Phillip Thompson (Herbert, Liberal National Party, Shadow Assistant Minister for Defence) Share this | Link to this | Hansard source

I'd like to start by acknowledging all those veterans and Defence Force personnel who keep us safe, who've served our nation so proudly and honourably, and say thank you: thank you for what you've done for this nation, thank you for what you've done in service to this nation, whether it's been through natural disasters, floods, fires, COVID assist, or in wartime operations. On behalf of a grateful parliament, we say thank you, and I hope that the Defence Home Ownership Assistance Scheme Amendment Bill 2022 goes that little bit further in supporting you.

The coalition strongly supports the government's commitment to expand the Defence Home Ownership Assistance Scheme. The amendments to this bill are an additional incentive for recruitment and expanding the ADF and meeting existing recruitment targets. Initiatives like this can directly contribute to retaining skills and talent within the ADF, which is critical in the current geopolitical climate. We support measures that will reduce the cost of living for current, serving and former ADF members. Measures like this can improve the health and wellbeing of ADF members past and present. We support these amendments, both me and my good mate the member for Braddon—the shadow minister for defence—as well as other Defence Force members that we have in this place, because we know that supporting our bravest is something that this nation needs to continue to do.

The DHOAS is a great scheme. It's a scheme that means that, when you're serving, you have that support to help you get into homeownership. When I joined the Defence Force as a young 17-year-old, I didn't think I would ever own a home. I came from social housing. I was raised by an awesome single mother raising three kids. I was a ratbag. I couldn't save. I didn't think I'd ever have this opportunity. When I got into Defence, it was explained to me that this scheme was there as a supportive mechanism to help our soldiers, aviators and sailors get into the homeownership market. I didn't understand it for many years, and it took until I was leaving for me to fully grasp how DHOAS would actually work—and I'm glad I did, because it helped me get into the homeownership market. It helped me get that stable footing to buy my first property. I know the member for Braddon has also been a beneficiary of this scheme. It is a good scheme, and it has helped so many Australian Defence Force members since its inception in 2008.

One of the good things about this bill is that it will be retrospective to 2008, which will mean people who may have missed out can apply. Some of my friends missed out because they were wounded during their service without the qualifying period and therefore had missed out on being able to apply for DHOAS. This is a good thing, and it will see an excessive amount of people that may have missed out or slipped through the cracks being able to obtain this. I'd like to thank the Assistant Minister for Defence and defence personnel and for Veterans' Affairs for his collaborative approach in working with me and going through these amendments, not just in the first brief but also by making his office available to me and my team so we were able to ask questions, go through it and really nut down into the details. I want to thank him for his approach there. We do have some questions that will need answers, but we'll get to them soon.

DHOAS was introduced by the Department of Defence on 1 July 2008 to assist Australian Defence Force members to achieve homeownership. It is a retention initiative aimed at encouraging members to continue serving in the ADF, and, as we will go through later, it is a scalable system—the longer you serve the more support you receive. The scheme provides an incentive to members to stay in the ADF. The longer you serve, the more your entitlement and the longer you receive the assistance. To be eligible to access DHOAS, you need to have served in the ADF within the last five years, completed a qualifying period of service and accrued a service credit. For permanent members, the qualifying period is four consecutive years of service. For reservists, it is eight consecutive years of effective reserve service of at least 20 paid days per financial year. That doesn't include CFTS, current full-time service. You get assessed under the permanency side, not the reserve side. For all members, if you have a break in your service, you start again. Like I said, CFTS can fast-track reservists for the qualifying period. There are many reservists who are on CFTS throughout the whole ADF, so this is a good thing as well.

The assistance provided by the scheme is not tied to a home loan with a specific value. Eligible banks are the Australian Military Bank, Defence Bank and NAB. We believe this can be expanded, and I will touch on that in a minute. The minimum service for permanent members of the Australian Defence Force as it currently stands is four years, and eight years for reservists. That's a tier 1 subsidy, a subsidised loan limit of $402,159 up to a $422 maximum monthly subsidy. Then it goes to the next tier—tier 2 is eight years minimum full-time service, 12 years for reservists, and that has a subsidised loan limit of $603,238, up to a subsidy of $633. The last tier, tier 3, is 12 years for minimum permanent service and 16 years for minimum service as a reservist, with a subsidised loan limit of $804,318. That's a maximum monthly subsidy of up to $845.

Changes to the DHOAS act came into effect from 22 June 2020. The amendments extended the time frame for members leaving the ADF to access their final DHOAS subsidy certificates from two to five years. The changes also ensure that members who leave the ADF and re-join within five years will retain all service credit accrued prior to the break in their service. This is a good thing.

I'll add a bit of background on the bill. The key change this bill achieves is to effectively halve the amount time that a member has to serve before becoming eligible. It used to be four years for a permanent member of the ADF—that's halving to two years. For a reserve member it will halve from eight years to four years. In tier 2, it's four years for minimum service and eight years for reserves. In tier 3 it's eight years for permanent service and 12 years for reserves. This is something that will be beneficial to people who have served. It is a quicker time. There are questions that we have around the halving and what it will mean for people and retention and the like, but I'm sure that we can all work collaboratively with members in this place to ensure that we can bolster the numbers of our ADF members while also supporting them.

This means members can take advantage of the DHOAS to achieve homeownership sooner, which I think is really good. I know it's definitely on both sides of the House, but we heard the Leader of the Opposition, Peter Dutton, mention DHOAS in his budget reply speech. It's something we are supportive of on this side and in the government—we want people to be able to get into homes earlier and quicker. We know from the cost of living, which is getting harder and harder for people every day, that helping people that serve our nation be able to get into homes at a quicker rate if they would like to is a good thing.

The bill also removes the existing five-year separation time frame so that anyone who was in the ADF since the scheme was introduced in 2008 and has left the military will be eligible to access it. If people have who have been out have somehow slipped through the cracks and somehow haven't been able to apply—or, like some friends of mine, were wounded in combat and went through quite a challenging time during service or post service—they will be able to jump back in, apply and be successful in this.

The opposition does support these amendments.

We do have some questions that I think we can get answered. As we've been able to work with the government, and the Assistant Minister for Defence and Assistant Minister for Veterans' Affairs, in a collaborative nature, we think we can work with them if this bill does need to be reviewed or looked at for any problems in it.

We know that the Australian Defence Force has a retention problem. We are in a period of increased geopolitical uncertainty. We need to do everything we can to attract, retain and train our people in the ADF. The statistics show that the ADF has a retention problem. In 2019-20 the Navy had a 6.6 per cent turnover rate. That increased to 9.7 per cent in the 2021-22 financial year. In the Army it has gone from 11 per cent in 2019-20 to 13.2 per cent in 2021-22. In the Air Force it has gone from 7.3 per cent to 8.8 per cent. Combined it has gone from nine per cent to 11.2 per cent. We are losing 11 per cent of our people each year. We should be adding to our numbers and adding about that every year, not losing it.

We need to have as many initiatives in place as possible to ensure that there are reasons for people to join and reasons for people to stay. We know that homeownership and cost of living are a part of why people can either stay or leave the Australian Defence Force.

We also note that operational tempo is a way that people keep retained in the ADF. When I served it was high tempo. Get into East Timor—I got injured so I was transitioning out, but they had a little break and they went back on into Afghanistan on another training team. Part of it is operational tempo, which is a good thing for retention, whether it's a training team or the like; and part of it is homeownership. Getting your roots bedded down in your community is something that will benefit the retention rate.

We have some questions. While the coalition supports this bill, we do have some concerns that we will raise here and in further speeches. Firstly, there does not appear to have been any modelling done on the outcomes of the changes. There have been no statistics provided as to how many extra people will be retained as a result of these changes. That's not saying that people won't be, but we haven't seen any data on the modelling.

The government must also ensure that they have plans in place to ensure that there are incentives for members to stay on when they reach the minimum service period—noting that two years is the minimum service in the ADF. In most cases it's four years. I do think that the government needs to have a plan for that. We do not want to see people leaving the ADF just because they've clicked over the bare minimum number of days; we want to see people retained, which comes back to a whole gamut of reasons why we keep people but also why people want to stay in the ADF.

It will be important for the government to monitor the cost of the scheme. The costings over forward estimates are expected to total $46.2 million. In the context of increased rate rises this cost may also increase. The subsidy a member receives is a percentage linked to the interest expense of the member's pay. As interest rates keep rising, under the government these subsidies will have to increase as well. Also, I don't think we have, or we haven't been provided in the opposition, the numbers of people that potentially could have missed out on the scheme. I think that is a hard thing to really gauge. There could be a risk of a cost blowout here, but I'm sure the government has plans to address that as we continue.

At present, there are only three home loan providers that've signed up to the scheme: Defence Bank, Australian Military Bank and National Australia Bank. Each of these banks charge interest rates that are traditionally higher than the variable rates. We believe this should be opened up to more players to enable more competition in the market and in turn help to minimise the cost of the scheme. I think only having three banks involved puts limitations on access. Not everywhere you go, especially, say, in remote areas, will have all three banks there. I know we do in Townsville. However, if you're banking with a different bank and you would like to take part in the scheme, it could be somewhat problematic for you to try and transfer your whole life over or to have a separate bank account, so I think expanding this would be a good idea. I've spoken to the assistant minister about this, and I do believe that he'll take a look at it maybe next year to see if we can expand it. In 2008, when it went out to market, these three banks were picked. I do think we're now at a time when the scheme could be broadened quite substantially.

There is the question of staffing. That is an issue that the government must keep their eye on. The Department of Defence owns it; the Department of Veterans' Affairs administers it. As we've seen, DVA has had, and continues to have, significant issues with staff retention and staff availability. This bill could potentially be adding an extra burden. If the scheme expands quickly or grows a lot, there will need to be more staff members put on to manage the scheme. I know that there's a very long backlog of claims and I would hate to see staff pulled out of the claims unit to jump onto this. I would also hate to see people seeking to get onto the scheme waiting because there is no-one available. So I do think the government will need to explain to the House as well as to the people of Australia how the government and the department are going to absorb this extra work.

While this is a very well-intentioned amendment to the bill, there are little touch points. We're not opposing the bill or seeking to amend the bill, but we want to work constructively on addressing those touch points. We don't want DVA to be overburdened. We know they've got significant staff shortages and backlogs of claims. We want veterans' claims to be sorted, of course, because it's not fair that Australian veterans are waiting a year plus to get claims approved. It's not good enough. We've seen what happens when claims are pushed down the list for far too long: the member for Braddon and I end up attending funerals of our mates. So we want that squared away as a priority. If there needs to be extra staff put into the department to make sure that this extra workload will be absorbed by them and not by anyone else, that is something that we would support, and it is the suggestion we would make.

The coalition strongly supports the government's commitment to expand the Defence Home Ownership Assistance Scheme. The coalition believes that, if younger Australians are prepared to defend Australia, we should help them buy and establish a home. The amendments to this bill are an additional incentive for recruitment and expanding the ADF and meeting existing recruitment targets. However monitoring how it's tracking with the minimum service, we would suggest, is a good thing to be across. Initiatives like this can directly contribute to retaining the skills and the talent that we have. The Defence annual report mentions the conduct of surveys that identify DHOAS as a key factor in ADF service and retention. Hearing our brave men and women do surveys and saying that this is a key factor in their being in defence or in whether they will stay in the locality after their service is, I think, a really good thing. If they put down their roots in a place like Townsville while they're serving there, when it's their time to transition at a time they choose or if, unfortunately they have to transition out medically, they have that foundation already in place to stay and grow their family.

The coalition supports measures that will reduce the cost of living for current serving and former ADF members. Measures like this can improve the health and wellbeing of ADF members, past and present, in terms of having that supportive wraparound network whether it's where they retire or wherever they go when they get out of defence. Having a stable home and having somewhere you can call your own home does promote positive mental health. We do see people who potentially haven't gone through this scheme, and I heard only last night about veterans living in cars and things like that. That's simply not good enough. That's a national disgrace. I do believe that homeownership or having your roots grounded is a good thing to promote positive mental health.

The ADF is currently facing significant challenges to recruit, retain and grow its workforce. It is thought the bill will improve the ADF's ability to recruit and retain new and existing ADF members, but I do think that this would be a very positive step towards recruiting future ADF members—whether there's an educational piece that can be conducted throughout school leavers or people who are looking to get into apprenticeships and the like—because there is a good subsidy for homeownership once you've done your minimum time. I think that people do look to want to buy a home in the future, and I think getting a subsidy and support is beneficial. I think it is a good move that we need to educate and explain.

This is one thing that Defence has never really done well. Governments and the like don't send out the messaging or the education as to how this would benefit school leavers or young people who want to get into the military. Also, when you watch the recruitment ads, there's rappelling out of helicopters, rock climbing and all of that kind of stuff. You don't really get to do a lot of that, but I do think a positive measure and a positive push could be that you can get support into homeownership more quickly and get the support that's needed to be able to own your own home. I know banks are pretty good when it comes to looking after ADF men and women who want to get loans, because it is a stable, secure job. It's secure employment, but if young people know that they can also get that support to buy their first home and can bed down their roots where they are, I do think that would be a positive. Housing and homeownership in places around the country can be quite challenging. I know that in Townsville we have a housing shortage, but I know that building a new home or getting involved will definitely boost recruitment.

In closing, the coalition supports these amendments. The coalition has raised questions today, and I've also raised this with the minister's office. I do think that working collaboratively together in a bipartisan way for veterans, Veterans' Affairs and Defence is the best way forward to support our brave men and women who support us. I had conversations just last night with some veterans here, locally, in Canberra. I was talking to them about it and I kind of means tested it with them. They were very supportive; they liked it. They had questions, but that's okay; we'll get the answers. I'm sure the minister will supply them. The coalition will work collaboratively. We'll work together. We want to make sure that our brave men and women are supported.

Debate adjourned.