Karen Andrews (McPherson, Liberal Party, Minister for Industry) Share this | Hansard source

I present a revised explanatory memorandum to this bill and move:

That this bill be now read a second time.

The National Rental Affordability Scheme Amendment Bill 2019 (the bill) contributes to the Australian government's comprehensive plan to address housing affordability, announced in the 2017-18 budget. The bill makes amendments to the National Rental Affordability Scheme Act 2008 (NRAS Act), to streamline and simplify the administration of the National Rental Affordability Scheme (NRAS) until it ceases operation in 2026-27.

On 19 October 2017, the Senate referred the Social Services Legislation Amendment (Housing Affordability) Bill 2017, which included the amendments to the NRAS Act contained in this bill, to the Community Affairs Legislation Committee, the committee, for inquiry and report. The committee recommended that the housing affordability bill be passed.

National Rental Affordability Scheme

Amendments to the NRAS Act

The government's amendments clarify and expand the power to make regulations under the NRAS Act, by removing any doubt that the NRAS Regulations can provide for protections and rights for investors in NRAS, and for the tenants of NRAS rental properties. The amendments will allow the making of regulations that will require approved participants to pass on annual state and territory contributions to investors within a reasonable time.

The amendments also clarify and expand the power to make regulations about the transfer of allocations from one rental property to another rental property, the imposition of additional conditions and changing conditions on existing allocations, and the transfer of allocations to another approved participant.

The NRAS Act requires the NRAS Regulations to prescribe that the rent charged for an approved rental dwelling must be at least 20 per cent less than the market rent 'at all times during the year'. The expression 'at all times during the year' has been subject to different interpretations over the years, including a view that the requirement is satisfied if the rent charged over the course of a year is at least 20 per cent less than the market rent. This amendment confirms the intended interpretation, which is that each time rent is charged, it must be at least 20 per cent less than the market rent. There may be circumstances where a specific charge for rent is higher than permitted because of a mistake.

The amendments to the NRAS Act will permit the NRAS Regulations to provide for the secretary of the Department of Social Services to have a power of dispensation for a breach of the requirement in a specific instance, where it is established that the excessive charge for rent occurred because of inadvertence and the tenant has been fully compensated for the error.

The NRAS Act requires the NRAS Regulations to prescribe maximum vacancy periods for approved rental dwellings. The prescriptive nature of the current vacancy provisions has been amended to allow greater flexibility for the NRAS Regulations to prescribe permitted vacancy periods. This flexibility will assist in the future administration of NRAS should changes be required on how the maximum vacancy periods are to operate.

The Commonwealth relies on a number of heads of legislative power under the Constitution to support the NRAS Act. The amendments set out these constitutional powers and give the NRAS Act operation within the scope of these powers.

While most of the approved participants in NRAS behave appropriately in relation to investors, a small number of approved participants do not treat investors fairly. Examples of poor behaviour include delays in passing on incentives to investors, and the provision of misleading communications to investors.

The amendments will allow the secretary of the Department of Social Services to accept and then, if necessary, enforce a voluntary enforceable undertaking from an approved participant. This compliance tool will assist the Department of Social Services to modify the behaviour of some approved participants. In some cases, accepting an enforceable undertaking may be a more appropriate compliance response than transferring or revoking an allocation.

There will be no further new allocations in NRAS. The amendments to the NRAS Act will allow the NRAS Regulations to be simplified by the removal of provisions relating to the issue of new allocations.

The government is committed to reducing rental costs for low- and moderate-income households. This bill lays the foundation for improving the NRAS legislative framework to support the efficient administration of NRAS.

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