EXPLANATORY STATEMENT
Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2009 (No.1)
The Defence Home Ownership Assistance Scheme Act 2009 (the Act) provides a home ownership assistance scheme for eligible members of the Australian Defence Force (ADF). Section 52 of the Act enables the making of determinations dealing with the average house price.
The purpose of this Determination is to set the average house price for the purpose of calculating the monthly subsidy amount for the Defence Home Ownership Assistance Scheme (the Scheme). The Determination has been prepared by the Office of Legislative Drafting and Publishing in the Attorney-General’s Department and is made by the Minister for Defence under subsections 52(1) and 53(1) of the Act.
Clause 1 of this Determination sets out the manner in which this Determination may be cited.
Clause 2 of this Determination provides that the Determination commences on 1 July 2009.
Clause 3 provides that Schedule 1 contains amendments to the Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2008 (the Principal Determination) made on 24 November 2008.
Item 1 of the Schedule substitutes section 4 of the Principal Determination for the purpose of section 52 of the Act. The new subsection 4 (2) provides that the average house price for 2009-2010 financial year is $429,073. Subsection 52(1) of the Act confers power on the Minister to set a figure as the average house price under the Scheme, by determination from time to time.
Subclause 52(2) requires the Minister to have regard to the national average house price and regional weighting data for the purpose of the determination of an average house price for the scheme. The national average house price has been derived according to statistical data published by the Australian Bureau of Statistics for the period up to the end of the March 2009 quarter for each of the eight capital cities, from the unstratified median house prices for a capital city multiplied by the house price index weighting for that city.
Subclause 52(3) explains that the average house price is to be determined annually for a financial year. This ensures that the scheme will be adjusted each year to take account of changes that have been observed in the housing market across Australia. The average house price for the 2009-2010 financial year is $38, 824 lower than the figure determined for the previous year, reflecting broad downward movement in the market and house prices generally.
Consultation was considered inappropriate and unnecessary pursuant to section 18 of the Legislative Instruments Act 2003 because the Determination relates to the service of members of the Australian Defence Force. However, the Treasury and the Department of Finance and Deregulation and Australian Bureau of Statistics were consulted in relation to the methodology for determining the average house price. The Office of Best Practice Regulation has advised that a regulation impact statement is not required for this amendment.
Authority: Defence Home Ownership Assistance Scheme Act
Overview
The Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2009 (No.1) was enacted to address the need for an updated average house price figure under the Defence Home Ownership Assistance Scheme for the 2009-2010 financial year, as required by the Defence Home Ownership Assistance Scheme Act 2009. This Determination was made by the Minister for Defence under the authority conferred by the Act, specifically under subsections 52(1) and 53(1). The primary objective of this Amendment Determination is to reflect the changes in the housing market and to provide an accurate basis for calculating the monthly subsidy amount for the Scheme. The average house price for the 2009-2010 financial year was set at $429,073, a decrease from the previous year, to align with the observed downward trend in the market. This was determined by taking into account the national average house price data, derived from the Australian Bureau of Statistics for the period ending March 2009.
Scope and Application
The Defence Home Ownership Assistance Scheme Act 2009 applies to eligible members of the Australian Defence Force (ADF) who participate in the Defence Home Ownership Assistance Scheme (DHOAS). This Act provides a home ownership assistance scheme designed to support ADF members in achieving home ownership. The scheme's primary application is financial, providing a monthly subsidy to assist with mortgage repayments for eligible members. The Act authorises the Minister for Defence to make determinations regarding the average house price, which is a critical component in calculating the subsidy amount. This geographic application extends nationally, as it considers average house prices across Australia’s capital cities and adjusts annually based on housing market changes. The Act does not specify exclusions or exemptions but rather operates within the framework of national housing market data, ensuring the scheme remains responsive to economic conditions. Subordinate instruments may further define or refine the application of the Act, although the specific determinations, such as the average house price, are established by the Minister under the statutory power conferred by the Act.
Key Provisions
The main operative sections of the Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2009 (No.1) involve the setting of the average house price for the 2009-2010 financial year. Under section 52(1) of the Defence Home Ownership Assistance Scheme Act 2009, the Minister for Defence is empowered to determine this average house price, which is critical for calculating the monthly subsidy amount under the Scheme. Specifically, the new subsection 4(2) stipulates that the average house price for the 2009-2010 financial year is $429,073. This determination is made annually, as mandated by subclause 52(3), ensuring the Scheme adapts to the changes in the housing market each year.
The obligations imposed by this Act on the relevant parties are primarily concerned with the accurate and timely calculation of the average house price for the Scheme. The Minister for Defence must consider the national average house price and regional weighting data when making this determination, as required by subclause 52(2). This involves using statistical data published by the Australian Bureau of Statistics up to the end of the March 2009 quarter. The unstratified median house prices for each of the eight capital cities are multiplied by the house price index weighting for that city to derive the national average house price. By adhering to this methodology, the Minister ensures that the average house price is reflective of the broader housing market trends.
The consequences for non-compliance with the provisions of the Act are not explicitly detailed in the Explanatory Statement. However, it is reasonable to infer that failure to adhere to the prescribed methodology for determining the average house price could lead to discrepancies in the monthly subsidy amounts provided under the Scheme. Such discrepancies might result in legal challenges or administrative adjustments to correct any financial imbalances caused by an inaccurate average house price. While specific offences, penalties, or consequences are not outlined in the text, the importance of accurate calculations underscores the need for compliance to maintain the integrity of the Scheme.