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) for the 2019-2020 financial year.
Subsection 52(3) requires the average house price 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 2019-2020 financial year is $23,532 lower than the figure determined for the previous year, reflecting broad downward movement in the housing market and house prices generally.
This Determination amends Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Determination 2018 (the Principal Determination).
The Determination is made by the delegate of the Minister for Defence under subsection 52 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 2019.
Section 3 of this Determination provides that the Determination is made under section 52 of the Act.
Section 4 provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
Schedule 1—Amendments
Section 1 amends section 6 of the Principal Determination by omitting item 11 of the table and substituting a new item 11 and item 12. The new item 11 remakes the average house price for the 2018-2019 financial year without change. Item 12 sets the average house price of $718,071 for the financial year 2019-2020.
Subsection 52(2) of the Act 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 December 2018 for each of the eight capital cities. The unstratified median house prices for a capital city is multiplied by the house price index weighting for that city.
Consultation
The Treasury, the Department of Finance and Australian Bureau of Statistics were consulted on the methodology for determining the average house price when the legislation was enacted in 2008.
In relation to this current amendment, the Department of Veterans' Affairs, which administers the scheme under contract, has also been consulted and will adjust its 2019-2020 subsidy payments to reflect the new average house price.
The Office of Best Practice Regulation within the Department of the Prime Minister and Cabinet has advised that a Regulation Impact Statement is not required for this amendment (OBPR exemption no.10425).
Authority: Defence Home Ownership Assistance Scheme Act 2008
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.
Overview of the Determination
The Defence Home Ownership Assistance Scheme (the Scheme) is a home loan subsidy scheme for eligible current and former ADF members. A major objective of the Scheme is to improve current ADF retention and recruitment rates. This is achieved by offering ADF members subsidy payments to assist them to purchase homes for them and their family and provides progressively higher levels of assistance once they have served beyond critical career points. The subsidy reflects the current home loan market interest rates. This Determination sets the average house price for the purpose of calculating the monthly subsidy amount for the Scheme.
Human rights implications
Right to an adequate standard of living
Article 7 of the International Covenant on Economic, Social and Cultural Rights guarantees the right to just and favourable conditions of work, including remuneration, safe and healthy conditions, equal opportunity and reasonable limitations.
Right to the enjoyment of just and favourable conditions of work
Article 11 of the International Covenant on Economic, Social and Cultural Rights requires Australia to progressively realise the right of everyone to an adequate standard of living, including adequate housing, within the maximum available resources.
The purpose of the Scheme is to assist ADF members and their family to purchase a home to live in and ensures that ADF members do not suffer any disadvantage because of the requirement for them to travel to new posting locations. This Determination sets a new average house price for the 2019-2020 year from which home loan subsidy payments rates are determined. The average house price for the 2019-2020 financial year is $23,532 lower than the figure determined for 2018-2019.
The Scheme in itself, and the making of this determination, promotes the right to just and favourable conditions of work and the right to an adequate standard of living, including adequate housing, for ADF and their families, by recognising the unique nature of service of ADF members.
Conclusion
This Determination is compatible with human rights because it advances the protection of human rights.
Fiona Louise McSpeerin, Assistant Secretary, People Policy and Employment Conditions