated conditions; or

•        a designated housing agreement (if any) — satisfying the terms and conditions of that agreement.

Financial assistance is payable to a State each financial year, for the purpose of expenditure on housing (through the NSPP for Housing Services).

Financial assistance is payable to a State on the condition that the financial assistance is spent on housing services.

Detailed explanation of new law

1.23               The Bill amends the FFR Act to repeal the current NSPP for housing services. It permits the Minister to, by determination, make payments to a State or States if this is consistent with:

•        the legislated conditions for a primary housing agreement and a supplementary housing agreement; or

•        the terms and conditions of a designated housing agreement.

[Schedule 1, items 3 and 4, sections 15B, 15C and 15D]

1.24               Generally, ongoing funding for housing (including affordable and social housing), homelessness or housing affordability matters will be provided under the primary housing agreement with accompanying supplementary housing agreements. A designated housing agreement provides flexibility to enter into other agreements as needed from time to time.

Primary and supplementary housing agreements

Definitions

1.25               An agreement is a primary housing agreement if:

•        it is an agreement between the Commonwealth and one or more of the States that relates to housing (including affordable and social housing), homelessness or housing affordability matters; and

•        it specifies that it is a primary housing agreement for the purpose of these provisions.

[Schedule 1, item 2, definition of primary housing agreement in section 4]

1.26               An agreement is a supplementary housing agreement if:

•        it is only entered into between the Commonwealth and one State;

•        it relates to housing (including affordable and social housing), homelessness or housing affordability matters;

•        it specifies that it is a supplementary housing agreement for the purpose of the FFR Act; and

•        it does not apply for more than five financial years.

[Schedule 1, item 2, definition of supplementary housing agreement in section 4]

1.27               A housing affordability matter is a matter that is likely to affect the affordability of housing. This could include a range of factors that impact the supply and cost of housing. For example, financial capacity to access suitable housing (to purchase or rent) and planning and zoning arrangements. [Schedule 1, item 2, definition of housing affordability matter in section 4]

Operation of agreements

1.28               The primary housing agreement will contain details of how funding is provided by the Commonwealth to the States. It is a multi-party agreement that will be entered into by the Commonwealth and all States, setting out any national objectives and outcomes and will include common details that apply to all jurisdictions.

1.29               Supplementary housing agreements, to accompany the primary housing agreement, are intended to be entered into by the Commonwealth and individual States. Supplementary housing agreements will outline how a State intends to implement their housing and homelessness strategies. For example, the supplementary housing agreements recognise the differences in States’ housing markets and their respective policy priorities.

1.30               The NHHA is expected to be a primary housing agreement, supported by supplementary housing agreements.

1.31               The Government announced in the 2017-18 Budget that the existing level of funding for housing and homelessness under the NSPP and NPAH will be maintained in the NHHA (the primary housing agreement) on an ongoing basis and that it would be indexed. This means that all of the currently available funding under the NPAH and NSPP (and the additional homelessness funding) will be available to the States if they meet the legislative conditions (see paragraph 1.32).

1.32               A State is entitled to funding for a financial year under a primary housing agreement if the State satisfies the following conditions:

•        it spends funds in accordance with the primary housing agreement and supplementary housing agreement (see paragraph 1.33)

•        it has a housing strategy in place (see paragraphs 1.34 to 1.36);

•        it has a homelessness strategy in place (see paragraphs 1.37 to 1.38);

•        it matches Commonwealth funding for homelessness services (see paragraph 1.39);

•        it provides information required about housing and homelessness matters (see paragraphs 1.40 to 1.42); and

•        it has entered into a supplementary housing agreement with Commonwealth (see paragraphs 1.43 and 1.44).

[Schedule 1, item 4, section 15C]

Spending of funds

1.33               The State must spend the funds it receives in accordance with the primary housing agreement and the supplementary housing agreement. [Schedule 1, item 4, subsection 15C(4)]

Housing strategy

1.34               The State must have a published, up-to-date housing strategy that:

•        indicates the level of housing supply needed to respond to projected housing demand, and outlines the reforms and initiatives that will be implemented to meet this need; and

•        includes other matters (if any) detailed in a primary housing agreement or the associated supplementary housing agreement.

[Schedule 1, item 4, subsection 15C(5)]

1.35               A housing strategy would also be expected to outline plans to address housing priorities in the jurisdiction.

1.36               The housing strategy is published for a financial year if it is:

•        published on a publicly accessible website of the State; and

•        publicly accessible at all times during that financial year.

Homelessness strategy

1.37               The State must have a published, up-to-date homelessness strategy that:

•        addresses the priority homelessness cohorts set out in the primary housing agreement including reforms or initiatives that contribute to a reduction in the incidence of homelessness priority homelessness cohorts could include people affected by family and domestic violence, children and young people, older people, people experiencing intermittent or continuous homelessness, Indigenous Australians, and people currently exiting institutions and care and becoming homeless;

•        includes reforms or initiatives that contribute to a reduction in the incidence of homelessness in that State; and

•        includes other matters (if any) included in the primary housing agreement or the supplementary housing agreement.

[Schedule 1, item 4, subsection 15C(6)]

1.38               The homelessness strategy is published for a financial year if it is:

•        published on a publicly accessible website of the State; and

•        publicly accessible at all times during that financial year.

State matching of Commonwealth funding for homelessness services

1.39               The Commonwealth funds provided to the States designated for homelessness services must be matched by the States from their own resources. [Schedule 1, item 4, subsection 15C(7)]

Provision of information

1.40               States may be required to provide information about housing, homelessness and housing affordability matters under the terms of a primary housing agreement or a supplementary housing agreement. The terms of the agreement will specify:

•        the data that is to be provided, including information relating to performance indicators and benchmarks that may be used to monitor and report on sector-wide performance through an annual performance dashboard and jurisdiction-specific performance against the outputs of the agreement, and/or evidence for the review of the agreement and future development of housing, homelessness and/or housing affordability policy;

•        evidence of government expenditure on housing and homelessness, including for the purposes of matched homelessness funding; and

•        the manner in which data is to be provided, including format and timing.

[Schedule 1, item 4, subsection 15C(8)]

1.41               The provision of this information by the States supports the development and implementation of a nationally consistent data set for housing and homelessness.

1.42               The information must be provided to the Minister.

State entering into a supplementary housing agreement with the Commonwealth

1.43               States must enter into a supplementary housing agreement to be eligible to receive funding under a primary housing agreement. Supplementary housing agreements can apply for up to five years. It is only once the supplementary housing agreement with a State has been entered into that this condition for receiving funding from the Commonwealth is satisfied. As this condition applies separately to each State, a State is not affected in any way if it has entered into a supplementary housing agreement with the Commonwealth, but another State has failed to enter into a supplementary housing agreement as required. [Schedule 1, item 4 , subsection 15C(1)]

1.44               The supplementary housing agreement is expected to include details of how the housing and homelessness strategies will be implemented, and could include details of how Commonwealth funding is to be spent.

Designated housing agreements

Definition

1.45               An agreement is a designated housing agreement if:

•        it is an agreement entered into by the Commonwealth and one or more of the States that relates to housing (including affordable and social housing), homelessness or housing affordability matters; and

•        it specifies that it is a designated housing agreement for the purpose of the FFR Act.

[Schedule 1, item 2, definition of designated housing agreement in section 4]

Operation of agreements

1.46               Financial assistance is payable to a State by the Commonwealth under a designated housing agreement that is not a primary housing agreement if all of the terms and conditions that are specified in that designated housing agreement are satisfied. [Schedule 1, item 4, section   15D]

1.47               A designated housing agreement is not contingent on a primary housing agreement or supplementary housing agreement. Designated housing agreements may have multi-lateral or bilateral schedules.

Payment determinations

1.48               The Bill provides that the Minister’s determination is a legislative instrument, but is not subject to disallowance . [Schedule 1, item 4, subsections 15C(2) and 15D(2)]

1.49               This is because the determinations facilitate the operation of an intergovernmental scheme involving the Commonwealth and a State and are made for the purpose of that scheme. In this instance, the scheme is the primary housing agreement supported by the supplementary housing agreements or the designated housing agreement, and payments made by the Commonwealth are for the purpose of that scheme.

1.50               This is consistent with other payment arrangements, such as NSPPs and National Health Reform payments, where there is an obligation on the Commonwealth to make payments in a prescribed manner as part of an intergovernmental body or scheme involving the Commonwealth and the States.

Consequential amendments

1.51               The amendments also make a number of technical amendments to the FFR Act to replace references to the NSPP for Housing Services with references to primary housing agreement, supplementary housing agreement and designated housing agreement and to ensure these payments receive equivalent treatment to National Health Reform payments. [Schedule 1, items 1 and 5 to 9, paragraphs 3(bb), 17(b), 18(1)(b), 18(2)(b), 21(ab) and section 22]

Application and transitional provisions

1.52               The amendments commence on 1 July 2018. [Clause 2]

1.53               The new funding arrangements apply to payments made on or after 1 July 2018 in relation to a primary housing agreement and the associated supplementary housing agreements, and designated housing agreements entered into both before and after that time. [Schedule 1, item 2, definition of primary housing agreement, supplementary housing agreement and designated housing agreement in section 4]

1.54               The repeal of the NSPP for Housing Services applies in relation to payments for the 2018-19 financial year and later financial years. It does not affect payments or obligations that relate to earlier periods. [Schedule 1, item 10]

1.55               As a result, financial assistance is still payable for those past years, even if the Minister had not made a determination prior to this Bill’s commencement. Further, the Minister and other entities would continue to be able to exercise powers and discretions and be bound by obligations under the FFR Act in relation financial assistance in those past years.

Statement of Compatibility with Human Rights

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

Treasury Laws Amendment (National Housing and Homelessness Agreement) Bill 2017

National Housing and Homelessness Agreement

1.56               This Bill is 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

1.57               This Bill amends the FFR Act to introduce new funding arrangements for Commonwealth support for housing and to address homelessness. The Bill establishes a funding framework to support improved outcomes across the housing spectrum. The Bill also repeals the NSPP for Housing Services.

Human rights implications

1.58               The Bill engages the right to an adequate standard of living, including housing under Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

1.59               Article 11.1 of ICESCR states that everyone has the right to ‘an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions’ and that ‘appropriate steps’ be taken to ‘ensure the realization of this right’.

1.60               The Bill supports the advancement of this right by establishing a framework that supports the achievement of improved housing and homelessness outcomes. Under the NHHA (once it becomes a ‘primary housing agreement’ under the Bill), the States are required to develop a housing strategy, a homelessness strategy and commit to better data collection and reporting to receive payment.

1.61               As part of the new NHHA, the Commonwealth and each State will enter into a supplementary housing agreement. This will formalise the specific strategies, actions and proposals each State intends to pursue to deliver improved housing, homelessness and housing affordability outcomes. This could include (subject to negotiations) outcomes for new affordable and social housing supply, renewal of public housing stock and better targeting and tailoring of homelessness services.

1.62               The NHHA will separately identify the indexed funding (to be matched by the States) for homelessness services. This funding arrangement will continue to support the most vulnerable priority cohorts, including people affected by domestic violence, Indigenous Australians and vulnerable young Australians.

1.63               The Government has announced that the existing level of funding for housing and homelessness under the NSPP and NPAH will be maintained in the NHHA. This funding will also be ongoing and indexed.

1.64               A five year review process will also ensure that the housing and homelessness outcomes in the NHHA continue to reflect the reform priorities of the Commonwealth and States while also giving certainty over the medium term.

Determinations to include human rights statements

1.65               Previously, the Parliamentary Joint Committee on Human Rights’ (Report 7 of 2017) requested further advice from the Treasurer as to the compatibility of determinations made under the FFR Act with Australia’s human rights obligations.

1.66               In response to this report, the Assistant Minister to the Treasurer (letter dated 18 August 2017) undertook to provide compatibility statements with future payment determinations from September 2017 onwards (Report 9 of 2017).

1.67               As such, each determination made under this Bill will include a Statement of Compatibility to address the specific engagements of human rights as they relate to payments made under the NHHA (or any other primary, supplementary or designated housing agreement).

Conclusion

1.68               This Bill is compatible with human rights.