EXPLANATORY STATEMENT
Defence Home Ownership Assistance Scheme (Average House Price and Median Interest Rate) Determination 2008.
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). Sections 52 and 53 of the Act enable the making of determinations dealing with the average house price and the median interest rate.
The purposes of this Determination are to set the average house price and provide the method for determining the median interest rate 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.
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 the day after it is registered.
Clause 3 sets out the two definitions used in this Determination. The first definition provides that Act means the Defence Home Ownership Assistance Scheme Act 2008 and the second definition provides that CANNEX means CANNEX (AUST) Pty Limited (ACN 053646165).
Clause 4 provides that, for the purpose of section 52 of the Act, the average house price for 2008-2009 financial year is $467,897. 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 national average house price and regional weighting data for the purpose of the determination of an average house price for the scheme. The 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 2008 quarter for each of the eight capital cities. The unstratified median house price for each capital city was multiplied by the house price index weighting for that city; the sum of the results for all eight capital cities is the average house price.
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.
Clause 5 sets out the method for determining the median interest rate. This clause provides a verbal formula which takes into account interest rates published by CANNEX in relation to owner-occupier standard variable home loans offered by lending institutions in Australia. The median interest rate determined using the formula is the rate used in calculating the amount on which home loan interest subsidy can be paid each monthly authorisation period. The rate is not able to go above the maximum figure set in the Defence Home Ownership Assistance Scheme Regulations 2008.
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 have been consulted in relation to the methodology for determining the average house price and the median interest rate.
Authority: Defence Home Ownership Assistance Scheme Act 2008