Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2012 (No. 1)

Administered by Department of Defence

Legislation au F2012L01372 Not in force Legislative Instrument

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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
 

 

 

 

Overview

The Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2012 (No.1) was enacted to address the need for updating the average house price used in the calculation of monthly subsidies under the Defence Home Ownership Assistance Scheme (the Scheme) provided by the Defence Home Ownership Assistance Scheme Act 2008. This legislative instrument was prepared by the Office of Legislative Drafting and Publishing in the Attorney-General’s Department and made by the Minister for Defence under subsection 52(1) of the Act. The primary policy objective of this Determination is to ensure that the Scheme remains reflective of current housing market conditions by adjusting the average house price annually. This amendment specifically updates the average house price for the 2012-2013 financial year, reflecting a downward movement in the market, thereby maintaining the Scheme’s relevance and effectiveness in supporting eligible members of the Australian Defence Force.

Scope and Application

The Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2012 (No.1) applies to eligible members of the Australian Defence Force (ADF) under the Defence Home Ownership Assistance Scheme Act 2008. The scheme is designed to provide home ownership assistance to these members, facilitating their housing needs as they may be posted to different locations within Australia. The Act and this Determination focus on the calculation of the monthly subsidy amount for the Scheme by setting the average house price for the 2012–2013 financial year at $483,440. This figure is derived based on statistical data published by the Australian Bureau of Statistics and is subject to annual adjustments to reflect changes in the housing market. The Minister for Defence, who has the power to set these figures, has delegated this responsibility to the Director General People Policy and Employment Conditions. The Determination ensures that the scheme remains responsive to economic conditions, providing necessary assistance to ADF members in securing suitable housing. The Determination does not specify any exclusions or exemptions, applying broadly to all eligible ADF members across Australia.

Key Provisions

The Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2012 (No.1) (the Determination) provides critical updates to the Defence Home Ownership Assistance Scheme Act 2008 (the Act). Specifically, Section 3 of the Determination replaces the previous subsections of Section 4 in the Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Amendment Determination 2008, with a new consolidated table. This table now includes the average house price for the 2012–2013 financial year, which is set at $483,440. This adjustment is vital for calculating the monthly subsidy amount for the Scheme, ensuring that it reflects the current housing market conditions. The Determination imposes specific obligations on the Minister for Defence and other relevant parties. Under Section 52(1) of the Act, the Minister is mandated to set the average house price by determination, with the power delegated to the Director General People Policy and Employment Conditions. The Minister must consider the national average house price and regional weighting data, derived from the Australian Bureau of Statistics, when determining the average house price. This ensures that the Scheme is adjusted annually to account for fluctuations in the housing market. Furthermore, the Determination requires consultation with key stakeholders, including the Treasury, the Department of Finance and Deregulation, the Australian Bureau of Statistics, and the Department of Veterans' Affairs to ensure the accuracy and relevance of the average house price. Failure to comply with the provisions of this Determination could result in significant consequences. While the explanatory statement does not explicitly outline specific offences or penalties for breach, it is reasonable to infer that non-compliance could lead to financial discrepancies in subsidy calculations, potentially resulting in legal disputes or financial losses for eligible members of the Australian Defence Force. The consequences could also extend to administrative and procedural penalties under the Defence Home Ownership Assistance Scheme Act 2008, although the exact nature of these penalties is not specified in the Determination itself. In summary, the Determination serves to update the average house price for the Defence Home Ownership Assistance Scheme for the 2012–2013 financial year, ensuring that the Scheme remains relevant and effective. It imposes clear obligations on the Minister for Defence and relevant stakeholders to consult and consider appropriate data when making determinations. While specific penalties for non-compliance are not detailed, the importance of accurate and timely updates underscores the potential severity of any breaches.

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