Keith Wolahan (Menzies, Liberal Party) Share this | Hansard source

I acknowledge fellow veterans the members for Spence and Solomon. In various capacities, we've actually served together. We started off as reservists in the 8/7 Royal Victorian Regiment, which is a very proud regiment. I think there are many names from the 8th/7th Battalion engraved on our war memorial, many of whom were Victoria Cross winners and many of whom fought in every conflict. It's one of the oldest reserve battalions in the country.

Member for Solomon, we did commando selection together, so we got to see each other at our best and our worst, where all of the layers were peeled away with no sleep and no food. It was a wonderful life experience that I'm glad that I shared with you. I also acknowledge that we're both co-chairs of the parliamentary friends of veterans group. It's important that, wherever we can, we make sure that it's bipartisan because, I think, both major parties take this seriously and we do our best. We might differ on the margins, but at the core interests of veterans we're as one, as we should be.

I rise to speak to the Defence Home Ownership Assistance Scheme Amendment Bill 2022. I'm actually someone who has one of these home loans. It's on my declaration of interests. I acknowledge that the pay that we get here is way above what the average Australian gets, but it's probably something that wasn't quite noticed with lower interest rates. Because the scheme is tagged to how the interest rate is, as interest rates go up I think people will notice it more. Those who use it will really appreciate it, especially as the cost of living rises in so many areas, so making this more available is a really good thing and a timely thing to do.

Serving our nation is a privilege, and it demands the most and the best of us. Before I go to the bill, I would like to give some historical context to a scheme like this. The chamber might not be aware, but this bill belongs in the best traditions of the Australian Public Service. After the First World War—Australia's greatest generation—the government decided to come to soldiers' aid, and they did it in the Discharged Soldiers Settlement Act 1917, which was designed to deliver en-masse support for soldier property ownership. In the Victorian experience of that, in Mallee, Gippsland and the Goulburn Valley, over 10,000 soldiers found a home. The government acquired a million hectares, and a formidable deciding body was established. It was called the Victorian Lands Purchase and Administration Board.

All of the inputs was celebrated and the funding was paraded. They didn't have social media then to tell everyone what was happening, so they put it on bills and posters and in the newspapers. Everyone thought, what a great thing! But, often, the devil is in the detail, and the execution didn't turn out too well. In some states, more than half of those resettled did not remain in their properties in the succeeding decades. In 1926—and we know what was happening in the 1920s in Australia—3,000 walked from their homes in Victoria. That's what we saw in the United States in 2008, when people dropped the keys on the kitchen bench and walked out of their house, creating the financial crisis. But it happened in Australia too.

It was a bright and shiny idea. It had all of the press plaudits. It was just defied by the reality and the times—the economic crisis that the nation faced. Even though they were gifted land, many could not afford their homes. Many were without work and they didn't have the means to sustain it. There was a royal commission that followed it, and this was in the era where royal commissions were rare, unlike the times we find ourselves in now. The verdict was clear: the scheme had overwhelmingly failed.

I'm not raising this because I feel that this scheme is in that territory. I'm raising this because we should always learn from the past and the mistakes that are made, even the past as distant as a century ago. There is an important lesson from that experience, and it's that support for veterans does not work in a vacuum. We should not be deluded into thinking that we might offer a cash scheme, a simple loan, and then that's it: we've done our job; we don't need to think about it anymore. We should not avert our gaze from the complexity of these challenges and the onus on us to make sure that the implementation of a scheme is as it should be.

Maintaining a long career in the armed forces is truly a challenge. It's one that's not easily reduced to a cold calculation of financial entitlements.

I do know that these programs—often, conceived by well-meaning public servants here in Canberra—need to be stress-tested. If we get them wrong, it is not we who pay the price; it is the veterans at the other end. So we should make sure that this scheme is continuously reviewed.

Another historical context for the purpose of the scheme is the concept of homeownership. Homeownership, I think, is core to our sense of fairness as Australians. It is core to economic security. We know that—whether you have a partner or you are single, you've been divorced or someone has died—if you have your own home, your financial security is entirely from different people who don't. So the more Australians we can have owning their own home, the better and fairer a nation we will be.

When you look at the statistics on homeownership for younger people, they're not good enough. And that failure is on my party as much as it is on any other. The challenge is on all of us, but obviously the Labor Party is in government. We need more young people owning a home.

The founder of my party, Robert Menzies, in the depths of World War II, when he could have thought about nothing but national security, turned his mind to homeownership. In his forgotten generation speech, he singled it out as one of the most important things for this country—even in World War II, when our very survival was at stake. He spoke about people having a home of their own into which they could withdraw and in which they could be among their friends.

A home into which a veteran can withdraw and be among their friends is the greatest gift that we can give a young veteran. If they have done two years of service, or four years as a reservist, we are talking about young Australians in their 20s who have their whole future ahead of them. So if they're making that decision, incentivised by this scheme, to buy a home, then I think we've done a great thing for them.

Turning to the actual bill and the policy detail, if we look at the implementation for the year 2020-21, over 6,000 applications were made and over 3,600 subsidies were paid. So the program enjoys growing demand. It's well-regarded. When I was serving, I know that there wasn't a serving member who wasn't aware of it. And it's not just the subsidy; it's that decision to put their money towards a house that a young person might not otherwise make. So in a way, we're sort of giving them a nudge, like a parent would, to do the right thing for themselves.

The critical terms of the bill specify reductions in the required minimum years of service, and I think this is an important thing. When a person put on our uniform, as a reservist or a full-time member, they signed a contract that had a term that meant they would lay their life down for this nation. Whether they served more than a day or a week, or served overseas or domestically, that was a contract they engaged in voluntarily, and we owe them a great debt of gratitude because of that. The change in this bill reducing the time frame is an important change that recognises the importance of that service—because all service matters.

In terms of the monetary context, it is clear, from the recent budget and the pronouncements of the Reserve Bank governor, that inflation is not going away, the cost of living is not going down and interest rates will continue to rise. So, given these headwinds, it is important that the subsidies remain tiered to the median interest rate, with all of the fluctuations that the months and years ahead may present.

Another issue I'd like to note is the actual number of banks that subscribe to this scheme. So, at present, the right to the Defence Home Ownership Assistance Scheme, or DHOAS, as it's referred to, is implemented by three banks: the National Australia Bank, the Defence Bank and the Australian Military Bank. I think it would be worth reviewing if there is any way for that scheme to be used more broadly. The reason is this: you may have a subsidy given on an interest rate, but if the bank down the road is offering a reduced rate then it's really just a cash transfer to that institution. It would be nice for a veteran to look through the market, like any other young person would, and say, 'I have found for myself and my family the best rate,' and then add onto that the subsidy that is in this scheme.

If it's just limited to three banks and they then add onto that subsidy other fees, charges or a higher interest rate then there's a risk that this scheme is helping not veterans but the National Australia Bank, the Defence Bank and the Australian Military Bank. It should be available to all providers of mortgages. If the only restriction on that is the providers themselves not signing up to it, I plead with them to get on board and offer this to their customers. The most competitive mortgage rate plus the subsidy should be available.

The point has been made by others that one of the risks of reducing eligibility is that it might affect retention. I don't accept that argument. If a reservist or a full-time member is paying a monthly mortgage, they're not going to rush off and change jobs in a hurry. I don't think it's going to affect retention at all. It's just recognising, as it should, that service matters, no matter how long.

I turn to the geopolitical context we find ourselves in. It's not lost on any members of the House that these are graver times than we saw 10 years ago or 20 years ago, principally in our region. We are looking to increase the Defence Force by 30 per cent, and that has bipartisan support. With the low unemployment rates that we have that's not an easy thing to do. This scheme is an extra reason for talented members of the public to sign up to the Defence Force and help get those numbers up. It's just another reason to pick this job over others.

I conclude in the last few minutes where I started. This nation has a great tradition of encouraging veterans into their own home. We didn't always get it right, but with the history of the 1917 act we need to recognise that these schemes live and die by the economic circumstances they are found in. We had a royal commission into the 1917 act because this scheme then clashed with the Great Depression. We are not heading into another great depression—touch wood; I don't want to crash the market today—but we are heading into tough times. This scheme must survive in those tough times.

I commend the government on the amendments. They have our support. We should keep an eye on it as inflation rises and interest rates rise. I repeat my plea that every mortgage provider in the nation gets on board, is there for veterans and uses this scheme. They will be great customers of yours. If you put them first, they will reward you. I commend the bill to the House.

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