Warren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | Hansard source

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.

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