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Thursday, 19 June 2008
Page: 2859

Senator MINCHIN (Leader of the Opposition in the Senate) (1:19 PM) —The coalition strongly supports the Defence Home Ownership Assistance Scheme Bill 2008 and the Defence Home Ownership Assistance Scheme (Consequential Amendments) Bill 2008. These bills in fact implement a very significant coalition policy commitment to establishing a new scheme to provide financial assistance to members of the Defence Force for the purchase, maintenance and development of their homes. We are very pleased that these bills have finally made it onto the floor of this chamber for debate. We strongly support this measure and the commencement date of 1 July. We acknowledge the strong support for this measure by many defence personnel and their families. It is a package which will allow ADF personnel to have access to a more appropriate method of home loan assistance that more appropriately reflects the requirements of ADF service in the current housing market.

It is important to note that a range of other housing and assistance measures will continue but that these bills close the former Defence Home Owners Scheme to serving members who have not yet exercised their rights under that scheme. The bills will allow for the transition of eligible persons into the new scheme. The new scheme, as announced by the former coalition government in 2007, is much more contemporary and generous than the previous scheme, and we do welcome the new government’s adoption of this coalition initiative. The bill implements a 2007 decision of the former government aimed at increasing rates of retention in the ADF. In 2006 the Defence Force (Home Loans Assistance) Amendment Bill extended the life of the Defence Home Owners Scheme by 12 months to allow Defence to conduct a review of the scheme. The objective of the review was to look at the scheme and examine options for a revised scheme that would: support recruitment, retention and resettlement; recognise the benefits homeownership provides to both members and Defence; and be cost-effective for Defence. In the 2007 budget the former coalition government announced the response to that Defence review and provided additional funding of $864 million out to 2016-17 in the form of a home loan interest subsidy to involve progressively higher subsidy assistance to ADF members who serve beyond critical retention points.

In 2007 amending legislation was passed extending the life of the current scheme until 30 June this year while legislation to implement the 2007 budget decision was prepared. It was the former coalition government’s desire that the new scheme come into operation by 1 July 2008, but of course legislation to that effect was being drafted when parliament was prorogued. We are pleased that the Labor Party supported this measure in opposition. This bill in fact reflects the original announcement made by the former coalition government. I agree with my colleague in the House of Representatives Mr Bob Baldwin, who said:

... I think it is important for information about this scheme to be clearly ... communicated with ADF personnel and their families. It is important to make sure they are aware of the various fees imposed by their current financial institutions if they switch mortgages to take up this new subsidy scheme.

Ultimately, the decision to take on a home loan or change home loans is a big financial decision for any individual or family, including those in the ADF. Financial decisions of this nature require an analysis of their impact on the family budget and disposable incomes over the life of the loan. So these are big decisions. Implementing this new scheme, Defence and the government will need to ensure that families have access to the information they need to make an informed decision.

The bill provides that there will be a review of the scheme after four years, with Defence reporting on the outcome of the review, for consideration in the context of 2012-13 budget deliberations. We would suggest to the government that they provide updates on the operation of the scheme earlier than year 4, when the review will occur, including an examination of the impact of the critical retention points and the operation of the scheme overall. We believe that should include qualitative as well as quantitative advice on satisfaction with the scheme by ADF personnel and their families, particularly on the ease of understanding the scheme’s operation. I want to take this opportunity to commend the work of the Defence Families association. They have been very strong in their advocacy and support for this measure and have been, of course, very keen to see it come into effect on 1 July this year.

In the other place, the shadow assistant defence minister, Mr Bob Baldwin, moved a second reading amendment that called for the government to consider amending the bill to give access to the maximum subsidised loan entitlement to the surviving partner of a member of the Defence Force who has died in warlike service. May I say, contrary to the allegations of the Minister for Defence, the opposition’s amendment was entirely in accordance with the standing orders, and that was confirmed by the House clerks. We are disappointed that the government has not seen fit to support what we think is a very good amendment. But, in the interests of getting this bill through so that the scheme can commence on 1 July, we will not be moving that amendment in the Senate. However, we urge the government to consider a subsequent amendment to the scheme to incorporate our suggestion. Defence families want to see this bill in place, so we will not be doing anything to delay it in any way. We are very pleased that defence personnel will have access to the scheme—a scheme that the coalition announced last year. We look forward to ADF families utilising the subsidy and we look forward very much to this scheme having a material impact on retention rates in the ADF. I commend the bill to the Senate.