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Table 1: Performance summary of the 2018–19 financial year

Performance areas

Performance objectives

Targets
2018-19

Analysis

Outcomes achieved

Facilitate the sustainable growth of the community housing sector across Australia

AHBA loan facility established and functioning well with appropriate geographic coverage

Develop and implement arrangements with a focus on existing projects.

AHBA loan facilities were established with both the external market (through a successful bond issuance program) and line of credit from the Commonwealth.

Y

Total loan portfolio valued at $900m-$1.25b by 2021-22

$200m-250m

NHFIC Board approved total loan commitments of $472 million during 2018-19, of which $308 million was settled before 30 June 2019.

Y

Regular AHBA bond issuance program established

Develop and implement the products to establish and support the bond facility.

NHFIC established a successful bond issuance program and procedures with appropriate governance structures, experienced Joint Lead Managers, and an agreement with the ASX Austraclear as the transactional clearing house.

Y

Total dollar value of bonds issued by AHBA valued at $500m-$800m by 2021-22 (noting that NHFIC can also draw funds from a line of credit)

Nil

In March 2019, NHFIC issued its first bond of $315 million, the largest social bond issued to date in Australia[1]. The inaugural bond issue was for a tenor of 10 years and was rated AAA (stable) by S&P.

NHFIC is currently on track to achieve the performance objective by 2021-22.

Y

Increase the capacity of the CHP sector to successfully apply for loans

Establish the Capacity Building Program.

Capacity Building Program established for launch in 2019-20.

Y

Facilitate investment and increase the supply of housing, in particular affordable housing

Accelerate infrastructure development

Develop policies and procedures to implement the NHIF.

NHIF policies and procedures were developed and soundings in the market for infrastructure development completed.

Y

Blended NHIF finance

$800m in blended finance deals over four years.

The first NHIF loan facility signed.

NHFIC is well-advanced in progressing a number of potential projects for NHIF funding and expects to announce the first NHIF transaction in the first half of 2019-20.

N

Build strong stakeholder relationships that support better housing outcomes

Good working relations with state and territory Registrars

Protocols established with each Registrar nationally.

Strong relationships have been developed with state and territory governments and registrars.

Y

Raised awareness of the NHFIC values

Significant communication and stakeholder engagement activity.

The NHFIC website is easy to navigate for stakeholders.

NHFIC has established strong stakeholder relations, actively engaging in roundtables and industry events participation.

Social media channels were established to distribute regular content and company activity updates.

Website redesign project commenced with delivery scheduled for early 2019-20.

Y

Become a high-performance organisation

Highly experienced and skilled workforce

Continue to recruit workforce with appropriate expertise to enable the NHFIC to deliver its functions.

Significant recruitment of highly skilled, experienced people in specialised areas including origination, credit, finance, strategy and operations, legal and compliance, while continuing to utilise shared services from Export Finance Australia as necessary.

Y

Adequate systems, policies, governance and management oversight

Develop and implement systems, policies and procedures which are fit-for-purpose.

NHFIC utilised the existing established systems, policies and procedures of Export Finance Australia, which were adapted to meet NHFIC’s needs and requirements.

Y

Financial sustainability

Operating expenses per annum are within annual appropriation provided by government.

Achievement of benchmark return to cover operating costs from 2021-22 and build an adequate capital reserve in accordance with legislation.

Maintain the minimum target value of the permanent fund associated with NHIF.

Operating expenses for the period were within the annual appropriation provided by the Government. The four-year business plan targets returns to cover operating costs from 2021-22 and build an adequate capital reserve in accordance with legislation for NHFIC to be self-sustaining.

NHFIC has commenced reserve accumulation to meet the minimum target value of the permanent fund associated with NHIF over the medium to long term.

Y

Establish a best-practice governance regime

Best-practice governance

Establishment of fit-for-purpose frameworks to meet legislative obligations.

Strong governance arrangements have been established, including appropriate controls to provide transparency and accountability to the Board and management on NHFIC’s operations.

Y

[1] Largest social bond in Australia in accordance with 2018 International Capital Market Association (ICMA) social bond principles.

Visit

https://www.transparency.gov.au/annual-reports/national-housing-finance-and-investment-corporation/reporting-year/2018-2019-14