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Wednesday, 23 May 2007
Page: 109


Mr GRIFFIN (5:04 PM) —The Labor Party supports the Defence Force (Home Loans Assistance) Amendment Bill 2007, which will continue to provide ADF personnel with loans assistance until the new scheme is established. The bill seeks to amend the Defence Force (Homes Loans Assistance) Act 1990 to extend the operation of the Defence HomeOwner Scheme by half a year, from 31 December 2007 to 30 June 2008. This would allow sufficient time for the new scheme, announced in the 2007-08 budget, to be finalised and introduced. The intention of the new scheme is also supported, although the specific detail will be carefully considered once it is available. The Labor Party welcomed its announcement in the 2007-08 budget as a step in the right direction. So far, we know that the new scheme will increase the subsidy limit in tiers according to length of service and will also allow the ADF member to choose their mortgage provider instead of the single provider, National Australia Bank. We will be seeking further information from the government on the particulars of its new scheme and eligibility requirements at estimates in the coming weeks. I note that the current scheme is 16 years old and was established under the previous Labor government. This is the first real attempt by this government at improving it. It is about time, and Labor encourages the government to implement the new arrangements without delay.

This government must do more to ensure that strong support and first-class services are provided to ADF members and their families. The Labor Party believes that more can always be done to provide Defence personnel and their families with greater choice, better housing and more incentives to stay on. The basis for this matter, and one of the reasons why housing is a significant issue in relation to the defence forces, relates to the whole issue of recruitment and retention, key issues with respect to personnel requirements of the ADF. It is an area where there are real difficulties with the record of this government.

February 2007 Senate estimates data revealed the situation with ADF recruitment by looking at the question of target achievement and the disparity thereof across the services and across the ADF as a whole over the period of this government. There are some key points with respect to that. ADF recruitment levels have been short of recruitment targets for 10 years in a row. There was a massive jump in the disparity between target and actual levels of recruitment between 1997-98 and 1998-99, with a peak in poor performance in 1999-2000. There is still an overall shortfall in 2006-07 of 839 personnel across the ADF. Some of these figures are quite mind-boggling.

The variation in respect of targets back in 1999-2000 was some 4,593 less than the target. For the year before it was 3,027 less than the target. For the year after, in 2000-01, it was 4,077 less. In the years following the figures were 1,983 less, 1,382 less, 1,421 less, 1,924 less and 1,630 less. As we can see, right across this whole period the circumstances show that the government has failed to deal with this issue. It has set targets but has not been able to meet them. Action on this matter is long overdue.

In the broader sense of this particular issue, a report today on ABC Online headed ‘Backlog leaves Army recruits waiting for training’ talked about a side issue. The report read:

The latest recruitment drive for the Australian Defence Force ... appears to have hit a snag, with a major backlog in training for soldiers.

The ADF has estimated that about 300 Army Reserve recruits have not yet been trained, while four out of five of those who have enlisted will face waits of between one and six months for training.

Nearly 400 former Defence employees are also still waiting to hear if their applications to rejoin have been approved.

The ADF has blamed the situation on the training cycle for specific jobs and a lack of vacancies in trade schools.

But a News Limited report suggests the reason is that the Army training centre near Wagga Wagga, in southern New South Wales, is overstretched.

As the opposition defence spokesperson was quoted as saying in that report:

“The Government’s throwing lots of taxpayers’ money into glossy advertising but can’t put the people through the system ...

This is a major concern as to the operation of ADF recruitment. It is one of the reasons why this government has got itself into trouble in ensuring that the Defence Force has the capability to do what is required.

The question of what has occurred with defence home loans assistance is an example of that. The government has waited 10 years before doing anything about the scheme. The comparison of activities table in the 2005-06 Department of Defence annual report shows a steady, consistent decline since 2001-02 in the take-up rates for the program. As we look at that particular table we see some of the differences. In ‘Applications for entitlement certificates received’ the situation is that the figure has gone from 2,451 in 2001-02 down to 1,724 in 2005-06. When we go to the question of entitlement certificates issued, we see the figure has gone down from 2,342 to 1,674. For ‘Applications for payments of subsidy received’ it was 1,648 back in 2001-02 and has been dropping on a yearly basis to 1,544, 1,428, 1,301 and 1,184 in 2005-06. As for the number of subsidy payees as a whole, the figure has increased but, again, we have to take into account the building factor over time. But the circumstances on an annual basis in terms of new applications across that period have seen it go down. That raises some questions about this scheme, given the fact that it is not new, that its take-up is going down and that this has been happening for some time. It has taken this government quite some time to actually start looking at the issue of what to do to try to address that.

The Defence HomeOwner Scheme assists ADF members to purchase a home, and that is an important ADF personnel retention measure. Under the Defence Force (Home Loans Assistance) Act 1990, the scheme will finish on 31 December 2007; hence the need to make this change on this occasion until the new scheme is in place. The maximum entitlement of the current scheme for married or de facto couples who are both in the ADF is up to $160,000 on one property. I am advised that the amount of subsidy was increased in 1996 but then remained the same until this year’s budget.

Home ownership assistance first began in 1919 as a repatriation measure for servicemen returning from overseas war service after World War I. The reasons for the establishment in 1990-91 of the Defence HomeOwner Scheme under the Defence Force (Home Loans Assistance) Act 1990 were outlined in a paper from the Parliamentary Library. The war service homes scheme was established in 1919, as I mentioned earlier. From 1972 the scheme began to be seen as part of the Defence Force’s conditions of service rather than as a repatriation measure. The erosion of the value of the loan, which had been capped at a maximum of $25,000 since 1980, led the government, in its May 1985 economic statement, to seek the involvement of the private sector in the funding and operation of the scheme.

The big issue for some time was the failure to increase the maximum amount available from $25,000, the amount set in 1980. I mentioned earlier that the new scheme commenced on 15 May 1991, and this area was not updated for quite some time. In November 1996 the ADF Home Loan Assistance Scheme had its maximum subsidised loan increased from $40,000 to $80,000.

In May 2006, Defence announced that it was exploring some options to replace the Defence HomeOwner Scheme and that it would conduct a review. The review is now complete, but it appears that its findings have not been publicly released. I have to question why that is the case. However, the Labor Party welcomes the new scheme and encourages the government to implement it without delay. There is still more work to be done, but this government has shown that it will not act decisively and determinedly to do so. If Defence personnel have had to wait 11 years for movement on Defence home loans support, we do not want to wait to see action from the Howard government on other areas of personnel retention, housing and entitlements. I commend the bill to the House.