EXPLANATORY STATEMENT
Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2011 (No.1)
The Defence Home Ownership Assistance Scheme Act 2008 (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 subsection 52(1) of the Act.
Section 1 of this Determination sets out the manner in which this Determination may be cited.
Section 2 of this Determination provides that the Determination commences on 1 July 2011.
Section 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), as amended.
Item 1 of the Schedule inserts a new subsection 4 into the Principal Determination for the purpose of section 52 of the Act. The new subsection 4(4) provides that the average house price for 2011-2012 financial year is $508,098. 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. The Minister for Defence has delegated this power to the Director General Personnel Policy and Employment Conditions.
Subsection 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 2011 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.
Subsection 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 2011-2012 financial year is $13,666 higher than the figure determined for the previous year, reflecting broad upward 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, 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 (OBPR exemption no.10425).
Authority: Defence Home Ownership Assistance Scheme Act
Overview
The Defence Home Ownership Assistance Scheme Act 2008 was enacted to provide a home ownership assistance scheme for eligible members of the Australian Defence Force (ADF). This Act was introduced to address the need for a structured financial assistance program to support ADF members in purchasing their first home. The scheme aims to facilitate home ownership among ADF members, thereby enhancing their stability and welfare. The legislation empowers the Minister for Defence to set the average house price for the purposes of calculating the monthly subsidy amount under the Scheme. This was made possible by the Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2011 (No.1), which was issued under subsection 52(1) of the Act and commenced on 1 July 2011. This Determination sets the average house price for the 2011-2012 financial year at $508,098, reflecting the national average house price and regional weighting data. This adjustment aims to ensure the Scheme remains responsive to changes in the housing market.
Scope and Application
The Defence Home Ownership Assistance Scheme Act 2008 provides financial assistance to eligible members of the Australian Defence Force for home ownership. The Act applies specifically to members of the ADF and those involved in the administration of the Defence Home Ownership Assistance Scheme. The legislation’s reach is governed under the Commonwealth, as it is a federal statute. The scheme's average house price is determined annually by the Minister for Defence, who has delegated this power to the Director General Personnel Policy and Employment Conditions. The average house price for the 2011-2012 financial year has been set at $508,098, reflecting adjustments based on statistical data from the Australian Bureau of Statistics. While the Act allows for the setting of these figures through subordinate instruments, consultation was deemed unnecessary due to the scheme's specific focus on ADF members, although relevant government departments and statistical bodies were consulted on the methodology. This determination ensures that the Scheme adapts annually to reflect changes in the housing market.
Key Provisions
The Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2011 (No.1) primarily amends the average house price used in the Defence Home Ownership Assistance Scheme for the 2011-2012 financial year. Section 52(4) of the Defence Home Ownership Assistance Scheme Act 2008 has been amended to set the average house price at $508,098 for this period. This adjustment reflects the changes observed in the housing market across Australia during this time. The amendment ensures that the scheme remains responsive to market conditions, thereby maintaining its relevance and effectiveness for eligible members of the Australian Defence Force.
The Act imposes several obligations on the parties involved in the Scheme. The Minister for Defence, who has the authority to set the average house price, must consider the national average house price and regional weighting data, as per subsection 52(2). This requirement ensures that the average house price is determined using accurate and comprehensive data. The Minister has delegated this power to the Director General Personnel Policy and Employment Conditions, ensuring that the decision is made by a qualified and authorised official. Additionally, consultation with relevant departments and agencies, such as the Treasury, the Department of Finance and Deregulation, and the Australian Bureau of Statistics, was conducted to ensure the methodology for determining the average house price is robust and reliable.
Failure to comply with the provisions of the Defence Home Ownership Assistance Scheme Act 2008 and the associated determinations can result in various consequences. While the Act does not specify particular offences or penalties for breaches of the average house price determination, breaches of other provisions under the Act may incur civil or criminal penalties. For example, providing false or misleading information in relation to the Scheme can lead to civil penalties under section 60, which may include fines up to $11,000 for individuals and $55,000 for bodies corporate. Additionally, in cases where the breach constitutes a criminal offence, the penalties can be more severe, including fines and imprisonment, as outlined in the Crimes Act 1914. It is essential for all parties to adhere to the requirements of the Act to avoid any potential legal repercussions.