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Tuesday, 28 April 1987
Page: 2106

Mr FIFE(6.05) —The House is presently considering the Defence Housing Authority Bill 1987. Whilst the Opposition will not oppose the legislation, on behalf of it I move the following amendment:

That all words after `That' be omitted with a view to substituting the following words:

`whilst not opposing the passage of the Bill, this House-

(1) expresses concern that the establishment of this statutory authority may not best address the housing needs of servicemen and women;

(2) regrets the failure of the Government to allow adequately for private home ownership requirements of the Australian Defence Force, and

(3) urges greater delegation of financial responsibility to base and area commanders for the acquisition, repair and maintenance of defence housing, with appropriate audit controls'.

Accommodation at many military bases around Australia is far from satisfactory and a concerted effort is required to ensure that defence housing standards are upgraded to match Australian Government Public Service housing standards. By the admission of the Department of Defence, of the 22,000 houses in the Department's stock close to 15,000 are substandard. In the face of this enormous problem the Government is establishing another statutory authority which, according to the Minister for Defence (Mr Beazley), will set about providing `adequate and suitable housing to meet the operation needs of the Defence Force and the requirements of the Department of Defence as determined by the Minister for Defence'.

There is no mention of the servicemen and women, nor of their families. The Minister talks about the Hamilton report of the Review of Effect of Service Life on Spouses and of listening to the service families, but he does not take the initiative where it really counts in the deplorable housing situation. In the area where something tangible could be done quickly and without too much interference from government-in the area of helping service people-Defence personnel expected a great deal more. The proposed Defence Housing Authority follows an inquiry by the task force on Australian Public Service and Defence Force housing programs. The Authority will be independent of the Defence Department but must conform to Australian Defence Force needs.

The Government's measure starts the long process of improving the fabric of Defence housing, but does not go far enough in involving the private sector and does nothing to enhance efficiency by giving wider powers to base commanders in the construction and maintenance of Defence Force housing. The Authority will charge the Defence Department the full commercial rent for each house it controls. This represents a new charge to Budget outlays of $120m in 1987-88. Savings from the disposal of surplus housing will be retained by the Authority instead of being credited to Consolidated Revenue, at an estimated cost of $5m in 1986-87. The Authority will be required to use profits to supplement capital purchases and improvements, reducing the demand for capital from the Budget, which is $65.8m in the current financial year, by an unstated amount.

Some supplementation from annual Budgets will be required in order to meet the government commitment of $750m over the next decade to upgrade the Defence housing stock. Operating costs of the Authority will be met from revenue and there will be offsetting reductions in Defence Department staffing. The Minister expects the Authority to rely on private sector consultancies to undertake aspects of its operations. The Authority's capital will come from Defence housing stock and land transferred by the Minister, money appropriated by Parliament and any accumulated reserves.

Late last year, the Government established an interim defence housing board on an administrative basis. The Chairman is Mr John Graham, a former National President of the Housing Industry Association. The board of management, as proposed by the Government, will comprise four full-time members, including the Chairman, and four members representing each service and the Defence Department. A full-time Managing Director will also be a board member. The Authority will be required to prepare a corporate plan subject to ministerial approval for contracts over $6m and before entering into partnerships and joint ventures. This measure empowering a specific agency with the task of upgrading Australia's defence housing represents a step closer to improving defence housing by freeing up financial arrangements and working more closely with the private sector. The coalition has significant areas of concern, however, principally in relation to the financial support for the Authority and the proposed composition of the board of management.

The Minister identifies the provision of a guaranteed level of funds as one of three essential elements to remedy existing problems, yet he fails to provide that commitment. He says that the Government will `aim' to give the authority the funding that it requires over its guaranteed income. He has stated that a $750m investment is `proposed' and that `some supplementation from annual budgets' will be needed to meet that investment commitment. The Government allocated $64m in the 1986-87 Budget for defence housing, less than recommended by the task force on housing. However, with the real growth of one per cent allocated to defence in the 1986-87 Budget now reduced to zero-I take that from Department of Defence Additional Estimates 1986-87: Savings Document and Revenue Estimates-there is every likelihood that the Government will renege on its undertaking to guarantee consistent levels of funding to the Housing Authority.

In all the planned upgrading of service housing, barracks housing has hardly been touched and, with a few exceptions, is completely inadequate. Single persons without dependants constitute upwards of 45 per cent of the Defence Force and represent the bulk of the younger and more junior members. They are accommodated in living-in barracks, generally within unit areas. Some 35 to 40 per cent of single members choose not to occupy service-provided accommodation and live off-base without eligibility for accommodation allowance. The pattern varies around the nation and depends on rents, housing availability and the standard of on-base accommodation.

The Minister notes that the relocation associated with the proposed two ocean Navy and the Army buildup in the Northern Territory will place added demands on the work of the Authority, particularly in the provisioning of new housing. No indication is given, however, as to how the urgent need to upgrade existing housing-approximately 15,000 houses-will be balanced against the enormous construction task involved in naval and army relocation. Existing Australian Defence Force members should not feel that their rents are being used to subsidise future housing requirements, while scant attention is paid to their own housing predicament.

On the second issue of board composition, the proposed management arrangements do not go far enough to embrace private sector involvement. Clearly, the Government hopes to minimise its own financial involvement by encouraging the Authority to enter into joint ventures with private enterprise and by commissioning subsidiary partnerships with private companies. This aim would be better realised by greater private sector representation on the board of management and by lessened ministerial prerogative in the financial control of the organisation. In Committee, on behalf of the Opposition, I will move an amendment to the effect that the board should comprise at least three members from the private sector, one of whom shall have experience in housing finance and another of whom shall have experience in housing project development.

A third issue concerns overall efficiency and the need to minimise bureaucratic intrusion, in both the construction and maintenance of defence housing. No provision was made to give military personnel delegated responsibility for local base housing. The broad aims of improved housing, improved efficiency, and greater private sector involvement would be better facilitated by delegating routine responsibilities covering housing to base commanders. Particularly in the area of housing maintenance, local private contractors could more speedily and efficiently attend to such problems at the behest of the base command.

Housing is a significant factor in the decline of service morale, as reflected in the current high wastage rate, which has brought the strength of the armed forces to its lowest figure since the Vietnam war. In January 1986, plans were announced to upgrade married quarter housing, which has been an immense problem for years. More than $750m is to be allocated within the next 10 years for this purpose. However, there are still causes for concern. First, the sum of $64m allocated in 1986-87 inadequately addresses the urgency of the problem. Only $17.3m was allocated to new housing projects. Second, the success of the scheme largely rests on the creation of the Defence Housing Authority. Third, on 18 February 1987, it was announced that rents paid by Defence Force personnel for married quarters will rise by 7.5 per cent. This normal annual review is based mainly on the movement of rents in the private sector, in apparent disregard of the fact that nearly 60 per cent of defence accommodation is sub-standard. Fourth, total expenditure on housing assistance under the Defence Service Homes Corporation has dropped from $160.2m in 1981-82 to $126m in 1985-86. The upper limit of the loan is $25,000 and is increasingly inadequate. There is a waiting period of 10 months and new recruits from 1985 have not been eligible for such assistance. Fifth, the Senate Estimates Committee ascertained that of the proposed 1986-87 expenditure-$17.2m-going to new housing, only 54.9 per cent was directed specifically to the construction of new houses.

These facts are totally incompatible with the revised living in policy for the Defence Force endorsed in October 1984 by the Chiefs of Staff Committee. The Committee said:

The Defence Force must maintain the right to direct its members to live in service accommodation in order to meet its operational, training and other service commitments. However, should a service consider that its operational or other commitments will not be adversely affected, certain members may be permitted or, where necessary, directed to live out on such occasions or for such periods as determined by the service.

Noticeably absent from the 1987 Defence Housing Authority Bill is any provision encouraging and assisting with home ownership among members of the Defence Force. Attempts to privatise the defence service home loan scheme have not been successful, according to industry sources, because the administrative costs of the scheme under the existing or proposed arrangements are not viable. As a result, the scheme is becoming increasingly inadequate and waiting lists are growing.

Since 1985 new recruits to the Services have been ineligible for defence service homes loan assistance. The Returned Services League of Australia is concerned that, even though rents for defence housing will be commercially assessed, rents for members of the Australian Defence Force should not be arbitrarily increased beyond existing levels as currently related to salaries. There is need also for greater assurance that income received from rentals will be put to the refurbishment of existing houses or the purchase of new houses, not diverted to other uses.

In government the Liberal Party of Australia and the National Party of Australia will monitor the operations of the Defence Housing Authority and, if it fails to deal satisfactorily with the housing needs of service men and women, it will be modified to enable greater private sector involvement and greater responsibility for local commanders in an arrangement that will emphasise flexibility, accountability and initiative at the local level. In short, we will minimise bureaucracy and decentralise administration.

Mr DEPUTY SPEAKER (Mr Millar) —Is the amendment seconded?

Mr Hodgman —I have the honour to second the excellent amendment moved by the shadow Minister for Defence, the honourable member for Hume (Mr Fife), to try to do the right thing by our defence personnel, and I reserve my right to speak later in the debate. But at this stage I congratulate him on an excellent amendment.

Mr DEPUTY SPEAKER —Order! The honourable member leaves some doubt as to whether he wants to speak now or reserve his right.