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Australian Housing Corporation Act and Defence Services Homes Act - Australian Housing Corporation - Report and financial statements, together with Auditor-General's Report - Year - 1974-75


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T h e P a rlia m en t of th e C om m onw ealth of A u stralia

A U S T R A L IA N H O U S IN G C O R P O R A T IO N

Report for th e year 1974-75

Presented pursuant to Statute 7 June 1978 Ordered to be printed 9 June 1978

P arliam en tary Paper N o. 1 5 5 /1978

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Australian Housing Corporation Report for the year 1974-1975

ANNUAL REPORT OF OPERATIONS UNDER THE

AUSTRALIAN HOUSING CORPORATION ACT 1975 AND THE

DEFENCE SERVICE HOMES ACT 1918

Senator The Hon. P. D. Du rack, Q.C., Acting Minister for Veterans’ Affairs, Parliament House,

CANBERRA A.C.T. .

Responsibility for the administration of the Defence Service Homes Act was transferred from the Director of Defence Service Homes to the Australian Housing Corporation on 24 June 1975. The Australian Housing Corporation was reconstituted as the Defence Service Homes Corporation on 13 December 1976.

In accordance with section SOB of the Defence Service Homes Act 1918 and section 48 of the Australian Housing Corporation Act 1975 (now repealed) I submit for presentation to Parliament reports of the operations under those Acts from 1 July 1974 to 30 June 1975, together with financial statements in respect of that year.

Apart from the financial statements, which have been modified and redrafted for presentation in the form approved by the Minister for Finance, no substantial changes have been made to the Interim Reports prepared by the Australian Housing Corporation and tabled in Parliament. The Interim Report of the operations under I he relevant Acts (other than insurance activities) was tabled in the House of

Representatives on 2 October 1975. The Interim Report of Insurance operations was tabled in the Senate on 30 September 1975.

0 JUNE 1978

Secretary to the Department of Veterans' Affairs

AUSTRALIAN HOUSING CORPORATION ACT 1975

STATEMENT

ON OPERATIONS (OTHER THAN THE DEFENCE SERVICE

HOMES SCHEME) FOR THE YEAR ENDED 30 JUNE 1975

(0

AUSTRALIAN HOUSING CORPORATION

STATEMENT FOR PERIOD ENDED 30 JUNE 1975

The Australian Housing Corporation Act was proclaimed to come into operation on 24 June 1975. The following persons were appointed members of the Corporation:

Chairman — Mr A.M. Ramsay, C.B.E.,

General Manager, South Australian Housing Trust

Deputy Chairman — Mr P. Troy

Department of Urban and Regional Development

Acting General Manager — Mr P. Edwards

Member — Mr K. Driscoll

Managing Director, National Homes Pty Ltd.

Member — Mr R.B. Lansdown

Secretary, Department of Urban and Regional Development

Member — Mr T. McDonald

Secretary, Building Workers’ Industrial Union

Member — Mr A.S. Reiher

Secretary, Department of Housing and Construction

Member — Mr H. Stretton

University of Adelaide

It will be noted that the Corporation was in existence for only 7 days during the financial year ended 30 June 1975. On establishment the Corporation received the amount of $25 million contained in the 1974/75 Budget which had been allocated to the Corporation “to undertake those housing functions which are not provided for under

other appropriations”. The only expenditure by the Corporation prior to 30 June 1975 was the payment of $59,500 being fees paid to the Registrar of Titles, Sydney to vest all the rights, property and assets registered in the name of the Director of Defence

Service Homes in New South Wales in the name of the Corporation.

Section 48 of the Australian Housing Corporation Act requires the Corpora­ tion as soon as practicable after the end of each financial year, to prepare and furnish to the Minister a report of the operations of the Corporation during that year, together with financial statements in respect of that year in such form as the Treasurer approves. The section also requires the Corporation to include in its annual report all directions in respect of the performance of its functions or in the exercise of its powers given to it by the Minister during the year to which the report relates. No specific directions were given

by the Minister to the Corporation in the seven days prior to 30 June 1975.

Section 48 also requires the Corporation before furnishing financial state-

merits to the Minister to submit them to the Auditor-General who shall report to the Minister on the matters set out in sub-section 48(3) of the Act. Under section 48(4) of the Act the Minister is required to cause the report and financial statements of the Corporation, together with the report of the Auditor-General to be laid before each

House of Parliament within 15 sittings days of that House, after their receipt by the Minister.

Action has been undertaken by the Corporation which will ensure that it is in a position to comply with the abovementioned requirements in respect of reports and financial statements by the Corporation. This action which has included the com­ missioning o f recommendations by external accountants on appropriate financial

accounting and reporting systems, is not yet complete and it is not possible, therefore, at this time to submit reports and financial statements in accordance with "the statutory requirements. I am making this statement available, however, to inform Members of

Parliament of the factual position concerning the operations of the Corporation for the period 24 to 30 June 1975.

NOTE

The above report is as set out in the interim statement, prepared by the Australian Housing Corporation and tabled in Parliament on 2 October 1975.

In the period 24 June 1975 to 30 June 1975 the Corporation conducted no operations other than those associated with the administration o f the Defence Service Homes A c t and its other financial transactions were limited to the items referred to above in paragraph 2. In the circumstances the financial statements required under section 48 o f the Australian Housing

Corporation A c t and section 5 OB o f the Defence Service Homes A ct have been consolidated. The consolidated statements are included as Appendices to the Corporation’s report o f operations (other than insurance) in relation to the Defence Service Homes Scheme.

1’riiitod bv F1RII PRINT! RS ΡΊΎ. I.TD.. CANBPRRA A.C.T. 2609

DEFENCE SERVICE HOMES ACT 1918

REPORT

OF OPERATIONS IN RELATION TO THE DEFENCE SERVICE HOMES

INSURANCE SCHEME FOR THE YEAR ENDED 30 JUNE 1975

(vi)

C O N T E N T S

Page

Introduction 1

Summary of Operations 2

Risks Insured Against 3

Amount of Insurance 3

Premiums Payable for Insurance 3

Income 4

Claims 4

Administration Costs 4

Contributions to Fire Brigade Boards 5

Reinsurance Premiums 5

Financial Results 5

Financial and Statistical Statements

7

Appendices 8 - 13

(vii)

(viii)

INTRODUCTION

The Defence Service Homes Act 1918 makes provision for the grant of long-term low interest housing loans to eligible persons as defined in the Act. The principal purpose of the Scheme is to provide as a measure of repatriation and also as a reward for service, homes for persons who, as a result of service in the Forces, have been placed at a disadvantage relative to other members of the community in acquiring a permanent home.

The Defence Service Homes Act provides that all dwellings in which the Australian Housing Corporation, which is responsible for the administration of the Act, has an interest, shall be insured as prescribed against Are and prescribed risks for the benefit of the purchaser or borrower and the Corporation. Insurance in accordance with

the Act is compulsory for all purchasers and borrowers. The legislation was amended in 1948 to enable purchasers and borrowers, who have discharged their liability, to continue the insurance of their homes under the Act on a voluntary basis.

The Insurance Scheme is financed by premiums paid by Defence Service Homes purchasers and borrowers. Section 40 of the Act provides for an Insurance Trust Account to which shall be credited all monies paid to the Corporation as an insurer under the Act and to which shall be debited all insurance expenditure. All costs of administra­ tion are debited to the Trust Account.

1

SUMMARY OF OPERATIONS

A summary of insurance operations for the year ended 30 June 1975 with a comparison in respect o f the previous year is set out in the following table:

Sum insured at 30 June Number of homes insured Total sum insured ($ million) Average sum insured per home ($)

Income Interest on investments ($) Premiums received ($)

Claims Number of claims paid Total amount o f claims paid ($) Average claim paid ($) Average claim paid per house insured ($) Claim cost per $1,000 o f cover ($):

New South Wales Victoria Queensland (including Papua New Guinea) South Australia (including Northern Territory) Western Australia

Tasmania Australia Number o f claims paid in excess o f $2,000 Total losses during the year (number of homes) Claims outstanding at 30 June ($) Administrative Expenditure

Salaries ($) General Expenses ($) Average administrative cost per home insured ($) Contributions to Fire Brigade Boards Total sum contributed ($) Average contribution per home insured ($) Financial Total operating income ($) (on accruals basis) Total operating expenditure ($) (on accruals basis) Loss on realisation of investments ($) Surplus or Deficit in operations ($)

Balance in Defence Service Homes Insurance Trust Account at 30 June ($)

1973-74 1974-75

200,481 203,457

2,535 3,532

12,643 17,359

106,210 64,961

2,066,532 3,980,013

6,452 15,206

1,444,574 3,541,141

224 233

7.21 17.40

0.19 0.46

0.25 0.41

2.91 3.76

0.19 1.56

0.15 0.34

0.27 0.56

0.57 1.00

161 392

6 25

1,910,249 1,485,591

534,614 760,974

187,071 190,243

3.60 4.68

236,706 384,006

1.18 1.89

2,098,201 3,043,897

4,068,063 4,516,013

70,549

1,969,862 1,472,116

(deficit) (deficit)

1,503,337 486,212

2

RISKS INSURED AGAINST

The risks for which the property shall be insured are set out in section 38 of the Act and regulation 19 of the Defence Service Homes Regulations. The risks insured against are generally comparable with the risks normally covered in a house-owner’s comprehensive policy relating to the building. In addition, cover is provided against flood,

for which other insurers apply a special loading, and depredation by borers and white ants in the first two years after which the Corporation acquires an interest in the dwelling house, sonic boom and damage to gates and fences caused by storm and tempest for

which cover is not available from other insurers. Moreover, in the case of earthquake damage while most other insurers require the insured to pay the first $100 of any restora­ tion work, no such contribution is required under the Defence Service Homes Insurance Scheme.

AMOUNT OF INSURANCE

At 30 June 1975 insurance cover in the sum of $3,531,902,369 was provided in respect of 203,457 homes, including 16,546 homes where former purchasers or borrowers have repaid their loans and have elected to continue the insurance on their homes under the Scheme. The total sum insured at 30 June 1975 represented a sub­

stantial increase in the total sum insured of $2,535,000,000 covering 200,481 homes insured at 30 June 1974. The increase in the total sum insured was largely the result of special action taken during the year to update the amount of insurance cover on all

properties insured under the Scheme so that the sum insured reasonably reflected the full insurable value of the improvements having regard to existing home building costs.

PREMIUMS PAYABLE FOR INSURANCE

The Defence Service Homes Regulations authorise the Australian Housing Corporation to determine the amount payable for insurance. It has been normal industry practice to charge a premium for insurance based on a percentage of the sum insured. Investigations carried out some years ago of Defence Service Homes insurance claims experience established that this method did not reflect the true cost of providing insurance cover and the relative risk as between the various classes of insured properties.

Defence Service Homes premiums therefore are now compiled on the basis of a fixed amount to cover administration expenses, a fixed amount to cover claims up to $2,000, an amount for each $2,000 of cover to provide for larger claims and a further amount for each $2,000 of cover to provide a general reserve to meet catastrophies and bad years.

The premiums payable for insurance are determined each year after consultation with the Australian Government Actuary after taking into account the expected costs of administration in the ensuing year, the expected cost of claims and the amount o f the general reserve. At 30 June 1975 the premiums charged for insurance

under the Scheme were as follows.

3

$

Fixed Administration Charge 9.00

Fixed Claims Charge 7.10

Claims Charge per $2,000 o f Cover 0.46

Reserve Component per $2,000 of Cover 0.32

INCOME

Premium income increased from $2,066,532 for the year ended 30 June 1974 to $3,980,013 for the year ended 30 June 1975. The increase in premium income was due mainly to an increase in premiums effective from 1 July 1974, an increase of 2,976 in the number o f homes insured and an increase in the amount of insurance cover provided in respect of homes insured under the Scheme.

Income from investments fell from $106,210 for the year ended 30 June 1974 to $64,961 as a result of the realization of investments to meet claims.

CLAIMS

Total claims paid during the year amounted to $3,541,141 compared with $1,444,574 paid during the year ended 30 June 1974 and $748,931 paid during the year ended 30 June 1973.

The claims paid during 1974-75 included a further $1,600,000 paid out in respect of damage to homes in Queensland resulting from Cyclone ‘Wanda’. After allowing for the amount paid out in 1973-74 and a balance of some $60,000 to be paid in 1975-76 the total cost to the Insurance Fund in respect of this catastrophe is estimated at more than $2.4 million.

The claims paid included also a sum of $365,000 in respect o f tempest claims in New South Wales resulting from severe storms during 1974.

It is estimated that cyclone ‘Tracy’, which stmck Darwin in December 1974, will cost the Fund $1,420,000. Of this sum approximately $475,000 was paid during the year, leaving nearly $1 million to be met in 1975-76.

The year ended 30 June 1975 was the first year in which the risks insured against included the breakage of glass, sanitary fixtures and sinks, etc., and the claims expenditure resulting from this extension amounted to nearly $200,000.

ADMINISTRATION COSTS

Administration costs, which include the salaries of officers engaged in the administration of the Insurance Scheme and other general expenses associated with the Scheme, increased from $721,685 for the year ended 30 June 1974 to $951,217 for the year ended 30 June 1975. The increase in administration costs reflected the cost of processing a substantially larger number of claims, higher salary costs, higher superannuation contributions, etc.

4

CONTRIBUTIONS TO FIRE BRIGADE BOARDS

Contributions to Fire Brigade Boards increased from $236,706 for the year ended 30 June 1974 to $384,006 for the year ended 30 June 1975.

Set out below is a statement showing contributions made to Fire Brigade Boards in each State in each of the last two years.

1973-74 1974-75

$ $

N.S.W. 53,981 81,115

Victoria 69,423 124,942

Queensland 42,934 63,052

South Australia 17,348 31,178

Western Australia 43,548 80,014

Tasmania 9,472 3,705

Australia 236,706 384,006

REINSURANCE PREMIUMS

In order to protect the Fund against major catastrophies, reinsurance cover was taken out in February 1975, providing excess of loss cover of 95% of $2,500,000 in respect of any one loss or series of losses arising out o f any one event in excess of $1,500,000.

FINANCIAL RESULTS

The financial statements show that total operating expenditure of $4,516,013, including a loss on realization of investments, exceeded total operating income ($3,043,897) by $1,472,116. The financial soundness o f the Insurance Fund has been severely affected

by the flood damage claims resulting from cyclone ‘Wanda’ and by the tempest damage claims resulting from cyclone "Tracy’. These two catastrophies will cost the Insurance Fund an amount of nearly $4 million. Inflation has contributed to a deterioration of the position of the Insurance Fund through higher salary costs and increases in the cost of carrying out repairs.

To re-establish the financial soundness of the Fund, action has been taken to increase premiums for insurance and as a result premium income is expected to rise from the amount of $3,980,013 received during the year ended 30 June 1975 to an

5

amount of approximately $6 million in 1975-76. The anticipated increase in premium income in 1975-76 should ensure that the balance in the Fund is restored to a level in excess o f $ 1.5 million at 30 June 1976.

The following table gives details of insurance premiums received and expenditure in each State during the year.

Premium and Interest Receipts

Claims Paid

Other Expenditure Net

surplus or deficit for 1974-75

State Admin.

expenses

Contri­ butions to Fire Brigade Boards

Total Expendi­ ture

$ $ $ $ $ $

New South Wales 1,416,161 600,547 344,633 81,115 1,026,295 389,866 (surplus)

Victoria 1,138,226 397,376 265,547 124,942 787,865 350,361

(surplus)

Queensland 551,553 1,816,514 137,583 63,052 2,017,149 1,465,596

(deficit)

South Aust. (including NT) Western Australia

377,766

401,396

560,685

118,616

■ 87,738

94,274

31,178

80,014

679,601

292,904

301,835 (deficit) 108,492 (surplus)

Tasmania 93,622 47,403 21,442 3,705 72,550 21,072

(surplus)

Reinsurance premiums 125,000 125,000 125,000

Interest on Investments 76,063 76,063

Loss on Re­ alization of Investments 70,549 70,549 70,549

TOTAL 4,054,787 3,541,141 1,146,766 384,006 5,071,913 1,017,126* (deficit)

* After making appropriate adjustments in respect o f provisions for unexpired risks, outstanding claims, accruals, pre-payments etc., the net amount of deficit charged to the reserve was $1,472,116.

6

FINANCIAL AND STATISTICAL STATEMENTS

The following financial and statistical statements in respect of insurance operations under the Defence Service Homes Act are included as appendices to this report. The financial statements were submitted to the Auditor-General for report to the Minister in accordance with section SOB of the Act.

Appendix A Defence Service Homes Insurance Scheme Balance Sheet as at 30 June 1975

Appendix B Defence Service Homes Insurance Scheme Income and Expenditure Statement for Year ended 30 June 1975

Appendix C Risks Insured Against — Insurance Claims Paid

Appendix D Insurance Claims Paid Classified According to Type of Construction

Appendix E Number o f Insurance Claims 1974-7 5 Classified According to Amount Paid and Type o f Construction.

SEPTEMBER 1975

7

APPENDIX A

DEFENCE SERVICE HOMES INSURANCE SCHEME

BALANCE SHEET

AS AT 30 JUNE 1975

30 June 1974

$ $

606,611

1,969,862 dr 1,363,251 dr

1,032,148

1,910,249

219

1,579,365

LIABILITIES 30 June 1975

Accumulated Fund $ $

_ Surplus _ g ajance at beginning

' Deficit of year 1,363,251 dr

. Add DEFICIT Transferred from Income and Expendi­ ture State- ■ ; ment 1,472,116 dr 2,835,367 dr

Provision for unexpired risks 1,946,789

Provision for outstanding claims 1,485,591

Sundry creditors and accruals 1,872

TOTAL 598,885

ASSETS

1,124,603

350,000

28,734 1,503,337

61,640

14,206

182

1,579,365

Trust Account

. Investment - Commonwealth Government Securities (at cost) (Market value: 1974 $962270, 1975 $333492)

. Fixed Deposits

. The Trust Fund within the Commonwealth Public Account

Sundry debtors and prepayments

Accrued interest on investments

374,603

111,609

Cash on hand

TOTAL

486,212

109,384

3,103

186

598,885

J. T. R eynolds, D irector, F in an ce

C. E. S tenhouse,

M anager, C o rp o rate Planning & E valuation

APPENDIX B

DEFENCE SERVICE HOMES INSURANCE SCHEME

INCOME AND EXPENDITURE STATEMENT

FOR YEAR ENDED 30 JUNE 1975

1973-74 . INCOME 1974-75

$ $ $ $ '

2 ,0 6 6 ,5 3 2 P re m iu m s received 3 ,9 8 0 ,0 1 3

L ess - R e in su ran ce p rem iu m s 8 6 ,4 3 6

9 5 7 ,6 0 7 A d d - P rovision a t 1 Ju ly fo r

u n e x p ire d risks

1 ,0 3 2 ,1 4 8

1 ,0 3 2 ,1 4 8 L ess - P rovision a t 30 Ju n e

fo r u n e x p ire d risks 1 ,9 4 6 ,7 8 9

1 ,9 9 1 ,9 9 1 P re m iu m s earn ed 2 ,9 7 8 ,9 3 6

1 0 6 ,2 1 0

In c o m e fro m in v estm en ts in c lu d in g accruals 64 ,9 6 1

2 ,0 9 8 ,2 0 1 T O T A L O P E R A T IN G IN CO M E 3 ,0 4 3 ,8 9 7

EXPENDITURE

1 ,3 9 9 ,2 2 4 C laim s p aid 3,521,135

1 ,9 1 0 ,2 4 9 A d d - Provision a t 30 Ju n e for

o u tsta n d in g claim s 1,4 8 5 ,5 9 1

2 0 6 ,0 3 7 3 ,1 0 3 ,4 3 6 L ess - P rovision a t 1 Ju ly for

o u tsta n d in g claim s 1 ,9 1 0 ,2 4 9 3,09 6 ,4 7 7

7 2 1 ,6 8 5 • A d m in istra tiv e expenses 9 5 1 ,2 1 7

2 4 2 ,9 4 2

C o n trib u tio n s to F ire Brigade B o ard s (including p ro p o rtio n o f p re p a y m e n ts applicable to

c u rre n t year) 3 9 7 ,7 7 0

— L oss o n realisatio n o f in v estm en ts

70 ,5 4 9

4 ,0 6 8 ,0 6 3 T O T A L O P E R A T IN G E X P E N D IT U R E 4 ,5 1 6 ,0 1 3

1 ,9 6 9 ,8 6 2 O P E R A T IN G D E F IC IT 1 ,4 7 2 ,1 1 6

1 ,9 6 9 ,8 6 2

D E F IC IT T ran sfe rred to

A ccu m u lated

F u n d 1 ,4 7 2 ,1 1 6

J. T. R e y n o ld s, D irecto r, F in an ce

C. E. S ten h o u se ,

M anager, C o rp o rate P lanning & E valuation

9

APPENDIX B 1

DEFENCE SERVICE HOMES INSURANCE SCHEME

NOTES TO AND FORMING PART OF THE ACCOUNTS

The Defence Service Homes Insurance Scheme forms part of operations of Australian Housing Corporation conducted in accordance with the Defence Service Homes Act 1918 and Regulations. As moneys in the Defence Service Homes Insurance Trust Account form part of the Trust Fund within the Commonwealth Public Account,

assets and liabilities relating to the Insurance Scheme are not assets and liabilities of the Corporation.

10

APPENDIX C

Risks Insured Against - Insurance Claims Paid

$

Total Amount paid since inception $

Fire and lightning 878 267,203 1,006

Flood 799 . 768,342 833

Tempest 3,462 325,564 6,091

Other Risks:

464,395 4,114,571

1,647,166 2,664,436(1)

1,084,160 4,296,953(2) 2,205,924(3)

Bursting of Boilers etc. 206 18,164 256

Impact of Road Vehicles 488 23,006 774

Burglary and Housebreaking 311 11,283 373

Depredation - borers & white ants 15 2,730 31

Explosions 50 5,705 41

Earthquakes 129 16,901 20

Malicious Damage 59 2,472 120

Impact of Trees 53 2,293 57

Theft 19

Breaking of Glass 4,640

Breakage of Sanitary Fittings 763

Malicious Damage to Glass 158

Impact Other 1 895 22

Thunder 1 16 2

24,520 64,488 15,916 6,599

11,542 4,692 12,406 4,128

1,265 146,032 47,681 5,342

694 115

(1) Amount includes $2,361,416 in respect o f damage caused by floods in Queensland in January 1974.

(2) Amount includes $475,486 in respect o f damage caused by cyclone in Darwin on 24 December 1974.

(3) Details from inception not available. Amount includes $801,784 in respect o f damage caused by earthquake

Australia ta c S S b e ? " 968?n d Ο ^ Ϊ Ι μ » 2 ’” 2 “ " * PeCt ° f damage CaUS

APPENDIX D

Insurance Claims Paid Classified

According to Type of Construction

1 9 7 4 -7 5

No. Amount

Brick 1,901 189,764 4,644

Brick Veneer 1,263 341,780 3,091

Fibro, Conite, Stucco Pise and Plaster 977 168,542 2,471

Timber 2,218 703,600 4,792

Imitation Brick 4 251 16

Strata-Title Homes 2 937 1

Miscellaneous 87 36,702 191

504,064

449,225

690,400

1,768,012

2,340

63

127,037

APPENDIX E

Number of Insurance Claims 1974 — 75 Classified

According to Amount Paid and Type of Construction

Fibro Conite

Brick B-Veneer Stucco Timber Imit. S/ Misc. Total

Pise & Brick Title

Plaster

Under $100 3,900 2,494 1,944 3,487 11

$100-$199 409 310 282 540 3

$200—$499 214 172 124 288 1

$500-5999 66 44 33 113 0

$1000— 51999 25 27 36 106 1

$2000—$2999 12 15 7 85 0

$3000—$3999 7 10 13 47 0

$4000—$4999 3 4 7 38 0

$5000—$5999 3 3 7 31 0

$6000-56999 0 6 2 16 0

$7000 -57999 0 1 1 19 0

$8000 & Over 5 5 15 22 ■ 0

1 137 11,974

0 21 1,565

0 14 813

0 4 260

0 7 202

0 3 122

0 1 78

0 1 53

0 0 44

0 0 24

0 1 22

0 2 49

191 15,206

14

DEFENCE SERVICE HOMES ACT 1918

REPORT

OF OPERATIONS (OTHER THAN INSURANCE) IN RELATION TO

THE DEFENCE SERVICE HOMES SCHEME

FOR THE YEAR ENDED 30 JUNE 1975

15

16

CONTENTS

Page

Introduction 19

Summary o f Activities 20

Applications for Assistance under the Act 21

Applicants Assisted under the Act 24

Erection o f Homes 25

Existing Properties Financed 25

Acquisition of Land and Estate Development 26

Operations in Respect of Properties Subject 28

to a Contract of Sale, Mortgage or Other Security under the Act

Financial Operations 29

Legislation 35

Financial and Statistical Statements 33

Appendices 36-52

17

18

INTRODUCTION

The Defence Service Homes Scheme, for which provision is made in the Defence Service Homes Act 1918, was introduced in 1918 to provide, as a reward for service and as a measure of repatriation, homes for those who, as a result of service in the Forces, have been placed to a disadvantage relative to other members of the com­

munity in acquiring a permanent home.

Introduced originally to provide homes for persons with service in the 1914 - 18 War and certain female dependants of those persons, the Act was subsequently amended to extend the Scheme to persons with appropriate qualifying service in the 1939 — 45 War or in the war — like operations in Korea and Malaya.

An amendment to the Act in 1962 extended benefits to persons who served on ‘special service’ which involved service outside Australia at a time when the member was allotted for ‘special duty’ in a ‘special area’ as prescribed under the Repatriation (Special Overseas Service) Act. The prescribed areas for the purposes of that Act include Vietnam (Southern Zone); certain Vietnamese waters, and certain areas of Borneo, Sabah

and Sarawak, Malaysia and Singapore.

Prior to 7 December 1972 eligibility in respect of service in the Forces was, in general, based on a period of war service or a period of service abroad involving operational risks beyond those normally associated with peace-time service. In 1973 the Act was extended to include as an ‘eligible person’, a person who has served on contin­ uous full-time service as a member of the Defence Force, not being service that ended

before 7 December 1972, and, during that service, has whether before or after that date, completed three years’ effective full-time service as such a member. The Act was also amended to include as an ‘eligible person’ a person who was, immediately before 7 Dec­ ember 1972, a national serviceman or a national service officer, for the purposes of the National Service Act 1951 serving in the Regular Army Supplement and who, on or after

that date, completed the period of service in that Force for which he was deemed to have been engaged to serve or for which he was appointed, as the case may be.

The Defence Service Homes Scheme is a home ownership scheme, its main purpose being to provide loans for the purchase or erection o f homes. Subject to the provisions of the Act, a loan of up to $15,000 may be granted to an eligible person to buy a home or home unit or to build, complete or enlarge a home. Other benefits

include:

the opportunity to purchase land or land and a dwelling-house in a Defence Service Homes estate, at cost;

comprehensive insurance cover at a low premium on a home purchased or built under the Scheme; and

special assistance in certain circumstances to the widow or widowed mother of a deceased eligible person or the wife of an eligible person

19

who is temporarily or permanently insane, to help them meet outgoings on their homes.

SUMMARY OF ACTIVITIES

The following table summarises the main activities under the Act during the year compared with 1973-74.

1973 - 74 1974 - 75

Total number o f applications received (excluding applications for additional loans for extra accommodation, etc.) 15,758 14,823

Number of applications received for additional loans for extra accommodation, sewerage, etc. 2,633 2,448

Total number o f homes provided 8,462 9,052

Applicants assisted by transfers from existing purchasers, etc. 389 333

Total number of applicants assisted as shown in the two previous items 8,851 9,385

Number of additional loans granted for extra accommodation, sewerage, etc. 1,778 1,613

Total expenditure on provision of homes $102,000,000 $130,000,000

Average cost of each home provided $22,587 $25,740

Number of applicants who discharged their liability during the year 9,773 6,639

Number of homes subject to a mortgage or contract of sale under the Act 185,617 188,221

Total receipts (including Widows’ Relief $101,563,748 $92,421,567 repayments) Widows, etc. in receipt of assistance under the Widows’ Relief Scheme

at 30 June 515 459

20

a p p l ic a t io n s f o r a s s i s t a n c e u n d e r t h e a c t

Assistance Available

Subject to the provisions of the Act, assistance is available to an eligible person for the following purposes:

. to erect a dwelling-house.;

. to purchase or complete the purchase o f land and erect a dwelling- house thereon;

. to purchase an existing property;

. to complete a partially erected dwelling-house; and

. to enlarge a dwelling-house.

A full architectural service is available for the benefit of eligible persons.

Persons Eligible for Assistance

To be eligible for assistance under the Defence Service Homes Act a person:

. must be an ‘eligible person’ under the Defence Service Homes Act;

. must not already own a home or be the wife or husband of an owner of a home;

. must intend to use the dwelling-house as a home in which he and his dependants (if any) will usually reside; and

. must establish that he has an income which will enable him to meet the monthly repayments in respect of his loan as well as the other obligat­ ions in respect o f the property concerned, such as payment of rates and maintenance.

An ‘eligible person’ as defined in the Defence Service Homes Act, includes:

. members of the Australian Forces and Nursing Services enlisted or appointed for or employed on active service outside Australia or on a ship of war during the 1914-18 and 1939-45 Wars and, subject to the prescribed conditions, persons with service in Korea between 27 June

1950 and 31 August 1957 and Malaya between 29 June 1950 and 27 May 1963, or who have served on ‘special service’ as defined in the Repatriation (Special Overseas Service) Act 1962.

21

A person who has served on continuous full-time service as a member of the Defence Forces, not being service that ended before 7 December 1972, and during that service has, whether before or after that date, completed three years’ effective full-time service as such a member or who was engaged or appointed for a period of full-time service of not less than 3 years and whose service ended on or after 7 December 1972

by reason of death or discharge (in certain circumstances) on medical grounds before the completion o f 3 years’ service.

A person who was immediately before 7 December 1972 a national serviceman, or a national service officer for the purposes of the National Service Act 1951 serving in the Regular Army Supplement and who, on or after that date, completed the period of service for which he was deemed to have been engaged or appointed to serve, or whose service ended on or after 7 December 1972 by reason of death or his

discharge on medical grounds.

Certain1 "other persons such as the widow and, in some cases, the widowed mother of an ‘eligible person’; persons domiciled in Australia and ; employed in certain sea-going service during the 1914-18 and 193945 Wars; and subject to the prescribed conditions, a representative of an

approved welfare organisation who, on or after 3 September 1939, served overseas with the Australian Forces.

Applications Received for Assistance

The number of applications for assistance to build or purchase homes received during the year totalled 14,823. This was 935 less than the number of applicat­ ions received in 1973-74. '

The 14,823 applications received for assistance in 1974-75 consisted of (1973-74 figures in brackets) :

202 (183) based on service in the 1914-18 War;

6,476 (7,501) based on service in the 193945 War;

528 (410) based on service in Korea or Malaya;

4,267 (4,435) based on ‘special service’ as defined in the repatria­ tion (Special Overseas Service) Act 1962. This 3,808 (3,912) includes based on service in Vietnam;

3,350 (3,229) based on service as a ‘national serviceman’ or a ‘regular serviceman’ as defined in the Act.

22

The table below shows the number of applications received in each State for the various categories o f assistance for the 1974-75 year.

Type of Assistance NSW Vic Qld SA WA Tas ACT Aust

To Build 948 581 415 243 439 66 55 2,747

Purchase — New Homes 571 485 490 132 199 38 258 2,173

Previously Occupied Homes 2,218 1,735 1,177 691 910 257 270 7,258

Discharge of Mortgage 437 504 456 176 235 76 27 1,911

Transfer and resale 187 101 72 52 68 7 6 493

To purchase homes built under the Housing Agreements with the States 50 128 45 18 241

Sub-Total 4,411 3,534 2,655 1,294 1,869 444 616 14,823

Additional accommodation etc. 1,014 618 274 165 325 33 19 2,448

Total 5,425 4,152 2,929 1,459 2,194 477 635 17,271

NOTE: Figures for New South Wales include three applications from Norfolk Island (to build — 2; to buy previously occupied home — 1); figures for South Australia include 29 applications from the Northern Territory (to build - 6; to buy new — 9; to buy previously occupied homes — 13; to discharge

a mortgage — 1).

Since the inception of the Scheme on 6 March 1919, to 30 June 1975, 607,120 applications for assistance to build or purchase homes have been received. Of this number 356,139 have been approved, 242,647 have been refused or withdrawn for various reasons, and 8,334 were still pending at 30 June 1975.

The number pending at 30 June 1975 represents applications which were in the course of being dealt with at 30 June 1975 or which were deferred for various reasons.

23

APPLICANTS ASSISTED UNDER THE ACT

As previously mentioned in this Report, 9,385 applicants were assisted to acquire a home during the year compared with 8,851 assisted in 1973-74.

In addition, 1,613 existing purchasers and borrowers were granted further assistance for the provision of essential extra accommodation or for the installation of approved utility services. The total expenditure in respect o f additional assistance for 1974-75 was $2,700,294 compared with an expenditure of $1,934,615 in 1973-74.

The following table shows the number o f eligible persons granted assistance in each State during each of the last two years and the total number who have received assistance since the inception o f the Scheme in 1919.

State 1973-74 1974-75 Inception to

30 June 1975

New South Wales 2,587 2,576 116,789

Victoria 2,440 2,303 103,462

Queensland 1,551 1,635 51,246

South Australia 804 873 34,849

Western Australia 825 1,322 35,083

Tasmania 292 256 9,143

Australian Capital Territory 337 407 2,618

Northern Territory 14 10 150

Papua New Guinea 31

Norfolk Island 1 3 11

Total 8,851 9,385 353,382

Of the total number of eligible persons who received assistance in 1974-75, 765 persons were assisted to purchase a strata-title home unit, making a total of 7,484 eligible persons throughout Australia who have been assisted in this way since strata-title legislation providing for an acceptable separate title was first introduced in New South Wales in 1961.

24

ERECTION OF HOMES

Details of building activities under the Defence Service Homes Act for the year ended 30 June 1975 are given below, together with the corresponding figures for 1973-74.

1973-74 1974-75

Building contracts signed 1,051 1,365

Homes completed 715 1,244

Homes under construction including contracts let — work not started at the close of the year 935 1,138

The building contracts signed during 1974-75 included contracts providing for the construction of 502 homes in Defence Service Homes estates under the group building scheme.

Particulars of the average cost of homes erected under the Act during the year, including the average cost of lots on which the homes were erected, are given in Appendices H and J. Appendix K shows the average cost of all homes built or financed under the Act during 1974-75.

EX IST IN G P R O P E R T IE S F IN A N C E D

In 1974-75, 7,620 existing properties were 7,579 in 1973-74. Details relating to the properties financed as compared with are set out hereunder:

New Homes Financed —

Homes erected with temporary finance under pre-arranged

1973-74 1974-75

discharge of mortgage method 1,295 1,713

Homes purchased

Previously occupied homes financed —

1,689 1,568

Mortgages discharged 61 67

Homes purchased 4,534 4,272

Total , 7,579 7,620

25

ACQUISITION OF LAND AND ESTATE DEVELOPMENT

It has been the practice since the inception of the original War Service Homes Scheme to acquire areas of land in broad acres for the erection of homes. After roads and other services have been provided, the land is used for group building or is made available to eligible persons for the erection of individual homes to their own design. All land made available in this way is allotted to eligible persons at the capital cost plus interest at the rate chargeable under the Act.

During 1974-75 a total of 256.90 hectares of undeveloped land was acquired and the land restocking program, which was commenced in 1970, was comple­ ted for all States except New South Wales. The land acquired was located as follows:

New South Wales

Helensburgh Rouse Hill Dapto Adamstown Heights

Victoria

Craigieburn 132.00 hectares

Queensland

Thomlands 27.55 hectares

South Australia

Gawler Parafield Gardens

15.38 hectares 14.16 hectares

Western Australia Teeming 16.60 hectares

A further 154 fully developed sites were acquired at Wantirna, Victoria (122), Sunnybank, Queensland (24) and Panorama, South Australia (8).

As a result of the vigorous land re-stocking program which was undertaken, land holdings, which at 30 June 1970 were capable of yielding approximately 2,000 lots, were sufficient at 30 June 1975 to yield an estimated 1 1,728 lots. These lots were distributed as follows:

3.64 hectares 25.33 hectares 20.22 hectares 2.02 hectares

New South Wales Victoria Queensland

2,681 3,711 2,481

South Australia Western Australia Tasmania

1,120 1,407 328

At 30 June 1975 there were 50 Defence Service Homes estates in various stages of planning and development and during the year contracts were let for the constmction of a total of 502 group homes, compared with 114 and 250 in 1972-73 and 1973-74 respectively.

The following is a brief summary of estate development activities during the year.

New South Wales

Construction o f houses to complete the final sections of estates at North Rocks and Mount Druitt comprising 561 lots proceeded and both estates will be fully completed in 1975-76. Design and documentation was also carried out in respect of estates at Coniston (64 lots), Adamstown Heights (77 lots), Campbelltown (194 lots) and a medium-density development of 66 courtyard homes at Bankstown.

Victoria

Development continued in respect of estates at Seaford, Wantima and Wheeler’s Hill and contracts for the provision o f roads and services and the constmction of homes on these estates are proceeding satisfactorily. The sub-divisional plans make provision for the construction o f 643 homes on the estates. Planning was commenced in

relation to the development of estates at Dandenong North and Mooroolbark which will provide 540 residential lots.

Queensland

The provision of roads and services to an estate at Boondall was completed during the year and contracts were let for the construction of 80 group homes on the estate which will ultimately comprise 187 homes. In addition, the development of estates at Wishart and Runcorn was commenced during the year. The sub-divisional plans make provision for 275 residential lots which will be available for the construction of houses in 1975-76.

South Australia

Contracts were let for the construction of 36 group homes on an estate at West Lakes which, when fully developed, will comprise 137 homes. The construction of roads and the provision of associated services was commenced on an estate at Modbury Heights which will yield 93 lots. These are expected to be available for the construction

of homes in 1975-76.

27

Western Australia

Contracts were let for a further 28 homes on an estate at Greenwood which, when fully developed, will comprise 126 homes. The construction of roads and the provision of associated services in respect o f an estate at Karawarra was commenced during the year. The sub-divisional plan for this estate is based on the Radburn principle

and makes provision for 96 residential lots with the majority of houses having a direct frontage to public open space. Planning for the development of estates at Duncraig and Hamersley, which will yield 500 building lots, was completed during the year and the provision of roads and associated services on the Hamersley estate will be commenced early in 1975-76.

Tasmania

In 1973 an elevated piece of land commanding superb water and mountain views was acquired at Kingston, some 16 kilometres south of Hobart. Planning in relation to the development of this estate was commenced during the year. It is estimated that the estate will yield sites for approximately 300 housing units. The estate will be ; developed in stages and the first lots are expected to be available for construction of houses by early 1976.

OPERATIONS IN RESPECT OF PROPERTIES SUBJECT TO A CONTRACT OF SALE, MORTGAGE OR OTHER SECURITY UNDER THE ACT

These operations cover the accounting action in respect of homes provided and advances made under the Act, arrears action, sale of reverted homes, proposals to raise second mortgages, requests for reduction in instalments payable, administration of the Widows’ Relief Scheme, discharge of liability and a wide variety of other matters in respect of 188,221 homes subject to the Act at 30 June 1975. Comments in this

report have been restricted to the most important of these matters.

Relief Scheme for Widows and Certain Other Persons

The Defence Service Homes Act contains provision whereby the Minister may reduce the instalments payable by a widow, or the wife of an eligible person who is temporarily or permanently insane, where, in the Minister’s opinion, payment of the full amount of the instalment could cause hardship. Provision also exists for the payment of the cost of repairs, rates, taxes and other outgoings on the property.

The Relief Scheme was established to assist widows who, as a result of a considerable reduction in the family income upon the death of the husband, are experiencing hardship in meeting the payment of instalments and other outgoings in respect of loans granted to their husbands. The assistance granted to a widow as relief becomes a charge upon the property. Repayment is not ordinarily required while the widow continues to occupy the home, unless there is a substantial improvement in her

financial position, but the amount of relief is repayable on the sale of the home or on

28

the death of the widow. Where a debt for relief proves to be irrecoverable either because there are insufficient assets in the estate from which the debt can be paid or for any other reason, the debt may be written off.

At 30 June 1975, 459 widows and other eligible persons were in receipt o f assistance under the Scheme. This was 56 less than the number at 30 June 1974.

Direct expenditure under the Relief Scheme during the year 1974-75 totalled $108,884. In addition, relief from the payment o f instalments was granted to the extent o f $22,576, bringing the total cost to $131,460 compared with $107,431 in 1973-74. After allowing for repayments o f relief previously granted amounting to

$92,857, the net cost of relief in 1974-75 was $38,603 and the net amount owing at 30 June 1975 was $1,377,476 including $282,797 by way o f direct reduction of instalments otherwise payable.

Details of the number o f persons granted relief and the cost involved since the inception of the measure in 1935 to 30 June 1975 are shown in the following table.

States

Number of persons granted

relief

Net Cost o f Relief

Instal­ ments

$

Rates, Taxes, etc. $

Mainten­ ance

$

Road making, Sewerage $

Total

$

New South Wales 1,179 160,043 117,446 119,614 34,816 431,919

Victoria 928 166,978 144,912 141,548 103,248 556,686

Queensland 318 35,362 40,880 54,983 11,783 143,008

South Australia 277 25,234 32,583 23,177 856 81,850

Western Australia 385 93,357 38,929 19,670 151,956

Tasmania 39 5,497 3,093 3,412 55 12,057

Australia 3,126 486,471 377,843 362,404 150,758 1,377,476

FINANCIAL OPERATIONS Arrears o f Instalments

The position in respect of the payment of instalments continued to be generally satisfactory. Arrears of instalments decreased from $621,252 at 30 June 1974

29

to $567,968 at 30 June 1975. The average arrears per account at 30 June 1975 in each State was as follows.

New South Wales and A.C.T.

$

2.98

Victoria 3.69

Queensland 3.20

South Australia 1.80

Western Australia 2.05

Tasmania 2.62

Northern Territory 55.26 (a)

Papua New Guinea 54.64 (b)

(a) The high average of arrears is associated with the large number of homes rendered uninhabitable by cyclone ‘Tracy’.

(b) There is only one serious arrears case - the average is high because of the small number (7) of accounts involved. ;

The number of cases in which it was necessary to exercise powers under the Act for default decreased from 18 in 1973-74 to 8 in 1974-75. A total of 15 reverted homes were resold during the year and at 30 June 1975,7 reverted homes were still to be sold compared with 14 at 30 June 1974. These homes are being sold as the opportunity

arises.

Homes Subject to a Mortgage or Contract o f Sale under the Act

During the year, 6,639 applicants discharged their liability and the number o f homes remaining subject to the Act increased from 185,617 at 30 June 1974 to 188,221 at 30 June 1975.

Loan balances outstanding at 30 June 1975 amounted to $1,053,816,326. This figure does not include expenditure on items such as works still in progress. Details in respect of each State of the number o f homes provided, the number of loans repaid, and the number of homes still subject to the Act are given in the following statement.

30

State

Homes provided (including homes under construction,

contracts let and approved building applications where security

taken)

Loans Repaid

Total Percentage

to homes provided

Homes still subject to Act (including homes under

construction, contracts let, approved building

applications where security taken and reverted homes)

New South Wales 109,491 44,886 41.0 64,605

Victoria 96,679 41,63l(a) 43.1 55,048

Queensland 46,178 19,699 42.7 26,479

South Australia 31,970 14,968 46.8 17,002

Western Australia 32,444 13,947 43.0 18,497

Tasmania 8,391 3,907 46.6 4,484

Australian Capital Territory 2,571 549 21.4 2,022

Northern Territory 146 79 54.1 67

Papua New Guinea 31 24 77.4 7

Norfolk Island 11 1 9.1 10

Total 327,912(b) 139,691 42.6 188,221

(a) Includes 264 homes retained by the Victorian State Savings Bank upon ceasing to operate for the Commission in 1932.

(b) Includes 954 under constmction, 184 contracts let - work not yet started, 29 securities taken, and 3,299 homes taken over under the Housing Agreements with the States.

31

Capital Expenditure

An amount o f $130,000,000 was appropriated for expenditure on Defence Service Homes in 1974-75. This sum was expended as follows:

1973-74 1974-75

$ $

Homes built under the Act 7,999,201 22,171,304

Purchase o f previously occupied homes 51,826,034 55,043,215

Purchase of new homes 19,479,266 20,101,110

Homes built under prearranged discharge o f mortgage scheme, etc. 15,003,039 21,881,716

Miscellaneous expenditure on main­ tenance of homes, provision of additional accommodation, purchase and development o f land, etc. 7,692,460 10,802,655

Total 102,000,000 130,000,000

The total capital expenditure under the Defence Service Homes Act from the inception of the Scheme to 30 June 1975 was $1,798,076,297. The total expenditure in each State during each of the last two years and from the inception of the Scheme to 30 June 1975 is as follows.

State

1973-74 1974-75 Inception to

30 June 1975

$ $ $

New South Wales 30,170,944 37,925,000 618,246,831

Victoria 27,149,056 32,250,000 524,711,358

Queensland 17,400,000 22,785,000 250,840,700

South Australia 10,580,000 12,000,000 162,395,009

Western Australia 9,499,999 16,400,000 176,087,250

Tasmania 3,200,001 3,220,000 44,147,869

Australian Capital Territory 4,000,000 5,420,000 21,647,280

Total 102,000,000 130,000,000 1,798,076,297

33

Receipts

Monies received during the year and paid into the Consolidated Revenue Fund totalled $92,421,567 made up as follows.

Instalments - Principal and Interest $ 91,393,318

Rents from properties let or leased 25,994

Repayments of advances made for Utility Services 20,502

Proceeds from sales of land 15,917

Recoveries - Technical and legal fees 863,886

Repayments - Widows’ Relief Scheme 92,857

Miscellaneous receipts 9,093

Total 92,421,567

Principal and interest receipts included $27,931,339 in respect of liabilities discharged on properties subject to the Act before the end of the repayment period. Receipts since the, inception of the Scheme to 30 June 1975, including interest paid on relief expenditure, having now reached a total of $1,372,162,710.

Excess Payments Credits

There is provision in the Act for purchasers or borrowers to make payments in excess of those required by their contract of sale or mortgage. Such payments are credited to the purchaser or borrower and earn interest at 3.75 per cent per annum.

Excess payments accumulated to the credit of a purchaser or borrower may be applied to discharge his liability earlier than provided in the contract of sale or mortgage, when the accumulated amount equals the capitalised value of the whole of the existing and future liability of the purchaser or borrower.

In addition, excess payment credits may be utilised for the purpose of meeting the payment of any instalment. The excess payment credits may also be made available on request by a purchaser or borrower to assist him in meeting the cost of carrying out repairs and improvements to the property and 9,667 requests were received and dealt with during the year.

34

At 30 June 1975, 124,450 accounts representing 67 per cent of accounts, throughout Australia, showed excess payment credits, and the total amount of excess payments accumulated to the credit o f purchasers and borrowers was $24,267,125.

LEGISLATION

During the year the Defence Service Homes Act 1918 was amended by the Defence Service Homes Act 1974. The principal changes effected by the legislation, which came into operation on 6 December 1974, were as follows:

. an increase in the maximum loan to $15,000;

. extension o f eligibility to single and widowed ex-servicemen and male members of the Forces who have the necessary qualifying service but who do not have dependants for whom it is necessary for them to provide homes;

. widening of the definition of ‘Holding’ to include a lease on Norfolk Island, granted by Australia or the Administration of the Territory, for a term o f not less than 28 years;

. an increase in the rate of interest to 7.25 per cent per annum on that portion of a loan which is in excess of $12,000 or on any additional assistance granted to an existing purchaser or borrower;

. provision for the granting of relief for persons paying the higher rate of interest where it would cause hardship if they were required to pay full amount of the instalment;

. provisions to facilitate the transfer of the balance of an existing loan from one home to another where a borrower, for reasons beyond his control, is compelled to move from his Defence Service home.

The Defence Service Homes Act was also amended during the year by the Australian Housing Corporation Act 1975. The principal changes effected by these amendments were the transfer of responsibility for the execution of the Defence Service Homes Act from the body corporate which previously existed under the name of the

Director o f Defence Service Homes, to the Australian Housing Corporation and the transfer of all the assets and liabilities of the Director to the Corporation. These changes came into operation on 24 June 1975.

FINANCIAL AND STATISTICAL STATEMENTS

Financial and statistical statements in respect of operations (other than insurance) under the Act are included as Appendices to this Report.

35

APPENDIX A

AUSTRALIAN HOUSING CORPORATION

STATEMENT OF ASSETS & LIABILITIES

AS AT 30 JUNE 1975

In respect of operations under the Defence Service Homes Act other than Insurance

LONG TERM L IA B IL IT IE S

NOTES $ $

A m o u n ts ow ing to C o m m o n w ea lth on C ap ital 2 1 ,1 1 3 ,1 1 4 ,6 0 9

Provision fo r P ro p e rty R ectificatio n 5 1 ,2 5 1 1 ,1 1 3 ,1 6 5 ,8 6 0

C U R R E N T L IA B IL IT IE S

D eposits T rust and O th e r M oneys 3 9 4 4 ,6 7 8

T rade C re d ito rs 4 2 2 5 ,9 4 1

O th e r C re d ito rs an d A ccruals 5 1 ,0 0 9 ,8 5 4 2 ,1 8 0 ,4 7 3

1 ,1 1 5 ,3 4 6 ,3 3 3

LONG TERM ASSETS

C apitalised F o rm a tio n C osts 5 9 ,5 0 0

P ersonal L oans 6 1 ,0 2 9 ,8 6 5 ,0 8 2

Progress P ay m en ts o f Loans 7 2 ,2 2 5 ,4 6 8

In v en to ries - L and and Btlildings 8 1 8 ,4 8 2 ,2 6 6

A dvances to S ta tu to ry A u th o ritie s 1 38,657 1 ,0 5 0 ,7 7 0 ,9 7 3

C U R R E N T ASSETS

P ersonal Loans 9 2 1 ,7 1 6 ,0 0 0

A dvances to S ta tu to ry A u th o rities 9 6 0 ,6 2 2

Work in Progress 10 1 2 ,844,551

A cco u n ts Receivable M iscellaneous

11 4 ,3 1 5 ,8 8 7

8,595

Cash o n hand and at Bank 2 5 .6 2 9 ,7 0 5 6 4 ,5 7 5 ,3 6 0

1 ,1 1 5 ,3 4 6 ,3 3 3

J . T . R ey n o ld s.

D irecto r. I inance

C, E. Stenhuu.se.

M anager. C o rp o rate Planning & E valuation

APPENDIX B

AUSTRALIAN HOUSING CORPORATION

STATEMENT OF RECEIPTS & PAYMENTS

FOR YEAR ENDED 30 JUNE 1975

In respect of operations under the Defence Service Homes Act other than Insurance

1973 -7 4 RECEIPTS NOTES 1974-7 5

$ $ $ $

102,000,000

Funds advanced by the Commonwealth for the provision of Defence Service Homes 130,000,000

Funds advanced by the Commonwealth for the provision of Housing Assistance 25,000,000

102,000,000

Funds provided by the Commonwealth as Refunds and Advances of moneys previously

paid to the Consolidated Revenue Fund 1,120,361 156,120,361

100,857,140 Instalments — Principal

& Interest

91,393,318

Other -

13,776 Rent from properties let

or leased

25,994

10,190

Repayments of advances made for the provision of utility services 20,502

143,132 Proceeds from the sale

of land

15,917

442,561 101,466,799 Miscellaneous 872,979 92,328,710

Widows’ Relief Scheme —

69,124 Funds advanced by the

Commonwealth

108,884

96,949 166,073 Repayments of

assistance

92,857 201,741

1 203,632,872 TOTAL RECEIPTS 248,650,812

37

PAYMENTS

7,999,201 51,826,034

19,479,266 15,003,039

7,692,460

- 102,000,000

69,124

101,563,748

203,632,872

203,632,872

1. T. R eynolds. D irecto r, F inance

Expenditure on the provision o f Defence Service Homes:

Erection o f homes Purchases o f previously occupied homes Purchases o f new homes Discharges o f pre­ arranged mortgages Miscellaneous expc. ture on maintenance of homes, provision o f additional, accommoda­ tion purchase and development o f land, etc.,

Payments and Advances made from moneys pre­ viously credited to the Consolidated Revenue

Fund

Expenditure under Widows’ Relief Scheme

Payments to Consolidated Revenue Fund 12

Payment made in estab- 13

lishing the Corporation

TOTAL PAYMENTS

UNEXPENDED FUNDS

22,171,304

55,043,215 20,101,110

21,881,716

10,802,655

1,120,361 131,120,361

108,884

91,732,362 59,500

223,021,107

25,629,705

248,650,812

C. E. Stenhouse,

Manager, Corporate Planning & Evaluation

38

APPENDIX C

NOTE 1:

NOTE 2:

AUSTRALIAN HOUSING CORPORATION

NOTES TO AND FORMING PART OF THE ACCOUNTS

These Statements have been prepared pursuant to section SOB of the $ Defence Service Homes Act 1918 and section 48 of the Australian Housing Corporation Act 1975. The provisions of the Australian Housing Corporation Act came into operation from 24 June 1975. Comparative figures for 1973 -7 4 in the Statement o f Assets and

Liabilities are not shown because of changes in the form of presenta­ tion of the Statements which were made with the objective of com­ plying with accounting principles generally applied in commercial practice as required by section 45 of the Australian Housing Corpora­ tion Act. Because of the limited period o f operation o f the Act in this year, it was not practicable by retrospectivity recasting the accounts for the form of presentation to disclose fully the results of the year’s operations in accordance with accounting principles generally applied in commercial practice. Prior to the establishment of the Corporation, expenses incurred in administering the Defence

Service Homes Scheme during 1974-75 (and 1973-74) were met from administrative appropriations for the former Department of Housing and Housing and Construction.

AMOUNTS OWING TO THE COMMONWEALTH ON CAPITAL

Opening Balance

ADD

Funds advanced by the Commonwealth for the provision of Defence Service Homes

Funds advanced by the Commonwealth for the provision of Housing Assistance

Interest charged by the Corporation on outstanding loan balances

Refunds and Advances of moneys previously paid to the Commonwealth of Australia

Funds advanced by the Commonwealth for the provision of assistance under the Widows’ Relief Scheme

Liabilities transferred from State Housing Authorities in respect of homes built under the Commonwealth/State Housing agreements

Fees charged to applicants in respect of technical and legal services

Profit on sale of land

Profit on sale o f house property

Miscellaneous earnings and recoveries

1,006,573,557

130,000,000

25,000,000

38,870,805

1,120,361

108,884

2,007,298

1,136,701

17,516

4,239

9,128

1,204,848,489

CONT’D

39

LESS

Payments to Commonwealth o f Australia of

Instalments - Principal & Interest Rents from properties let or leased Repayments of advances made for utility services Proceeds from sale of land

Recoveries - Technical and legal fees Repayments - Widows’ Relief Scheme Miscellaneous Receipts

90,775,488 25,994 20,502 15,917 792,511

92,857 9,093

91,732,362

Bad debts for interest, fees, etc. 1,010

Miscellaneous losses 508

91,733,880

Closing Balance 1,113,114,609

NOTE 3: DEPOSITS TRUST AND OTHER MONEYS

Deposits and fees

Personal Loan 468,263

Individual Construction 216,236

Additions 22,459

Mortgagors and Transferors Equity 227,283

Miscellaneous 10,437

Closing Balance 944,678

NOTE 4: TRADE CREDITORS

S ettlem en t Retention Moneys 225,941

NOTE 5: OTHER CREDITORS AND ACCRUALS

Interest on Commonwealth Advances

Interest on Commonwealth Advances was not paid by the Corporation for the period 24-30 June 1975 as the determination of interest for the period was not made until after 30 June 1975. (refer Note 11.)

1,009,854

NOTE 6: PERSONAL LOANS (LONG TERM)

1st MORTGAGE ELIGIBLE

Opening Balance 986,114,456

Loans completed in the year 113,501,054

State Housing Authority transfers

Second and Subsequent Assistance (Special Appropriation

2,007,298

Section 39 AB) 194,905

Excess credits (Special Appropriation Section 39 A2) 925,455

Principal repayments 52,655,435cr

Closing Balance 1,050,087,733

NOTE 7:

NOTE 8:

NOTE 9:

NOTE 10:

NOTE 11:

NOTE 12:

1st MORTGAGE INELIGIBLE (SECTION 48D)

Opening Balance Loans completed in the year Principal repayments

Closing Balance

WIDOWS’ RELIEF

Opening Balance Instalments Rates Repairs

Insurance Roadmaking and Sewerage costs Interest Repayments

Closing Balance

LESS Transfers to Personal Loans (Current)

Closing Balance

PROGRESS PAYMENTS OF LOANS

Individual Construction Other (including Additions)

Closing Balance

INVENTORIES - LAND AND BUILDINGS

Land for development or resale — broadacres Reverted property

Closing Balance

Balance includes a component for sale during the forthcoming year

PERSONAL LOANS & ADVANCES TO STATUTORY AUTHORITIES

These amounts represent repayments due to the Corporation in the ensuing year.

The balance of Work in Progress at 30 June 1975 includes the cost of developed property, some of which is expected to be sold in the forthcoming year.

ACCOUNTS RECEIVABLE

Interest accrued from beneficiaries

Interest subsidy from Commonwealth

Closing Balance

PAYMENTS TO CONSOLIDATED REVENUE FUND

This item represents the payment to Consolidated Revenue Fund of all moneys received by the Corporation under the Defence Service Homes Act 1918 not being payments that are required by

430,079 2,700 34,109ci

398,670

1,085,815 4,243cr 32,022 48,482

6,779 3,636 15,045

92,857cr

1,094,679

21,716,Q00cr

1,029,865,082

$

1,946,418 279,050

2,225,468

18,458,376 23,890

18,482,266

3,306,033

1,009,854

4,315,887

41

Section 40 to be credited to the Defence Service Homes Insurance Account.

NOTE 13: PAYMENT MADE IN ESTABLISHING CORPORATION

This item represents the payment of the costs incurred as a consequence of the vesting in the Corporation o f assets previously in the name o f the Director of Defence Service Homes.

42

SUMMARY OF OPERATIONS FROM 1 JULY 1974 TO 30 JUNE 1975.

Excluding operations in respect of homes built under the Housing Agreements with the States.

Homes placed under

Number of Number of construction

Applications Applications ----------------------------

State received approved

Ordinary Group Total

APPENDIX D

New South Wales 4,358 2,685 326 204 530

Victoria 3,406 2,555 136 98 234

Queensland 2,610 1,712 112 95 207

South Australia 1,265 900 63 42 105

Western Australia 1,851 1,357 183 28 211

T asmania 444 264 12 12

Australian Capital Territory 616 475 31 31

Northern Territory 29 9 2 2

Papua New Guinea

Norfolk Island 3 2

TOTAL 14,582 9,959 865 467 1,332

Homes remaining under construction at 30.6.75.

Ordinary Group Total

178

72

46

42

75

11

14

1

221

110

109

47

28

399

182

155

89

103

11

14

1

439 515 954

APPENDIX D contd..

State

Homes completed

Homes Mortgages

purchased discharged

Ordinary Group Total

Transfers and resales

Dual Homes

assistance enlarged

New South Wales 370 83 453 1,498 399

Victoria 192 36 228 1,429 506

Queensland 109 25 134 1,062 338

South Australia 45 53 98 558 180

Western Australia 211 10 221 763 257

Tasmania 5 5 190 54

Australian Capital Territory 22 22 333 41

Northern Territory 1 1 6 3

Papua New Guinea

Norfolk Island 1 2

133

54

41

37

60

5

3

49

9

10

2 2

2

8

333 80

Notes', (a) Applications approved includes a number of pending applications carried forward from the previous year,

(b) The Transfers and Resales do not include two transactions in respect of civilian purchasers.

APPENDIX E

SU M M A R Y O F O P E R A T IO N S FRO M IN CEPTION TO 3 0 JU N E 1975

Excluding operations in respect o f homes built under the Housing Agreements with the States

Building Applications

Number Number "

o f o f Approved Tenders called- Contracts le t - Homes under

State applications applications tenders Not finally dealt with Work not yet started construction

received approved not yet

called Ordinary Group Total Ordinary Group Total Ordinary Group Total

New South Wales 212,682 115,699 34 33 86 119 37 38 75

Victoria 163,234 103,542 11 16 82 98 68 68

Queensland 83,886 51,380 11 19 19 18 4 22

South Australia 57,660 34,899 9 9 3 . 3

Western Australia 61,290 35,196 27 1 1 16 16

Tasmania 19,366 9,188

Australian Capital Territory 3,921 2,691 3

Northern Territory 392 155

Papua New Guinea 77 31

Norfolk Island 25 12 1

178

72

46

42

75

11

14

1

221 399

n o 182

109 155

47 89

28 103

11

14

1

>n Ί "

APPENDIX E Cont...

A rrears Average

o f a m o u n t

H o m es in sta lm e n ts o f

enlarged at 30 J u n e arrears

1975 per

acc o u n t

$ $

N ew S o u th W ales 2 8 ,3 8 5 3 ,6 2 3 3 2 ,0 0 8 6 0 ,3 5 2 14,361 7 ,7 9 0 19 4 0 6

V ic to ria 2 0 ,4 8 7 2 ,1 6 3 2 2 ,6 5 0 5 6 ,3 7 0 16,475 7 ,0 3 3 56 174

Q u e e n sla n d 1 1 ,4 9 5 1,113 12 ,6 0 8 28,301 4 ,7 3 3 5 ,2 5 2 14 136

S o u th A u stra lia 1 0 ,7 7 6 1 ,3 4 6 12 ,1 2 2 15 ,9 8 3 3 ,5 5 3 2 ,9 7 5 17 41

W e ste rn A u stra lia 1 1 ,4 1 2 3 ,3 1 4 1 4 ,7 2 6 1 2 ,4 4 0 4 ,7 0 4 2 ,7 5 8 12 61

T asm an ia 2 ,6 5 2 525 3 ,1 7 7 4 ,1 0 6 1 ,070 76 3 5 22

A u stra lia n C a p ita l T e rr ito ry 3 7 0 28 39 8 1 ,918 2 1 3 61 28

N o r th e rn T e rr ito ry 34 3 4 56 53 5 2

P a p u a N ew G u in e a 3 3 . 6 21 1

N o rfo lk Islan d 5 5 4 2

T O T A L 8 5 ,6 1 9 1 2 ,1 1 2 9 7 ,7 3 1 1 7 9 ,5 3 6 4 5 ,1 8 5 2 6 ,6 3 7 123 871

1 97,363 2.98

2 0 2 ,3 9 5 3 .6 9

8 4 ,4 0 5 3 .2 0

3 0 ,4 6 3 1.80

3 7 ,6 3 4 2.05

1 1 ,7 3 4 2 .6 2

* *

3 ,5 4 2 5 5 .2 6

383 5 4 .6 4

* *

5 6 7 ,9 6 8 3 .0 4

(a ) T h e T ra n s fe rs an d R esales sh o w n ab o v e d o n o t in c lu d e 6 ,901 tr a n s a c tio n s in respect o f C ivilian P u rch asers.

( b ) A p p lic a tio n s a p p ro v e d ( 3 5 2 ,7 9 3 ) d o n o t in c lu d e 75 h o m e s e re c te d s h o rtly a fte r in c e p tio n o f o p e ra tio n s u n d e r th e D efence Service H om es A ct and

sold o n th e o p e n m a r k e t; 4 G r o u p H o m e s c o m p le te d ; 1 h o m e p u rc h a se d ; 5 1 5 G r o u p H o m es u n d e r c o n s tru c tio n ; an d 168 G ro u p H o m es for w hich

te n d e r s h ad b e e n called a t 3 0 J u n e 1975 b u t h ad n o t b e e n a llo tte d at th a t d a te .

(c ) A p p lic a tio n s a p p ro v e d ( 3 5 2 ,7 9 3 ) in c lu d e 2 ,0 4 4 cases 1 ,437 for p u rc h a se o f ex is tin g p ro p e rtie s ; 4 7 2 to disch arg e m o rtg ag es; I 15 tran sfers and resales, 1 d u a l assista n ce an d 19 to en larg e h o m e s a p p ro v e d b u t n o t s e ttle d at 30 J u n e 1975 w h ich are n o t show n ab o v e.

* In c lu d e d in N .S.W .

SO

a p p e n d i x f

SUMMARY OF OPERATIONS IN RESPECT OF HOME 3 BUILT UNDER THE HOUSING AGREEMENTS WITH THE STATES FROM 1 JULY 1974 TO 30 JUNE 1975

State

Number of applications received

Number of applications approved

Homes purchased

New South Wales 50 26 44

Victoria 128 87 77

Queensland

South Australia

45 47 50

Western Australia

Tasmania

Australian Capital Territory

Northern Territory

Papua New Guinea

Norfolk Island

18 15 17

TOTAL 241 175 188

47

APPENDIX G

SUMMARY OF OPERATIONS IN RESPECT OF HOMES BUILT UNDER THE HOUSING AGREEMENTS WITH THE STATES FROM INCEPTION TO 30 JUNE 1975

State

Number of applications received

Number of applications approved

Homes purchased

New South Wales 2,472 1,866 1,853

Victoria 1,151 724 704

Queensland 294 212 202

South Australia 164 158 158

Western Australia

Tasmania

Australian Capital Territory

Northern Territory

Papua New Guinea

Norfolk island

506 386 382

TOTAL 4,587 3,346 3,299

Note: Applications approved include 47 cases approved but not settled at 30 June 1975.

APPENDIX Η

T h e average cost o f h o m es erected u n d e r th e D efence Service H o m es A ct d u rin g 1 974-75 as c o m p a re d w ith 1 9 7 3 -7 4 , covering b o t h lan d an d dw elling-, house, w as as follow s.

AVERAGE COST OF HOMES ERECTED

N.S.W . Vic. Q ld . S .A . W .A. T as. A .C .T . N .T .

c it

Φ 4) 4) 4)

Dw elling-H ouse o n l y -1973-74 16,441 13,712

1974-75 19 ,1 5 0 19 ,0 3 0

L and o n ly -

1973-74 5 ,4 4 0 3 ,6 9 3

1974-75 6 ,3 0 6 5 ,6 0 6

D w elling-house and land -

1973-74 21,881 17,405

1974-75 2 5 ,4 5 6 2 4 ,6 3 6

Increase or decrease in 1974-75 in cost o f dw elling-house + 2 ,7 0 9 + 5 ,3 1 8

Increase o r decrease in 1974-75 in cost o f land + 86 6 + 1,913

15,752 16,861 13,251

2 2 ,1 2 4 2 1 ,0 7 9 1 9 ,3 0 6

2 ,1 7 2 3 ,1 4 8 4 ,2 3 5

2 ,6 4 5 4 ,9 9 8 3 ,1 0 4

1 7 ,9 2 4 2 0 ,0 0 9 1 7 ,4 8 6

2 4 ,7 6 9 2 6 ,0 7 7 2 2 ,4 1 0

- 6 ,3 7 2 + 4 ,2 1 8 + 6 ,0 5 5

■ 4 7 3 + 1 ,8 5 0 - 1,131

13,3 4 8 19 ,9 0 7 2 0 ,5 9 6

1 5 ,6 4 2 2 6 ,2 2 3 2 3 ,8 4 5

2 ,8 9 7 * *

2,771 * 3 ,0 0 0

16,2 4 5 * *

18 ,4 1 3 * 2 6 ,8 4 5

2 ,2 9 4 + 6 ,3 1 6 + 3 ,2 4 9

126 N .A .

L easehold land o n ly .

APPENDIX H Cont...

AVERAGE COST OF HOMES ERECTED

22 homes only were erected in the Australian Capital Territory during the year 1974-75.

98 homes only were erected in South Australia during the year 1974-75.

5 homes only were erected in Tasmania during the year 1974-75.

1 home only was erected in the Northern Territory during the year 1974-75.

The average cost of land includes some allotments made available from land owned by the Corporation. This land is made available at cost price which is usually substantially less than its current market value.

Because o f the leasehold title system applying in the Northern Territory in 1973-74, no comparison with the 1974-75 figure is possible.

APPENDIX J

The average cost of homes erected under the Defence Service Homes Act each year since 1 JULY 1965 covering both land and dwelling-house, were as follows.

AVERAGE COST OF HOMES ERECTED SINCE I JULY 1965

New South Victoria Queensland South Western Tasmania Australian Northern Australia

Wales Australia Australia Capital Territory

Territory

$ $ $ $ $ $ $ $

1V65-66 11,132 10,712 9 ,9 2 6 1 2 ,5 0 0 9 ,6 5 8 1 0 ,2 5 9

1966-67 10,734 10 ,6 1 9 10,3 6 6 12 ,2 4 6 1 1 ,7 0 0 9 ,9 8 3

1967-68 11,388 12,102 10,665 10,427 11,705 10,031

1968-69 12,178 . 12,648 12,756 1 2 ,0 6 9 1 2 ,6 1 0 10 ,2 9 7

1969-70 13,415 12,981 13,502 16,6 9 0 1 2 ,5 7 4 9 ,7 3 8

1970-71 14 ,9 9 0 13 ,5 4 4 13,897 11 ,7 3 2 1 2 ,6 6 8 1 3 ,7 7 6

1971-72 16,852 1 4 ,8 0 4 14 ,5 7 2 17,153 15 ,6 5 8 1 3 ,9 8 0

1972-73 18,733 16,807 16,726 17,4 4 6 16,552 14,797

1973-74 21,881 17,405 17,924 2 0 ,0 0 9 17,4 8 6 16,245

1974-75 2 5 ,4 5 6 2 4 ,6 3 6 24 ,7 6 9 2 6 ,0 7 7 2 2 ,4 1 0 18 ,4 1 3

1 2 ,4 3 6 1 0 ,6 4 3

1 3 ,4 8 6 9 ,4 9 3 1 0 ,8 1 2

13,161 8 ,7 6 7 1 1 ,4 8 7

1 2 ,8 5 5 12,4 8 5

1 7 ,7 3 2 1 3 ,2 4 3

1 1 ,7 1 2 1 1 ,3 5 0 1 4 ,1 4 7

1 3 ,2 6 3 1 9 ,9 9 7 1 5 ,7 7 3

11,941 1 6 ,8 8 6 1 7 ,4 2 9

2 3 ,7 2 7 2 0 ,5 9 6 * 1 9 ,6 6 2

2 6 ,2 2 4 2 6 ,8 4 5 2 4 ,6 9 9

Leasehold land, capital cost of construction of dwelling-house only.

APPENDIX K

AVERAGE COSTS OF ALL DWELLING-HOUSES BUILT OR FINANCED DURING THE YEAR 1974-75

T h e average c o s t o f all h o m e s b u ilt o r fin a n c e d u n d e r th e D efen ce S ervice h o m es A ct d u rin g 1 9 7 4 -7 5 , covering b o th lan d and dw elling-house, was as follow s.

T y p e o f assista n ce N.S.W V IC . Q L D S .A . W .A. T A S.

S $ $ $ S $

T o b u ild ................................................. 2 5 ,4 5 6 2 4 ,6 3 6 2 4 ,7 6 9 2 6 ,0 7 7 2 2 ,4 1 0 18,413

P u rc h a se — n e w h o m e s ................... 2 8 ,9 2 4 2 9 ,9 2 3 2 8 ,0 0 9 2 3 ,2 8 6 19 ,7 1 3 2 4 ,6 4 6

P u rc h a se - p rev io u sly o c c u p ie d h o m e s ........................... 2 7 ,0 8 7 2 4 ,5 7 3 2 4 ,4 3 6 2 3 ,6 9 4 . 1 8 ,2 0 9 2 0 ,1 8 0

D isch arg e o f m o r tg a g e ................... 3 5 ,8 9 7 2 9 ,9 3 5 2 9 ,4 1 5 24,741 2 2 ,3 4 8 2 5 ,8 3 8

T ra n s fe r an d r e s a l e ......................... 2 3 ,1 0 7 2 2 ,9 6 4 2 2 ,8 8 2 18 ,8 3 3 9 ,4 1 0 2 1 ,5 9 4

T o p u rc h a se h o m e s b u ilt u n d e r th e H o u sin g A g re e m e n ts w ith th e S t a t e s ............................................ 1 3 ,7 8 0 1 2 ,6 0 4 10,301 11,081

A verage c o s t ..................................... 2 8 ,1 5 7 2 6 ,1 7 8 2 5 ,7 6 2 23 ,9 1 1 19,363 2 2 ,0 2 9

A .C .T .

S * *

2 6 ,2 2 4

3 5 ,2 5 9

3 5 ,8 4 7

3 5 ,3 7 0

5 5 ,5 0 0

3 5 ,1 3 3

N .T . A U ST.

S S

2 6 ,8 4 5 24 ,6 9 9

19,0 0 0 2 8 .0 5 0

3 2 ,0 0 0 2 4 ,5 5 0

24 .2 8 5 2 9 ,5 5 2

2 0 ,2 6 0

11,952

2 6 ,5 7 0 2 5 ,7 4 0

* E x c lu d e s 2 h o m e s b u ilt o n leaseh o ld lan d

+ L ea se h o ld la n d , c a p ita l c o s t o f c o n s tru c tio n o f dw ellin g -h o u se o n ly .

N o te : T h e average c o s ts s h o w n f o r D ischarge o f M ortgages are b ased o n th e v a lu a tio n o f la n d a n d d w ellin g -h o u se as d e ta ils o f ac tu a l co sts are

n o t av ailab le.

AUDITOR-GENERAL’S OFFICE CANBERRA, A.C.T.

The H onourable the M inister 31 M ay, 1978

for V eterans’ A ffairs, Parliament H ouse, C A N BE R R A . A.C.T. 2 6 0 0

Dear Sir,

AUSTRALIAN HOUSING CORPORATION

In com pliance w ith section 4 8 (1 ) o f the Australian Housing Corporation A ct 1975 the follow in g financial statem ents have been subm itted for m y report —

Statem ent o f R eceip ts and P aym ents for year ended 3 0 June 1975 in respect o f operations under the D efen ce Service H om es A ct other than Insurance; and

Statem ent o f A ssets and L iabilites as at 30 June 1975 in respect o f operations under the D efen ce Service H om es A ct other than Insurance.

I now report in term s o f section 4 8 (3 ) o f the A ct that in m y opinion —

(a) the statem ents are based on proper accounts and records;

(b ) the statem ents are in agreem ent w ith the accounts and records and to the ex ten t these are reflected in statem ents prepared on a cash rather than an accrual basis show fairly the financial transactions and the state o f affairs o f the C orporation; and

(c ) th e receipt, expenditure and investm ent o f m on eys, and the acquisi­ tion and disposal o f assets, by the Corporation during the year have been in accordance w ith the A ct.

A lso subm itted, in. com pliance w ith section 50 B (1 ) o f the D efence Service H om es A ct 1918 were an Incom e and Expenditure Statem ent for the year ended 30 June 1975 and a Balance-sheet as at 3 0 June 1975 in respect o f the D efence Service Homes Insurance Schem e.

I now report in term s o f section 50 B (2 ) o f that A ct that in m y opinion -(a ) th e statem ents are based on accounts and financial records kept in

accordance w ith the A ct; and

(b ) the statem ents are in agreement w ith the accounts and financial

records and show fairly the financial operations o f the D efence

Service Hom es Insurance Schem e.

Copies o f the statem ents in the approved form together w ith N otes to and Form ing Part o f the A ccou n ts are attached for your inform ation.

Yours faithfully,

D.R. STEELE-CRAIK AUDITOR-GENERAL

53