Wednesday, 22 August 2012
Veterans' Affairs Legislation Amendment Bill 2012; Second Reading
Thank you, Madam Deputy Speaker. I take pleasure in joining in the debate on the Veterans' Affairs Legislation Amendment Bill 2012. As other speakers from this side of the chamber have indicated, the legislation proposed by the government makes a series of minor, technical amendments to various pieces of legislation which affect veterans. It is non-controversial in nature and the coalition intends to support the measures contained within it.
But there is another aspect to the legislation, and amendment put forward by the member for Fadden, which is somewhat more controversial and has been the subject of great debate, both in this place and in the broader community. We believe there is an opportunity before the House today to make this legislation better, and the coalition is seeking to do so. We are seeking to legislate for fair indexation as a requirement for the passing of this legislation. As a member who represents a large constituency of Defence Force personnel, with the RAAF base at East Sale, and also as a member who regularly attends Anzac Day services and participates in a whole range of activities in commemoration of the service provided by men and women of the armed forces throughout Australia's history, I believe very strongly in the unique nature of military service—as I believe those opposite do. Australia's service personnel, the men and women both past and present, have given an enormous amount to our nation. I believe that they deserve to live out their lives in the knowledge that they have financial security. And that is the very essence of the amendments put forward by the member for Fadden and supported so strongly by members on this side of the House.
As I said, the bill before the House makes a number of important legislative changes, which the coalition will support. However, we believe that the government has the opportunity now to introduce fair, just and equitable arrangements for military superannuants.
We are in a position in this place to make a very real difference here today. The time for fair indexation has come, and it is time this parliament delivered it. I am sure members and senators on both sides would be very much aware of the ongoing campaign by individuals and veterans groups regarding this important issue. There would not be a member in this place who has not been approached by a veterans group expressing concerns with the current situation. The coalition has committed itself to beginning the process of military superannuation reform. That is why the coalition made the commitment, more than two years ago now, to provide fair indexation for Defence Forces Retirement Benefits and Defence Force Retirement and Death Benefits Scheme superannuation pensioners.
The coalition's commitment will see DFRB and DFRDB military superannuation pensions being indexed in the same manner as the aged and service pensions. This commitment will benefit in the order of 57,000 ex-service men and women and their families. It concerns me that as we stand here today, and as I speak to the chamber, the coalition—the Nationals and the Liberal Party—are the only parties in the Australian parliament that have shown their commitment to fair indexation of DFRB and DFRDB military superannuation pensions. To be fair, there are members from other parties and within the ranks of the crossbenchers who have expressed strong support for the position taken by the veteran community. But, as we stand here today, only the Liberals and National Party members are prepared to actually vote in support of this measure. It remains to be seen what happens when the crossbenchers enter the parliament later on today.
To show why this is important, I would like to refer to a very practical example in my own electorate. As I said, I have had the chance to meet with members of the veteran community in the Gippsland region, who have expressed their concerns with the current situation. To say that they are angry and disappointed would probably be an understatement. A typical letter is the one I have here from a Mr Ken Phelps in Traralgon, who outlines the process as it currently stands and then goes on to say:
The purpose of pension indexation is to maintain the purchasing power of our pension. Until 1997 CPI was considered the relevant index but the Australian Bureau of Statistics (ABS) concluded that 'the tight nexus between movements in the CPI and wage and salary adjustments no longer exists.' In 2001 ABS said that '… CPI is not a measure of the cost of living.'
It goes on to say:
In 1997 the Government acted to maintain the purchasing power of Age and other Welfare pensions by changing indexation to CPI or MTAWE whichever was the greater. More recently it included another index factor, the New Pensioner and Beneficiary Living Cost Index (PBLCI).
Nothing however has been done for Military Superannuants, even though a number of Senate inquiries have recommended a form of wage-based indexation be introduced.
Military retirement and disability pensions now stand out as being more harshly treated than almost every other long-term Commonwealth payment that is subject to regular indexing to maintain its value.
Mr Phelps goes on to say, in conclusion:
Service in the ADF is unique and it must be treated that way. It is the military who use every firepower resource available to kill or capture the enemy. The military endure the greatest hardships and it is the military who give up their personal freedoms to carry out the Government's orders. We must not contaminate the uniqueness of military service by including other non-military members or organisations. If the DFRDB superannuants are treated separately funds could be available to provide a higher benchmark for indexation.
Mr Phelps attached his DFRDB benefit statement from 20 June 2012. It is the most bizarre situation of all that we have Mr Phelps receiving a statement saying that his fortnightly pension increase is going to be the princely sum of 62c. He is going to receive a pension increase of 62c. And I can only describe as bizarre that the end result for Mr Phelps is that, because he gets tipped into another tax bracket, he actually ends up being worse off. His net fortnightly payment drops by $23.38.
So I have written to the Minister for Veterans' Affairs and Minister for Defence Science and Personnel, Mr Snowdon, on this matter to explain the situation, and I attached the documentation to go with it. I wanted to make the case on behalf of one constituent of mine—and there are about 20 who have contacted me on this issue—that we have people like Mr Phelps who rightly feel aggrieved that they are actually going to be worse off under the current arrangements. He is concerned that he and his fellow military superannuants are being unfairly penalised at a time when everyone in the community appreciates the cost-of-living increases and other increases related to government policy, such as the carbon tax. The military superannuation is simply not keeping up with those costs.
I have written to the minister and sought his advice on that matter, and I look forward to hearing what he has to say.
I have another example that concerns a veteran named Ralph Faber, from Stratford, who in an email to me puts it somewhat more dryly. He writes:
A few weeks ago I told my good wife that when 1 July comes we would get an increase in our DFRDB pension. I salivate at the prospect of no longer having to share our one serving (two slices) of raisin toast with our coffees.
Well, notification arrived today and advised that I will receive the princely increase of 88 cents … that's right, 88 bloody cents. Even a mini dim sim costs a dollar. 88 cents … that is about as useful as being the world's tallest midget. Oh well … back to sharing the raisin toast.
At least Ralph has kept his sense of humour, but I believe he has every right to be angry, frustrated and disappointed with the current situation. I appreciate that in the contributions from those opposite they have asked why we did not fix this situation, given that we had the opportunity during more than 11 years in government. Perhaps that is a valid argument. I think I heard the minister himself make that argument. Perhaps we could have done better in that regard.
But we stand here today trying to make an improvement to the situation. We have the capacity in this place to actually make a difference for people like Ken and Ralph and about 20 other people in my electorate who have directly contacted me on behalf of other ex-service personnel.
The coalition has been committed to beginning the process of military superannuation reform. I am concerned that the government took a position before the 2007 election that, if not a direct promise, certainly gave a nod and a wink to the veterans community that the government would be taking action in this regard. But the government has failed repeatedly to deliver on its commitment before the 2007 election. The coalition, and I imagine every member in this place, has probably had the same experience as me in that they would have been approached by veterans, ex-servicemen and ex-servicewomen, ex-service organisations and current ADF personnel expressing concern about this issue.
I fear that not only has Labor failed veterans when it comes to military superannuation reform but if the vote does not go the way we would like it to go in the coming days and weeks this parliament will continue to fail veterans when it comes to military superannuation reform. I acknowledge that members opposite may say the cost of fair indexation is too high. But I do suggest that we have a situation where we have a government with twisted priorities in that regard. We have seen the government's home insulation debacle, whereby it cost $1 billion to put the insulation in and another $1 billion to take it out. We have seen the wastage associated with the school halls program: a $16 billion program that was not based on needs but was based on shovelling the money out the door to provide some level of economic stimulus. Even Ken Henry admitted as much as a year or two later that the first priority was not to achieve value for money for taxpayers' dollars—which I found to be quite a staggering admission. So we had the wastage associated with that program and the home insulation debacle, and right now as the government attempts to recover its position in the polls we are seeing $36 million being spent on carbon tax propaganda. So we are telling veterans that we cannot afford to assist them with fair and equitable indexation of their superannuation payments but we can afford to find $36 million for a carbon tax propaganda campaign. That is a government with a twisted set of priorities.
The cost to the Commonwealth of fair indexation over the next four years is something on the order of $100 to $150 million. It is not the inflated $1.7 billion that the Labor Party claims. I think the minister should be honest with the veterans community in that regard. The coalition has already come up with savings proposals in terms of how you could find the funds necessary to implement this important change. As we have this debate I want to stress that there does not appear to be any philosophical divide in this chamber in relation to this issue. There are members opposite who we know want to do the right thing by our veterans. Also, members of the cross bench have indicated they want to do the right thing by our veterans. I note that in his speech even the member for Eden-Monaro—and I acknowledge his service to our nation in the armed forces—after going through his attack lines on the coalition concluded with what I would say was quite a remarkable statement on the coalition's commitment to fair and equitable arrangements for military superannuants. I will quote the last line from the member for Eden-Monaro's comments:
I am intent on actually delivering a result. I really believe we can do this, we can find a way to do it, and I will never cease my efforts to achieve an outcome in this respect. I am committed to work for as long as it takes to achieve that result.
I say to my good friend and electoral neighbour the member for Eden-Monaro that this is exactly what we are attempting to do today. The member for Eden-Monaro can actually help us achieve the result he so obviously believes in and spoke about in his own contribution in this place.
So there is no philosophical divide on this. This is about the government being prepared to make this a priority, to find the savings, if necessary, to support our veteran community and to recognise the extraordinary contribution they have made to our nation and the uniqueness of the service they have provided to our country. There is no philosophical divide. If we want to find the money, we can find the money and we can provide a fairer outcome for our veteran community.
In conclusion, as I said, the coalition announced this fair indexation commitment more than two years ago, in June 2010. We have been strong and consistent in our support for veterans and in our advocacy on this issue in the chamber and in the wider community. Our commitment extended fair indexation to superannuants aged 55 and over to DFRB and DFRDB scheme members. Under a Liberal-National government their pensions will be indexed in the same manner as age and service pensions. We took that commitment to the 2010 election.
It is history now that we did not quite achieve a majority or secure the opportunity to govern with the crossbenchers. Despite losing that election we introduced our legislation to the Senate on 18 November 2010 to provide fair, just and equitable indexation for DFRB and DFRDB military superannuants. There have been already more than half a dozen inquiries, all of which supported our approach towards fair indexation.
As I have stressed in my contribution here this morning, there is no philosophical divide on this issue. There are members opposite who strongly believe in what we are trying to do. There are members on the crossbench who strongly believe in what we are trying to do. And, of course, members of the Liberal and National parties are also advocating very fiercely on this issue. The time for action on this important issue is now.
In closing, I would simply like to congratulate the member for Fadden for his dogged pursuit on behalf of the veteran community. I thank the House.
I rise to speak on the Veterans' Affairs Legislation Amendment Bill 2012. This bill seeks to make some minor measures and amendments to legislation affecting our veterans and ex-servicepeople. Most importantly, the bill seeks to clarify the arrangements regarding the payment of travel expenses for treatment under the Veterans' Entitlement Act and the Australian Participants in British Nuclear Tests (Treatment) Act. It also makes exemptions from income tax for reimbursements under the Repatriation Pharmaceutical Benefits Scheme, MRCA Pharmaceutical Benefits Scheme, and the new Veterans' Pharmaceutical Reimbursement Scheme. The bill also exempts bereavement payments in respect of Indigenous veterans or members from social security income tests. However, as welcome as these amendments are, I, in concert with my coalition colleagues, believe that they do not go far enough. As I said back in May 2010 when I spoke on the Veterans' Entitlements Amendment (Income Support Measures) Bill:
This government seems to believe that tinkering on the edges of policy development and introducing administration bill after administration bill on veterans' affairs issues are wholesale substitutes for policy reform. It is disappointing that I again stand here and debate yet another bill that fails to deal with the No. 1 issue that affects our veteran community, an issue that the then Rudd and now Gillard Labor Party said prior to the 2007 election it would fix.
I speak about the promise to fix the indexation of military superannuation pensions. It is as live an issue today as it was back then—perhaps even more so. However, before I address the indexation issue I want to address the issue of the Veterans' Pharmaceutical Reimbursement Scheme. For those who do not remember, this government went to the 2007 election with much fanfare, promising our ex-service community a Veterans' Pharmaceutical Reimbursement Scheme. As with so many of their promises which they had failed to deliver during their first term of office, they then took the scheme for a second time to the 2010 election. However, what was eventually delivered—by regulation I might add, not by legislation in this parliament—was a poor imitation of what had been initially promised and it has not been widely welcomed by the veteran and ex-service community.
The wholesale changes that the veteran community were expecting after the promises made by Labor at the 2007 and 2010 elections and since then have simply failed to materialize. Like the Rudd government before it, the Gillard Labor government promised much to the veteran community but have repeatedly failed to deliver, due to their own self-interest and poll-driven policy paralysis.
Like the government, the coalition also promised a veterans' pharmaceutical reimbursement scheme at the 2010 election. However, unlike the government scheme, which only gave those veterans with qualifying service and in receipt of a disability pension help with their out-of-pocket expenses, the coalition promised that all veterans and ex-service people in receipt of disability pension paid above 50 per cent of the general rate would qualify for the scheme. The coalition believes the government's Veterans' Pharmaceutical Reimbursement Scheme creates two classes of disabled veterans and is unfair, to say the least. More importantly, it means that 1,500 of our most disabled ex-servicemen who receive a disability pension are not eligible for the scheme. The coalition during Senate estimates asked the government for the advice used to introduce the scheme by regulation, which it has refused to provide. It is for this reason that we on this side of the House have introduced amendments to this bill to correct what we perceive as a flaw in the scheme that was introduced by regulation.
Saturday was the 46th anniversary of the Battle of Long Tan. As I said at the two Vietnam Veteran Day ceremonies I attended in my electorate in the Medowie and Forster, the day was an opportunity to pause, reflect and remember the sacrifice over 10 years between 1962 and 1972 of nearly 60,000 Australians who served in the Vietnam War. Throughout the campaign 521 were killed in action and more than 3,000 were wounded. For many Vietnam veterans, Australia's involvement in the war is as vivid and fresh today as it was all those years ago, even though the conflict for all intents and purposes ended 39 years ago. General Westmoreland, the commander of US forces in Vietnam, said of the Australian troops at an Anzac Day service, 'I have never seen a finer group of men. I have never fought with a finer group of soldiers.' Yet their return home was not a happy one for the Vietnam War had divided our nation. There were no welcome home matches, no garlands placed around their shoulders, no tributes to their gallantry. Many have told me of the hardships they faced and the feelings of rejection and alienation from a nation that was looking to put the Vietnam War behind it.
Passing this legislation with the coalition's amendments would be a significant win for our veterans. The RSL has already called for the abolition of out-of-pocket pharmaceutical expenses for all veterans, something that has also been supported by Legacy, the Vietnam Veterans Association of Australia and Vietnam Veterans Federation of Australia. This would be a strong step in that direction.
Recently the House paid tribute to the service of Sergeant Blaine Diddams, whose parents, Peter and Cath, live in Pacific Palms in my electorate. He was tragically killed on 2 July during an engagement with insurgents on his seventh tour of operation in Afghanistan. As a member of the Special Operations Task Group from the Special Air Service Regiment, he was a true hero who leaves behind a wife and two children. Working so closely together in the services, mateship is like no other. This is something we were reminded of in the family statement on Sergeant Diddams' death, which read, 'His mates really became members of our family and the men he stood side-by-side with in the SASR were his brothers in every sense of the word.' His death again brought home to me the sacrifices our soldiers today are prepared to make for our country and those that our veterans have made from lines that run from Gallipoli through Kokoda to also reach into Long Tan and Tarin Kowt.
As my phone call expressing my deepest condolences over the loss of their son drew to a close, I asked what I could do to help the family. Sergeant Diddams' father Peter, himself a Vietnam veteran who retired in 1998, simply asked that I should do all I could to look after our troops. We should never forget the sacrifice of all 33 of the Australians who have died in Afghanistan and neither should we forget the troops who have died in all conflicts that our nation has been involved in, from the first Australian soldiers killed in South African wars in the last years of the 19th century to recent operations in Afghanistan. However, we can honour their memory by looking after all of those veterans who have returned. Today we recognise that the way the Vietnam veterans came home at the end of that conflict was not our country's finest hour. It is therefore time to heed Sergeant Diddams' father's call to look after our troops and honour all veterans.
As I alluded to earlier, the number one issue for our veteran community is to achieve a fair indexation for the 57,000 military superannuants and their families, something the coalition is determined to see happen. That is why the coalition will support this legislation while seeking to introduce two significant amendments.
The fair indexation of military superannuation has been an ongoing campaign, most notably by the Alliance of Defence Service Organisations and the Defence Force Welfare Organisation campaign, which calls for a fair go.
In this House we have all received ongoing correspondence on this matter. I have received hundreds of emails and letters from many of my constituents regarding the paltry increases in the DFRDB pensions this year. Dave from Medowie asked:
I notice from the news that the federal MPs will receive a three per cent pay increase, which is the second in three months. This news came to me the same day that I was advised from DFRDB that my pension would increase by 0.1 per cent for the year. How is it that your pay increase is by a factor of 30 compared to mine?
Brian from Raymond Terrace wrote:
I received my DFRDB update that informed me the CPI had risen by 0.1 per cent, thus raising my pension by 66 cents. With the carbon tax and increasing costs on everyday essentials this seems bizarre in the extreme. Can you look into this unfair and possibly discriminatory action, not just for me but for all military pensioners?
Ernie from Salt Ash wrote:
After 20 years service to queen and country I received my six-monthly self-funded update of that pension. It was 0.1 per cent. This equates to 86 cents per fortnight until the next CPI increase. I feel insulted and sad.
Ernie concluded by asking, 'Is there no way that the subject can be raised again?' Well, Ernie, like all DFRDB recipients in my electorate Paterson—indeed, across our nation—you deserve better. I believe, as do my coalition colleagues, that it is not acceptable for parliamentarians to bestow upon themselves pay increases, whether awarded by an independent body or otherwise, without looking after those veterans, such as Dave, Ernie and Brian, who have served our nation in a much greater capacity.
Veterans' organisations have also been making strong representations on this issue. The submission to the Senate committee on the coalition's Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010 by the Alliance of Defence Service Organisations noted:
In no other calling, occupation or profession has the State the power to accept or demand the surrender of these rights [Universal Human Rights]. The Unique Nature of Military Service deserves unique solutions and also places a great burden on the Government as the “employer” to ensure that ADF members are looked after both during and after Service.
The submission by the Returned and Services League of Australia, the RSL, further argues that the differences between the legislation for military superannuation schemes and other Commonwealth superannuation schemes is a policy aberration. It says:
An examination of legislation for the Australian Defence Force shows that in almost all respects, the Parliament has been consistent since Federation in regarding the nation's armed forces as a separate and quite distinctly different part of Australian society.
I have been calling for indexation for some time now. In fact, prior to the last election my colleague Louise Markus, who is now the member for Macquarie, and I developed the policy to increase the DFRDB that was taken to the election. We feel very strongly about this issue. That is why I am delighted the coalition have heard these calls and have responded, as we are doing here today.
The coalition is committed to seeing the DFRB and the DFRDB military superannuation pensions being indexed in the same manner as the aged pensions. Last year, in Melbourne, the Leader of the Opposition recommitted—to our last election campaign commitment—to fairly index the DFRB and the DFRDB. This was during his address to the RSL national conference. In fact, he signed a pledge this March to deliver fair indexation.
The government has not yet responded. On the same day that our side recommitted to providing veterans with fair indexation, the Treasurer rejected it outright. Labor is also still to respond to the Podger review on military superannuation, despite having had four years to do so. Labor should do better than let its wasteful and reckless spending erode veterans' pensions even further by not supporting the coalition's fair indexation amendment.
Military superannuants should not have to wait for a coalition government to be delivered fair indexation, which is why I call upon all parliamentarians—whatever their political affiliation—to show support for our veterans by supporting the coalition's amendments. I know that there are others outside the coalition who share our position on this matter.
On 18 May this year the member for Lyne gave notice of a motion which called for fair indexation of these pensions. Today is the day that he can join in and support the coalition and deliver on his commitment in that notice of motion. The member for Denison, back in October 2011, also spoke in favour of this measure—
As I said before I was interrupted, the member for Denison, back in 2011 also spoke in favour of these measures—again, this will be an opportunity to vote for what he has previously said, instead of just blatantly lining up with the government. I am sure there are others on the crossbenches who must be in favour of a better deal for our superannuants
However, these are amendments that all members of this House should be able to support. By coming together in a bipartisan manner in this House, we can show Australians that we always do the right thing by those who give so much to our nation through their service. Sergeant Diddams father, Peter, whose son made the greatest sacrifice of all, has asked us to look after those who have served our nation and returned home. By supporting these amendments we are able to do that.
We come in this place to debate, to reach an intelligent consensus. I asked the opposition spokesman a reasonable question and I got by way of reply a gratuitous insult. Let him reflect upon whether this place is a place where we have intelligent debate or whether it is a name-calling political party escapade.
Mr Baldwin interjecting—
I am not grandstanding; you are the one who grandstanded. Madam Deputy Speaker, would you shut him up please, so I can continue with my speech? Let me say that, when a minister or an opposition spokesman asks us to vote for a proposal, it is reasonable for us, because we have not been able to get it out of his office, to ask: 'What are the implications of the amendment he is moving? I am more than happy to take the interjections from the opposition spokesman. The question that I asked the opposition was: as we understand it, you amendment throws out all these benefits. That is the question I ask. Would someone in the opposition like to answer that?
Mr Robert interjecting—
We are simply asking these people—they are not going to tell us, obviously; we ask for some information and we cannot get it off them. But, as we understand the implications of what they are doing, these benefits that are needed and wanted will not flow if the opposition gets their way. What you are looking at here is a re-run of the Malaysia solution: 'Oh, no; if we get a solution then that will not be to our political benefit.'
It would be nice if they thought a little bit about the benefit to their country, and the servicemen. Quite frankly, if you are going to throw these benefits out, one would have to question your sincerity.
I volunteered to go to Indonesia as a lad of 18. We had to give out three telephone numbers, and we were on 24-hour call-up to go over there. I want to make the point that I do not think I was being very patriotic; I just assumed everyone was going. My logic at the time was that it was better to get in first. So I do not want to make out that I was a hero, because I most certainly was not.
My electorate takes in Townsville and has for a long time, so I am very familiar with the biggest Army base in Australia and the people who man that Army base. The family breakdowns in the Army are horrifically higher than in any other areas in Australian society. Mining is another very bad area. Because of fly-in mining, people are away from home all the time, and loneliness creates problems in family relationships. There are forced separations. There is the Child Support Agency, which makes it very easy now for a woman to leave. And then there is a very oppressive regime that falls upon the soldier, because now he has to make child support payments and is left with no money.
So when you go into the Army there is a very grave risk to your family. When you go into the Army you go and fight, and there is a grave risk to your life. We recently had probably one of the most moving events in North Queensland's history in the last 20 or 30 years: Ben Chuck's funeral. He was from a very prominent and well loved family up on the Atherton Tablelands. The Prime Minister—God bless her—and the Leader of the Opposition—God bless him—both turned up to honour a man who had given his life for his country. If you knew that family, you would never doubt for a moment that—unlike me, who joined up because everyone was joining up, not for the best of reasons—they really are very patriotic people. Ben was a very, very patriotic person. My chief of staff was at school with Ben. You would never doubt their patriotism. And they made that point that his death will not be used as an argument with respect to Afghanistan. It is the decision of our country to be there, and it is our patriotic duty to stand by our country. That is the line they took—and I hope I am interpreting that correctly.
Service men and women are just very patriotic people. They risk their life, they risk their family—out of all proportion to anyone else in our society. And because of these factors, particularly the marriage one, we have a very high attrition rate in the Army. People start thinking about it and then decide they do not want to be in the Army, so we lose people with very great attributes that our country simply cannot afford to lose. When the opposition spokesman spent his time passing gratuitous insults to me and wasting three or four minutes of his speech time—rather stupidly, I thought—I was thinking: 'Well, you were there for 12 years. If this was so dreadful and horrific and terrible, why didn't you do something about it in the 12 years you were there, as the government of Australia?' I, amongst many others, including some of your own members, were screaming for action on the indexation issue with respect to our soldiers.
You stand here in a position of colossal hypocrisy, because you were there for 12 years and you did nothing about it. If these are such burning questions, were you just a bunch of numbskulls who did not understand it or were you very callous people who did not even bother about it?
The government and the opposition agree, as do the crossbenchers, although I speak for myself and not for them, that these are good moves. The people in the Army I have spoken to have advised that these are very good little things. The pharmaceuticals is one; travel is another. It sounds like a small thing but it is not. It is 20 bucks to get a taxi to go anywhere these days, and $20 is a hell of a lot of money to a veteran on a pension. To be able to do that afterwards is very important, because you get sick and you cannot ring up and get permission in a time frame that is acceptable. The bereavement payment and clean energy are very good things.. But I am not going to go through them all as other members have already done so. There are a lot of good things here.
The second reason we will be voting for this is that as we understand it—I cannot get any sense out of the opposition on this—if we vote for the opposition's amendment all of this is lost. I cannot see any purpose in losing all of this.
The honourable member said that that is not right. Well I wish somebody on his side would explain it to us. If people are of limited ability intellectually they do not like taking interjections. I understand that. But if you are a spokesman—
Standing order 90 requires that a member not impugn a motive upon another member. The member for Kennedy cannot say of another member that they have limited intellectual abilities.
I retract that. I apologise for saying 'limited intellectual abilities'.
There are three options, and I think that most people probably understand this. It can be indexed on male average weekly earnings, 27.7 per cent, on the CPI or on the fairly complex pension benefit arrangement that exists at present. So, there are three different ways it can be indexed. As I understand it, the decision by successive governments—which is a good decision—is that they choose the best of those three for the Australian pensioner. All we are saying is: for heaven's sake, surely our returned servicemen should get the same treatment.
I ask the government: why wouldn't you do this for these people? I ask the minister again to put this before his government. Other crossbenchers and I will be moving legislation along these lines yet again. We plead with you to go down this path. It is not a lot of money. You have cut four thousand million dollars out of the Army budget. Surely you can give back a little bit. But you are losing very valuable personnel at present. These people suffer death on the front line defending the things we believe in, and they have family breakdowns. Really, they should be entitled to a better deal than we in this place have with our indexation arrangements or even, God bless them all, Australia's pensioners. These people should get the best deal of all, but they are not. They are getting a second-rate deal at present.
I strongly agree with the opposition on this. If they did nothing in 12 years at least they are doing something now. As to what their motives are, I am not going to impugn them for that. I am just going to say, 'Good on you, Mr Opposition. We hope that you continue to fight for the best outcome, which is simply putting them in line with all of the other pensions.' I think that is more than warranted.
I can see absolutely no point in depriving our servicemen of these benefits. It would appear to me that the opposition is doing that, and, I hate to say it, but they are doing it for political reasons.
That seems to be the clear and unequivocal interpretation that I can put upon what is happening here. If I am wrong someone can come and explain it to me. I would be quite happy to listen to them.
We thank the government for these changes, but we must emphasise that there is no logic, and there most certainly is no humanity involved, in the continuing position by the government of not accepting the preferable alternative as far as indexation of the pensions goes. It is a point of view that my own party will be hammering continuously and continually. Many of the people in the services are closely associated with us and we most certainly intend to be their champions. I think that every single person here should be their champions, but for 12 years the opposition were not and for three years the government has not been. But we will be the first to congratulate either side if they move forward to a serious indexation of the pensions.
I, like many members here, am very gravely embarrassed by us getting parliamentarians' indexation through—indexation of a very generous nature—while having to face these people who have risked their lives, risked their families and sacrificed themselves in a very tough occupation for our sake. I really do think that—unlike myself—a lot of these people act out of patriotism.
I thank all of those who have contributed to this debate. I am not sure that I can agree with everyone, obviously, because, as the member for Kennedy rightly points out, if the proposal of the opposition were passed it would deprive those potential beneficiaries of the benefits contained in the amendments we are putting before the House. That, to me, is just silly. What it highlights is the political stunt that is being pulled here by the opposition to highlight an issue which they have got out of the public domain about their attitude towards DFRDB indexation. I will come to that in a moment.
What we need to do is to concentrate on this bill. The bill, as you would be aware, exempts from income tax reimbursements made under the Veterans' Pharmaceutical Reimbursement Scheme and the MRCA Pharmaceutical Reimbursement Scheme. The payments are due to commence in the first quarter of 2013, benefiting 50,000 veterans. Why should we deprive those veterans of the benefits that will flow as a result of this legislation? There is absolutely no reason for us to do so. To have this bill hijacked for a political stunt is, to my mind, something which we should be very concerned about.
There will also be amendments to the Income Tax Assessment Act to make it clear that treatment costs reimbursed under the Australian Participants in British Nuclear Tests (Treatment) Act are exempt from income tax. There were 155,000 claims for reimbursement processed in 2010-11. That is an important element. This will clarify administrative arrangements for the payments of travel expenses under the Veterans' Entitlements Act and the Australian Participants in British Nuclear Tests (Treatment) Act. There will be amendments to the Defence Service Homes Act to ensure that those with operational service as part of Operation DAMASK VI in 1993 are eligible for subsidised home loans and insurance under the act—another important benefit.
This bill will ensure bereavement payments for funeral expenses in respect of indigent veterans or members is exempt income for the purpose of the social security income test. There are amendments to the definition of 'Australia' to authorise clean energy payments under the VEA and MRCA to residents of Norfolk Island. That is important to the residents of Norfolk Island but clearly not important to the opposition. And the bill will provide for more timely provision of special assistance under the VEA and MRCA via legislative instrument, instead of the current arrangements, which require regulation. The bill will ensure that debt recovery provisions will be applicable to all relevant provisions of the VEA, the regulations and any legislative instruments made under the VEA, and amend the MRCA to replace obsolete references to pharmaceutical allowances and telephone allowances.
There are important things. Many of them are small but they are very important to the veteran community and they should not be side-tracked and put off as a result of this stunt by the opposition to try and get us to accept an amendment which would have the House decline to consider the bill. Let us be very clear about this: whilst I appreciate the integrity of some in the debate—and I understand full well the intensity of the debate—I think we need to appreciate a number of points.
The first point is—and the member for Kennedy rightly pointed this out—the opposition did nothing during the 11 years they were in power to address the issue they now say is at the front of their minds. Why is that? Perhaps it is because the then government took a conscious decision not to do so. We know that because of a contribution recently made by Nick Minchin, the former finance minister, to the Australian on 2 May. In this letter to the editor, he said that this claim to change indexation:
… was properly rejected by the Howard Government, of which I was a member … There is no inherent logic to the proposition that a public sector employment-related superannuation payment should be indexed in exactly the same fashion as a means-tested welfare benefit in this case, the aged pension.
I table that correspondence.
Let me make it very clear. One of the furphies of this debate is that somehow, by supporting this amendment by the opposition today, we should come to agree that we are equating a superannuation benefit—an employment benefit—with income support payments. How different are they?
Let me just take you through what the DFRDB scheme provides. It has generous benefits: payment of benefits on retirement after 20 years of service—I might just point out that 75 per cent of the people who are beneficiaries under the DFRDB after 20 years of service retired before their mid-forties—they are 45 before they retire—that is three-quarters of them; the ability to commute between four and five times the annual retirement pay in exchange for a reduction in retirement pay—this option has been exercised by 99 per cent of members; a higher employer contribution to other schemes, around 30 per cent from the Commonwealth, compared to the current community standard; and, since 1988, a separate three per cent productivity benefit fortnightly that is available as a lump sum on retirement. What does that mean? Let me put this in context. For example, a colonel aged 55 with 35 years of service, retiring at the beginning of 2012 would, it is estimated, receive a payment without commutation of approximately $84,000 a year. If they decided to commute a proportion of it, they would receive a lump sum of $420,000—that is, five times their annual pay—and a reduced annual payment of $64,000 per year.
What we are being asked to do here is equate that $64,000 a year which can be received at age 55 with the income support payments made to a pensioner at age 65. They are very different. One is a superannuation benefit, a worker entitlement; the other is an income support payment. Should a former member of the Defence Force have an income below the threshold, they will be eligible for—potentially, depending on their service—a service pension at age 60 or, if not, an age pension at 65. I might also point out that this proposal being put forward by the opposition does nothing for the 150,000 service men and women who joined after 1991, who are on the MSBS payments—nothing.
Let us be very clear about it. What we are being told here is that we should equate a superannuation benefit with an income support payment. This is not the place to have that debate. We have been diverted from discussing the intention of this legislation. It is a political stunt by the opposition to try and put off the benefits that will come as a result of this legislation if it passes through the chamber. If it does not—if we do not get this legislation through and we fall, a sop to the opposition's proposal—this House will decline to consider the bill.
That will mean none of the benefits outlined in this legislation will flow on to veterans who are entitled to those benefits. Let us be very clear, this is a stunt.
Mr Robert interjecting—
You know it is a stunt. We all know it is a stunt. There is a bit of to-ing and fro-ing as to what they mean, by the way. We have shadow minister Ronaldson's report from a meeting at Caboolture. It says that the indexation issue will be addressed in the first term. During the course of last night's debate in this chamber Wyatt Roy, the member for Longman, who was at that meeting, said that it would happen in the first budget.
Let us be very clear. There is obvious confusion. I am not sure what the message is to the veterans community, who they are going to on an almost daily basis to plead their case about this.
Mr Robert interjecting—
I am sick and tired of listening to the banal comments coming from the opposition about this matter. We can certainly have a discussion about it, but this is not the time. We should be looking at the benefits that can accrue to veterans as a result of the legislation being put through the House. We should pass the bill and move onto the next stage of the legislation—and reject the opposition's amendment.
The question is that the amendment be agreed to.
The question now is that this bill be now read a second time.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.