Robert McClelland (Barton, Australian Labor Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

Defence housing is a fundamental condition of military service and is central to the retention of experienced personnel and the attraction to the service of talented young Australians. The Defence Housing Authority has evolved as a separate authority from the cumbersome bureaucracy which preceded it, and the Defence Housing Authority Amendment Bill 2006 is a further step in that process of evolution.

Under the previous bureaucracy, housing was the subject of numerous complaints by serving members of the ADF. While the situation is far from perfect, there have in recent years been a number of improvements. The previous complaints related to the basics, such as lack of maintenance or a poor standard of accommodation, and it would be naive to suggest that some of those problems do not remain, certainly in some areas. It is entirely relevant because, for a long while, when members were posted to different locations they expected that their families would suffer the same poor standard of housing. Fortunately, in a number of areas conditions have significantly improved. In particular, better management and attention to defence housing as a critical issue in the early 1980s saw the establishment of the Defence Housing Authority.

In the current strategic climate in which the ADF is experiencing a high operational tempo it is clearly unacceptable for defence families to have to live in substandard accommodation or receive substandard service while partners and parents are deployed overseas. It is the husbands or wives or the children who are most affected by poor quality housing and poor service in the provision of that housing.

DHA has matured and its responsibilities have grown with maturity to include removals. The service requirement of postings is another issue which potentially impacts on the retention of experienced personnel. Moving house can be a traumatic experience. The frequency of removals for service families demands quality and efficiency in the delivery of that service. Our military men and women deserve no less. The authority’s task in facilitating removals on posting is rightly expected to minimise the inconvenience occasioned to defence families.

A further step in the evolution of the DHA is the move from providing and maintaining its own properties to being a broader property management business which is active in the rental and leaseback fields. DHA now performs commercially and reports accordingly. This bill will improve on that by establishing a smaller, more commercially focused board in an arms-length relationship from government, thus providing, in theory, greater freedom to act.

The bill establishes an advisory committee to assist the DHA board in meeting Defence’s operational requirements. Importantly, the bill emphasises the importance of people in Defence by confirming that the primary function of the DHA is to provide housing and housing related services to Defence and its members.

The commercialisation of DHA has seen improvements in the quality of housing provided to ADF members. The success of the commercialisation is evidenced in last year’s figures. Last year’s earnings, before interest and tax, were $82.3 million, up some $8 million on the previous year. Net profit was $66.9 million, which was $26.5 million above target.

During the year, 451 houses were built and a further 520 purchased. The combined cost of this was $396 million, which equates to more and better quality houses for defence families. Investors in the Australian property market can also appreciate the benefits of renting to the DHA, including guaranteed year-round rental income and total property maintenance. The success of the government’s business enterprise is unfortunately not reflected in other Defence acquisition programs.

The greater commercialisation of DHA as provided by this bill is reflected in the name change from the Defence Housing Authority to Defence Housing Australia; thus the bill converts DHA from a statutory authority serving Defence exclusively to a commercial enterprise providing housing related services to other Commonwealth agencies.

The bill also broadens DHA’s powers to allow it to provide services that are ancillary to housing. These ancillary services are not further defined except that they must have a nexus with housing and housing related services, the minister having the discretion to broaden the ambit of these ancillary services. These ancillary services may include the provision of access to providers of social support such as education, recreation and financial services. Presumably such ancillary services could include preschools and family support during absences on deployment, all of which have a direct nexus with housing related services and all of which are critical to the problem of retention and recruitment. We would certainly support such a holistic approach to the provision of housing services to defence families.

The commercial focus of the bill sees a reduction, as I have mentioned, of DHA board members from 12 to nine. This may, however, be adverse to Defence in that Defence representation will now be reduced from five to two. The representatives being removed are from the defence community, including a spouse representative. In light of the high operational tempo and the result that spouses remain at home while serving members are deployed, the removal of a spouse representative from the board is unquestionably a negative aspect of the bill.

While it is intended that the DHA, as it will be renamed, will have a broader role in the provision of housing for Commonwealth purposes, its primary emphasis will remain on defence families, and we believe it is appropriate that defence representatives remain on the board, including, most importantly, the spouse representative. We believe that defence families deserve representation in matters which directly affect them, and housing is one of the most significant matters that affect them and their families. Reflection on the number of complaints related to housing, particularly in days gone by, and on the adverse impact on retention that poor housing has had—and, it must be said, continues to have in some areas—is evidence of the value of spousal representation.

The bill intends that representatives of defence families and the Department of Defence will be members of the advisory committee to the board in lieu of having a representational responsibility. The value of this advisory role, to the detriment of a representational function as an actual board member, is questionable. The purely advisory function of the committee is reinforced in clause 30 of the bill, which gives the board power to issue the committee with directions as to how it should operate. Notwithstanding the criticisms as to the removal of the defence family representation on the board, we support the bill, which it must be said does enhance the welfare of ADF families.

Military life makes demands on individuals and families which are not necessarily reflected in the civilian world. Indeed, very few families in the civilian world face the same level of dislocation of moving from base to base and of overseas deployment. The absences from home and the service requirement to frequently relocate can be difficult for members and their families and may affect the decision to remain in the service. It is said that increasingly the numbers of serving personnel are affected in their decision to remain with or leave the military as a result of the input, as would be understandable, from their family. Good quality housing and housing services go some way towards alleviating the pressures on defence families.

Conditions of service are at the very heart of military life and directly impact on the recruitment and retention of personnel, which is one of the real crisis issues facing our defence forces and, hence, our nation’s security. When the labour market is tight and recruitment is difficult, the attraction of subsidised housing can be a very important incentive to people both joining and remaining in the Defence Force. But obviously to have that impact it must be good housing. Defence families deserve quality housing and a standard of living which recognises the unique and mobile nature of service life. The dedicated members of the ADF provide an invaluable service to this country. In return, good housing is part of the deal and that is why we support this bill as going some way towards enhancing that condition of service.

Bruce Billson (Dunkley, Liberal Party, Minister Assisting the Minister for Defence) Share this | Link to this | Hansard source

in reply—I would like to thank the member for Barton for his considered contribution and I welcome his sincere, genuine and ongoing interest in the welfare of our Defence Force and its members and in its important work. I thank him for his comments.

In summing up on the Defence Housing Authority Amendment Bill 2006, let me reiterate some of the key points. This bill will help to underpin the long-term viability of the Defence Housing Authority as a government business enterprise. The existing DHA Act is 19 years old. It requires updating to better reflect the current governance arrangements that are to be applied to the DHA. The proposed amendments are supported by both the shareholder ministers and the DHA itself.

The amendments reinforce the government’s clear and ongoing commitment to provide quality housing and housing related services to defence personnel and their families. As the member for Barton mentioned and as is very clear in my role, the link between support for Defence Force members and their families and the important role that appropriate housing plays is very clear to the government and is very much a priority and a focus for me. This is also why these amendments allow DHA to expand its commercial base to include other government agencies whilst ensuring that the interests of Defence are safeguarded. The expansion of DHA’s client base and services will enable it to provide a more diverse range of services to Defence and will assist it in competing more effectively in the marketplace for new accommodation projects, and I remind the House of the ongoing efforts of the government and the DHA to constantly review and improve the housing stock available for ADF members and their families.

The bill also proposes amendments that will expand the scope of the DHA and increase its operations beyond defence. DHA will be able to provide housing and housing related services to other Commonwealth agencies, and ancillary services to both Defence and other Commonwealth agencies. The ability for Commonwealth agencies to utilise DHA’s expertise in the provision of housing and housing related services has the potential to benefit the whole of government.

The changes to the structure of the DHA board will provide a more commercial focus and will better reflect the best practice outlined in the Uhrig review. The member for Barton mentioned some of those changes. For those who are interested in this subject, the new board will in fact have a nominee representing the Secretary of Defence and the Chief of the Defence Force, so that direct link with the client group, if I could put it that way, is reflected in the board itself.

The member for Barton also mentioned the issue about Defence Families Australia’s representation. Let me just draw out what is embodied in this bill, and it is in line with the Uhrig review recommendations. Those representative roles for Navy, Army, Air Force and Defence Families Australia will be appointed to the advisory committee. As the member for Barton would know, the decision to restructure and reform DHA presents board members of DHA with corporate governance responsibilities which go to the wellbeing of the entity itself. Therefore, those people seeking to play a key advocacy role in arguing and pressuring and raising issues is potentially inconsistent with the governance responsibilities and the directors’ responsibilities on the board. So what we have done—and it has been recommended in the Uhrig review and I think it will be a very effective method—is establish this advisory committee, including representatives from Navy, Army and Air Force and Defence Families Australia, as the primary vehicle for representation of the defence and defence families community to the DHA board.

That committee will assist and support the board in its primary role as the provider of housing to meet the operational requirements of defence, but not lead to a confusion between the role of directors that goes to the welfare, viability and ongoing responsiveness of DHA and the advocacy role of the advisory group. That group can stridently and with great vigour put its case through the advisory committee to the DHA board. I also meet regularly with Defence Families Australia and other interest groups, so there is plenty of opportunity for those avenues to provide feedback and insight and for the views of the families themselves to be factored into the operations of DHA. So the concerns there are noted. We have tried to take account of them and provide those advocates with a strong advocacy role, and not have that cluttered or confused with the specific responsibilities of directors which go to the welfare and wellbeing of the entity. We think that will work quite well, but we will certainly keep on an eye on that and make sure that the defence community’s voice is heard loudly and clearly in the deliberations of DHA.

The bill proposes amendments that will improve the harmonisation between the Defence Housing Authority Act 1987 and the Commonwealth Authorities and Companies Act 1997. The DHA governance arrangements will be more closely aligned with those of other government business enterprises. The bill is an investment and an assistance to ensure the long-term viability of the DHA and to support the DHA in making sure the defence community has the housing stock and support it needs for its crucial role. I welcome the input of the member for Barton and thank him for his encouraging remarks. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.