Louise Markus (Greenway, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I rise to speak on the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009. This bill will deliver a pension increase that will be welcomed by veterans who receive the service pension, as well as war widows and recipients of income support supplement. This bill will increase the single maximum basic rate of the service pension by $1,560 per year, or $30 a week, from 20 September—in just over four weeks time. The bill will ensure that the Rudd Labor government deliver on their promise to pensioners—a promise that was forced on them after their failure to recognise pensioners in last year’s budget.

Since becoming shadow minister for veterans’ affairs in September last year, I have been criss-crossing the country and meeting with stakeholders in the veteran community. I have listened to the concerns, both wide and diverse, of members of the veteran community, and many of the issues of concern to the veteran community have been reflected around the country. The pension increase is a win for the veterans. As shadow minister, I critically evaluate and, of course, monitor government initiatives and policy to ensure that everything that is done will not only reinforce, strengthen and add value to the nation’s commitment to our veterans but also not undermine their entitlements. In the short time available, I have done my best to scrutinise this bill, to look beyond the simple headline ‘$30 a week extra’ and to look at the finer detail and make sure, to the best of my ability, that there are no hidden traps for veterans.

This is a complex bill with 12 schedules of amendments—the majority of which are to the Veterans’ Entitlement Act 1986 but there are also minor amendments to the Social Security Act 1991 and the Aged Care Act 1997. The increase in the single maximum basic rate of the service pension will deliver, to quote the second reading speech of the Minister for Veterans’ Affairs:

… increases of $32.50 per week for single service pensioners and $10.10 per week combined for couples on the maximum rate.

War widows and widowers will benefit from an increase of $30 per week.

Income support supplement recipients will also receive an increase in the supplement and the ceiling rate will be increased.

I would like to note that I have very recently been advised that due to rounding the figure for couples is now $10.15. I support this measure as it responds to an issue of concern to the veteran community and the change will benefit veterans and dependants.

The service pension is indexed twice a year, and I note within the bill that a new indexation is proposed—to be known as the pensioner and beneficiary living cost index, the PBLCI. The maximum basic rate of service pension will be indexed to the pensioner and beneficiary living cost index. The PBLCI will be used to adjust the maximum basic pension rate where movement of the PBLCI is greater than movement in the CPI for the relevant indexation period. I understand that the rationale for the new PBLCI is the desire to have an index that closely resembles the cost-of-living expenses experienced by pensioners. The Australian Bureau of Statistics is developing the PBLCI. The index is yet to be made available. I have no idea of the inclusions in the ‘basket of goods’ so am unable to comment on its benefits or otherwise. I can only assume that it will deliver what is hoped for.

There are changes in this bill to the couples benchmark. From 20 March 2010 a new combined couple benchmark for pension rates will be 41.76 per cent of the annualised male total average weekly earnings, MTAWE, figure. The maximum basic rate of service pension that can be paid to a person who is a member of a couple will be half the maximum combined couple rate of pension. The single pension will be benchmarked at 66.33 per cent of the combined couple benchmark, effectively 27.7 per cent of MTAWE.

A change that simplifies a payment to veterans is always welcomed. Schedule 4 consolidates a number of smaller payments and allowances into one pension supplement. The explanatory memorandum also says that an increase to pension payments of an estimated $10.10 per week—which, as I noted earlier, is now $10.15—for couples combined and $2.50 per week for singles is to be provided. From 20 September 2009, the pharmaceutical allowance and telephone allowance will be replaced by a veterans supplement under the Veterans’ Entitlements Act 1986 and MRCA supplement under the Military Rehabilitation and Compensation Act 2004. The veterans and MRCA supplements will be payable to eligible persons not in receipt of service pension, income support supplement or an income support payment under the Social Security Act 1991. It will be very important to communicate carefully to the veteran community this combining of a number of well-established individual allowances into one payment. I understand that plans are in hand, and I encourage and will look closely at that communication as it progresses.

I also support the decision to retain the current pension age arrangements for veterans. The male veteran age will remain at 60 years. Pension age for female veterans and partners does not appear to be impacted by this bill. The introduction of a new work bonus in schedule 7 will provide an incentive for those veterans and dependants who wish to take up or continue to work. The new work bonus will allow for a certain amount of employment income earned, derived or received in a pension period by a person who is of qualifying age on a service pension or income support supplement to be disregarded for the purposes of the income test. For each fortnight the amount disregarded is 50 per cent of $500 where the person earns more than $500 in the pension period or 50 per cent of the person’s total employment income for a period, where the person earns less than $500. The work bonus will enable pensioners who have reached qualifying age and who undertake some paid work to supplement their pension.

The proposed change to the income test taper will, I believe, be unpopular. The income test taper rate will increase from 40c to 50c per dollar of income over the ordinary income-free area. This will remove the additional income test free area for dependent children from the calculation of the amount of a person’s ordinary income-free area. The income test taper will have an impact on the amount new claimants can earn from additional income. This is, in my view, a disincentive and contradicts the sections of the bill, such as the previous measure, the new work bonus. However, I understand that the reason for the change is the need to ensure that the pension system is sustainable and targeted to those most in need.

There is one entitlement that is not addressed in this bill that I would like to discuss, and that is the indexation of TPI pensions. The indexation of TPI pensions has been raised regularly with me over many months—in fact, ever since the pension reform was first announced in the budget. I wish to put on the record the importance of the indexation of their pension to TPI recipients. The significance of maintaining the relativity of the TPI pension cannot be ignored. The coalition committed to and began the process of indexing the TPI pension to CPI and MTAWE. There was an expectation that this would be retained. Expectations have been dashed. While the minister may claim that the majority of TPI recipients will benefit from the changes that this bill will deliver, what about the minority—those who may miss out? Is the minister saying that the minority are not important?

The principle expressed that the benchmark should be maintained goes to the issue of trust. In a recent policy implementation update the minister promotes the importance of restoring the value of compensation and entitlements. The first achievement listed with a tick is ‘to provide fair indexation for all veterans’ compensation pensions’. The footnote does acknowledge that the implementation of these commitments follows legislation and regulations passed by the Howard government.

I wish to place on record the importance of maintaining the relativity of the TPI pension benchmark to reduce the risk of erosion back to past pension rates. The bill includes a provision for the future. An amendment provides increases and future adjustments of indexation for pensions to compensate for the expected increases in the cost of living arising from the introduction of a Carbon Pollution Reduction Scheme. This amendment provides for increases to pension payments of one per cent in July 2011 and 1.8 per cent in July 2012. When I asked how this was derived, I was informed that this was Treasury modelling. Not being able to cite the modelling, I am unable to comment on the adequacy of this amount. Labor know that veterans are going to be impacted by the Carbon Pollution Reduction Scheme and are planning compensation, but will this be sufficient and are veterans going to struggle to pay for their food and electricity bills?

I also have concerns about the limit on the number of advanced payments in one year having been relaxed. Veterans will no longer be limited to one advance in any 12-month period. Given that those people on fixed incomes will be able to apply for multiple advances, I am concerned that this will create unnecessary and avoidable pressure on already financially vulnerable people who will have to pay more than one debt. An accrual of multiple debts will have to be paid back in the same period that is available now for those who have applied and received only one advance. I know that advances are important, particularly in times of unexpected financial stress, but multiple advances have to be repaid in the same time frame as if there were only one advance. Is this adding unnecessary stress in times of uncertain cost of living increases? I caution that this change should be carefully communicated and monitored.

In closing, I recognise that any increase in veterans’ entitlement will be of benefit, and the coalition will not be opposing this bill.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009. My electorate of Blair in South-East Queensland is home to thousands of veterans, service personnel and service pensioners. Some 320,000 service pensioners, war widows and widowers will benefit from the pension changes. The 2009-10 veterans’ affairs budget funding of $11.8 billion is demonstration that the Rudd Labor government is committed to improving the circumstances of veterans, their partners and their families and also the system which supports them.

I am pleased to speak on this particular bill because I know that the many RSL groups in my electorate of Blair—in Ipswich, the Fassifern Valley and the Lockyer Valley—are very supportive of this legislation and the pension reforms which will improve the financial living circumstances for veterans and their families. I want to pay tribute to those organisations and also to the Goodna RSL in the federal electorate of Oxley, neighbouring mine. They have been active participants in supporting so many people and their families across so many years. Particularly in Gatton, the RSL and the veterans communities are very active in supporting people in circumstances which are adverse and in financial circumstances which are difficult. They have a dedicated house there, and support workers who do a wonderful job in helping veterans and their families.

The extra financial support will be much welcomed because many veterans have chosen to live in Ipswich and in rural communities outside of Ipswich. We have the RAAF base at Amberley there, and 3,500 personnel serve there. Many of them are in the Royal Australian Air Force, but also we have 9 FSB, an Army battalion based in Ipswich. The legislation here will support veterans and their families enormously.

It is important to note that it is Labor governments across many decades which have made the major changes and reforms when it comes to veterans, pensioners and their families. It was the Rudd Labor government which made a commitment in this legislation, but it was the Hawke, Keating and Whitlam governments who helped pensioners so much by lifting the rates of pensions and lifting the linkages, which will give a decent lifestyle and show a degree of humanity towards veterans and pensioners who struggle so much to meet the needs of their living circumstances.

The legislation here is really about securing and sustaining our pension reforms. It is identical in many ways to the legislation that deals with nonveterans and their families as well. I am pleased to speak on this, because I know so many of my constituents will benefit from this legislation. The recipients of the service pension and income support supplement, from 20 September this year, will receive $32.50 per week for singles on the full rate, with a minimum increase of $10.10 per week. With respect to couples, there is a rounding up to $10.15 combined per week. So we are seeing an increase of $30 a week in the base pension, which is an important reform and a fulfilment of our commitment to veterans and their families. For a war widow or widower there is an increase of $30 a week in the war widow’s pension and a further $2.50 increase to the income support supplement ceiling rate. It is not just the higher base rate which will improve the financial circumstances of veterans and their families; the increase on top of the indexation is important, and the linkages are important as well.

The new pension supplement will simplify a number of the supplementary allowances currently available and given to pensioners, with a better arrangement and a more sensible and concise payment. The value of the existing GST supplement, the pharmaceutical allowance, the utilities allowance and the telephone allowance at the higher internet rate will be incorporated in the pension supplement. It will be increased by $2.50 to match the 66.33 single to couple ratio, and for couples there will be an increase of $10-$15, as I said. This will be a big difference in people’s financial circumstances. It will help them meet their housing costs. It will help them meet their food and clothing needs as well.

The seniors supplement will also assist. It replaces the seniors concession allowance and the telephone allowance currently available to holders of a Commonwealth seniors healthcare card—and gold card holders over the veteran pension age are not eligible for the seniors concession allowance or the utilities allowance. That is important because many people will benefit accordingly. The seniors supplement will also be available as a quarterly payment.

I will not go through in detail many more of the changes because the previous speaker did that, but I think the income test taper rate will tighten, strengthen and sustain the system. It will increase from 40c to 50c per dollar of income over the income test free area. And I think the work bonus will make a big difference to people’s lives. It will allow pensioners over veterans pension age to get access to greater wage income, which will help them meet their weekly needs.

The adjustment in March and September each year in line with CPI increases and the male total average weekly earnings benchmark is also important, and the linkages there with a new index will help, of course. We are developing a new index—the Australian Bureau of Statistics will do that—to reflect the real cost-of-living changes for pensioners. It has been a complaint from many of my constituents that their real costs are much greater than the CPI. This new index will be known as the pensioner and beneficiary living cost index. The bill before the House provides for pension rates to be adjusted each March and September by whichever is greater, the CPI or what will become known as the PBLCI. On the linkages: as I said before, the bill sets the rate of single pensions at 66.33 per cent of the combined couple rate, which is equivalent to 27.7 per cent of MTAWE, and that is important because that is an increase, again, on the current 25 per cent.

I am pleased that there is no change to the pension age for veterans. I was concerned about that, and I am pleased that it will remain unchanged despite the increase in the nonveteran pension age from 65 to 67 by six months every two years starting from 1 July 2017. I was concerned that our veterans might lose faith with what we are doing in terms of caring for them, but I am pleased that the government has listened to the stakeholders and the voices of veterans communities and has not changed that.

I think the pension bonus scheme will provide an incentive for older people to defer claiming age or partner service pensions or income support supplement and remain in the workforce as well. The tax-free lump sum pension bonus to members is also important in that regard. The Harmer pension review found that the system is enormously complex, and that is what veterans and their families tell me in my electorate, so any reform that simplifies or gets rid of red tape and the bureaucratic nightmare that veterans so often find themselves subject to will be important for constituents across the 150 constituencies represented in this House.

In the time remaining, I want to make comment on something that I experienced in my electorate where many veterans were also present, and that was the ceremony for Victory in the Pacific, which we recognised recently at Manson Park, at Cemetery Road, Raceview. Representatives of the Manson family were there. Manson Park, in Ipswich, was the home of the graves of many American service personnel. You can see the indentations where those graves were. Those bodies went back to the USA, but Mrs Manson looked after the graves of the young men who died and were buried at that place. She communicated with their mothers and their families about what she was doing to care for their lost and loved ones who had died. So representatives of the Manson family were there. There is an eagle on top of the flagpole at Manson Park, Cemetery Road, Raceview, in Ipswich, and we have started to celebrate Victory in the Pacific there.

I commend Ipswich City Council for what they did in putting on that ceremony. Colonel Andrew Britschgi, from the American military, was there. Mayor Paul Pisasale was there. Air Commodore Chris Sawade, also known as ‘Noddy’ Sawade, who is the senior ADF officer at the RAAF base at Amberley, and Lieutenant Colonel Andrew Fidge, the commanding officer of 9th Force Support Battalion, known as 9FSB, were also there. Many representatives from the local RSL were there, and many veterans were there. I talked to the veterans about these types of issues and what we are doing about pension support as well. I am also pleased that John O’Neill, Post Commander, American Legion, was there. I have seen and met John on a number of occasions. He tells me that he is moving to Ipswich, which is great, because he will become one of my constituents.

Also present was Ms Donna Reggett, who was appointed by the Rudd Labor government to give the ex-service community a greater voice at the highest level of government. She is a member of the Prime Ministerial Advisory Council on Ex-Service Matters. Donna is the partner of a long-serving RAAF veteran who served as a peacekeeper in Somalia, and she is the daughter of a RAN veteran who served in Vietnam. She has been involved for a long time in the Australian Peacekeeper and Peacemaker Veterans Association and is a member of the National Treatment Monitoring Committee. She has undertaken many courses in counselling and mediation and has helped veterans in my community. She did those courses at the Southern Cross University. She has trained under the department’s program as a level 3 advocate. She is actively involved in my community helping veterans. I know that Donna and other people who are involved in that community have very warmly welcomed the legislation that is here today.

I want to make note of her daughter, Nicole, who spoke at that service last Saturday. Nicole is a wonderful young woman and a great representative of Ipswich. She is Ipswich Young Citizen of the Year and she spoke movingly and brilliantly that day about what victory in the Pacific meant to her generation, and to honour the veterans in the Ipswich community.

Nicole has a motto. She has told everyone that this is what she believes. She says, and I commend her for it, ‘If you see something that needs to be done, you pitch in.’ I think that is fantastic and says everything about Nicole. She is the sort of young woman who would travel to Africa to work in orphanages as part of the RSL Youth Development Program. She is undertaking tertiary studies in psychology at the University of Southern Queensland at the Springfield campus in Ipswich. She has won several youth development awards, all geared towards helping veterans in my local community. She has helped to raise funds and bring awareness of youth and homelessness issues, through her position on the Ipswich City Youth Council.

Nicole was a recent winner of the Pride of Australia award in the Young Aussie category. When at school, she helped set up a student welfare fund for her school and raised funds for her local veterans community. Her dad served in Somalia in 1994 and suffered terribly with post-traumatic stress disorder. She said, ‘So I know what it is like to deal with these issues as a child.’ She is a tribute to her parents and a tribute to the City of Ipswich. I thank the council of the City of Ipswich for their support and thank the veterans community in my area and the RSL for their ongoing support of Nicole. I also want to thank the veterans for their involvement in the 2009 VP Day commemoration service at Manson Park, Cemetery Road, Raceview.

I spoke to the veterans on that day about what is going to happen in terms of the pension changes. They know we are keeping the faith with this legislation. But they raised a couple of other issues with me. One of these—and I have spoken to the Minister for Veterans’ Affairs in relation to it—is the F111 deseal-reseal report, which was tabled in parliament on 25 June 2009. This issue was raised with me that day. It certainly affects the military personnel and former military personnel in my community. We had a parliamentary inquiry into the health support needs of RAAF deseal-reseal workers and their families. The Joint Standing Committee on Foreign Affairs, Defence and Trade’s Defence Subcommittee, chaired by the member for Brisbane, Arch Bevis, looked into this. We had made an election commitment before 2007 in Ipswich. Alan Griffin, the shadow minister at that time, the now Minister for Veterans’ Affairs, came to the RSL at North Ipswich and made the commitment that we would undertake a parliamentary inquiry.

The aim of the parliamentary inquiry is to work out whether the response of the Commonwealth government—that is, the previous government—was adequate and consistent with the findings of the 2004 Study of Health Outcomes in Aircraft Maintenance Personnel and if the overall handling and administration of the ex gratia program was sufficient. More than 130 submissions were provided to the community. Six public hearings were held and 18 recommendations were made to the government. As I have said to the minister, and have said publicly, I hope the government will accept the recommendations, lock, stock and barrel, and implement them. The veterans community in my area are strongly supportive of the legislation that is before the House today. I know they are strongly supportive of a fair, just, decent and humane response to the deseal-reseal report which has been tabled in federal parliament. But they are also supportive of wonderful young women, like Nicole Reggett, who have done so much to advance the cause of the veterans and their families in the Ipswich community. I commend the legislation to the House.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

What’s coalition policy?

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

There are many emails from the veteran community being circulated, and these emails have gone from reflecting the Minister for Veterans’ Affairs, Alan Griffin, in a glowing light to, now, reflecting him in a growling light. He has gone from being their pin-up boy to being a person they hold in disdain. The member opposite interjects and asks what the policy is. Let me tell this member what the policy of the coalition was. The coalition was called on to conduct a review into military superannuation. That review was conducted. The same minister, the now Minister for Veterans’ Affairs, said at the time that three months—12 weeks—was too long for a report to be handed down. What we have seen since the report was handed down, on 24 December 2007, by the then Minister for Defence Science and Personnel, Warren Snowdon, is nothing more. On Monday, 24 August, it will be 20 months of no response—20 months of no response to a report that the government, when in opposition, demanded be expedited.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

What is your policy?

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

There has been not one ounce of rhetoric in response. The minister opposite sits there like a smartypants and asks what our policy is. Our policy was: we had a review. We had a report. The report was presented. It has been tabled by your government. Your minister has sat on his hands and done nothing in response, despite the veterans community asking for a response. You are the government. You are in control of the purse strings. You have the opportunity to provide a response and, where deemed fit, to provide an increase in the superannuation benefit. But you have done absolutely nothing. There has been 20 months of no action whatsoever, and yet you interject with rhetoric—

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

The shadow minister will address his comments through the chair, please. I have taken no position on these issues.

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

Thank you, Madam Deputy Speaker. This minister has done nothing. This minister refuses to be a part of any action that will see a benefit, under superannuation benefits, to former and currently serving members of our Defence Force. They were left with a budget surplus in excess of $20 billion. As I said before in this speech, we saw a $14 billion cash splash with no account or reference to any ADF person, past or present, in relation to their superannuation. So today—as he will come in and sum up this bill—I say to Minister Griffin: today is the opportunity, as you bask glowingly about your increases in veterans affairs pensions today, to actually enunciate your response to the review into military superannuation. If needs be, admit to our defence people, past and present, that you have an inability to do anything to increase their service pension because you are part of a government that blew the budget.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I am not part of the government that blew the budget, thank you. Address your remarks through the chair.

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

The Minister for Veterans’ Affairs is part of the government that blew the budget. The Minister for Veterans’ Affairs is one of the people who signed off on the $14 billion cash splash that probably took away the opportunity for this government to provide an increase in the military superannuation arrangements. So today, Minister for Veterans’ Affairs, when you come into this House to sum up this bill, provide a response to your report. You have seen the emails that are going around that outline that you, the Minister for Veterans’ Affairs, have failed to address their concerns; that you, the Minister for Veterans’ Affairs, have ignored their requests; that you, the Minister for Veterans’ Affairs, have gone from being their pin-up boy to being a person of shame. I ask you today to come into this House and provide a response. You should not have to wear the burden of this on your own, as the Minister for Veterans’ Affairs. The Minister for Defence Personnel, Materiel and Science should also come into this House and put forward his response to the review into military superannuation arrangements report, because jointly you have responsibility.

The person who has the most responsibility and who is most accountable in this would have to be the Minister for Veterans’ Affairs, because when he was in opposition he was the person who singularly said that three months was too long. He said that three months was too long to deliver a response. As I said, on Monday, 24 August, it will be 20 months since the report was handed down. We have seen 20 months of inaction. How many more months of inaction will we see before the issues surrounding defence superannuation payments are addressed? The veterans are not asking for much. They are asking for it to be changed from a CPI index to the MTAWE index.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Is that part of your policy?

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

Obviously the minister opposite does not agree with that policy.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

No, I am asking you.

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

Obviously he does not agree.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Don’t ask and don’t respond. Just continue, thank you.

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

Here is a minister who has a lot to say, and the rubber is yet to hit the road. Today is the day. This is the week in which Vietnam Veterans Day occurred. Yesterday, 18 August, was Vietnam Veterans Remembrance Day. Today should be the day in which our defence military superannuants should be remembered for their service, and a response should be forthcoming about their superannuation arrangements.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009. At the commencement of my contribution to the debate I inform the member for Paterson that that is the legislation that we are debating—

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

So you don’t count service personnel?

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Thank you. You have had your say.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

and it would be highly inappropriate—

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

That’s never stopped you before.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

for the Minister for Veterans’ Affairs to come down here to give his response—

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

Then do a ministerial statement.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

to the report on military compensation. Mr Deputy Speaker, I find it highly offensive that the member for Paterson is allowed to continually interject on my contribution to this debate.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Shortland should continue her speech now.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I suppose that gives the member for Paterson open slather to interject during my contribution to the debate.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I will decide that; you continue to speak.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

The minister at the table, Dr Emerson, asked the member for Paterson what his policy was. I would have to say the answer is easy: he does not have a policy. They do not have a policy. They have never had a policy. He weaves, he ducks, he goes around in circles, but when it comes to giving an answer the answer is no policy. The member for Paterson could be asked what the Howard government’s policy was when they were in power.

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

Mr Deputy Speaker, I rise on a point of order. Do I take that—

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

That is not a point of order. Sit down, thank you.

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

The point of order is on relevance. The member should address the legislation that is before the House.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Your point has been made. Sit down, thank you.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I say to the member for Paterson that when the Howard government was in power the coalition had no policy. And when then Minister Abbott took to cabinet a request for a $30 per week increase in the pension, the Howard government cabinet said no, they were not interested in looking after pensions. That is in stark contrast to the Rudd government, who have always had the interests of pensioners and veterans at heart.

I acknowledge the enormous contribution that veterans have made to our community here in Australia. Without their contribution, Australia would not be the country it is today. At the weekend I attended two ceremonies that recognised the contribution of Vietnam veterans to Australia and that also celebrated the victory in the Pacific. In that context, it really brings home to me the importance of looking after our service men and women. And that is exactly what the Rudd government has done. They conducted a review into pensions and veterans entitlements, and coming from that review are this legislation and commitments that were made in the budget. This legislation implements key elements of the Rudd government’s secure and sustainable pension reform package for the veterans community. We have already had legislation through this House that has done exactly the same thing for pensioners. This legislation covers veterans. The increases and the changes included in this legislation will come into effect next month along with the changes for pensioners.

The measures are not at all dissimilar to those reforms already enacted for social security pensions. The variation in this bill just reflects the difference between the repatriation and the general social security pensions system, and I think it also acknowledges the importance of the contribution that veterans have made to our community. This bill delivers on the government’s strong—I emphasise strong—commitment to the service community, providing certainty for so many in such an uncertain time. What this legislation does is show our genuine concern for veterans. It does this not only with words but by putting in place the right sort of system so they get the right sorts of payments. It is what the Howard government failed to do in the time that they were in power. They totally ignored the needs of ex-service men and women and of pensioners.

The Rudd government do not do that. We have put in place substantial increases, as you will see as I continue with my contribution to this debate. The bill, as part of the pension reform package, prepares Australia to meet future challenges, and the reforms provide a long-term, sustainable, more responsive, fairer and simpler pension system. Pensioners will also benefit from improved indexation and can receive more concessional treatment for the first $500 of wages income a fortnight, encouraging older Australians to join the workforce. So half of the first $500 of income earned will be discounted, and that will act as an incentive for ex-servicemen and pensioners to work that little bit longer. For those who are currently working, it will also benefit them enormously. They are good changes. They are changes that really benefit our veterans. They are changes that this government have embraced because we believe in our veterans and we believe in the contributions they have made to our community.

From 20 September this year, the full single service pension will increase by $65 a fortnight. That is a very significant increase. Partnered service pensions will rise by $20.30 combined a fortnight. Those single service pensioners on part pensions because of other income will still receive an increase of not less than $20.20 a fortnight. These increases are on top of regular indexation due in September. The regular indexation will come through and then on top will be the $65, the $20.30 and the $20.20. The normal September indexation will be calculated and applied to the pension. War widows will receive an extra $60 a fortnight and there will be an increase to the income support supplement of an extra $5 a fortnight.

I should at this point acknowledge that the member for Paterson wholeheartedly supported this legislation. He acknowledged the fact that the Rudd government had prepared outstanding legislation, that the legislation will deliver to veterans and pensioners. It is a pity that when the member for Paterson was part of the previous government he did not encourage them to develop similar legislation.

Another important aspect of this legislation is the changes to the pension supplement. The pharmaceutical allowance, the utilities allowance, telephone allowance and the GST supplement will be replaced by a pension supplement to be paid with the pension each fortnight. It will be a little higher for those who receive a supplement for the internet. The current supplement system is a bit of a mish-mash. Bringing together all these supplements and paying them fortnightly I think will provide certainty for our veterans. Pensioners have already had this change made to the way their supplements will be paid. The supplement will provide a payment of up to $56.10 a fortnight for singles and $84.60 combined for couples. Each and every fortnight they will receive that supplement. I think that gives them a greater ability to manage their income. Pensioners who would like to take half of this payment as a quarterly lump sum will be able to do that from 2010. In that way they will benefit from the flexibility within the legislation. They can still have the certainty of half the supplement being paid to them fortnightly and then get the lump sum to help them with the big bills that come in from time to time.

War widows, widowers and income supplement recipients will have their former allowance added to their base rate of pension. For veterans, members and dependants who will not benefit from another supplement, the bill also establishes two new supplements that replace pharmaceutical and telephone allowances. These are the veterans supplement for those under the Veterans’ Entitlement Act and the MRCA supplement for those under the Military Rehabilitation and Compensation Act. Self-funded retirees or pensioners of qualifying age who are holders of the Commonwealth seniors card or the repatriation gold card will also receive the new seniors supplement. The seniors supplement will be a quarterly payment of $196.30 for singles and $296.40 combined for couples. They are good changes; they are sensible changes. It is workable legislation streamlining the payment system and providing more certainty and more income.

One of the major reforms is the changes to the indexation and benchmarking of income support pensions. New indexation arrangements will better reflect cost of living increases for pensioners and the ABS will calculate the new pensioner and beneficiary living cost index, which will be known as the PBLCI. This index has been designed to better reflect the cost of living and the costs incurred by pensioners and veterans. From 20 September, the maximum basic rate of relevant veterans pensions will be adjusted in line with the PBLCI or the consumer index, whichever is the highest. No matter what happens, our veterans will not lose. Pension rates will also continue to be benchmarked to the male average weekly earnings.

This is really good legislation. It delivers an increase to our veterans and a change to the way veterans pensions and veterans affairs payments are made, and it delivers those things in a way that ensures veterans will receive more income. It is legislation that combines the supplements and provides them on a fortnightly and quarterly basis from July 2010. It is legislation that implements a new work bonus scheme, which I talked about earlier; it is legislation that delivers transparency; and it is legislation that will benefit our veterans.

I wholeheartedly support this legislation and, in doing so, acknowledge the enormous commitment of the Rudd government and the Minister for Veterans’ Affairs to our veterans. We know that their service to this country is immeasurable, we know that their service has benefited all Australians and we know that it is our role to ensure that they have strong income support. We recognised the fact that they needed an increase in their payments—an increase that had been needed for some considerable time. It is an increase which the Howard government failed to deliver, but the Rudd government listened and we have delivered to our veterans community.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

The Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009 is important legislation. We have a new group of veterans coming into a period in which they will require the sort of support that is proposed in this legislation. They are the Vietnam veterans, and I am just wondering where the member for Shortland was when they came home and were treated with absolute contempt.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Oh, come on!

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

That’s a live one!

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Well, let’s get something straight. It is amazing how you can rewrite history in this place. I can see Tom Uren and the others marching in the street and giving our soldiers a hard time. For your information, I am a nasho. I did not go to Vietnam but I do know what it is all about.

Putting that aside, the fact is that this legislation, as it applies to veterans, is virtually a replica of what Brendan Nelson put to this House, and he was treated with contempt when the government failed to address these matters in its first budget. Let’s get a few things on the record. When Brendan Nelson brought forward a proposal that primarily recognised the relative needs of single pensioners he was attacked because he did not mention everybody—at a time when the government was supporting nobody. They are the facts of the matter. They are clearly recorded. The member for Shortland carries on about it being a good idea, but it was acted on very slowly.

Pensioners who voted for this government were promised reduced grocery prices and fuel prices. Of course, any reduction in the cost of groceries and fuel is the same as an increase in the pension. How were those promises delivered? There was GroceryWatch, which the minister at the table, the Minister for Competition Policy and Consumer Affairs, had the good sense to cancel after it had cost about $8 million or thereabouts. That was absolute tokenism. And of course it took the good sense of the opposition to stop the government from—

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

Why aren’t you designing the coalition’s emissions trading scheme?

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I will get to that, because you have given me an opportunity within the legislation. Let’s just talk about the fact that it was the opposition that prevented the government from knocking off another $8 million, $10 million, $20 million, $30 million—whatever—on a Fuelwatch scheme that by any measure is not working in Western Australia. It was implemented over there by a Liberal government, under Richard Court, but that does not stop me being even-handed. I do not always cast my vote on the basis of my loyalty to my party; I have a loyalty to my constituents. It is a silly scheme and, what is more, that was all the pensioners got from the Rudd promises in the election campaign—tokenism.

That, of course, can be added to the plethora of broken promises that are materialising from this government. Don’t you think veterans are concerned about the intentions of the government with regard to the health insurance rebate? Be they wealthy veterans or otherwise, they all went and fought for us. Some of them are on military pensions. Why should they be denied the rebate? That was a solemn promise made by the government and negated. I note that there are people in the Senate who have not been voted in as Liberals or Nationals who are taking a similar view, and they are entitled to. The Senate has a responsibility to see the government keeps its promises.

This legislation is belated but it is welcome. Above all, it recognises what the former Leader of the Opposition brought to this parliament by way of a private member’s bill to start this debate and eventually embarrass the government into doing something. Again, there are issues. It is a fact that I wrote the Howard government’s veterans affairs policy as the shadow minister leading up to the 1996 election. Whilst I did not serve in that role, the member for Maranoa, Bruce Scott, certainly implemented many of those measures dealing with issues which the previous government had failed to address and yet were of grave importance to people.

During that period the Keating government, to its credit, implemented Australia Remembers and I, as the shadow minister, gave it full endorsement. It was an appropriate recognition of our veterans and the contribution they have made. What is more, it refocused the Australian people’s attention on that contribution and on the issue of defence. Since then we have seen an ever-increasing number of people attending dawn services, parades et cetera.

In the present debate, it is interesting to note that up to that point the Commonwealth government actually ran some hospitals. They were called ‘repatriation hospitals’. There was one in every state. And they were run so badly that the response of the Keating government was to dispose of them. In absolute foolishness, I thought, New South Wales and Victoria—one under a Labor government and one under a Liberal government—took over those hospitals. The premiers of Queensland and Western Australia declined the offer; a private health firm called Ramsay Health Care took those hospitals over. I can tell you that there was grave disquiet and concern within the veterans community and the RSL that the hospitals were coming from under the umbrella of government ownership. The veterans really worried how their future would be managed by the private sector. About two months into its ownership, they came to me and said, ‘Wilson, this is the best thing since sliced bread. We don’t want you to make any criticism that this has gone to the private sector. For instance, we no longer, as veterans, get frozen TV dinners served up to us, because Ramsay has reopened the hospitals’ kitchens and are serving cooked, hot meals delivered within the premises.’

And then, of course, at that time there was a 10-month waiting list for elective surgery. That was eliminated over a three-month period. How did Ramsay do that? They opened the operating theatres on Saturdays and cleaned it up. Yet we have this government telling the states that it is going to run hospitals better than the states are. When it had the opportunity, it ran crummy hospitals. There is nothing in this legislation, I hope, that is going to alter that arrangement in Western Australia, where the veterans have got some of the best conditions—brand-new sections of the hospital built and invested in.

Fundamental to all this is that Ramsay gets paid by the Commonwealth for delivering the service. That is the only way you will fix the entire health system. When you give public hospitals budgets, you make a patient a liability. Ramsay had an incentive to get rid of waiting lists because every service it provided it got paid for. That is not the way we function in the public hospital sector. You wonder why, as health professionals will tell you, waiting lists are part of the management process. The pity of it is that, as one highly ranked hospital representative said at a conference I attended as shadow minister for health, whilst waiting lists are a necessary part, there are problems with the administration of the waiting lists. This lady, very high ranking, complained about the administration of the waiting lists. We saw that in Canberra when a former Treasurer’s wife had gallstones and needed an elective operation. It was done in a private hospital by the specialist of choice, notwithstanding that the then Treasurer boasted of not having private health insurance.

There are other issues in this legislation worthy of comment. I give considerable credit to the government on the issue of initiating a ‘pensioner CPI’, if you like. It was by coincidence that I raised that matter the other day in relation to some other veterans legislation. I have long had the view that the standard CPI does not represent the cost structures of retirees. The government can be commended for investigating that. I am surprised that it is going to cost $18 million, but I still think such an approach is worth it. And I endorse the decisions they have made in shifting the percentage of MTI to a pensioner couple rate—41.76 per cent of the MTAWE rate. I endorse the fact that the veterans community now has three options, virtually, and they will always be provided with a pension increase relevant to the highest of those three. Yet, at the same time, the government are increasing the taper clawback from 40c in the dollar to 50c, and I criticise that.

I welcome the initiative regarding personal exertion, which is my choice of words, where people remain in the workforce or continue in the workforce. They deliver an economic benefit, in my view. If they are fit and well, they will have a personal benefit over and above the extra remuneration. It is at least a reasonable proposal that, were they to earn in excess of $500 a week—or a fortnight, I think it might be—they will be credited with 50 per cent of it. If it is an amount less than $500 then they will be able to earn all of it without loss of benefit. That is a good move. I am sorry that the government, nevertheless, has in this legislation taken the Harmer criticism to heart and removed the bonus that people who chose to continue working past 65 could get if they took their working age to 70. Harmer said it was complex and not understood. That was true, but that was not an excuse to remove it. Pensioners and persons approaching that age were never properly informed. Some discovered it after the event. They had decided to retire and then found that they really should not have, but it was too late. Every person approaching 64 years of age should have been properly notified as to their options in that regard, particularly in the past few years, when there was a grave shortage of reliable labour.

But there are other measures within this bill. One of which I am highly critical is that the government is choosing to set the price increase that is going to arise in a veteran’s budget from the emissions trading scheme. To suggest that an increase of one per cent in 2011 and an increase of 1.8 per cent in 2012 will be the ceiling for assistance is a joke. Yesterday the major representative groups in the retail food industry said the price increase will be seven per cent. Furthermore, as I have asked in this House previously, what does that provision tell us? It tells us that, for instance, electricity generators are not going to lower their pollution. It makes a farce of the label ‘carbon pollution reduction scheme’ because the government admits openly—

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Order!

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

No. This is in the legislation. It is in there. There is a provision here for an increase in the pension in response to the government’s misnamed CPRS, so please do not tell me it is not part of my opportunity to speak on this matter. I am making the point that the government, by their process of giving people compensation, are making an admission that the electrical coal fired generating system is not going to reduce pollution. They are going to pay the price. Because they have a reasonably captive market, they are going to send it on to consumers and homeowners.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order!

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

The irony arises when you compensate people for that cost and expect they will respond to the market signal and actually use less energy. I have never seen anything like it.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I ask the member to come back to the bill.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

I am on the bill.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I ask the member to come back to the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

No. You cannot instruct me not to talk about segments of the bill. This is quite clear in the bill. I will quote you the section. You will cost me time in making a very relevant point. I copied out the section. When you assume control of the House, it is not a bad idea to be cognisant of the legislation.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! Do not reflect on the chair. I ask the member to speak to the bill before the chair.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

The bill before the chair makes provision for a one per cent increase in the pension in 2011 as a result of the CPRS, and it makes another provision for 1.8 per cent as of 2012. I am saying that that identifies the fact that the government admits that there is going to be no reduction in pollution at coal fired power generators because they are going to pay for certificates, some of which Treasury says they can buy from China. They are going to pay for them and pass the costs on to veterans. The veterans are going to get some compensation but over in the supermarket the cost arising from the ETS is going to be seven per cent, not one per cent. That is the point that arises in this particular situation, and I can assure you that it is to be found in the legislation. I have made that point. To prevent a member from addressing actual issues in this place would be a great pity.

The reality is that this is a very important aspect of the bill of which veterans should be aware. There are veterans in various income groups and some of them will say, ‘I am prepared to pay a price to reduce pollution,’ when in fact they will be paying a price to maintain pollution. That is why I constantly argue for renewables—and they are available in your state, Mr Deputy Speaker Adams—that would reduce emissions and reduce the price of electricity if they were properly applied. There is the difference. This is an admission contained in this legislation.

Now let me talk about other things. I have touched on the pension bonus, and I think that is a pity. The reality is that these are belated measures. Some are positive for veterans and some are not. I am happy that I have had the opportunity to address both sides of that. You will note that I gave credit where credit is due and criticism where I believe the veterans community is not being properly assisted through this legislation.

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

It is with a great deal of pleasure that I rise today to voice my support for the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009. This bill is yet another example of this government’s commitment to both senior Australians and those who have served their country. The key elements of this bill will ensure our government delivers a sustainable and secure pension reform package for veterans and their dependants. The pension reform package addresses three key areas: it addresses the adequacy of income support pensions, it makes their operation simpler and more responsive to pensioners’ needs and it secures long-term sustainability. It prepares Australia to meet future challenges, including the ageing population, through changes to social security, family assistance, veterans affairs and aged-care legislation. The reforms will provide significant increases in pensions and result in a simpler, fairer and more flexible pension system. I know that that is something those I have spoken to in my electorate of Solomon look forward to.

We have a very vibrant veterans community in Darwin and Palmerston. In fact it would be remiss of me at this stage not to mention the very special day that we commemorated this week. Yesterday, on 18 August, Vietnam veterans and their families paid tribute to those who have served, suffered and died in and as a result of the Vietnam War at the annual Vietnam Veterans Remembrance Day service at the Darwin cenotaph. Vietnam was Australia’s longest involvement in war, with around 60,000 personnel serving over 10 years from 1962 to 1972. Some 2,400 Australian service men and women were wounded in the conflict and 521 made the ultimate sacrifice.

I would like to take this opportunity to acknowledge and thank the Vietnam Veterans Association Northern Territory branch for all their hard work in the community. Like so many community groups helping out those who need it most in the community, the great work the Vietnam Veterans Association does often goes unnoticed—but I know the difference they make is significant. It was something that the very hardworking Minister for Veterans’ Affairs talked to me about earlier this year when he was up in Darwin for the bombing of Darwin commemoration.

More than 320,000 veteran pensioners will benefit from these reforms, boosting their income by $1.1 billion over the next four years. The bill will see a number of changes. Single service pensioners and war widows and widowers with income support supplement will receive up to $65 extra a fortnight. All service pensioners and couples will receive a guaranteed increase of just over $20 a fortnight. These increases are in addition to the regular indexation due in September.

The pension system will be simplified by combining the value of the fortnightly and quarterly allowance payments into a single pensioner supplement to be paid fortnightly from September this year. The pensioner supplement will be made up from the quarterly payments of the utilities allowance and telephone allowance and the fortnightly GST supplement and pharmaceutical allowance. The telephone allowance component of this payment will now be paid to all those eligible at the higher internet rate, regardless of whether or not recipients have the phone or internet connected.

To ensure the reforms are more responsive to recipients’ needs, from July next year pensioners will be able to elect to have some of their pension supplement paid quarterly instead of fortnightly. The pension reform package introduces a new pensioner and beneficiary living costs index. The new living costs index recognises that the cost of living for pensioners and beneficiaries may increase faster than the cost of living for the general community, as measured by the consumer price index.

From September this year the maximum base rate of income support pensions will be adjusted in line with either the consumer price index or the new pensioner and beneficiary living costs index, whichever is higher. Pension rates will also continue to be benchmarked to male average total weekly earnings. Lump sum advance payments are a popular mechanism to allow pensioners to budget for those unexpected one-off expenditures. The maximum advance will be increased to 1½ times the fortnightly pension rate and the minimum advance will be set at half the fortnightly rate. A new work bonus will be introduced to provide an incentive to encourage those over the pension age who are able to continue in the workforce to do so. In fact only 50 per cent of the first $500 a fortnight of income will be counted in the income test.

This pension reform bill will improve the pension system and make it simpler and more sustainable into the future as the population ages. These changes have been a long time coming as part of the reforms. This bill delivers a stronger and fairer pension system that will serve both the recipients and Australia well into the future. These are people who have seen us through our darkest hours as a nation and we need to support them. Australia has a proud wartime history, and that has been part of the lives of so many Australians. The government remains committed to honouring those who have served and continue to serve, ensuring their legacy is remembered for generations to come.

I was very pleased when the Minister for Veterans’ Affairs announced funding for the Northern Territory branch of the Royal Australian Regiment Association for a reunion and a dinner to be held in Darwin commemorating the 40th anniversary of the Battle of Binh Ba. Commemorative activities in local communities play a major role in encouraging Australians, especially younger Australians, to learn about our wartime experiences and provide an opportunity for veterans to share their stories.

Through a whole-of-government approach the pension reform package prepares Australia to meet its future challenges, including the ageing population, through changes to various pieces of legislation, including veterans affairs, social security and aged-care legislation. This government is delivering on its core values to support those most in need in our society and to give all Australians the opportunity to lead a decent and fulfilling life. As the very hardworking Minister for Families, Housing, Community Services and Indigenous Affairs said last month at the centenary of the age pension commemoration:

Today’s celebrations coincide with the Australian Government’s recent landmark reforms of the pension system, delivering a simpler, fairer, and flexible safety net for millions of age and disability pensioners, carers and veterans.

These long overdue reforms will provide greater certainty for pensioners, and meet the new challenges of an ageing population in the 21st century.

In conclusion, the veterans in my community of Darwin—and I have many, and we will have more veterans in the future because of our involvement in the coalition forces in the last eight or so years—are very happy. Pensioner entitlements was one of the things that veterans often bought up with me when I was doorknocking in my electorate during the election campaign. To be able to bring on an increase at a time of a fairly tough global financial environment is very important so that we can look after these people who have looked after us in the past.

There could be a certain element of criticism regarding spending, but the budget demonstrates the government’s strong commitment to the veteran community—and these increases show that. They provide certainty to the veteran community during these uncertain economic times. This spend, as I said, will be $1.9 billion over the period to 2012-13—this having been injected into the veterans’ affairs portfolio since the election of the Rudd government. It includes $1.1 billion, in response to the Harmer review, to some 320,000 veteran pensioners. So a large number of people will be directly assisted by the Rudd government’s reforms in this area.

It is a tough area. I know that it would be easy to be critical of the former government; however, when it comes to our veterans and support for our people who are fighting overseas, defending our democracy and the rights that we hold dear, I think it is really important that this place is united in its support for those people. There is very strong support on the government benches. The member for O’Connor mentioned the past with regard to Vietnam. We do not look to change our past, but we certainly look to the future as a Labor government. I know that, on many issues to do with defence, we have the support of the opposition. There is very rarely a point of difference between our position and the position of the opposition when it comes to our Defence Force personnel, their safety and their deployment. As a member of this House I certainly take very seriously our role whenever any sort of legislation that affects our service men and women is before the House, whether it be increases to pension benefits for veterans or deploying our troops into a dangerous area. These are things that all members take very seriously.

I have 1st Brigade in my electorate, and I am very proud of the role that 1st Brigade play. On 8 August this year we had a welcome home parade in Darwin for some 1,200 personnel coming back from Afghanistan, Iraq and East Timor. I really enjoyed the feeling in the crowd. It was a day for our veterans and the people who have served. The crowds really turned out in Darwin to welcome back 1st Brigade. They are an institution in my electorate. They contribute fantastically well in fundraising for charity events—for example, when they push the gun through the city each year and collect money. They help young people from disadvantaged backgrounds. They contribute in the sporting area very strongly. The Army, Navy and Air Force are involved in local sporting activities. They are a massive part of the fabric of the Northern Territory.

I think Darwin has probably more of an affinity with the Defence Force than other places—and I will probably have to take a bit of flak from colleagues on both sides of the House for saying that—through the bombing of Darwin and our close ties to the violence of war, experienced when it came to the shores of Darwin in 1942. Some 250 people lost their lives in those bombings. We have a very proud history of engagement in war on the shores of Darwin during the Japanese bombing raids at that time.

The community of Solomon fully support all endeavours to make things easier for those people who have come back. And it is probably about that, as much as anything. There are often financial constraints put on people who may be injured in war. Their ability to earn better incomes in the future is always jeopardised when they have been to war. There is obviously the physical damage that can occur but there is also the emotional trauma that many of our veterans have been through. The people of Darwin understand that and they turn out in great numbers whenever there is an opportunity to support the veterans, the returned service men and women and the people who have been in the services but who, in times of peace, have not been deployed. The fact that they were on standby, ready to go to defend Australia, means that we need to give them our utmost gratitude and respect. In Darwin we have a special relationship with our ADF. We have a booming ADF community. I am very proud to represent ADF personnel in this place. I am particularly proud to have 1st Brigade in our city. As I said, they do a wonderful job.

In speaking to veterans, I found that this pension increase and reform package has been very well received, including the fact that we have been able to put some of the bonuses into the fortnightly payments, that they are getting the utilities allowance to assist with power bills and the like, and that they are getting the internet. For some veterans who have disabilities the internet is their contact with the outside world. They can do all their shopping online. They can do all their banking online. They can talk online to friends through Facebook and those other mechanisms. So the internet is very important to them. I am proud, as a member of this government, that we have been able to assist in giving them a quality of life after they have served us.

I do not think you would not get too much dispute from anyone about this bill. I am glad to see that the opposition are supporting it. I did not doubt that they would support it, but it is good to see that they are supporting it. As I said halfway through my contribution today, I really believe our Defence Force goes above politics. Sure, we debate things in this place but, when it comes to an issue affecting the men and women of the services, that is an issue that is above politics. It is about supporting those people who look after our interests and let us enjoy the democracy that we live in. These reforms will deliver a stronger and fairer pension system to veterans and their dependants. I commend the bill to the House.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I congratulate the member for Solomon on his heartfelt contribution. I know how proud he is of his Defence community in Darwin. He is right: it is a community that we need to support. Particularly with our overseas commitments, we must have a concerted view on how we approach the support of our military personnel. I am proud to support the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009, which primarily boosts the income support paid to our veterans. The government and the Australian community are justifiably proud of our ex-service men and women. The measures contained in this bill will go some way towards improving the wellbeing of Australian veterans and the wider ex-service community. The member for Solomon was a bit charitable in his comments about the former government, but I will not be. Unlike the former government, which, when it came to dealing with our ex-service people, was long on rhetoric but did very little, this government has embraced the issues of the ex-service community so that they can have certainty.

The new measures in this bill will inject $1.9 billion into the Veterans’ Affairs portfolio in the period from 2012-13. We consider the provision of robust services and support to the ex-service community to be an appropriate way to express our gratitude for, and recognition of, the bravery of these Australian men and women and the sacrifices they have made for this country. They are people who deserve the highest respect we can give them, and we should recognise the service they have given to this country. How we approach this following their service is a measure of not only our respect and recognition but also our undying gratitude for their contribution. This should stay front and centre in the minds of legislators whenever they make laws that affect people who have committed themselves, rather heavily at times, to the wellbeing and future of this country.

Yesterday, as we all know, was Vietnam Veterans Day. I would like to take this opportunity to honour the service and sacrifices of the 60,000 Australians who served in Vietnam in the 10-year period between 1962 and 1972. Yesterday 300 people gathered at Mawson Park in south-west Sydney, in my electorate of Werriwa, led by Bob Ellen, the Secretary of the Macarthur Sub-Branch of the Vietnam Veterans Association, to recognise and commemorate the contributions made during the Vietnam War. It is interesting to note the Australian community’s long overdue embrace of our Vietnam veterans. Whilst I was unable to attend that gathering yesterday because parliament was sitting, members of my office were able to attend and they reported to me that many school kids descended on that particular venue in Campbelltown—as they should. This is about understanding that the history of this country is steeped in not just what occurred in Vietnam but also the contribution over time of men and women who have been prepared to fight for this country’s future. That is something we should all take forward with us and, certainly for young people growing up, it is something that should never be taken for granted.

I would also like to briefly mention a few other people who are heavily involved in the ex-service community in my electorate, including Ron Brown OAM, the President of the New South Wales Branch of the National Servicemen’s Association of Australia, and Mr Ken Foster, the Secretary of the Vietnam Veterans Information Service. Ken travels around as an advocate for Vietnam veterans. Unfortunately, Ken is seriously ill at the moment and is recovering in hospital. I wish him all the best. I have never heard this bloke whinge for himself, but I have certainly heard him advocate very strongly on behalf of his fellow Vietnam veterans. He is a person who believes in putting service ahead of the individual. I wish Ken all the best for his recovery.

I would also like to mention Geoff Grimes. As a matter of fact, I rang the office just to check what Geoff’s title is. I always see him at Vietnam veterans functions. He runs the Ingleburn mower shop. Whenever I visit that shop, he is invariably sitting in the corner with another Vietnam veteran talking about various things, helping him to channel his issues and directing him to people who can help him. I never fail to be impressed by the commitment of Geoff and people of his ilk who go out of their way to look after their mates.

We remember also those men and women who made the ultimate sacrifice in the Vietnam War. There were 521 Australians who lost their lives in that conflict. We should never forget the deplorable way our service men and women were treated during the course of that conflict. It certainly did not do this country well, and it is a blight on our history. We are entitled to have our different political views, but it is absolutely deplorable to take that out on our service men and women. And it is our current generation who are now recognising the contribution, sacrifice and commitment of those men and women.

It is also important to acknowledge the effect war service has on the individual and their family. Many Vietnam veterans suffer long-term health impacts from their services, and the effects still resonate today. I see the work that people such as Ken Foster and Ron Brown do. It is clearly something that will not simply go with the passage of time.

From my various discussions locally with the veterans community throughout my electorate—with people in our local subbranches and with Max Chin from Dredges Cottage in Campbelltown, where a number of our ex-servicemen’s organisations meet—I certainly know, as I said a little earlier, that they are not a pack of whingers. They are very strong, they are very forthright in their views, and they do unashamedly stand up for their mates. They have only ever asked for what they considered was a fair go. They did not want anything more than that. They wanted proper recognition of their service and, as a consequence of their service, of their position in life. They wanted financial security and assistance with their various medications or treatments as they grow into later years.

This bill that is before the House today demonstrates that this government is committed to the Australian veterans community. I would like to discuss in a little bit of detail what this bill delivers and what it makes better in their lives. The bill before the House will introduce a range of measures from the government’s Secure and Sustainable Pension Reform package announced in the 2009 budget and will provide certainty for Australian pensioners in these uncertain economic times. This particular bill is part of a reform package which prepares Australia to meet the challenge of the future. The reforms provide for long-term sustainability and a more responsive but fairer and simpler system for these people.

It was a rather unequivocal finding of the Harmer review that single pensioners were in financial stress as opposed to couples. In response, some 320,000 veterans affairs pensioners across Australia will receive direct benefits. In my electorate in the south-west of Sydney alone, that represents payments to 1,500 people. That total payment under this provision is $1.1 billion. From 20 September this year the full single rate for service pensioners and war widows will receive a boost of up to $32.50 a week. Service pensioners on the couples rate will get an extra $10.15 combined a week. Those single service pensioners on part pensions because of other incomes will still receive an increase no less than $20.20 a fortnight. It should be noted that these increases are on top of the regular indexation payment which is due in September this year.

One of the reform’s major improvements is the indexation and the benchmarking of the income support pension. This government understands that the pension rate should not be tied to the cost of living faced by pensioners. This bill allows the introduction of the new pensioner beneficiary living cost index, which will be developed to measure the increasing costs of goods and services that would typically be used by people in this group. From 20 September 2009 the pension will be increased to the higher of either the consumer price index or the pensioner beneficiary living cost index, and then that will be compared to the male total average weekly earnings rate.

The current system of payment of allowances will also be simplified by combining the value of the fortnightly and quarterly allowance payments into a single pensioner supplement to be paid fortnightly from 20 September. This pension supplement will provide a payment of up to $56.10 a fortnight for singles and up to $84.60 for combined couples.

A new work bonus will be introduced to provide an incentive and to encourage those who are over the pension age and wish to continue in the workforce. Under these rules, only 50 per cent of the first $500 a fortnight of employment income will be counted in the income test. This is great news for many veterans in my electorate who I know are still working and who still wish to work. This money will certainly go a long way to assisting them and their families.

The bill also brings greater flexibility and access to the existing arrangements for advanced payments. I know there are many calls to my office about, and I have certainly received plenty of letters on, this particular subject. Lump sum advance payments are a popular mechanism that allows pensioners to budget for the unexpected one-off expenditures in their lives. The improvements will increase the maximum allowable advance from $500 to $1,000 for singles and $1,500 for couples combined. We will link these amounts to movements in service pension rates. They will also enable pensioners to access more than one advance payment over a 12-month period. These changes modernise the advance payments system to better reflect the needs of pensioners and help them meet the challenges, particularly the one-off expenses that do occur.

Under the Rudd Labor government, the veterans community can expect our unrelenting effort to address a range of issues around veterans entitlements, services, wellbeing and recognition. This government will ensure that veterans and the ex-service community get a fair go. Australians are justifiably proud of our veterans and our ex-service men and women. This government believes that the provision of robust services and support for the ex-service community is a sincere way to show our gratitude and recognition of the bravery and sacrifice of these Australian men and women. As the Prime Minister said in the House on 13 August 2007:

There is perhaps no greater duty that we as a nation and as a parliament have than to honour, remember and express our gratitude to those Australians who have served in the defence of our nation in times of war, because our security and liberty have not come without a price.

The measures in this bill clearly demonstrate that this government is serious about looking after those in the veterans community and their families. I commend the bill to the House.

Alan Griffin (Bruce, Australian Labor Party, Minister for Veterans' Affairs) Share this | Link to this | Hansard source

in reply—The Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Bill 2009 gives effect to the key elements of the government’s secure and sustainable pension reform package in relation to veterans and their dependants. The measures in this bill closely parallel for veterans and their dependants the reforms recently enacted in relation to certain social security pensions. These reforms stem from a major review of the pension system conducted by Dr Jeff Harmer, Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs, and a dedicated team of officers. Officers from my department provided advice and assistance to the review team in relation to veteran specific issues. I thank all those who worked on this monumental task.

As has been said before but is worth repeating, these are the most significant pension system reforms to have been undertaken in the past 100 years. This government is very pleased to be delivering a simpler, more responsive, more adequate and more sustainable pension system for veterans, their dependants and social security recipients. These reforms prepare Australia to meet future challenges, including an ageing population, through changes to social security, family assistance, veterans’ affairs and aged-care legislation. This bill delivers these goals for veterans and their dependants.

More than 320,000 veterans’ affairs pensioners will benefit from these reforms, boosting their incomes by $1.1 billion over the next four years. A key feature of the reforms is the increase to pension rates. From 20 September 2009 the secure and sustainable pension reform package will increase pensions for all veterans’ affairs income support recipients and war widows and widowers. The reforms will deliver increases of $32.50 per week for single service pensioners and $10.15 per week combined for couples on the maximum rate. War widows and widowers will benefit from an increase of $30 per week. Income support supplement recipients will also receive an increase in the supplement and the ceiling rate will be increased. These increases are in addition to the regular indexation due in September.

A significant improvement will be made to the indexation of income support pensions, benchmarking them against a more realistic indicator of changes to the cost of living for pensioners. The pension reform package introduces a new pensioner and beneficiary living cost index that actually measures the cost of living for pensioners. The new pensioner and beneficiary living cost index recognises that the cost of living for pensioners and beneficiaries may increase faster than the cost of living for the general community, as measured by the consumer price index. From 20 September 2009 the maximum base rate of income support pensions will be adjusted in line with either the consumer price index or the new pensioner and beneficiary living cost index, whichever is the higher.

Another important increase being delivered by this package of reforms is the increase in the relativity of the single pension rate to the combined couples rate. For a person being paid the single rate of pension, the relativity of that rate will be increased from the current 60 per cent to a rate of 66.33 per cent of the maximum rate payable to a couple. This reform is further complemented by the new male total average weekly earnings benchmark arrangements. From 20 March 2010 a new pension benchmark will be introduced for the maximum combined couple rate of pension. The benchmark will be 41.76 per cent of the annualised amount of male total average weekly earnings. Therefore, the new benchmark for the maximum single rate of pensions will be 27.7 per cent of male total average weekly earnings, an increase of more than 10 per cent from the current 25 per cent benchmark.

The current complex system of allowances and supplementary payments will be simplified and made more flexible with the introduction of a new pension supplement for service pension recipients. Telephone allowance, pharmaceutical allowance, utilities allowance and the GST pension supplement will be consolidated into a single pension supplement for service pensioners. From 1 July 2010 income support recipients will have the option of receiving a portion of this payment quarterly instead of fortnightly. This introduction of the new pension supplement arrangements will provide income certainty for veterans and their dependants while maintaining flexibility in managing their budgets. War widows and income support supplement recipients will have the former allowances added to their base rate of pension. Self-funded retirees of pension or qualifying age will also benefit from the pension reforms.

A new senior supplement for holders of a Commonwealth seniors health card or gold card holders over qualifying age will be introduced from 20 September 2009. The senior supplement will replace the existing seniors concession allowance and telephone allowance. In addition, all senior supplement recipients will now be paid telephone allowance at the higher internet rate regardless of whether or not they were previously in receipt of the allowance. The senior supplement for a single person will be $785.20 per annum. For couples the combined payment will be $1,185.60 per annum. Depending on what allowances they are currently in receipt of, all senior supplement recipients will benefit from an increase of up to $266.40 per annum for a single person and $148 per annum for couples. The senior supplement will be paid quarterly.

The bill also establishes two new supplements to replace pharmaceutical and telephone allowances for those veterans, members and dependants who do not receive a veterans’ affairs or social security income support payment. The veterans supplement replaces pharmaceutical and telephone allowances under the Veterans’ Entitlements Act. The MRCA supplement will replace pharmaceutical and telephone allowances under the Military Rehabilitation and Compensation Act. These new supplements will commence on 20 September 2009.

A work bonus will be established to provide an incentive for those who wish to take up or continue to undertake paid work. The work bonus will apply to those veterans and dependants who are over veteran pension or qualifying age and will provide concessional treatment for their employment income. With the bonus, only 50 per cent of the first $500 a fortnight of employment income will be counted in the income test.

The work bonus provides a real and timely incentive for those veterans and dependants who are able to continue contributing their skills and experience in the paid workforce. With the introduction of the work bonus the existing pension bonus scheme will be closed to new entrants from 20 September 2009. The Harmer pension review found that the scheme is not meeting its objective of encouraging workforce participation among older Australians. The existing members of the scheme will be able to remain in the scheme and claim a pension and their bonus when they finish working.

The reforms in the bill introduce greater flexibility to the pension advance arrangements from 1 July 2010. The maximum advance amount will be increased for income support recipients and will link the maximum and minimum advance amounts to future movements in the service pension rate. More flexibility will be provided in the frequency of advances with up to three advances being available within a 12-month period. This will enable pensioners to better manage large, unforeseen costs.

To secure a pension system that is sustainable into the future, this government has had to make responsible but hard decisions. One of these decisions was to tighten the pension income test to ensure that the pension system is targeted at those most in need. From 20 September 2009 the pension income test taper rate will increase from 40c to 50c for each dollar of income over the income test free area. In the case of a pensioner couple their combined pension will reduce by 50c for each dollar of combined income over the income test free area. The pension as paid to each partner will reduce by 25c for each dollar of combined income over the income test free area. In addition to bringing the veterans entitlements income test in line with other means-tested payments the additional income test free area for dependent children will be removed.

As part of the reforms, new transitional payment arrangements are being introduced so that part-rate pensioners who would otherwise face a reduction in their payments as a consequence of the reforms will have their current payment rates maintained. The transitional safety net will maintain indexation in line with increases in the consumer price index and will provide an increase of $10.10 per week for singles or $10.15 per week for couples combined. The transitional rules will continue to apply until changes under the pension reforms result in a higher payment.

It is important to recognise that the pension reforms will have no impact on veteran pension age and qualifying age under the Veterans’ Entitlements Act. There will be no increase in these ages. The pension age for persons other than veterans, which is currently aligned with the social security age pension age, will increase from 65 to 67 for both men and women. These changes will be phased in gradually commencing in 2017. This was another of the responsible but hard decisions that this government had to make to maintain a viable and sustainable pension system. The delayed start date and gradual increase will allow those individuals who will be affected by the change time to make their retirement plans. The change in age pension age will allow the government to respond to the long-term costs of an ageing population.

Finally, the bill will provide a vehicle for the Carbon Pollution Reduction Scheme increases to be payable to service pensioners, war widows and disability pensioners. This government is acting to introduce much-needed and long overdue reforms that significantly improve the adequacy of the pension, and simplify and strengthen the nation’s social security and repatriation pension systems. These reforms will make for a more secure repatriation pension system, provide greater certainty to veterans and their dependants, and ensure the system remains both adequate and sustainable.

There have been a number of issues regarding aspects of this bill raised by speakers and I will endeavour to address some of them that were raised particularly by the opposition. The shadow minister, the member for Paterson and the member for O’Connor raised the issue that this is overdue and that it should have been done in the budget last year when the opposition, then under the member for Bradfield, moved for an increase in the single age pension of some $30. I think we need to go back and remember exactly what happened at that time.

There was a debate that was going on in the community, and understandably so, about the adequacy of income support pensions, particularly for those on the single rate. There was recognition in the community that something needed to be done. That is why a review was established and that is why the government took action. With respect to the argument that it could have been done 12 months ago, I think you have to go to the question of what was proposed 12 months ago. Initially, under the member for Bradfield, the opposition proposed a $30 increase for the single age pension. For example, if we look to this bill, what would have happened 12 months ago if we had acted on the proposal of the member for Bradfield, the then Leader of the Opposition? Frankly, nothing would have happened because aged service pensioners were not included. I know this because at the time I raised this matter with the national president of the RSL, who said that he felt sure it would be included and he would seek advice to that effect. The advice he got was that it was not included.

With respect to the $10.15 per week increase for couple pensioners, again, there was nothing in what the opposition proposed last year for couple pensioners. The circumstances are that what is included in this bill overwhelmingly would not be put in place under what the opposition then proposed. Subsequently, with the member for Wentworth as opposition leader there was an adjustment to the proposal of the opposition. This was some months later. Then they included the single rate age service pension in their proposal, but once again there was no inclusion which related to the circumstances around couples, and so again significant components of the veteran community would have missed out entirely under what was proposed at the time.

Let us not forget when it comes to the question of what support was provided. With the first stimulus package we had over 325,000 members of the veteran community receive that bonus. As members would recall, that was a bonus which initially was supported in the House by the opposition but was subsequently rejected. With the second stimulus package, which the opposition opposed right down the line, it is estimated that some 130,000 in the veteran community received that bonus. I would ask those members in the veteran community who received those bonuses to remember that what this opposition—which now says we could have acted 12 months ago on dealing with these issues—proposed then excluded them overwhelmingly. When they adjusted their position it then included some but excluded most, while at the same time they voted for and then rejected one stimulus package in terms of the public forums and opposed the second package right down the line. So, frankly, their issue around this question, that it could have been dealt with earlier, smacks of hypocrisy when it comes down to what it actually means for the veteran and ex-service community in this country.

The shadow minister raised an issue around advances, which I gather to mean a concern about the effect of too many advances. I would say that this came about as a result of requests for additional flexibility in the operation of the system. Advances in total cannot exceed the maximum amount and so the repayments cannot exceed a reasonable repayment amount. The issue of the work bonus and the taper rate as a disincentive was also raised, as I understand it, by the shadow minister for veterans’ affairs. I make the point clearly with respect to its operation that it does not provide a disincentive to those to work for the income that they earn because the additional increase in the free area overcomes any impact on the movement from 40c to 50c in the taper for the individual who is earning the income. There is no doubt that there are impacts for those who have investment income, there is no doubt there are impacts for those who have superannuation income, but again it is mitigated by transition mechanisms and overwhelmingly people will still be in front. They are in front now and they will be in front for some years, and in most cases they will be in front right the way through.

Both the shadow minister for veterans’ affairs and the shadow minister for defence, science and personnel have raised the question of how the changes will be communicated to recipients. Communication will be a priority because there is no doubt this is a complex issue and a complex reform. I want to assure the House that everyone receiving a payment will get a personal letter describing the change as it affects them. Additional communication with the veteran community will include a hotline, articles in Vet Affairs, the website and press and radio ads from Centrelink that also mention veterans and the circumstances as they will impact upon them.

Another issue which got some discussion was the question of the indexation of TPI pensions, how it fits into the system and the basic point we are dealing with today of increases in income support pensions and the argument that it should also have included disability pensions as paid under Veterans’ Affairs. I want to put a few points on the record with respect to that. The key question resolved just prior to the last election was the method of indexation to be used to adjust disability pensions relative to income support pensions. The argument was that it was only fair that they should be treated in the same manner to maintain indexation relativities over time. This was the argument that Labor championed in the lead-up to the election and which the coalition government belatedly acted upon. It is not the same argument as the need to adjust the base rate of income support pensions to allow those who rely on them the opportunity to try to maintain a reasonable standard of living, particularly when around 80 per cent of TPIs will also benefit from the changes made to income support pensions. A percentage of part-pensioners over a number of years will drop back, but there will be an immediate gain to just over 80 per cent.

One of the major issues regarding the indexation method was the argument that over time there was an increasing gap between the TPI pension and the percentage of male total average weekly earnings that it represents and that this led to greater inequity for TPIs regarding the value of their repayment. The link was to MTAWE and not to income support pensions like the age or service pension. The point relating to income support pensions is that they had the benefit of the better indexation method—that is, to maintain their relative value as a percentage of MATWE. Because the overwhelming majority of TPIs receive some form of income support pension, there was an inconsistency of indexation methods across different types of pensions that were being received.

The indexation method for disability pensions of all sorts and income support pensions will remain the same. In fact, an additional indexation formula has also been added to ensure that the value of pensions is better maintained. The means of maintaining the value of both income support and disability pensions over time has been secured. What has altered, on a one-off adjustment basis, is an increase to the base rate and pension supplement for single income support pensions in recognition of the inability of those who rely solely or substantially on them to make ends meet. There has also been a one-off adjustment to the pension supplement for couples. As the one-off increase to income support pensions also flows on, completely or in part, to more than 80 per cent of TPIs and is only denied to those who have substantial other sources of income, it shows that the increase is targeted to those most in need. It is not an adjustment that relates to how damaged you have been in service to your country. It is not designed for compensation pensions where income support pensions are still available for those who qualify for them. It is an adjustment designed to provide additional income support to those who must rely on income support payments to survive. That this includes a majority of TPIs should be expected and it is deserved. (Time expired)

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

Before I move to put the question, I shall make a comment about two events that just took place in this chamber. You might have noticed that we had a stranger in the House and then we also had a telephone going off. I will not name the members but it is disrespectful to the House. I would ask those two members who were involved in those events to please take note.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.