Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2019
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
NATIONAL RENTAL AFFORDABILITY SCHEME AMENDMENT BILL 2019
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Families and Social Services, Senator the Hon Anne Ruston)
NATIONAL RENTAL AFFORDABILITY SCHEME AMENDMENT
BILL 2019
OUTLINE
Schedule 1 - National Rental Affordability Scheme Amendments
This Bill clarifies and corrects certain ambiguous provisions in the National Rental
Affordability Scheme Act 2008 (NRAS Act), and provides further flexibility in the
future administration of the National Rental Affordability Scheme so as to further the
objects of the NRAS Act.
The Bill clarifies that the object of the NRAS Act is to be achieved in ways that
include protecting tenants in NRAS, protecting investors, providing rights to investors
and recognising that State and Territories contributions are complementary to NRAS.
The Bill expressly identifies the Constitutional powers being relied upon and giving
the NRAS Act operation within the scope of those Constitutional powers.
The Bill also clarifies other regulation making powers including to support the making
of new regulations to replace the National Rental Affordability Scheme Regulations
2008 (NRAS Regulations), which are due to sunset on 1 April 2020.
Financial impact statement
MEASURE FINANCIAL IMPACT OVER THE FORWARD
ESTIMATES
Schedule 1 - National Rental Nil
Affordability Scheme Amendments
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this
explanatory memorandum.
1
NATIONAL RENTAL AFFORDABILITY SCHEME AMENDMENT
BILL 2019
NOTES ON CLAUSES
Clause 1 sets out how the new Act is to be cited - that is, as the National Rental
Affordability Scheme Amendment Act 2019.
Clause 2 provides a table setting out the commencement dates of the various
sections in, and Schedules to, the new Act.
Clause 3 provides that each Act that is specified in a Schedule is amended or
repealed as set out in that Schedule, and any other item in a Schedule to the Bill has
effect according to its terms.
2
Schedule 1 - National Rental Affordability Scheme Amendments
Schedule 1 - National Rental Affordability Scheme Amendments
Summary
The purpose of this Schedule is to clarify and correct certain ambiguous provisions in
the National Rental Affordability Scheme Act 2008 (NRAS Act), and to provide
further flexibility in the future administration of the National Rental Affordability
Scheme (NRAS) so as to further the objects of the NRAS Act.
The Schedule clarifies that the objects of the NRAS Act are to be achieved in ways
that include protecting tenants in NRAS, protecting investors, providing rights to
investors and recognising that State and Territory contributions are complementary
to NRAS. The Schedule expressly identifies the Constitutional powers being relied
upon and giving the NRAS Act operation within the scope of those Constitutional
powers. The amendments will also allow for the Secretary to accept a voluntary
written undertaking from an approved participant in relation to NRAS.
Background
The National Rental Affordability Scheme (NRAS) is established by the National
Rental Affordability Scheme Regulations 2008 (NRAS Regulations), made under the
National Rental Affordability Scheme Act 2008 (the NRAS Act). The object of the
NRAS is to increase the supply of affordable rental housing for low to middle income
earners, by enabling eligible individuals and families to rent NRAS dwellings at a rate
that is at least 20 per cent below market value rent. NRAS also provides incentives
to persons to build and rent NRAS dwellings. Under NRAS, an 'approved participant'
may apply for an 'allocation' in relation to a rental dwelling, subject to certain
conditions. If the conditions are satisfied, the approved participant is eligible to
receive an 'incentive', either in the form of a monetary payment or a tax offset for a
period of ten years. The 'incentive' is comprised of a Commonwealth component
which is paid in accordance with the NRAS Regulations. There is also a State and
Territory contribution which is paid in accordance with an agreement between the
relevant State/Territory Government and an approved participant.
Often, an approved participant is not the owner of the rental dwelling; rather the
owners are third party 'investors'. The approved participant usually acts as a service
provider to the investor by managing the compliance with the requirements under the
NRAS Regulations in exchange for a fee (generally a portion of the incentive). Under
NRAS, an approved participant has an obligation to pass on an incentive to an
investor if there is a contractual arrangement in place to this effect (regulations 30A
and 30B).
Sections 1 to 3 and the majority of Schedule 1 will commence on the day after the
Act receives Royal Assent. Items 6, 12, 17 and 21 of Schedule 1 are to commence
on a single day to be fixed by Proclamation.
3
Schedule 1 - National Rental Affordability Scheme Amendments
Explanation of the changes
Item 1 amends section 3 to insert subsections in order to clarify the object of the
NRAS Act.
Item 2 inserts a new subsection 3(2) which clarifies that the object of the NRAS Act
is to be achieved in ways that include the matters mentioned in new paragraphs
3(2)(a) to (d).
Paragraph 3(2)(a) provides for protecting tenants of rental dwellings that are rented
during an NRAS year. Section 5 of the NRAS Act provides that the regulations that
prescribes NRAS must provide for certain matters that further the objects of the
NRAS Act. Together with the amendments made by item 10, this item will ensure
that regulations can be made in respect of protecting tenants in NRAS.
Paragraph 3(2)(b) provides that protecting investors of an NRAS rental dwelling is
also a way in which the object of the NRAS Act is to be achieved.
Since NRAS began in 2008, there have been instances where approved participants
have failed to pass on incentives to investors. Approved participants and investors
usually enter into a contract to facilitate this, outside of the Department's scope, as
investors are not defined under the Act. Investors provide a significant proportion of
properties in NRAS, and if they are not supported, investors are likely to withdraw
their properties from NRAS, which would reduce the number of rental properties in
NRAS and likely impact low to moderate income households. Therefore, the
inclusion of investors in this amendment will clarify that the purpose of NRAS is also
to protect investors.
Paragraph 3(2)(c) provides that the object of the Act is to be achieved by providing
rights to investors in NRAS. If investors' rights are not protected, they may be out of
pocket and may seek to remove their properties out of NRAS, which would lead to a
decline of available affordable housing for low and moderate income households.
Paragraph 3(2)(d) makes clear that there are separate contributions, in cash or in
kind, made by States and Territories, to approved participants in NRAS.
Item 3 inserts a new section 3A.
Section 3A provides that NRAS is supported by a variety of Constitutional powers.
The effect of this section is that if a court finds that the Commonwealth's legislative
power does not support the Act, a particular provision or multiple provisions of the
Act or the Income Tax Assessment Act 1997, the Act shall nevertheless be valid to
the extent to which it is supported by other legislative powers.
Subsections 3A(1) and (2) are provisions relating to the severable operation of the
Act. Subsections 3A(3) to (6) set out additional and severable heads of legislative
power under the Constitution which support the Act.
4
Schedule 1 - National Rental Affordability Scheme Amendments
Subsection 3A(3) provides that the Act has the effect it would have if its operation
were expressly confined to give effect to Australia's rights and obligations under
paragraph 1 of Article 2 and Article 11 of the International Covenant on Economic,
Social and Cultural Rights (ICESCR) to which paragraph 51(xxix) of the Constitution
applies. NRAS and its goal to provide for more affordable housing is a suitable
method for Australia to comply with its international obligations under the ICESCR.
Subsection 3A(4) provides that the Act has the effect it would have if its operation
were expressly confined to:
(a) the regulation of activities, functions, relationships or business of an investor
or approved participant that is a constitutional corporation;
(b) the creation of rights or privileges belonging to an investor or approved
participant that is a constitutional corporation;
(c) the imposition of obligations on an investor or approved participant that is a
constitutional corporation;
(i) in respect of the matters mentioned in paragraphs (a) to (c), the
regulation of the employees or shareholders of the constitutional
corporation;
(d) the regulation of persons or entities whose conduct affects or is capable of
affecting the activities, functions, relationships or business of an investor or an
approved participant that is a constitutional corporation.
Subsection 3A(5) provides that the Act has the effect it would have if its operation
were expressly confined to determining the tax liability of a person.
Subsection 3A(6) provides that the Act has the effect it would have if its operation
were expressly confined to apply in relation to the following:
(a) an approved rental dwelling located in a Territory;
(b) an approved participant or investor who is a resident in a Territory; or
(c) an approved participant or investor that is:
(i) a body corporate that is incorporated in a Territory; or
(ii) a body corporate that is taken to be registered in a Territory under
section 119A of the Corporations Act 2001; or
(iii) a trust, if the proper law of the trust and the law of the trust's
administration are the law of a Territory; or
(iv) an entity, the core or routine activities of which are carried out in or in
connection with a Territory.
Item 4 amends the definition of 'allocation' to substitute 'an approved rental' with 'a
rental'. This amendment is required as 'approved rental dwelling' is a defined term in
the NRAS Regulations and is not defined in the NRAS Act.
Item 5 inserts new definitions.
A new definition of 'constitutional corporation' is inserted to mean a corporation to
which paragraph 51(xx) of the Constitution applies. New section 3A will include
references to an investor or approved participant that is a constitutional corporation.
It is therefore necessary to define 'constitutional corporation'.
5
Schedule 1 - National Rental Affordability Scheme Amendments
A new definition of 'investor', similar to the definition in the NRAS Regulations, is
also inserted to mean a person who is the legal or beneficial owner of a rental
dwelling covered by an allocation and who is not an approved participant in relation
to the rental dwelling.
A number of other amendments to Schedule 1 to the Bill will result in provisions of
the NRAS Act including references to investors. It is therefore necessary to define
'investor'.
Investors are the owners of rental dwellings covered by an allocation in NRAS who
are not approved participants themselves. This amendment will ensure that investors
are acknowledged as being part of NRAS.
'Tax law provisions' is defined to mean item 23 of the table in section 67-23 and
provisions of Division 380 of the Income Tax Assessment Act 1997.
New section 3A will include references to tax law provisions. It is therefore necessary
to define 'tax law provisions'.
Item 6 repeals paragraph 5(a) and substitutes a new paragraph.
Current paragraph 5(a) states that the regulations must prescribe a Scheme about
the approval of participants by the Secretary. However, allocations are no longer
being made under NRAS and as such, the Secretary is no longer approving new
approved participants. Given this, it should be possible for future regulations not to
include provisions relating to the approval of participants.
Therefore, this item amends the NRAS Act to state that the NRAS Regulations must
prescribe a Scheme about the obligations of existing approved participants.
Item 7 inserts new paragraph 6(ca).
Section 6 sets out matters for which NRAS, contained in regulations, may provide.
New paragraph 6(ca) allows for regulations to be made in relation to the adjustment,
in certain circumstances of the amount of an incentive that:
(i) is to be provided to an approved participant; or
(ii) has previously been provided to an approved participant;
Approved participants are entitled to an incentive if they satisfy the conditions of
allocations, set out in the NRAS Regulations, for an NRAS year. The adjustment of
an incentive paid and payable may be required in circumstances where an approved
participant has failed to pass on the incentive to the investor.
Item 8 inserts new paragraph 6(cb).
Section 6 sets out matters for which NRAS, contained in regulations, may provide.
New paragraph 6(cb) provides that regulations may be made in relation to the
passing on of State and Territory contributions, or their monetary equivalent, by
approved participants in certain circumstances.
6
Schedule 1 - National Rental Affordability Scheme Amendments
Under NRAS, an approved participant that satisfies the conditions of allocation is
entitled to a Commonwealth incentive payment. The relevant State and Territory
Government also pays an additional contribution, either through a cash payment or
through an in-kind payment. There have been instances where approved
participants have failed to pass on this State/Territory contribution to investors.
However, it is not clear that the NRAS Act currently permits regulations to be made
relating to the circumstances in which the State/Territory contribution must be
passed on to investors. New paragraph 6(cb) will clearly allow for such regulations
to be made.
Item 9 inserts 'covered by an allocation' after 'dwelling'.
Section 6 sets out matters for which NRAS, contained in regulations, may provide.
Currently, paragraph 6(d) states that NRAS may provide for how the market value
rent of a rental dwelling for an NRAS year is to be determined. This current wording
appears to be broad and these amendments are a technical amendment because
'rental dwelling' is defined in a general way not connected to NRAS.
Item 10 inserts new paragraphs 6(e), (f) and (g).
Section 6 sets out matters for which NRAS, contained in regulations, may provide.
New paragraphs 6(e), (f) and (g) provide that regulations may be made in relation to
the protection of tenants of rental dwellings in NRAS that are rented during an NRAS
year, the protection of investors and the rights of investors.
Item 11 inserts a heading 'Conditions imposed by Secretary under the Scheme' to
clarify that the provisions following it relate to conditions imposed by Secretary under
NRAS.
Item 12 repeals and substitutes subparagraph 7(2)(b)(ii) of the NRAS Act. The new
subparagraph inserted by this item clarifies that the NRAS Regulations must provide
that a condition of allocation is that each and every time rent is charged for a
dwelling (whether that be on a weekly, fortnightly, monthly or other basis), that rent
must be at least 20 per cent below the market value rent.
This amendment is made for the sake of clarity to remove any ambiguity about the
operation of subparagraph 7(2)(b)(ii), and to protect eligible tenants from being
subject to higher rent at any time during the year.
Item 13 repeals and substitutes paragraph 7(2)(c) of the NRAS Act. Vacancy periods
will continue to be prescribed by the NRAS Regulations, but the substituted provision
provides greater flexibility in how maximum vacancy periods are prescribed,
including how the vacancy periods may be calculated, or what form they may take.
This is necessary to ensure that approved participants are not subject to excessive
penalties as a result of vacancy periods, while ensuring that NRAS continues to
meet its objective of increasing the stock of affordable rental dwellings.
Item 14 inserts new subsections 7(4) to (6).
7
Schedule 1 - National Rental Affordability Scheme Amendments
Current section 7 sets out matters for which NRAS, contained in the NRAS
Regulations, must provide.
New subsection 7(4) clarifies that the NRAS Regulations made for the purposes of
subparagraph 2(b)(i) may provide for the Secretary to make a legislative instrument
prescribing matters relating to the income of eligible tenants under NRAS.
Item 1 of Schedule 1 to the Bill will repeal subparagraph 7(2)(b)(ii) of the Act, and
substitute a new subparagraph which has the effect that the NRAS Regulations must
provide for the Secretary to make an allocation on the condition that each charge of
rent for the rental dwelling is at least 20% less than the market value rent for the
dwelling.
Evidence given to the Senate Community Affairs Legislation Committee's inquiry on
the Bill suggested that it is possible for a tenant to be overcharged rent inadvertently
in a number of circumstances. While the Government's policy is for each charge of
rent to be at least 20 per cent below the market rent, it is appropriate for the NRAS
Regulations to be able to set out circumstances in which this rule should not apply.
New subsection 7(5) empowers the NRAS Regulations to provide that in certain
circumstances, the Secretary may decide that the condition mentioned in
subparagraph 7(2)(b)(ii) does not apply if it will not result in an increase in rental
costs for low and moderate income households. The NRAS Regulations will confine
the Secretary's power to disapply the condition to very limited circumstances. The
Secretary will only be able to use the discretion in relation to a specific charge for
rent, for a specific allocation, where the overcharging of rent was inadvertent and the
tenant had been compensated.
The ability to implement new and varied conditions of allocations is important to
further the objects of NRAS, and to protect eligible tenants and ensure the safety
and viability of dwellings. For example, new conditions of allocation may be imposed
to deal with certain emerging safety issues, such as a requirement to use certain
non-flammable materials, or replace existing dangerous materials.
New subsection 7(6) provides express legislative authority for NRAS to impose a
new condition or vary conditions of an existing allocation. If the NRAS Regulations
provide, the new or varied condition could automatically apply to all existing
allocations by force of law, without any further action required by the Department to
individually vary those allocations. However, this subsection does not apply to a
condition that is varied or imposed by the Secretary (such as special conditions
made by the Secretary).
New subsection 7(7) provides that subsection 7(6) has effect despite anything in the
Act or the NRAS Regulations.
Item 15 inserts new paragraphs 8(ba) and 8(bb).
In some circumstances, approved participants engage in undesirable conduct in
relation to a large number of allocations. This item inserts a new paragraph 8(ba)
8
Schedule 1 - National Rental Affordability Scheme Amendments
that makes clear that the NRAS Regulations may provide for the transfer of all of an
approved participant's allocations to another approved participant, in certain
circumstances.
New paragraph 8(bb) confirms that NRAS may provide for the circumstances in
which an allocation can be transferred from one rental dwelling to another rental
dwelling. This ability is necessary in instances where a dwelling is sold and the new
owner does not wish to participate in NRAS.
Without this discretion, numerous allocations would fall out of NRAS where the
owners of the dwellings no longer wish to participate. This would lead to a significant
reduction in the stock of affordable housing provided for under NRAS.
Item 16 inserts new sections 10A and 10B.
The conduct of some approved participants towards investors has at times, been
unacceptable. Approved participants have sent incorrect or misleading
communications to investors, failed to perform their contractual obligations to
investors and taken action to require investors to use particular property
management services.
This item inserts new sections that allows an approved participant to voluntarily
provide a written undertaking to the Secretary in relation to any conduct relating to
NRAS. In appropriate cases, the acceptance of an enforceable undertaking by an
approved participant to remedy prior undesirable conduct, or to not engage in the
undesirable conduct in the future, may avoid the need for the Secretary to respond to
the conduct in another way, for example, by transferring an allocation.
Whilst this Bill has not adopted the enforceable undertakings provisions as provided
for under Part 6 of the Regulatory Powers (Standard Provisions) Act 2014, the
provisions are similar. These provisions are broader that the Regulatory Powers
(Standard Provisions) Act 2014 as it allows the Secretary to enforce broader
conduct, not in an Act or a legislative instrument, in relation to NRAS. Through these
provisions, the Secretary may accept a voluntary undertaking from an approved
participant relating to any conduct connected with NRAS (including the approved
participant's dealings with investors) and then enforce that undertaking, if necessary
in the Federal Court.
Subsection 10A(1) enables the Secretary to accept a written undertaking given by an
approved participant, committing them to particular action (or inaction) in order to
prevent or respond to an undesirable conduct committed by an approved participant
in relation to NRAS.
Undertakings provide a remedy other than financial sanctions to past or prospective
conduct committed by an approved participant in relation to NRAS.
Subsection 10A(2) states that the undertaking must be expressed to be an
undertaking under this section.
9
Schedule 1 - National Rental Affordability Scheme Amendments
Subsection 10A(3) states that the approved participant may withdraw or vary the
undertaking at any time, but only if the Secretary provides written consent to the
withdrawal or variation.
Subsection 10A(4) states that the consent of the Secretary is not a legislative
instrument. This is to assist readers to understand the status of consent given under
this clause; it does not meet the meaning of legislative instrument under subsection
8(1) of the Legislation Act 2003, and is not intended as an exemption from that Act.
Subsection 10A(5) provides that the Secretary may cancel the undertaking by
providing a written notice to the approved participant.
Subsection 10B(1) states that the Secretary may apply to the Federal Court of
Australia for an order of enforceable undertaking if an approved participant has been
given an undertaking under section 10A, the undertaking has not been withdrawn or
cancelled, and the Secretary considers that the approved participant has breached
the undertaking.
Subsection 10B(2) provides the list of orders the Federal Court of Australia may
impose to remedy a breach of an undertaking. This includes the ability to make
orders to comply with the undertaking, to pay a pecuniary penalty to the
Commonwealth, to compensate other people, or to make any other orders the court
sees fit, if it is satisfied that the approved participant has breached the undertaking.
Item 17 repeals subsection 11(1) and substitutes a new subsection.
Current subsection 11(1) states that the Secretary may, by written instrument,
delegate their power to approve a participant, to approve a rental dwelling and to
decide whether to make an allocation under NRAS, to an SES employee in the
Department. However, allocations are no longer being made under NRAS and as
such, the Secretary is no longer approving new approved participants or deciding
whether to make an allocation. Given this, new delegation instruments are no longer
required for the purposes of approving a participant or making an allocation under
NRAS.
This item substitutes a new subsection to state that the Secretary may still, by written
instrument, delegate the Secretary's power to approve a rental dwelling for the
purposes of NRAS, to an SES employee in the Department.
Item 18 sets out six application provisions.
Subitem 18(1) provides that paragraph 5(a) of the Act 'obligations of approved
participants' applies to an obligation that arose before, or arises on or after, the day
this item commences as the NRAS Regulations already includes matters relating to
the obligations of approved participants.
Subitem 18(2) provides that paragraph 6(ca) applies to an incentive provided before,
on or after the day this item commences. This would allow the NRAS Regulations to
provide for the adjustment of an incentive paid and payable in relation to an
10
Schedule 1 - National Rental Affordability Scheme Amendments
allocation in a past period. This would assist investors to recover incentives which
had not been passed on to them from past periods.
Subitem 18(3) provides that paragraph 6(cb) applies to a contribution made by a
State or Territory before, on or after the day this item commences.
Subitem 18(4) provides that paragraphs 6(f) and (g) applies in relation to an investor,
whether the person becomes an investor in NRAS, before, on or after the day this
item commences. In other words, the NRAS Regulations may be made to provide for
the protection of investors, including existing ones.
Subitem 18(5) provides that subsections 7(5), (6) and (7) apply in relation to an
allocation that exists on the day this item commences. This is because no new
allocations can be made and all allocations would have already been made on the
day this item commences.
Subitem 18(6) provides that paragraphs 8(ba) and (bb) apply in relation to an
allocation that exists on the day this item commences. This is because no new
allocations can be made and all allocations would have already been made on the
day this item commences.
Item 19 is an application provision providing that subsection 7(4) as inserted by item
13 applies to all allocations, including those made before, on or after the day the
Schedule commences. New subsection 7(4) provides that subject to some
exceptions, the NRAS Regulations can vary conditions of allocation from time to
time. The purpose of this application provision is to ensure that any future variation
of conditions of allocation will apply to conditions that were in effect before, on or
after the commencement of this Schedule, which will mean that different allocations
cannot be subject to different conditions.
Item 20 sets out the Transitional provisions in relation to the variation of condition
relating to charges of rent.
This item provides an exception to paragraph 7(6)(a) of the Act so that the NRAS
Regulations may vary the condition of an allocation mentioned in subparagraph
7(2)(b)(ii) of the Act for the purposes of the amendment made by item 12 of this
Schedule.
This would allow the NRAS Regulations to vary existing allocations with the condition
that 'the rent that is charged is at all times during the year at least 20% less than the
market value rent for the dwelling' to the condition that 'each charge of rent for the
rental dwelling during the year is at least 20% less than the market value rent for the
dwelling'.
Item 21 sets out the transitional provisions for delegations.
Subsection 11(1) allows the Secretary to delegate their powers to an SES employee
in the Department, through a written instrument. This item clarifies that any existing
delegation instrument made under subsection 11(1) of the Act that has been in force
before the amendment of subsection 11(1) continues to be in force.
11
Schedule 1 - National Rental Affordability Scheme Amendments
This clarifies that despite the repeal of the current subsection 11(1), all existing
delegation instruments still continue to be in force.
12
Statement of compatibility with human rights
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
SCHEDULE 1 - NATIONAL RENTAL AFFORDABILITY SCHEME AMENDMENTS
This Schedule 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 of the Schedule
The Bill expands and clarifies the objects of the National Rental Affordability Scheme
Act 2008 (NRAS Act) and the Constitutional powers that support the NRAS Act. The
Bill also expands and clarifies the power to make regulations under the NRAS Act.
The National Rental Affordability Scheme (NRAS) is prescribed in the National
Rental Affordability Scheme Regulations 2008. These amendments made by the Bill
are technical in nature and do not impact the rights or freedoms of any person.
The Bill includes provisions enabling the Secretary of the Department to accept an
enforceable undertaking from an "approved participant" in NRAS. There are 130
approved participants who have allocations in NRAS associated with rental
dwellings, who are entitled to receive an annual incentive for 10 years if the
conditions of allocation are satisfied. Some approved participants contract with
investors, who own rental dwellings, to make the dwellings available to rent as part
of NRAS. The behaviour of some approved participants to investors is undesirable.
For example, some approved participants delay or fail to pass on incentives to
investors or make misleading statements to investors. Under NRAS, investors may
request the Secretary to transfer the allocation associated with their rental dwelling in
certain circumstances. Enforceable undertakings are voluntary and will only be
given by an approved participant if the approved participant wishes to do so. An
approved participant cannot be required to give an enforceable undertaking.
However, where an enforceable undertaking is given, the Secretary will be able to
enforce the undertaking if the Secretary considers that the undertaking has been
breached.
Enforceable undertakings will provide a further flexible mechanism to enable the
Secretary of the Department to act to protect the interests of investors. The use of
enforceable undertakings may reduce the need to transfer allocations in some
circumstances. For example, if the Secretary accepts an enforceable undertaking
from an approved participant not to send particular communications to investors that
are misleading, the Secretary may decide not to transfer an allocation to another
approved participant, even if previous misleading conduct by the approved
participant means that a ground for transfer exists.
Human rights implications
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in the definition of human rights in
section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
13
Statement of compatibility with human rights
Of the human rights and freedoms recognised or declared in the international
instruments listed in the definition of human rights at section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011, this Schedule engages the right to an adequate
standard of living, including housing, as referred to in Article 11.1 of the International
Covenant on Economic, Social and Cultural Rights (done at New York on 16
December 1966 ([1976] ATS 5)).
This Schedule supports the right to adequate housing, as it is addresses areas of the
NRAS Act that lack clarity. This is a beneficial measure as it will enable
improvements to be made to the Scheme that can only be realised through changes
to the NRAS Act, thereby providing a clear legislative framework for approved
participants in the Scheme to continue to deliver more affordable rental
accommodation to tenants.
Conclusion
This Schedule is compatible with human rights because it supports the protection of
the right to adequate housing.
[Circulated by the authority of the Minister for Families and Social Services,
Senator the Hon Anne Ruston]
14