Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Hansard source

I rise today to speak on the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009. This bill will provide eligible veterans and their dependants with a much needed pension increase and is designed to ensure that those veterans or dependants in receipt of the pension receive the same level of support as age pensioners. The bill also provides for an increase in certain payments under the Veteran’s Entitlements Act, to compensate low- and middle-income households for the expected increases in the cost of living following the introduction of this government’s Carbon Pollution Reduction Scheme. Finally, the bill will make a number of minor amendments to the social security and aged care secure and sustainable pension reform measures enacted earlier this year.

The veteran community has given a lot to this country and so it is only fair that this country look after them, when they are no longer able to fight—even though I am sure most of them would if only given half a chance. That is why I am pleased that this government has finally acted to ensure that our veterans’ pensions will increase from 20 September 2009.

Under the new measures proposed in this bill, the most important for our veterans will be the long-awaited increase to the single maximum basic rate of the service pension. This measure will increase the pension for all Veterans Affairs’ income support recipients, war widows and widowers. In real terms, this change will deliver an extra $32.50 per week for single service pensioners and $10.10 per week for couples on the maximum rate. The new measures mean war widows and widowers will receive an extra $30 per week.

I take you back two budgets ago, when it was the coalition who pushed the idea of increasing the age pension by $30 per week to support our pensioners. Here it is—15 months later—and finally a bill increasing the pension, supporting our veterans, comes to this House.

One area of great concern to our veteran community is the way in which their pensions are indexed. Currently, their pensions are indexed by the CPI, which many believe does not reflect the true cost of living increases experienced by pensioners and beneficiaries. Under the new measures, the maximum basic rate of a service pension will be indexed to the CPI or the pensioner and beneficiary living cost index, whichever is the greater.

The new arrangements are designed to better reflect the cost-of-living increases experienced by pensioners and beneficiaries, whose costs may increase faster than those of the general community. I certainly hope that the PBLCI, which was recently developed by the Australian Bureau of Statistics, will serve this purpose. I also urge the government to redress this issue if the PBLCI fails to address the cost-of-living increases that pensioners, including veterans, experience.

In conjunction with the new indexation arrangements, this bill will also provide for an increase to pension payments, in line with an expected increase in the cost of living as a result of the Labor government’s Carbon Pollution Reduction Scheme. The increase, according to Treasury modelling, will be one per cent on July 2011 and 1.8 per cent on July 2012. I am quite surprised that we have Treasury modelling available that will predict an exact percentage amount, yet in this House during question time the Prime Minister failed to address what the price of a litre of milk, a litre of petrol or a leg of lamb will be; whether grocery baskets will go up; or detail what the cost of electricity will increase by, for all Australians not only for pensioners. Yet we have Treasury modelling that will define an exact benefit increase for our pensioners.

This bill will also introduce a new combined couples benchmark for pension rates: 41.76 per cent of the annualised male total average weekly earnings figure. The single pension will be benchmarked at 66.33 per cent of the combined couple benchmark, or 27.7 per cent of the annualised MTAWE figure. This new arrangement will apply to service pensions and, indirectly, to most disability pensions, components of war widows pensions and ceiling rate income support supplement and service pensions. These changes will help ensure that the MTAWE benchmarks continue to operate effectively for pensioners.

This bill will also serve to reduce the complexity of current arrangements as they pertain to allowances and supplementary payments. Under the new measures, a number of smaller payments and allowances will be combined into one pension supplement. This will result in an increase to pension payments of an estimated $10.15 per week for couples and $2.50 a week for singles. This payment will be made fortnightly; however, pensioners will be able to request payment quarterly. Under this measure, the pharmaceutical allowance and telephone allowance will be replaced by the veterans supplement under the Veterans’ Entitlement Act 1986 and by the MRCA supplement under the Military Rehabilitation and Compensation Act 2004.

While this measure is set to simplify payment arrangements, I again urge the government to ensure that the veterans community is properly informed of any changes. Small changes to payments may seem innocuous to those in government, but they can have a dramatic effect on the way pensioners budget on a day-to-day basis. I also urge those who represent the different sectors of the veterans community to communicate these changes to their fellow veterans and to approach the Department of Veterans’ Affairs should any problems be encountered.

Under this bill the income test taper rate will increase from 40c to 50c per dollar of income over the ordinary income free area. It will also remove the additional income test free area for dependent children from the calculation of a person’s ordinary income free area. This change will tighten the income test. The purpose of that is to ensure the pension system is sustainable and targeted to those most in need.

One particularly welcome change is the introduction of work bonus. This measure will provide an increase for those veterans and dependents who wish to take up or continue work. Under this arrangement, a qualifying veteran will have 50 per cent of $500 disregarded each fortnight where they earn over $500, or 50 per cent of their total fortnightly income disregarded where the person earns less than $500.

I will now briefly canvass the remaining changes to be enacted under this bill. Firstly, in accordance with the Harmer review’s recommendations, the pension bonus scheme will be closed to new entrants from 20 September 2009, as the scheme was judged to be too complex and was not meeting its objectives. The scheme will remain open to existing members. Secondly, existing arrangements will be improved to make pension advances more accessible. This is a welcome change. However, again I urge the government to ensure that such change is properly communicated to the veterans community so as to avoid a situation whereby a veteran is unable to pay back the advanced pension amount. Thirdly, it is welcome news that there will be a minor amendment to ensure that pensioners are not unintentionally charged higher aged-care fees as a result of pension reform packages. Lastly, the pension age for veterans will not be increased from 65 to 67 years of age as it has been for the rest of the community. This provision also applies to veterans’ partners.

It is important to note that the government has finally listened to the opposition with regard to ensuring that transitional arrangements ensure that veterans are not disadvantaged by any new amendments. As I said to this House before, any amendment that concerns a cessation or a change to a payment of a person’s pension, allowance or salary must be thoroughly examined before being implemented. The extra level of diligence needs to be applied when altering a payment system. This is particularly the case given the Rudd Labor government’s poor track record in this area, and given that the amendments in this bill concern those who are least able to compensate for poorly enacted policy.

I support the measures presented in the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009, and I am sure that it will also be welcomed by the majority of ex-service veterans and current ADF personnel. However, the measures contained within the aforementioned amendments still fall well short of what they could have done for our veterans if the Rudd Labor government had not recklessly spent $14 billion on cash splashes. Although this bill will see an increase in the pension paid to eligible veterans, it has done nothing more than ensure that their pension increase follows that given to the wider community. Veterans will once again see the Rudd Labor government’s continuing wilful neglect of their service to this nation. This shameful policy of neglect has been demonstrated in their not resolving the outstanding issues surrounding ADF superannuation benefits. This is most surprising, as superannuation is a key component of the total remuneration package for ADF personnel and is therefore critical to recruitment and retention of service men and women. Again, the Rudd Labor government favours rhetoric over results.

There is a considerable amount of frustration within the defence and veterans community due to the lack of initiative shown by this government in addressing ADF superannuation contributions. The inaction of this government has failed our Australian service men and women, past and present, whose current superannuation arrangements fall well below modern standards.

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