EXPLANATORY STATEMENT

Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2012 (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 2012.

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 substitutes section 4 of the Principal Determination for the purpose of section 52 of the Act. The amendment removes subsections 1, 2, 3 and 4, which set out the average house price for the
2008–2009, 2009–2010, 2010–2011 and 2011–2012 financial years, respectively. The amendment consolidates the information from subsections 1, 2, 3 and 4 into a table and adds the average house price of $483,440 for the 2012–2013 financial year.

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 People 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 2012 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 2012-2013 financial year is $24,658 lower than the figure determined for the previous year, reflecting broad downward movement in the market and house prices generally.

Although consultation could be considered 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, the Treasury, the Department of Finance and Deregulation and Australian Bureau of Statistics were consulted on the methodology for determining the average house price. In relation to this current amendment, the Department of Veterans' Affairs, which administers the scheme under contract, has also been consulted to assist it to communicate the change to applicants for subsidy. The Office of Best Practice Regulation has advised that a regulation impact statement is not required for this amendment (OBPR exemption no.10425).

This Determination is compatible with the human rights and freedoms recognised or declared in the

international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

This Determination engages the following human rights:

• Right to an adequate standard of living (article 11(1) International Covenant on Economic, Social and Cultural Rights)
• Right to freedom of movement (articles 12 and 13 International Convention on Civil and Political Rights)

The right to freedom of movement includes the right to move freely within a country for those who are lawfully within the country.

Legitimate objective: Defence members are posted to perform duty in different locations around Australia, this could cause the member to be separated from their family, or cause the family economic hardship should they choose to accompany the member to the posting location.

Reasonable, necessary and proportionate: The purpose of providing housing assistance in the form of a home loan interest subsidy is to assist the member to secure long-term housing at a suitable standard for them and their family. The subsidy reflects the current home loan market interest rates. It assists the member and their family to purchase a home to live in and not suffer disadvantage because of the requirement for the member to travel to a new posting location. This determination reviews and adjusts the average house price which can be used in the calculation of subsidy for applicants who become entitled to it during the 2012-2013 financial year.

This Determination is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

Authority: Defence Home Ownership Assistance Scheme Act 2008