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

by leave—The purpose of this statement is to advise the House of the government's response to the Review of Military Compensation Arrangements, as announced in the federal budget.

The review

The Military Rehabilitation and Compensation Act 2004—the MRCA—was introduced on 1 July 2004 and provides rehabilitation and compensation coverage for injuries, diseases and deaths caused by all types of military service after that date.

In the lead-up to the 2007 election, we undertook to conduct a review of the MRCA. The review commenced in mid-2009, at which time the MRCA had been in operation for five years. Broad terms of reference were established to ensure all aspects were captured in the review including how the legislation has been administered.

In the 2010 election, we committed to 'taking all appropriate action in response to the review to ensure services and support for veterans and serving members evolve with their needs'. The response announced in the budget takes account of the views gained from considerable consultation during the conduct of the review and following the release of the report.

Fifty-two submissions from individuals, ex-service organisations and other organisations were considered by the Review Steering Committee. Members of the steering committee visited 12 ADF bases to hear the views of more than 400 current ADF members. More than 100 members of the public and veteran community attended eight separate meetings at venues near the bases visited. A further 48 submissions, from individuals, ex-service organisations and other organisations, providing feedback on the report were considered. The response represents the government's strong commitment to ensuring appropriate legislation is in place to meet the needs of our men and women in uniform.

The report

The steering committee delivered its comprehensive report to me in February 2011. In March 2011, I released the report publicly and called for feedback from the veteran and defence communities to ensure their views had been understood and considered. The report concluded that the objectives of the MRCA are sound. It also confirmed that the unique nature of military service justified rehabilitation and compensation arrangements specific to the needs of the military.

However, not unexpectedly given the relative complexity and period of operation of the MRCA, the review found opportunities for improvements. It made 108 recommendations ranging from retaining the status quo, support for current initiatives, clarification of policy, further work and monitoring, through to administrative and legislative changes.

The government response

The government has allocated a net $17.4 million over four years to respond to the review. This comprises $39.6 million of additional expenditure, partly offset by estimated savings for the government of $22.2 million over four years generated by the initiative to issue repatriation health cards to certain beneficiaries with Defence related claims under the Safety, Rehabilitation and Compensation Act 1988—SRCA.

Outcomes

Of the 108 recommendations, the government is implementing 96. The 96 comprise: 94 recommendations accepted, either in full, or with modification or enhancement, and two replaced by favourable outcomes. The government deferred three recommendations for further consideration and the remaining nine recommendations were rejected. Of the nine rejected, four were presented as alternatives in the report, and the other five were rejected for various reasons, including concerns raised by ex-service organisations. Of the 96 recommendations to be implemented, that is those accepted or replaced with favourable outcomes:

Main initiatives

The major elements of the government's response are:

This important measure will address the unintended outcome of the current methodology for calculating permanent impairment compensation under the MRCA where the person has previously received compensation under the VEA and/or SRCA. Currently, the compensation paid for a condition accepted under the MRCA may be lower than expected for the level of impairment associated with that condition. The new methodology will remedy this in the majority of cases and will be applied both prospectively and retrospectively at a cost of $33.7 million over four years.

This will include revisiting all calculations involving this methodology made since 1 July 2004.

This initiative is expected to generate estimated savings of $22.2 million over four years.

The Department of Veterans' Affairs will be consulting with key health professionals and their representative organisations on the implementation detail of this initiative:

This will ensure compensation is not delayed in the situation where all a person's accepted conditions have not yet been stabilised.

Currently, wholly-dependent partners have a one-time choice between receiving ongoing periodic payments or converting all of it to a lump sum.

This initiative allows future recipients to make a one-time choice between periodic payments for life, or converting 25 per cent, 50 per cent, 75 per cent or 100 per cent to an age-based lump sum—thus allowing them to better match their income to their needs.

This will realign the payment with a similar payment made under the SRCA.

It is important that those eligible for this type of compensation have access to appropriate advice and this increase in compensation acknowledges that there have been changes in the way the financial industry charges for advice since the commencement of the MRCA in 2004.

Work is already underway to begin implementation of these recommendations, and following system and legislative changes and other preparatory work, the bulk of the recommendations will be implemented from 1 July 2013.

Over 20 of the accepted recommendations require changes to legislation.

The changes to the MRCA will ensure the needs of our men and women in uniform, including those serving in operations today, will have the support they need into the future.

Conclusion

I would like to thank the members of the steering committee for their comprehensive report on military compensation arrangements with a focus on those with service after 1 July 2004.

I would also like to thank the veteran and defence communities for their contributions to the review which were important in helping to shape the future of the military rehabilitation and compensation system.

I encourage you all to read the report, as it contains valuable explanations of the military compensation system.

I commend to you the government's response to the Review of Military Compensation Arrangements, the full details of which can be found on the Department of Veterans' Affairs website. I present a copy of the government's response to the Review Of Military Compensation Arrangements.

I ask leave of the House to move a motion to enable the member for Fadden to speak for nine minutes.

Leave granted.

I move:

That so much of the standing orders be suspended as would prevent the member for Fadden speaking in reply to the minister's statement for a period not exceeding nine minutes.

Question agreed to.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

I thank the minister for his statement to the House. The coalition welcomes the government's response to the Campbell Review of Military Compensation Arrangements. The government has accepted 96 of the 108 recommendations of the review and in response has detailed a $17.4 million package of assistance to veterans and their families.

The Campbell review considered the coalition's Military Rehabilitation and Compensation Act 2004, or MRCA. The act was developed by the previous coalition government and in particular by former Minister for Veterans' Affairs, Danna Vale, who determined that this legislation would ensure the best possible outcome for veterans. The new act combined elements of the Veterans' Entitlements Act 1986 and the Safety, Rehabilitation and Compensation Act 1988 to provide a modern compensation scheme for veterans and members of the Australian Defence Force.

The MRCA came about in response to the Tanzer review and the tragic Black Hawk accident at the High Range training area near Townsville in 1996. That accident focused our attention on the deficiencies of the military compensation system as it was then constructed. The act has generally worked well save for the Military Rehabilitation and Compensation Commission's previous decision to refuse to adopt the option of multiple offsetting formulas as allowed by the act. It was therefore prudent to consider the legislation and its operation to ensure that it meets the expectations of the veteran and ex-service community.

At the 2007 election Labor committed to a review and in 2009 announced that a review would be conducted by the Secretary of the Department of Veterans' Affairs, Mr Ian Campbell PSM. Mr Campbell's review team comprised representatives from the departments of defence, Treasury, finance and education, and employment and workplace relations. A sixth representative and expert in repatriation law, Mr Peter Sutherland, was also selected. It is fair to say that, after some pressure from the coalition, the report was finally concluded in early 2011 and was released for comment from the veteran and ex-service community. That public consultation period concluded at the end of June last year. Despite commitments to address 'no-cost' initiatives before last Christmas the minister's own deadline unfortunately lapsed, though the government has now responded to the entire report as part of this year's budget.

The coalition has long pressed for the compensation-offsetting methodology to be addressed. The act gives the Military Rehabilitation and Compensation Commission the power to adopt multiple compensation-offsetting formulas, an option which the commission had not previously taken. The new arrangements will provide two calculation methods enabling the best possible outcome to be achieved where a veteran has multiple accepted conditions under one or more acts. This change will be important to ensure that veterans receive adequate compensation for their accepted conditions. Importantly, it recognises the differences in the compensation methodology calculation under different acts to ensure that a veteran receives proper compensation for their service-related injuries. As the minister quite rightly said during his ministerial statement, it is about reflecting the unique nature of military service. The coalition cautiously welcomes the adoption of the white card system for veterans with entitlements under the Safety, Rehabilitation and Compensation Act 1988. The adoption of the white card system does not come without some risk attached, though. The government admitted in February that no consultation with providers had been undertaken in relation to this recommendation. The coalition will therefore seek further information from the government to make sure no veteran is left worse off as a result of this change. It is a step in the right direction but, as noted by departmental representatives in Senate estimates this year, it relies on the goodwill of providers to be implemented. That it is being implemented without consultation is slightly concerning.

The MRCA is a complex piece of legislation. Decisions taken by veterans in relation to their compensation can have significant life-long impacts, and the move to provide additional financial support to veterans and their families when making decisions about compensation is a welcome step. Whilst the government will provide further financial assistance in this area, it is disappointing that the government is continuing to cut $1 million from the BEST program. BEST, for the benefit of the House, is the Building Excellence in Support and Training program, and was established by the previous coalition government to assist largely-volunteer veteran and ex-service people and organisations to provide pension and compensation claims assistance to veterans. As a result of these cuts in the BEST program, veterans' welfare and service centres across Australia are being forced scale down or even close their operations. It is my view and the coalition's view that this will hurt the next generation of veterans seeking help and assistance with gaining their proper entitlements under law from the Australian government.

Unfortunately, this is not the only area where the government is letting our veteran community down—a community that, as the minister said in his own statement, involves and has shown a unique nature of service through its service. Labor continues to oppose the fair indexation for DFRDB and DFRB superannuants. Labor unfortunately opposed the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010 put forward by Senator Ronaldson in the Senate. We believe that the fair indexation bill we put forward, which indexes defence pensions in the same way as the age pension, represents fair, just and equitable indexation. We believe it represents a fair go to veterans.

The minister is known as a decent minister, and I call on the him to join with the coalition to see that these veterans get a fair go: Minister, they deserve it. The veteran community will welcome the somewhat delayed response by the government to the Campbell review, and will welcome in many ways the minister's statements here this afternoon. We will consider the enabling legislation when it is introduced, and I know the shadow minister is looking forward to examining the government's response in greater detail during Senate estimates next Tuesday night. I thank the minister for his statement to the House and look forward to some positive outcomes from the work that the minister's department has done.