Senate Economics Legislation Committee, , 3:59:51 to 4:10:57
The committee examines the financial structure and disbursement progress of the Housing Australia Future Fund.
Topics: Infrastructure, Procurement, Government spending
Speakers: Scott Langford, Andrew Bragg, Ben Rimmer, Dr Nerida Hunter, Unknown Speaker, Hon Jane Hume, Lisa Darmanin, Meghan Quinn PSM
>> Um so we are continuing with our um representatives from Department of Treasury Housing Group and Housing Australia. So Senator Bragg.
>> Okay. Thanks chair. So I think we're almost done with the department. Um who can I ask questions about help to buy to? Is that the agency
>> Senator in relation to the program implementation? That would be Housing Australia.
10,000 people will use the scheme. Is that that's the target? Is it?
>> Uh so there are 10,000 places.
>> 10,000 places. How much will it cost?
>> Uh Senator, um I'm not sure if we have a cost estimate. Uh that would be a matter of treasury in terms of the the budgeting.
>> Dr. Hunter might wish to answer that
How much will it cost?
>> So, um, as of the 2526 myo, the total estimated equity investments under the scheme, uh, was $7.6 billion. >> Places in this year.
>> Yeah.
>> And then 40,000 places in total have been committed. So, the 7.6 billion relates to um the 40,000 places. So the 7 sorry the 7.6 billion in equity investment uh corresponds to the total program allocation which is 40,000 places.
>> Okay. So it's you got two providers. Is
>> Uh there are currently two uh panel members on the the banks.
>> Okay. Bank Australia, they're they're not a they're offering it through their brokers. Is that right?
>> Uh Senator, I might ask my colleague, Miss Aub is responsible for the uh program to just answer that specifically, but I believe that is correct. Miss Aub,
>> thank you. Uh Ali Aub, executive leader for help to buy. Yes, Bank Australia does provide through the broker network.
>> Okay. And CBA is the other one. through their broker channels?
>> Not at this time.
>> Do you think they will?
>> That is a decision for the the commercial decision for the bank.
>> Have you engaged with them on these
>> We uh regularly have conversations with
>> Senator, um it may be helpful to add that we have been in a process which is yet to conclude but we are bringing on additional lenders into the help to buy scheme. The uh the intent was always to commence with two during a early implementation phase. um and now we'll expand the number of banks um that are participating in the scheme. Uh that process has also been looking at mechanisms by which there's distribution uh and how those lenders plan to uh make decisions about the the distribution channels they offer.
>> Those will have broker.
>> So I see one of the uh housing ministers senior staff has is recently moved to the CBA. Are you aware of that?
>> I'm aware of media reporting senator.
>> Okay. Yeah. Has that created any risks that you need to manage?
was said it no risks additional for housing Australia.
>> Um I want to ask you now about some housing Australia stuff. So the how much is the half actually spent so far?
>> Uh Senator I will ask my colleague Miss Harris to come to the table. I'm not sure that we actually have the figures on hand in terms of the distributions made to date, but I'm happy to take that on notice if we don't have that figure >> M Harris, do we have in the brief the
>> Pria Harris, chief investment officer, Housing Australia. Um, if you just give me a second, I think there might be something in the pack.
>> Senator, perhaps we could look for that information and just come back to it. Um, I've got some colleagues in the room who may be able to find the answer.
>> What? So, what is the total size of the
>> Sorry, Senator. Could can you just be clear? I'm not quite sure.
>> What's the size of it in terms of the the funds?
>> So, I think that's on the Treasury side. So, the balance of the half at 31 December 2025 was approximately 11.4 billion.
>> 11.4 billion. Okay. That's a result of investment
>> and the initial capital injection.
>> Yeah. And which was what 10? >> Okay. And how much is being expended? You're finding that number, are you?
>> So, Senator, can I think it's important to provide some clarity uh on this? So, the question that uh uh Dr. Hump's just answered is in relation to the Housing Australia future fund corpus which is a a matter that Treasury manages and that sits with the the future fund. If you're asking about distributions from Housing Australia, I can answer that question.
>> I'm asking about the Housing Australia future fund program.
>> Senator, we're not trying to be unhelpful. Um the the housing Australia future fund that is within uh with the future fund to manage has uh so far dispersed $500 million. >> Uh that happened uh towards the tail end of 202425. >> 276 million of that went to um Housing Australia uh for their implementation of the HAF program. Uh 99.4 million went towards Veterans Housing delivered through Veterans Affairs. Oh, sorry. I I apologize. 24 million went to uh veterans programs through veterans affairs. Uh 99.4 million went to the crisis and transitional program through uh treasury and 100 million went to uh NIAA to fund remote indigenous housing each year. Um there's a minimum uh legislative dispersement from the housing Australia future fund of $500 million peranom. uh and I expect the same uh dispersement would happen uh in the 2526 year um uh when we get closer to the end of this financial year.
>> So is Housing Australia on track to spend the 500 million stipulated for
>> That's not how it works, Senator. Um Housing Australia is given part of the dispersements from the Housing Australia future fund. uh there's no requirement for it to be given all of those dispersements and uh decisions about dispersements from the housing Australia future fund uh corpus uh held at the um in the future fund at 42526 have not yet been made.
>> It's so confusing and so convoluted I got to tell you. So how much money is actually in the housing future fund? 11.4 billion.
>> Yes sir.
>> Okay. And of that 11.4 4 billion. How many houses have been completed?
>> So, Senator, if you then talking about the program that falls into the administration of Housing Australia and um Dr. Hunter may wish to add because there are other programs outside our remitt that are being funded by this. Uh but uh we've committed funding to 18,650 homes. Uh at the end of January, 895 homes are complete. 9,000 >> 800 >> 895 Senator
>> 895 completed. Okay. 895 out of the initial 10 billion which has now grown to 11.4 billion.
>> Senator, there are other programs that have built Housing as Mr. Langford indicated that outside Housing Australia's uh territory that add on top of that 800 um >> 95 >> 95.
>> Okay. Um what about so you're saying 889 completions? So what is the target for the Housing Australia future fund overall? Is it 50 or 40?
>> So the H the Housing Australia future fund uh and the National Housing Accord facilities that Housing Australia manages have a target of 40,000 homes >> being made available over 5 years. So uh by a period by 30 June 2029.
>> 29. And so how many have been built so
far? So Senator, as I just mentioned, 895 have been delivered.
>> 895 out of 40,000. Do you think that you'll get there?
>> We are forecasting completions. Um, and with the release of round three and a very strong market response to that, uh, we forecast that there will be completions and hit the target.
>> Okay. And that includes some properties which have been acquired.
>> Well, Senator, we covered this.
>> I think you call them turnkey.
>> So, Senator, for the avoidance of doubt, I'm happy to to cover this again. Um the housing Australia future fund facility and the national housing accord facility allowed for applicants to um make homes available by two delivery mechanisms. One where the applicant is delivering it themselves >> and one where the applicant is >> one where no senator sorry um where the applicant's delivering it themselves that is not acquiring uh where the applicant's working with industry we reference that as turnkey.
>> You're at 9 minutes. I'm going to do 10-minute blocks. So, do you want to finish off this?
>> Um, okay. So, what do you call turnkey?
>> Well, Senator, it's an arrangement where the applicant um so typically if if uh for the purpose of this, we're talking about a community housing provider. >> Yeah. will go to a developer who has a project that will can deliver suitable social and affordable housing and they will form an arrangement with the developer and say you take the development risk and when the home is completed we will take ownership of it and there'll be a payment uh for that and then the it is what we call turnkey because the development risks up to the stage where you can turn a key in the lock >> is allocated to another party. This this
is is this another way of saying what Minister Gallagher said a while ago about acquiring and converting or was
>> Well, Senator,
>> everything here is so complex. I'm just trying to get some plain English understanding.
>> Yeah. So, Senator, I I can't go to what was in the mind of the minister. I'm not going to speculate on that, but we've covered a number of times that it is a very normal arrangement for the delivery of social and affordable housing for a a a community housing provider to go to industry and say, "I'd like to have homes here and then form an arrangement for that to be delivered by the development sector because that is a a risk set of risk."
>> You're already building them, right?
>> No, Senator, it could happen at different points in the life cycle. they >> So the construction on a project may have commenced >> but in many large scale projects construction will commence on early stages at different stages before a home before the balance of the project can be delivered. But for the absolute avoidance of doubt we're talking about new residential properties that have not been lived in and uh the community housing provider has gone and made an arrangement with industry for development industry to do what it does very well which is take development