Thursday, 15 September 2016
Budget Savings (Omnibus) Bill 2016; In Committee
by leave—I move Derryn Hinch's Justice Party amendments (1) and (2) on sheet 7926 together:
(1) Page 2, clause 2 (table item 6), omit "Schedules 5 and 6", substitute "Schedule 6".
[Australian Renewable Energy Agency ' s finances]
(2) Schedule 5, page 18 (lines 1 to 7), to be opposed.
[Australian Renewable Energy Agency ' s finances]
I am moving these amendments to try to save ARENA in its entirety. I believe that what the government and the Labor Party opposition have decided to do has the potential to destroy ARENA in the future.
This afternoon, we had Senator Sinodinos boasting that the government was not a one-night stand. Well, let him and the government prove that it is not a one-night stand. Years ago they courted ARENA, they wooed ARENA, they formed ARENA, they got engaged to ARENA and now they are trying not to marry ARENA—or, if they do, to make it a very short relationship. Leave it alone. You boast about all the things you can do. You boast about research and development; you say how good it is going to be. You talk about the jobs it can save and you talk about the things that it is going to do for everybody. You have left some of the money in there, and we know the fix is in and that you are going to ignore us.
What you could do, if you were really sincere about it, is preserve jobs in the area of renewables and in research and development. You talk about those young graduate students who have great ideas about new products and the new things they can do—the way they can save the world—and now you are trying to put the handcuffs on them. All I am asking you to do is think about it. Leave ARENA alone. In areas like the automotive industry in Victoria, and especially in South Australia—I know Senator Xenophon agrees with this—in the next couple of years thousands of people are going to be out of work, including the subcontractors. If you believe in ARENA and in the things they can do, you could retrain those people. Thousands of people could have new jobs in areas we do not even know about yet. So all I am saying to you tonight—and it is getting late—is leave ARENA alone.
The government does not support these amendments. At the request of the Labor Party, and in the context of the agreement on this bill, the government has agreed to restore $800 million worth of funding for the purpose of providing direct grants to ARENA. This $800 million is funded through savings in other parts of the bill, in particular, the changes to family tax benefit A supplement arrangements.
For the benefit of the chamber and to deal with some of the issues that the Greens have also raised during the debate, separately and off budget, the Clean Energy Finance Corporation and the Clean Energy Innovation Fund receive a capital allocation of $10 billion. The overall allocation is unaffected by the agreement that has been reached on this bill, and, unlike ARENA grants, these investments need to be commercially viable. So the agreement between the opposition and the government on the omnibus savings bill has no impact on the overall capital allocation for the Clean Energy Finance Corporation and the Clean Energy Innovation Fund, which remains unchanged at $10 billion. In relation to the decision to restore $800 million in funding for ARENA, and to avoid an unintended increase in public resources available to ARENA beyond this $800 million allocation, a commensurate adjustment has been made to the Clean Energy Innovation Fund, but without impacting the overall capital allocation to both the CEFC and the CIF.
While Labor is sympathetic to the intention of Senator Hinch's amendments, we are not able to support them on this occasion. We certainly welcome both Senator Hinch's interest in safeguarding ARENA and his enthusiasm for contributing to how this parliament can achieve real progress in tackling climate change while further developing our domestic renewable sector. We look forward to working constructively with you, Senator Hinch, and all willing crossbench and government senators in the future on this vitally important issue.
Our approach to budget savings is one guided by fairness but also an acute appreciation of the important work that programs like ARENA do. This agreement, we believe, represents that balance in action. We can achieve a significant budget saving while we maintain ARENA as a pillar of our support for a growing renewable energy industry. Labor is understandably protective of ARENA. Its establishment is a proud achievement of our previous term in government, and we will always support it. We have, over the course of the Abbott-Turnbull government, fought against its abolition, and now, through this bill, contrary to the initial intentions of this government, we have managed to obtain ongoing certainty of funding and purpose.
This bill secures additional funding of $800 million for ARENA over five years. This is in addition to the more than 200 existing projects that ARENA is already auspicing and in addition to the 12 large PV solar projects that were announced by ARENA last week but are not yet contracted. ARENA has stated that this sum—$800 million over five years—will provide it with a budget that allows it to continue a strong work program into the future. This agreement places ARENA's funding on a sound footing. Importantly, it provides researchers, entrepreneurs and industry with the certainty they need to continue turning renewable energy opportunities into new technologies, new projects and new jobs.
As part of the agreement underlying this bill, the government has also agreed to sit down with the opposition to ensure that our priorities are satisfied. These priorities are, first of all, to ensure that ARENA's budget preserves Australia's world-class leading research and innovation capability, particularly seen in our universities and CSIRO, and also to ensure that there is a budget for demonstrational, proof-of-concept stage developments in the industry.
In addition to securing our research capability, the agreement between the opposition and the government will also allow ARENA to support demonstration and proof-of-concept stage developments in the industry that ensure that the findings by those universities and by CSIRO scientists are able to be shown to be commercially viable and then able to be presented to lending and equity investors and become a reality across the Australian landscape. It is important to point out that there is no change and no reduction at all to the $10 billion Clean Energy Finance Corporation fund that is overseen by the expert board at the CEFC.
The final matter I quickly want to allude to is: there was also a commitment made by the government, as part of this agreement, to sit down with the opposition and explore opportunities for bipartisan agreement around policies that would accelerate the transition for Australia to a modern clean energy system and to ensure that this transition is, to use the words of the Paris agreement, a just transition for workers and impacted communities. So, whilst the opposition will not be supporting this amendment, I thank Senator Hinch for his concern and for the contribution. We do welcome the considered contributions to this vital policy area, and I am sure we will have cause and opportunity to work together on this issue going forward.
I can indicate that I and my colleagues Senators Griff and Kakoschke-Moore will be supporting this amendment. Even though the cut is still happening—we acknowledge that there will still be a fund but cut significantly—we are still very concerned that the solar thermal plant at Port Augusta, essential for that community, in one of the sunniest places in the world, ought to still proceed. I hope against hope there will still be enough funds for that solar thermal baseload power plant to continue.
I have a question of the minister in respect of this, and it follows from the second reading amendment that I moved that was defeated recently. Can the minister advise whether there are any plans on the part of the government to allow—by regulatory amendment, for instance—ARENA to make investments or to have a grant convert, in the event that it is a highly successful project, to be either repaid or get an equity in it? Is that something that has been discussed with the board of ARENA with a view to replenishing the fund in the event that there has an investment in a technology that takes off commercially?
I thank Senator Xenophon for that question. The short answer in relation to ARENA on its own is no, but of course that is precisely why the government, within the Clean Energy Finance Corporation, set up the Clean Energy Innovation Fund, which is jointly managed by the CEFC and ARENA. That is a fund that provides debt and equity financing for projects that need to be commercially viable. The difference between ARENA and CEFC—and that is the way it was set up by the previous government, not by us—is that ARENA provides grants, whereas the CEFC is the vehicle which provides debt and equity financing. As part of this agreement between the government and the opposition, we have restored $800 million out of the initial $1.26 billion save to ARENA for the purposes of ARENA providing direct grants, consistent with their modus operandi up until this point. We also have guaranteed that the overall capital allocation to the CEFC will remain at $10 billion. The way this is funded is by other savings in the bill, as I have indicated to the chamber.
Minister, just to clarify: you have confirmed that the CEFC's budget of $10 billion will not be altered, but am I correct in that you have also confirmed that you will move $800 million out of the $1 billion Clean Energy Investment Fund back into the Clean Energy Finance Corporation and that you have somehow linked that with the so-called savings from ARENA? Can you please clarify that you are in fact cutting $800 million out of Prime Minister Turnbull's signature pre-election clean energy announcement?
I certainly have not indicated that a saving to fund the $800 million contribution to ARENA would come from what you have just described. I actually answered that in my initial contribution in response to Senator Hinch's amendments. The funding for the restoration of $800 million to ARENA for ARENA grants comes from savings in other parts of the bill, principally the changes to family tax benefit supplement arrangements. However, given the decision to restore $800 million in funding for ARENA, for ARENA grants, and to avoid an unintended increase in overall public resources available to ARENA beyond that $800 million restoration of grants funding for ARENA, a commensurate adjustment in the Clean Energy Innovation Fund, which is a capital fund jointly managed by CEFC and ARENA to provide debt and equity funding, is necessary. However, for the avoidance of any doubt, the agreement between the government and the opposition has no impact on the overall capital allocation for the Clean Energy Innovation Fund and the CEFC, which remains at $10 billion as before.
So, Minister, am I correct in interpreting that you are cutting money out of CEIF and putting it back in CEFC and you claim that that was not part of the Labor Party deal? Did you raise this with the Labor Party before you reached an agreement with them? Are they aware that this so-called savings of $800 million from ARENA will now sacrifice $800 million from the CEIF?
Your characterisation is wrong.
Senator Waters interjecting—
If I may answer the question, no aspect of the agreement between the government and the opposition in relation to the omnibus savings bill has got any impact whatsoever on the overall capital allocation to CEFC and CEIF. You are mixing up off-budget-balance-sheet equity and debt financing instruments with actual cash grants which hit the underlying cash balance. You are mixing these up. If we were to do what the Greens are suggesting, instead of restoring $800 million to ARENA we would actually be making available to ARENA about $1.6 billion worth of resources for the purposes of providing grants as well as debt and equity financing. But that was never the intention of the arrangement reached between the government and the opposition. The intention, and in good faith what we have agreed to do, at the request of the Labor Party, is to restore $800 million worth of funding for the purpose of ARENA grants, which was previously supposed to be saved. But, obviously, when it comes to the capital allocation of the jointly administered capital fund between the CEFC and ARENA, within the CEFC, well, yes: the capital allocation for CEFC increases does take into account adjustment to the jointly administered CEIF.
Honourable senators interjecting—
If I may answer—
Honourable senators interjecting—
There is nothing tricky about it whatsoever—I take that interjection. The overall allocation—
Honourable senators interjecting—
If I may answer, the overall allocation remains, at $10 billion, unchanged, but obviously the funds that are available for ARENA to co-administer are now adjusted accordingly, given that there is an $800 million increase in terms of grants funding. What that means is that the capital funding for debt and equity financing for renewables remains precisely as it was. But we are not proposing to double the contribution to ARENA to $1.6 billion; that is not something that we are proposing to do.
Just following up on that question: it was a very straightforward question, Minister. The Clean Energy Innovation Fund, which was the centrepiece of the Prime Minister's announcement leading into the federal election, was funded to the tune of $1 billion—the Clean Energy Innovation Fund. How much will now be available within that fund?
I have answered that question. The Clean Energy Finance Corporation, which has within it the CEIF, has an overall capital allocation of $10 billion. That was the allocation before today; that will be the allocation after today, should this bill pass. On top of that, we have agreed to restore $800 million in funding to ARENA, for the purpose of ARENA being able to provide direct grants, which is funded from separate savings within the omnibus bill—namely and principally the changes to family tax benefit supplement arrangements.
This just requires a yes or no answer, Minister. Will the Clean Energy Innovation Fund continue to have $1 billion worth of investment available? Not the Clean Energy Finance Corporation—the Clean Energy Innovation Fund. Will it continue to have $1 billion available to it? Yes or no?
As I have indicated to the chamber, the Clean Energy Finance Corporation capital will continue to be $10 billion, and the funding for ARENA has been increased by $800 million compared to what is reflected in the budget.
Minister, I will just repeat my earlier question: was the Labor Party aware that you would take a commensurate amount out of the Clean Energy Investment Fund as part of their deal in what they think has saved ARENA?
Senator Waters, your characterisation is completely inaccurate. The capital available to the Clean Energy Finance Corporation, including the Clean Energy Innovation Fund, was $10 billion before today; it will be $10 billion after today, should this legislation pass. And, on top of that, the government has agreed, at the request of the Labor Party, as part of this agreement, to restore $800 million worth of funding, for the purposes of ARENA grants, which was previously supposed to be saved. I do not know how I can be any clearer than that. However, clearly the intention of the agreement between the government and the opposition never was to increase resources available to ARENA to $1.6 billion. It was to provide an additional $800 million, and the implication of what you are asking for is essentially to double the contribution to ARENA, once you take grants and debt and equity financing resources into account.
So, Minister, the implication of what you are saying is that there was really no point to the Clean Energy Investment Fund, if it is basically the same as the CEFC. So how then do you explain the Prime Minister's press release, in the lead-up to the election, trumpeting it as a 'strong new approach to clean and renewable energy innovation in Australia'? Which is it? Have you cut it, or was it meaningless in the first place?
Well, again, that is just political rhetoric—and I will conclude my contribution on this point. That was certainly the feedback during our conversations—without attributing feedback to specific people. The feedback that we have received was that ARENA did not feel that, for its purposes, debt and equity financing was workable—that that was more in the remit of the Clean Energy Finance Corporation, and that the focus of ARENA and its purpose were better suited to the provision of grants funding. And what we have done, through this exercise, is to restore $800 million in funding for grants, which was previously supposed to be saved, without making any adjustment to the overall capital available to the CEFC and the CEIF.
So, Minister, why were there multiple different explanatory memorandums when this bill was before the House—the first one mentioning the cut to the Clean Energy Investment Fund, the next one not mentioning it, and then a further version—before us here in the Senate? Which is the truth? Is there a link? And was this part of the deal with the Labor Party or not? Which version of the explanatory memorandum was accurate?
They are all accurate. Obviously, an explanatory memorandum that goes to the Senate after legislation is passed through the Senate is put together for the purposes of Senate consideration at that point. But, beyond that, it is all accurate and consistent with what I have just indicated to the chamber.
Minister, could you just clear up something for me. What is the overlap between with the three different organisations: ARENA, the CEFC and the renewable energy investment fund? Can you outline the quantum? You said a little bit earlier that there were joint ventures and that they worked together. Can you explain how debt financing, equity financing and cash grants worked between those three organisations? I am a little bit confused as to how they worked together. Can you just illuminate that?
It does seem that the Greens are a little bit confused, even though the explanation has been very clear for some time. As a result of the agreement that the government and the opposition have reached in relation to this bill, ARENA will end up with $800 million more in direct funding for the provision of grants than they otherwise would have had. Separate to that and off budget—and this is not something that we put in place; this is something that Labor and the Greens put in place under the period of the previous government—there is a capital allocation—
Chair, I raise a point of order on relevance. I asked how they worked historically. I did not ask about what you are planning to do now. I want you to explain to me how those three organisations have worked together and whether they have taken on joint venture projects together and how they have actually shared their financing across different projects. Perhaps you could explain to us how it worked previously, and then we can work out what quantum of differences we are looking at from these bills.
Thank you, Senator. I was getting to that, of course. You know that the Clean Energy Finance Corporation, as it was set up by the parliament under the period of the previous government, was set up to provide financing for commercially viable projects, by way of either debt or equity financing. ARENA was set up for the purpose of providing grants funding for relevant renewable energy projects. Our government has established within the CEFC a jointly administered Clean Energy Innovation Fund, which was aimed at bringing ARENA and the CEFC together in the context of, in particular, as it says, clean energy innovation related projects but providing support through debt and equity financing as well. What has been put to us is: instead of doing it this way, leave all of the capital that was previously allocated within the CEFC fund—not touch that at all; not reduce that at all. We have decided to restore $800 million worth of funding for ARENA, which they will be able to deploy for their pre-existing purposes, as per usual.
Thank you very much, Senator Hinch. No, that is not what the government has done. If you are suggesting that we have paid for the additional funding for ARENA with savings elsewhere, then that is true. We have paid for the additional $800 million funding for ARENA by proposing to pass adjustments to family tax benefit A supplement arrangements. We have not paid for this additional $800 million by savings in other parts of the renewable energy space. That is the point I was making. That is something that the Greens are inaccurately trying to assert, and it is not right.
I have one last question. If I get this right then the CEFC is debt and equity financing, depending on its risk profiles; the innovation fund that you have set up to bring these two organisations together is debt, equity and grants as well; and ARENA is now just purely grants. Is that correct?
No, the way you have put that is not correct. You should know this because you were a part of the government that set this up. ARENA has always been an organisation that provides grants and not equity and debt financing. This continues. The Clean Energy Finance Corporation has always been the body that provides debt or equity financing for commercially viable projects. Within the overall capital allocation of the CEFC, the Clean Energy Innovation Fund brought together the CEFC and ARENA within the CEFC to pursue debt and equity financing options. The overall capital available remains at $10 billion. There has been no money taken out of that overall capital allocation. It is the same as it was before. However, as a result of the agreement that the government has reached with the Labor Party, we are restoring $800 million worth of direct funding to ARENA for its usual purpose, which is to provide grants.
Minister, what impact will shuffling around the $800 million from the Clean Energy Innovation Fund—moving that to the CEFC—have on the decisions that can be made by the CEFC in relation to the risk profile of investments?
The risk framework that you are referring to is completely unchanged. There is absolutely no change whatsoever, and the Clean Energy Finance Corporation will continue to make decisions consistent with the arrangements that were put in place in legislation by this parliament under your period in government with the previous Labor government.
Minister, my understanding is that the whole point of the Prime Minister's Clean Energy Innovation Fund was to allow higher risk investments within the pool of money allocated to the CEFC. If you are now taking that ability away and taking $800 million out of that $1 billion, are you also now claiming that it will not have any impact on the risk profile of the investment decisions that can be made? Are you saying that the Prime Minister's announcement was a complete sham the whole time? Or have you got your facts wrong?
I do not know how productive this is. This is just essentially politics. As I have indicated consistently all the way through, the capital allocation to the Clean Energy Finance Corporation remains at $10 billion, consistent with the arrangements that were put in place under the previous Labor government, supported by a the Greens at the time, I believe. As far as ARENA is concerned, the government has agreed to restore $800 million in grants funding for the purposes of ARENA.
Minister, we can be here all night if you do not want to answer the questions. If you do not know the answer, I am quite happy to wait for you to talk to the advisers. I am simply going off the material that the Prime Minister has put in the public domain. You are the minister; I am happy to be corrected by you. My understanding was that the whole point of the CEIF was high-risk investments. If you are now taking money out of that and then saying there is no impact, are you belling the cat that in fact it was a bit of a farcical arrangement in the first place, or will there in fact be an impact in that higher risk investments will not be able to be made to the tune of $1 billion but only to $200 million?
Again, I hardly agree with anything that you have suggested there. I do not agree with your characterisation of the quality of the investments. But the point I would make—
Senator Waters interjecting—
Hang on. By putting $800 million to ARENA for grants funding, you do not even have to have a commercial return. Talk about high-risk investments.
Senator Waters interjecting—
So you are not interested in the fact that we are putting $800 million back for grants funding. The Greens are not interested in that. You want to have your cake and eat it too. Instead of us putting $800 million back in, you want us to put $1.6 billion back in. Guess what: it does not work that way. You cannot spend the same money twice. Maybe the Greens can spend the same money over and over, but you know what? We are acting in good faith. We have sat down with the Labor Party in good faith. We have agreed to absolutely leave the capital for the Clean Energy Finance Corporation intact at $10 billion and on top of that we have agreed to restore $800 million in grants funding to ARENA which, of course, was previously subject to a savings measure.
If you want to talk about high-risk investments, you cannot have an opportunity for higher risk investment than when you provide a grant, because, when you provide a grant, you literally give it away irrespective of what happens. If you talk about the fact that we now have a requirement for lower risk profile as a result of the money that is invested here, that is just plain wrong.
We are going around and around in circles. The Clean Energy Innovation Fund is jointly administered by the CEFC and ARENA, whereas obviously the capital outside the CEIF is managed by the CEFC on its own.
I will just point out that the amendments moved by Senator Hinch actually have no relationship to the Clean Energy Finance Corporation or the Clean Energy Innovation Fund. These are amendments that relate to ARENA. The government has clearly pointed out that the government is restoring $800 million worth of grants funding for ARENA which had previously been subject to a savings measure.
Given that both the Clean Energy Finance Corporation and the Clean Energy Innovation Fund are off balance but they will provide slightly different levels of return, I understand there will not be a significant impact on the balance sheet but there will be a small impact on the balance sheet because of the different levels of return. What is that difference?
Senator Cormann, given that you have acknowledged there will be a different level of return—you acknowledged that with your previous answer—and that clearly reflects the fact that you have taken $800 million out of the Clean Energy Innovation Fund and put it within the Clean Energy Finance Corporation, let's just get to the bottom of this. There is no significant impact on the balance sheet. Is this an attempt to undermine the Prime Minister and to shaft his signature project going into the last election? Is that what is going on here? Have the right-wing dinosaurs inside the Liberal Party decided: 'We are going to hobble the Prime Minister's signature renewable energy achievement. We are going to do it through the back door. We are going to use the Labor Party, who obviously went into this sleepwalking, and we are going to have a go at the PM'? Is that what this is about?
Senator Di Natale, you are now really scraping the bottom of the barrel. All night I could not have said it more clearly. Your assertion that we have taken money out of the Clean Energy Innovation Fund to put into ARENA is wrong. I have spelt that out very clearly. The overall capital allocation for the Clean Energy Finance Corporation and the Clean Energy Innovation Fund remains the same. It was $10 billion before today; it will be $10 billion after today.
On top of that, what we have done is to restore $800 million worth of funding, at the request of the Labor Party, to ARENA for the purposes of providing direct grants. This is not funded from any source related to renewable energy; this is funded from other savings in the bill, principally the changes to family tax benefit A supplement arrangements. I have said that several times now. There is absolutely no truth to the absolutely inaccurate assertion that you have made and that Mr Bandt made in the House of Representatives earlier this week. I have been making that very clear all week.
So, Minister, what is the rationale for moving money out of the Clean Energy Innovation Fund and putting it into the Clean Energy Finance Corporation? You have not actually outlined that for us. Could you please do so.
I have actually said that several times. The reason we are making an adjustment to the Clean Energy Innovation Fund is to avoid an unintended consequence, which would be effectively a doubling of the resources available to ARENA through grant and debt and equity financing beyond the $800 million restoration of grants funding. The intention is not to provide them with $1.6 billion in additional resources. The intention is to provide them access to $800 million worth of additional resources. That has been very openly and transparently put on the public record several times now and it is very openly and transparently the intent of the agreement between the government and the opposition.
Self-evidently, the staffing profile for ARENA will be improved as a result of the restoration of $800 million worth of grants funding. As far as the staffing profiles for the CEFC and the CEIF are concerned, they are unchanged.
I was after the difference from when ARENA had $1.3 billion—which they currently have until we rise tonight if the Labor Party sticks with the really bad deal to cut half a billion and then see $800 million slashed out of the CEIF, which I hope they walk away from. What is the difference in staffing from ARENA's current funding to what the staffing levels would be if this bill passes?
As is usually the case in relation to these sorts of arrangements, if the parliament were to support the restoration of $800 million in additional resources to ARENA, relevant consequential staffing arrangements would be put in place at that time.
Ground zero is not assuming that this has already been removed. That is a sleight of hand on a piece of paper. That is not a real development. We have got real people and an organisation performing a function right now. Senator Waters's question was obvious. Perhaps the minister could just tell us quickly how many staff are employed at ARENA now and across the fund and how many will be employed once this change of process occurs if the Labor Party vote for this tonight.
As I have already indicated to you, the current departmental staffing profile is 55 departmental staff and 15 specialist staff. Once the parliament has confirmed the appropriate resourcing allocation and whether to support this restoration of $800 million in additional funding for ARENA for the purpose of ARENA providing further direct grants, relevant decisions will be made at that point.
As I have indicated before, once the parliament has made a judgement on the proposed resourcing of ARENA, including the proposed restoration of $800 million worth of funding for ARENA, at that point in time judgements will be made about the appropriate future departmental resourcing and the requirement for specialist staff.
I was not able to get a clear response earlier on whether you had consulted with ARENA. The inference that I made from that was that you had not, but I would like to ask this next question anyway. Have ARENA sought to advise you or any relevant minister about the nature or extent of projects that will not be able to proceed as a result of half a billion dollars being cut from their budget?
This is probably a good time to remind everyone that this is actually not something that has just come out of nowhere. This is something that has been on the books and on the table for a very long time. It is something that we took to the last election. It is something that the Labor Party took to the last election. To be fair to the Labor Party, as I indicated in my summing-up speech, while they reflected the saving against their budget bottom line they had also made a series of other related decisions and had indicated publicly before the election that they would make judgements, should they win government, on how best to give effect to this saving, which is why we have been prepared to work with them constructively on this whole process to get to a commonsense resolution. That has resulted in $800 million worth of funding for ARENA being restored. That is what has been put into this bill in the form of government amendments in the House of Representatives and the Senate of course now has in front of it the amended bill, and that is what we commend to the Senate.
All of the existing programs, including the grant funding that you mentioned, of course remain in place. This $800 million comes on top of all of the existing projects that ARENA is currently managing.
Minister, ARENA is not currently managing that project and, now that its resources will dwindle by half a billion dollars, is it envisaged that there will be any money left for such an amazing job-creating project in a state like South Australia?
Let me just be very clear again. The ARENA grant funding includes up to $100 million for large-scale solar deployment projects and ARENA was also given ongoing resources through the budget to manage 252 current projects and continues its existing knowledge-sharing and brokering role.
None of those existing projects include the South Australian Port Augusta solar-thermal plant. I want to know from the minister: how will the government guarantee that that project will get the hundred million dollars it desperately needs? And which fund will it come from?
As you would be aware, decisions on specific projects are not made politically by the government. Decisions in relation to specific projects are made by ARENA, according to the process that the Labor Party, with the cooperation of the Greens, set up. We have not change that process. There is a process that is non-political, as it should be. It should not be political discretion that determines that we pick this project or we pick that project. There is a rigorous process. And of course, as to what we have done, there is grant funding available to ARENA of up to $100 million for large-scale solar deployment projects—that is not changing—and ARENA also has ongoing resources through the budget to manage 252 current projects and continue its extensive knowledge-sharing and brokering role. If you want to champion specific projects because you have an interest in a particular local project, then I would encourage you to make representation to ARENA in the appropriate way.
It would be entirely improper, and not the way you set up the process, for the government to make the decisions. We would not need ARENA. If you want the government to make these sorts of decisions, why have ARENA at all? Let's just have a discussion here and you could say you want a hundred million dollars there—'I want one for my backyard. I want one for over there.' That is not the way the process works. ARENA is there for a purpose. ARENA has a job to do. We want ARENA to do the job. I am not going to second-guess the professional judgements that ARENA makes in relation to this. It would be entirely improper.
I will take it, then, from the minister's comments that the government is not committed to funding that project, is not committed to ensuring that the hundred million dollars that is needed is there. And I hope that the Liberal senators from South Australia understand they have just sold Port Augusta and the South Australian community out.
Still on that matter of Port Augusta, my understanding is that SolarReserve is seeking debt and equity funding. The most likely bucket that that would have come from, given that it was a higher risk profile investment, would have been the Clean Energy Innovation Fund, which used to have a billion dollars in it. You have confirmed tonight that it is going to be cut down to $200 million. Port Augusta needs $100 million. Obviously that is 50 per cent of what is left in that bucket, because you have just taken out $800 million, and yet you were trying to maintain earlier that there would be no impact. How do you reconcile those two things?
Senator Waters, that comment is completely false and inaccurate. You should not talk about something you do not know anything about. The project proponents actually want the grant, and the advice I have got is that the grant does not come—
The CHAIR: Minister, resume your seat. Did you have a point of order, Senator Waters?
My very clear advice is that that project cannot proceed without a $100 million grant. A $100 million grant is something that can be accessed through ARENA, not through the Clean Energy Innovation Fund. So the suggestion that somehow this relates to that is wrong. Again, I go back to the first point: whether it is a grant or whether they are seeking debt and equity financing, it is not the government that makes a political decision to allocate that. There is an independent process at arm's length to the government to make merit-based judgements. That is the way it should be. If you are saying we should just spend money based on the government's political interests, I think that would be wrong in relation to this.
Could the minister give us an indication of the unfunded propositions before both ARENA and the Clean Energy Investment Fund at this stage? Call it a pipeline, if you like, of unfunded projects. Primarily in dollar terms.
The most important aspect of this is we have taken $500 million out of this fund and we still have some dodgy business as to how the accounting has gone down. I am interested in how many people actually want money off both ARENA and the investment fund. That is important to me because it tells a story about who is out there with innovation and who is out there with projects that are going to reduce emissions and have an impact on climate change. If there is $10 billion worth of people seeking high-risk seed funding, that is very important to know if we are cutting the resources of this organisation by $500 million. Minister, I ask you again: what kind of proposition pipeline is there for these agencies? In other words, who is going to miss out because you are cutting $500 million of funding?
The CHAIR: Senator Hinch's amendment is to oppose schedule 5. I am going to put the question that schedule 5 stand as printed so that I can ascertain whether schedule 5 has majority support. Senators opposing the schedule should vote no to that question. Senators supporting the schedule staying in the bill should vote yes. The question is that schedule 5 stand as printed.
by leave—I move amendments (1) and (2) on sheet 7931:
(1) Page 4, clause 2 (table item 25), omit "Schedules 22 and 23", substitute "Schedule 23".
(2) Schedule 22, page 189 (lines 1 to 17), to be opposed.
These amendments relate to the rates of R&D tax offset. I traversed this in the course of the second reading debate. The concern is that this will impact by ratcheting down the R&D tax offset. It will make it less attractive for small and medium enterprises to invest in R&D. Given the hour I will not restate what I said previously, but this is something that the ALP, less than a year ago, trenchantly opposed because they said it would destroy innovation and affect jobs, and we need this level of R&D at a time that is so critical when we are facing a crisis in our manufacturing sector.
The comparison with what is currently being proposed is that under the current law you may obtain a refundable tax offset equal to 45 per cent of eligible research and development. This will cut it down to 43.5 per cent. All other eligible entities may obtain, and, depending on the size of the entity, there is a cut of 1.5 per cent from 40 per cent to 38.5 per cent. That percentage difference does make a real difference in the context of being competitive in the R&D space compared to what other countries are doing in respect of R&D. I urge all senators to support these amendments.
I thank Senator Xenophon for his contribution. The government will not support either of these amendments. The reduction in the rates of the refundable and non-refundable tax offsets for eligible R&D spending will help improve the sustainability of the program. The R&D tax incentive will continue to provide generous, easy to access support for thousands of eligible companies in all sectors of the Australian economy. Companies with a turnover of less than $20 million will still get a 43.5 per cent refundable tax offset for the first $100 million of eligible R&D expenditure. All other companies will still get a 38.5 per cent non-refundable tax offset for the first $100 million of eligible R&D expenditure.
The government's National Innovation and Science Agenda is investing $1.1 billion to incentivise innovation and entrepreneurship, reward risk-taking and promote science, maths and computing in schools. Innovative businesses will benefit from a range of other measures, including allowing more businesses to access prior year losses. Changes have been made for operations such as entering into new business activities, and start-ups' intellectual property and other intangible assets will be more attractive investment options through more generous tax deductions through depreciation and connecting more small and medium businesses with researchers by investing $18 million in a new innovation connections initiative.
Labor will not be supporting this amendment. The provisions as set out in the omnibus bill relating to the R&D tax incentive are the same as those that Labor committed to supporting during the 2016 election, with a start date of 1 July 2016. As part of our election platform, Labor said we would support the government's proposal to take savings from the R&D tax incentive. We also said that a Labor government would use the findings of the review to consider whether there are more appropriate methods to achieve the same level of savings. It is disappointing that the technical issues with this measure remain unresolved, despite stakeholders raising them with the government on numerous occasions, but it is the government's responsibility to resolve those technical elements relating to the drafting of these provisions and their interaction with other areas of tax law.
I thank the opposition for the courtesy of setting out their position, but I am disturbed that the opposition acknowledges that there are technical issues in respect to these offsets, in respect of these changes. I just want to reflect on what Mr Conroy, the member for Charlton, said last year:
I do not see how reducing the R&D tax offset provides an incentive to invest in research and development. Surely it does the exact opposite?
He went on to say:
It is incredibly short-sighted and it is incredibly silly in an era where we need to grow jobs for the future.
My very short question to the finance minister, Minister Cormann, is: has any modelling been done on what the impact of this will be in terms of the level of R&D investment? Has there been an assessment made of the risk of seeing companies doing their R&D overseas, where there may be more generous tax offsets and incentives for R&D?
Consistent with usual practice, the government, through the Treasury, has assessed the budget impact of this measure, and of course that is reflected in this bill. There has not been any further modelling.
The CHAIR: I am going to put questions in the same way as we dealt with the previous amendments, so there will be two questions. The first question is that schedule 22 stand as printed.
Question agreed to.
The CHAIR: The second question is that the amendment be agreed to.
The CHAIR: Now we are moving to the final amendments, which are in the name of Senator Lambie and Senator Kakoschke-Moore.
I move my amendments (1) and (2) on sheet 7924:
(1) Page 4, clause 2 (table item 26) to be opposed.
[military rehabilitation and compensation]
(2) Schedule 24, page 212 (line 1) to page 215 (line 27), to be opposed.
[military rehabilitation and compensation]
The big problem we have is the veterans suicide crisis, and the large reason we have this problem is because of the way the veterans are being treated when they lodge claims for compensation. Veterans would rather return to war than deal with the mess the claims system is currently in and has been for many years. What the government is proposing under the single appeal pathways, even though it has been amended by Labor, still means that this bill denies veterans a right to legal representation when forced to go against a government body stacked with government lawyers. Important decisions about veterans' entitlements are being made in situations where a veteran and advocate walk into a room packed with government employees holding law degrees. It is a denial of natural justice and due process, and the government is trying to cover it up by saying they will simplify the process by taking away the lawyers. They are taking away the lawyers all right—they are taking them away quite nicely because, bloody hell, the veterans are not having one. You are putting them up against nine or 10 lawyers in a Veterans' Review Board. How would you go if you had PTSD, a missing arm, some missing legs, and you are going in there against a lawyer.
If you want to stand up, Senator O'Sullivan—
The CHAIR: Senator Lambie, address your remarks to the chair.
An honourable senator: Tell him to shut up, then!
Have some sympathy. You should pull your head in. Senator O'Sullivan—
The CHAIR: Senator Lambie, address your remarks to the chair, not through the chair. Please continue.
An honourable senator: Tell the boofhead to pull his head in.
The government only did half the job when they drafted this measure. They have taken away the lawyers representing the veterans but not the lawyers from the government. Last time there was such an inequity was when the Christians were thrown to the bloody lions.
This measure should be fiercely opposed because it jumps the gun. The Senate has already agreed to an independent inquiry into veterans affairs and the high rates of suicide. By the way, just so we are all clear, there was another one yesterday. I think we are at about 48 so far this year. It is going great guns! Nothing should be changed that disadvantages veterans until the veterans have had an opportunity to have their say in front of a committee. I know many veterans will make submissions which will describe the many injustices inflicted on them by the veterans compensation system, including the VRB and the AAT.
So I am asking you, Labor, to stand up for veterans tonight and support my motion to stop the government changing the compensation system to further deny the veterans their rightful compensation and entitlements. Labor, you stood with me and voted to establish a historic investigation into veterans affairs, with particular reference to:
a. the reasons why Australian veterans are committing suicide at such high rates,
b. previous reviews of military compensation arrangements and their failings,
c. the Repatriation Medical Authority's Statements of Principles, claims administration time limits, claims for detriment caused by defective administration, authorised medical treatment, level of compensation payments, including defence abuse, as contained in all military compensation arrangements …
More importantly, the committee will inquire into the performance of Veterans' Affairs—or the lack of performance over many years—and other related matters.
The government budget measure to establish more savings by adopting a single pathway for veterans compensation claims is jumping the gun. Before any change to the veterans compensation system is allowed by legislation, particularly a change which many veterans and legal experts say will have adverse effects on veterans, the findings and recommendations of the Senate inquiry should be seriously considered.
I am sorry, Minister—I need you to remind me what the cost saving of this measure is.
This is actually not about savings. The saving is absolutely miniscule. It is $3.6 million over the entire forward estimates. The reason we are doing this is to improve the service available to the ex-service community.
This initiative will benefit the ex-service community because it will streamline the appeals process presently available to veterans under the Military Rehabilitation and Compensation Act by providing access to the more veteran-friendly appeals process that exists through the Veterans Review Board. This implements the recommendation of the 2011 review of military compensation arrangements which was initiated by, and the recommendations of which were accepted by, the former Labor government.
It will achieve savings for the Department of Veterans' Affairs through a reduction in legal costs as a result of the introduction of a single appeals pathway for veterans covered under the MRCA. As I say, it is just $3.6 million worth, but that relates to specific legal costs.
The new appeals pathway, supported by a new initiative known as alternative dispute resolution, will encourage and facilitate the resolution of disputed cases at the Veterans' Review Board through case conference discussions. This streamlined process combines the advantages of the two current appeals paths available to veterans under the Military Rehabilitation and Compensation Act. The Veterans' Review Board provides a process that is non-adversarial and veteran friendly and will encourage and support participation in the process to reach a resolution for the veteran at the earliest possible point. This approach is supported by ex-service organisations, which have been consulted on this measure, because going through the Veterans' Review Board is independent. They know and understand the process, which is friendlier and less formal.
In the event that an appeal still proceeds to the Administrative Appeals Tribunal, access to legal aid will still be possible, subject to the usual eligibility requirements. The new process will make settling disputes faster, easier and less demanding for veterans covered under the Military Rehabilitation and Compensation Act than is presently the case.
I was just wondering if the government or the minister here could tell me how much money was spent on private law firms in 2009, in 2013-14 and in 2014-15 to fight against our veterans and to take their legal rights off them?
I do not have that data going back to 2009. As I have indicated to you, the process we are putting forward here is designed to be better for veterans. It is designed to be more veteran friendly. It is designed to achieve resolution of relevant, legitimate grievances more efficiently. This is not driven by seeking to achieve a major saving; this is driven by seeking to improve the veterans' experience in these circumstances and responds directly to relevant recommendations that were made by the 2011 review of military compensation arrangements.
Minister, in 2009 you spent $4.5 million to take down our veterans. In 2013-14 you spent close to $10 million. In 2014-15 you spent just over $10 million. Can you tell me why you see a problem with changing to one single pathway yet are prepared to go and spend millions and millions and millions of dollars on external lawyers—taxpayers' money—denying our veterans their rights to compensation?
We do not want to deny anybody their rights. We want to ensure that people's rights are respected and that the government acts in accordance with people's rights, and we are seeking to improve the process that determines the appropriate resolution of any issues where there is a legitimate grievance. What we are proposing here is to make the process less legalistic, at least in the first instance, to ensure that a larger number of issues can be resolved in a more informal and less adversarial fashion. If there is still an ongoing grievance then of course the current and existing process through the Administrative Appeals Tribunal will continue to be available.
I recognise that Senator Lambie probably has a couple of other questions to put to the minister. I will just put the Australian Greens position on the record so that the debate can proceed. We will be supporting this amendment by Senator Lambie, and I thank her for bringing it forward. Senator Cormann, before I proceed too far, can you identify whether these particular amendments relating to the veterans compensation system have been put in some other forum to an inquiry, apart from the 2011 review that you mentioned just a short time ago? Have these measures actually been fully ventilated with the veterans community, with their representative organisations, with individuals? Or is this just an attempt to pass something pretty late at night without proper process of review?
Again, this is probably a good moment to remind everyone of the history of the measures in this bill. These bills all have a long history. When the measure we are now discussing was considered by the Senate Committee on Foreign Affairs, Defence and Trade back in September last year—you have to remember: the budget measures that are brought together in this omnibus bill are measures that were left unlegislated from the previous parliament. They have all been discussed and debated at length. They have all been subjected to scrutiny. In relation to this particular proposition there was a 2011 review. It was a very important review that made good recommendations, which the previous government accepted and which we accepted and which, on coming into government, we sought to give effect to.
Obviously these things take awhile to work their way through the process and obviously after the election, given that both the Labor Party and the coalition took these measures to the election as part of our respective pre-election costings, we are now seeking to give effect to them through this vehicle. If you are trying to suggest that this has come out of nowhere and is trying to be snuck through late at night for the first time, that is just not correct. It was the subject of a specific Senate committee inquiry last year.
I think you know what I do, Minister. There are advocates out there—the external service organisations that are out there—and you know what I do: they are not lawyers. So when you try to sell them the crap that you sell them with this single pathway—and then I brought to their attention the harm that was going to do—things turned around very dramatically. They realised that you are hoodwinking them. So can you tell me: in the last three months, out of the 200 external service organisations out there, how many of them support this, and can you give me their names?
I respectfully reject any proposition that we are seeking to hoodwink the veterans community. I think all of us in this chamber have a very high regard for the contribution that has been made to our country by our veterans community—all of us in this chamber. So I think we should not question our motivations. This is not a partisan issue and should not be a partisan issue in any way, shape or form.
As part of the process of putting the measures in this bill together, the government consulted with the Returned and Services League of Australia and the Alliance of Defence Service Organisations. And, as I said, the changes in this measure will be of benefit to current, former and future members of the Australian Defence Force, covered by the Military Rehabilitation and Compensation Act, because it makes the process much more veteran friendly, less adversarial and more informal and seeks to facilitate a more efficient resolution of any disputes.
I just want to put on the record Labor's position on this amendment. We will not be supporting the amendment. The government's original Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill was flawed, and because of the referral of the bill to the Senate Committee on Foreign Affairs, Defence and Trade the flaws were highlighted and we now have a superior piece of legislation. In particular, veterans will now be able to appeal determinations of the Veterans' Review Board to the Administrative Appeals Tribunal, confident that if successful they can recover costs.
This means that enormous disincentive to challenge the Military Rehabilitation and Compensation Commission has been removed. The introduction of a 28-day statutory reporting time frame for the Military Rehabilitation and Compensation Commission to consider new evidence provided by a claimant is an important step in speeding up the time it takes for a claimant to achieve justice under the appeal system. The changes also allow for an internal review of the Military Rehabilitation and Compensation Commission decision as envisaged in the 2011 military compensation review. We believe that these changes make the bill stronger and will put in better protections for veterans, and that is why we are supporting them as part of the Budget Savings (Omnibus) Bill before us tonight.
I just want to get this clear: out of 200 external service organisations out there, you have support from the national RSL—which does not surprise me. I have in my office a letter from ADSO that says they do not support this. The Alliance of Defence Service Organisations does not support this. You have one, the national RSL—and why doesn't that surprise me? You have one lot of support. So, unless you have other evidence and I am missing something, please stand up. Otherwise, I rest my case.
Just to clarify: yes, we have consulted with the RSL, who, I am advised, does support what we are seeking to achieve here. And the Alliance of Defence Service Organisations is a peak body that covers a number of organisations representing veterans. So to suggest that there is just one organisation that supports this change is not accurate.
I was just going to ask the minister: what would you say to a former commando who narrowly missed being hit by an RPG and now has to fight the government to have access to $11,000 hearing aids? And should this person have a right to legal representation if he takes on a vindictive and heartless DVA who are determined to deny him access to modern hearing aids?
I am not in a position to talk about specific cases. What I can say by way of general comment is that all of our veterans ought to be treated with the utmost regard and receive all their entitlements and all the support they are entitled to through relevant legislation.
Does the government think it is fair that an injured veteran who has PTSD, alcohol abuse and drug abuse has to go into a VRB with an advocate who is not highly trained in the legal profession? Does he think it is fair that that veteran should have to go in there and fight his case against seven, eight or nine people on the Veterans' Review Board who are lawyers?
The whole point of this measure is to ensure that through this process a veteran does not have to fight, that it is a more veteran-friendly, informal opportunity for dispute resolution. This is the whole point. If it can be avoided, we should not send veterans into the sort of circumstance that you are describing, which is the whole reason why we are proposing to make this change. We are very grateful that, after making the improvements that Senator Gallagher indicated, the Labor Party sees fit to support this measure.
I indicate that I will obviously be supporting this amendment. I commend Senator Lambie for moving and Senator Kakoschke-Moore for co-sponsoring it. But references were made to the RSL and I want to put this very briefly on the record. When there was a Senate inquiry into this very bill, the RSL appeared and after questioning they could not really justify their support for this amendment. Unless they have recently articulated why they are now supporting this amendment, I think that the RSL needs to explain to their members why they are going down a path that could very well prejudice their members, who could be seeking compensation, given that they could well be out of pocket and disadvantaged as a result of this. I guess we will have to wait and see.
To clarify, as is the case with any consultation, when you consult with organisations, whether it is the RSL or any other organisation, concerns are raised from time to time. To the extent that I am advised, any concern has been addressed in this amended form of the bill. This has been an iterative process for some time. My advice is that all of the concerns that the RSL has impressed at various stages of the process have been addressed in the final version of this bill.
Can the minister please explain why a public servant appealing a decision by Comcare to the AAT will be entitled to their legal costs whereas a veteran who is appealing a decision of the VRB in the AAT will not? Why are veterans being treated to a different standard than public servants?
The whole point is the Veterans' Review Board hearing is not a legal process. The Administrative Appeals Tribunal process is a legal process. Of course, legal aid is entirely available, consistent with the usual eligibility requirements that apply to everybody on the same basis.
Lawyers can assist a veteran to prepare their board application and participate in alternative dispute resolution processes but cannot appear at a hearing for any party. This has always been the case and the ex-service organisations want it that way. That is certainly my advice. It is at no cost to the veteran.
Senator Cormann, would you at least now concede, after what has gone on tonight with Senator Lambie and the Xenophon team, that your fast-moving omnibus bill is really an express train which you are rambling along the tracks here? With all these questions about so many areas like ARENA, like the war veterans—question after question which, with respect, you cannot answer—would you at least concede to us tonight that you have pushed this along far too fast?
As I have indicated before, Senator Hinch, this process has been going for years. These measures have been debated for years. They have been subject to Senate inquiries for years. Everybody well understands what the government is seeking to achieve. Any flaws that have been identified through various processes have been addressed along the way and, of course, the measures in this bill are a reflection of savings measures, which both Labor and the coalition took to the last election and which are now reflected in this bill in a way that both the Labor Party and the coalition are comfortable to support.
I was wondering if the minister was aware: I know that the lawyers are not allowed to represent the veteran at the VRB. Does the minister actually realise it is cost neutral? All that paperwork he has to do on the outside, he could actually save himself the pen and the paper and be representing the veteran in the VRB, so then it is fair game against the other eight or nine lawyers he has against him on the other side. This is not fair.
Perhaps the minister misunderstood my previous question. I was inquiring as to why public servants who are appealing a decision of Comcare in the AAT are able to have their costs awarded but why veterans appealing a decision of the VRB in the AAT, the same forum, are unable to have costs awarded to them.
With the greatest of respect, that assertion is wrong. Obviously, if you do appeal a decision to the AAT and you win the case, you can get costs awarded. That is the general principle that applies to everyone. There is no distinction. So the distinction that you make in there is inaccurate.
I will just conclude my earlier comments. It was only a matter of a few days ago that the Senate voted to establish an investigation into veterans affairs with particular reference to some of the issues we are traversing here tonight. Senator Cormann would probably be aware, if he had anybody observing the hearing that Senator Siewert and other crossbenchers attended the other day—because you denied this parliament the opportunity for a formal hearing—that these very points that you are making are contested not just by people such as Senator Lambie but those who have been put through the ringer and have had a lot of experience trying to make their way through this system. The veterans compensation system is complex and the Australian Greens are open to reform proposals that simplify the system, but this is not the way to do it. Before any changes to the veterans compensation system are allowed by this parliament, particularly change which veterans and some legal experts are saying will have adverse impacts on the very people that we are trying to help, the findings and recommendations of that Senate inquiry, which has just been put on its feet, should be considered before this matter is resolved.
I am going to the legal aid funding. The single appeal pathway to the VRB brings with it the right for legal aid for veterans with overseas service—deployments to Iraq and Afghanistan—irrespective of a means-test and based on the merits of the case. For the majority of veterans injured during their normal service—that is, non-overseas service—they are highly unlikely to be eligible for legal aid under the respective state and territory legal aid means-test, as the means-test is stringent. Minister, can you explain to me how you have offered them all legal aid and they are all going to be covered legal aid because I am a little confused?
I am just trying to get my head around this. Access to legal aid is not an inherent right for veterans even with the operational service. This is evident when New South Wales legal aid decided in December 2014, and in response to cuts to legal aid funding—and, by the way, we have had more cuts to legal aid funding; isn't this hitting home?—with the Commonwealth Attorney-General not funding veterans even with operational service, after being notified of this substantial policy change by the New South Wales legal aid on 19 December 2014 and bringing it to the attention of and enlisting the assistance from ESOs by reminding DVA of how they spruiked the VRB system as providing beneficial support to veterans with operational service—that is, access to legal aid and New South Wales legal aid commission reinstated aid.
Isn't it true that DVA cannot control or determine access to legal aid and it is the states and territories that disburse legal aid after the Commonwealth Attorney-General makes a grant? This relationship is made abundantly clear by DVA to compensation lawyers. When we have previously highlighted how hard it is to run cases on the current grant of legal aid, we are told that it is not within DVA's control as it is state government that determines the amount of the grant. So the rights for veterans with operational service, and having gone through the proposed single pathway, the VRB, and expecting access to legal aid, are not enshrined, are they? Clearly, this is not a hypothetical question given what has happened in the recent past. DVA, the Department of Veterans' Affairs, are full of it. They cannot rely on the goodwill of the state or territory legal aid commissions to fund veterans. That is a straight-out lie, especially when they are subjected to the Commonwealth Attorney-General reducing their annual grants. Who will miss out? Our veterans, not those applying for legal aid for committing violent crimes and needing access to lawyers as a liberty, are at stake. So maybe you can explain to me how all these people are supposed to get legal aid funding, because, by the way, while they are fighting their cases they are broke. They are struggling to put bread on the table for their kids; they are going through marriage break-ups. It is just putting more financial strain on them. So maybe you can tell them out there, while they are listening to us on radio, how you promised to give them a guarantee that they would get legal aid funding.
As I have indicated before, access to legal aid funding for veterans is available on a non-means tested basis, whereas for an everyday non-veteran citizen a means test would usually apply, and of course there is a merit assessment which does happen in the usual way and that is organised at a state level through the relevant legal aid organisations, bearing in mind, though, that the Commonwealth provides the relevant funding for those organisations. May I also just clarify that access for veterans to legal aid funding is not only not means tested; it is available irrespective of the type of service that was provided, whether it was service oversees or service in Australia.
So you are going to give me a guarantee that every veteran who puts in for legal aid will receive it—100 per cent of them? Every single one of them. The states and territories are going to provide every single one of them with legal aid. Can you show me the document where you have made that deal with the states and territories?
Senator Lambie, I obviously cannot guarantee that every veteran who makes a claim for legal aid will get legal aid, because, as I have indicated to you, there is a merit assessment, which you would expect there to be. That is not a decision that the government makes; that is a decision that is made in the relevant legal aid commissions around Australia, as it is done for everybody else.
I am just going to return for a moment to the costs issue that we have been discussing. I am reading an extract from the Senate Foreign Affairs, Defence and Trade Legislation Committee inquiry into the Veterans' Affairs Legislation Amendment (2015 Budget Measures) Bill 2015, schedule 2, which was tabled in September last year. Paragraph 2.19, on page 13, reads:
A number of submitters raised concerns regarding the AAT's ability to order that the costs of proceedings, outlined in section 357, be paid by DVA in cases where the AAT finds in favour of the claimant. The Defence Force Welfare Association described the retention of section 359, which states that sections 356, 357 and 358 do not apply to reviews of determinations of the VRB, as an 'oversight', commenting that:
We notice that the Bill contains no provision for removal of that part of S359 which provides that S357 does not apply to review by the AAT of a determination of the VRB. We feel sure that retention of this provision is an oversight, and we think, a serious one. S357 provides for award of costs against the Commonwealth in some circumstances, in the event of a decision by the AAT in favour of the Veteran ... we hold strongly to the view that just treatment of Veterans' claims ought not to depend on their ability to meet the costs of access to the ordinary processes that are put in place to deal with those claims.
Can the minister please clarify whether the Defence Force Welfare Association's concerns still stand?
I thank you for putting that question. What you have just read out is evidence that this process works. It is also evidence, Senator Hinch, that this process has been going on for a very long time, because these concerns, which were expressed in September last year, were taken on board by the government, and the amended bill that is in front of us has addressed them. This concern has been removed. Senator Gallagher, in her contribution, also pointed that out explicitly. So this issue was raised. The government recognised that this was a legitimate issue, and we have addressed it by making relevant amendments to the bill that is in front of us.
Means testing, obviously, depends on what your level of income is; whereas merit testing of a case is, obviously, a high-level assessment of whether or not there is likely to be any prospect of success before you pursue a particular process.
I am still trying to get my head around why your government believes it is fair that somebody with all those physical and psychological injuries can walk into a Veterans' Review Board with a trained advocate, that is not trained in law like a lawyer, and has to go up against numerous lawyers on the other side. I am trying to see where the fairness is in that.
In all sincerity, what we are trying to do here is improve the process for veterans. What we are trying to do here is ensure that resolution of issues for veterans can be done in a less adversarial fashion, at least in the first instance, so that most issues, hopefully, can be resolved in a more informal setting through the Veterans' Review Board. Some issues will not be able to be resolved that way, and that is why the avenue for appeal to the Administrative Appeals Tribunal remains there, of course. But instead of having, right up front, an adversarial, formal, legalistic, confrontational process in the way that you describe it, what we are seeking to do here is improve the experience for veterans, improve the capacity to get satisfactory outcomes in a more efficient way, and the way we are doing it responds directly to relevant recommendations made by the 2011 Review of military compensation arrangements, and takes on board the feedback that we have received through our own consultations and the feedback that we have received as a result of the inquiry by the Senate Foreign Affairs, Defence and Trade Committee. As a parliament, I think we have done everything we possibly can do to ensure that this measure is in the best possible shape, and I genuinely believe that what we are doing here, if we pass this, is doing the right thing by our veterans. I very much commend this measure to the Senate.
How does the VRB improve the outcome for veterans, when the first thing they do is walk into a Veterans' Review Board, in front of nine lawyers, and feel as intimidated as hell? How does that improve their outcome? Do you at least agree that we have a suicide crisis under Veteran's Affairs?
My advice is that if there is further new evidence that is provided later in the process then obviously you have to reassess that at that time. But the AAT appeal is obviously in respect to a specific decision that was made on the basis of specific information at that point in time. My answer to the question from the senator representing the Nick Xenophon Team stands as accurate, but obviously you cannot award costs in relation to something that is not part of the scope of the AAT process in question.
In the circumstances you describe, my advice is that if evidence is presented late in the piece that should have been and could have been available then the process would essentially go back to the first step through the Military Rehabilitation and Compensation Commission.
The reason they go to the review board is that the Department of Veterans' Affairs has already knocked them back in the first place. What I am asking is: when the veteran supplies further medical evidence, and that backs the veteran 100 per cent against a medico-legal bloody medical report, which is usually rotten to the core, they do not get a reimbursement for the medical report that they have obtained by a specialist, do they, Minister?
Minister, can you give me the average price of obtaining a specialist report? The Department of Veterans' Affairs has the worst compensation system in this country and needs thousands and thousands of pages, and it costs the doctor, because they have to spend hours on it. Can you tell me what the average price of those specialist reports is? If you cannot, I will.
This is in relation to supplementary advice, obviously. Medical reports are routinely obtained for these sorts of processes, including, and in particular, through the improved process through the Veterans' Review Board. They are fully covered by the Department of Veterans' Affairs. This is an additional allocation on top of the payments that are made for these sorts of reports by the government itself.
Obviously, to resolve an issue in one way or another, the issue needs to be represented through this process, but this can happen either in person or, if that is not feasible, by phone, by video link or by representation through an advocate.
So let me get this right: when the veteran has PTSD, they have their up-and-down days—most of the time they are down while they are fighting the Department of Veterans' Affairs, because that compacts their injuries even further—and decisions can be made without them there fighting their own case, can't they?
Overwhelmingly, nearly all veterans in these circumstances are represented in these sorts of processes through relevant veterans' organisations. My advice is that that covers the circumstances that you mention. Let me stress again: the process in this bill is an improvement on the status quo. What we are seeking to do here is to make things better than what they are and improve the experience for veterans.
Let me get this right—I want to make sure, because there are a lot of veterans listening to our discussion here and I can tell you that the texts that I am getting are just amazing. They are absolutely ashamed of you people over there. You need to know that you have Veterans Affairs' executives, the ones who are highly paid, sitting right next to them. Let me get this right: the veteran, because of their physical or mental injuries, does not show up at the VRB. Their advocates, who are probably not trained to be there because they are up against lawyers, are walked all over by those seven or eight lawyers sitting at the other end. And that is it, end of game. Don't you see why they need legal representation, at the very least, in that VRB? Please! What the hell is wrong with you?
The CHAIR: I am going to put both Senator Kakoschke-Moore's and Senator Lambie's amendments together, so the question is that schedule 24 and table item 26 in clause 2 stand as printed.
Bill agreed to.
Bill reported without amendments; report adopted.