5. Allocation of incentives
This section provides details about the process for allocating Incentives under the Scheme.
5.1 Eligibility Requirements and Assessment Criteria
In June 2008, the Commonwealth will issue National Eligibility Requirements, with which proposals for allocation of incentives must comply, and National Assessment Criteria, by which eligible proposals will be assessed. They may be supplemented by compatible State and Territory requirements and criteria.
The Commonwealth will issue Calls for Expressions of Interest seeking proposals for allocation of Incentives. A particular Call may include additional eligibility requirements and assessment criteria, in addition to those specified in the National Eligibility Requirements and National Assessment Criteria. For example, a Call may identify particular areas of housing need (for example, locations, types of dwellings, characteristics of tenants) that will be given a priority in that particular Call.
Calls may also indicate special interest in proposals with a total number of dwellings above a specified amount. For example, this could be 100 dwellings for the Establishment Phase and 300 dwellings in the Expansion Phase. Special interest could also be expressed in receiving proposals from providers that have already been allocated a substantial number of Incentives (say 1,000 or more) under the Scheme.
This approach could be accompanied by setting maximum 'limits' or minimum 'reserves' on the proportions of total allocations which will be made to proposals of particular types. For example, 10 per cent of all allocated Incentives for the Establishment Phase could be reserved for proposals involving no less than 30 dwellings, rising to 50 dwellings during the Expansion Phase.
5.2 Calls for Expressions of Interest
Calls for EOIs will seek proposals from a wide range of applicants, including financial institutions, non-profit organisations, local governments and other sources. Proposals may be made by consortia or by other collaborative arrangements (involving, for example, a developer, a bank and a housing manager) for delivering and managing dwellings.
In response to the Call, applicants will be required to submit a proposal indicating the entity or entities that will be:
- recipients of the Commonwealth and State and Territory Incentives (‘the recipients’);
- responsible for tenancy and property management under the Scheme (‘the tenancy managers’); and
- responsible for ensuring compliance with the requirements of the Scheme (‘the providers’).
Any particular entity could be designated in one or more of these roles. In some proposals, for example, participants could agree that the manager will also be the recipient, thereby assisting it to guarantee a rental yield to the lender. In other proposals, one participant could be nominated to receive the Commonwealth contribution and another participant the State or Territory contribution.
Calls will set out the National Eligibility Requirements, and any additional requirements, which must be addressed in EOIs.
The National Eligibility Requirements will include mandatory information that is expected of an application such as:
- whether the applicant is seeking the Incentive to be paid as a refundable tax offset or (if eligible) as a grant;
- dwelling completion times and estimated dates after which the dwellings will become available for rent;
- the numbers and types of dwellings suitable for eligible families, couples, or individuals;
- the proposed tenancy and property management arrangements;
- the financial viability of the proposal, including details of the financing arrangements; and
- the quality of dwellings and compliance with building codes.
The National Assessment Criteria will need to be addressed by each applicant. Assessment against these criteria will determine selection of eligible applicants. The criteria may include:
- the locations and sizes of dwellings;
- the profile of tenants, especially their income levels;
- ability to deliver the required completions times within the specified periods;
- design preferences that addresses accessibility and sustainability; and
- experience and financial viability of the providers, recipients and managers.
5.3 Assessment and Selection Process
All proposals will be directed to and registered by FaHCSIA in the first instance. Where a proposal relates to a single State or Territory, FaHCSIA will forward it to the relevant State or Territory Government for an assessment of its merits and for consideration of the government's possible contribution. Where it relates to more than a single State or Territory, FaHCSIA will refer it to all relevant Governments.
Where a proposal has been referred to a State or Territory Government, the Government will be required to consider whether the proposal is eligible for allocation of Incentives and whether it is willing to provide the requisite level of benefit. The Government will then advise FaHCSIA which proposals it is willing to support and indicate its preferences. Where proposals involve several Governments, preferences will be determined jointly by them through a process convened by FaHCSIA.
FaHCSIA will then assess the proposals which have the support of the relevant State or Territory Governments. They will do so in accordance with the General Eligibility Requirements and General Assessment Criteria and with any additional requirements or criteria specified in the relevant Call for EOIs.
Governments may seek further details for some proposals in the course of assessment before making their selections. This may include, for example, clarification or reconsideration of the arrangements between participants in the proposal or of the support which may be provided from other sources. They may invite other governments to participate in this stage of the process.
Approval of a proposal will constitute a binding commitment to provision of the dwellings for which the Incentives have been allocated. Approval will be subject to the dwellings being made available for rental within a specified period and managed thereafter in compliance with the Scheme. In most approvals, the specified period is likely to be either 12 or 24 months but shorter periods may be specified in some cases, especially during the Establishment Phase.
Appendix A summarises the critical dates for the Establishment Phase.
Question 3 - Will this process allow for expressions of interest to be made without excessive costs to business?