8 February 2023
The Australian Banking Association (ABA) broadly supports the intention of the National Reconstruction Fund Corporation Bill 2022 and the National Reconstruction Fund (Fund), which is expected to support and diversify Australia’s emerging industry sectors but has some concerns in relation to the Fund’s design and implementation, including the proposed priority areas, scope of the investment mandate and how these matters may impact on the crowding out of the private sector market that is otherwise willing and able to invest in these areas. It is noted that banks already invest in many of the priority areas proposed by the Government and investments in these areas would be better suited towards the beginning of their lifecycle where it is more difficult for banks to manage the risk profile. The ABA recommends it being a requirement of the investment mandate to consult with traditional private sector participants before making an investment by the Fund, such as via a panel of financiers. Government should assess the commerciality of each prospective investment and refer it to the private sector where it is sensible to do so from the perspective of return and/or risk appetite.
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The ABA acknowledges the intent of the RIC in supporting agribusinesses during periods of difficulty, such as natural disaster and drought. While the ABA acknowledges these additional loan categories may be valuable to eligible farmers, we note the RIC was first set up for the purpose of supporting drought affected farmers who may not have… Read more »
The ABA continues to support establishment of the Housing Australia Future Fund as a mechanism to provide a sustainable funding source to support and increase the development of social and affordable housing during a critical period of lower than required housing supply. The ABA acknowledges that other industry factors such as planning, and the cost… Read more »