Nick Xenophon (SA, Independent) Share this | Hansard source

Further to Senator Ronaldson's comments in relation to these amendments, I just want to deconstruct what the government is trying to do here. I am genuinely trying to understand what the effect will be in practical terms. Senator Feeney on behalf of the government has said that these amendments result in no change, that they will clarify and affirm the current position but not change it, or words to that effect. Of course, I will stand corrected if I have misrepresented the government's position in any way. The addendum to the explanatory memorandum states:

The proposed amendments will not change the current operation of the compensation offsetting provisions. The changes are intended to clarify the operation of the legislation following the Smith decision and ensure that the established compensation offsetting practices can continue.

The decision of Commonwealth v David Ronald Smith was an interpretation of section 30C of the VEA in respect of incapacity from injury. I think Senator Ronaldson and others have fairly set out the circumstances of the Smith decision. We know that the court found in favour of the respondent, Mr Smith. The Senate committee report on this, which I thought was a very fair summary, states that the court:

… formed the view that the Commonwealth’s submissions failed ‘to give sufficient weight to the complete operation of section 30C, in particular the reference to ‘incapacity from that injury' as found in section 30C(1)(c)' … The court decided that in Mr Smith's case, it had not been appropriate to offset 'because the condition for which he was granted disability pension was a different condition from that compensated at common law'.

The report further states:

The government was of the view that this decision of the Full Federal Court underlined the need to clarify this aspect of the legislation. In its Portfolio Budget Statements for 2011–12, the government indicated that … it intended to amend the offsetting provisions in the VEA. In its submission, the department explained further:

It is considered that the decision of the Full Federal Court that offsetting should not have occurred applies only to the unique circumstances of Mr Smith's case. These included that, with the agreement of the Commonwealth, the common law claim for compensation was expressly changed to remove the two conditions that were being compensated under the VEA.

Nevertheless, the Government decided to amend the offsetting provisions of the VEA to ensure that the legislation is clear in its intent.

It stated further that if passed the amendments 'should avoid the likelihood that, on the basis of the Smith case, those seeking future compen­sation payments could circumvent the offsetting provisions by exclusion of specific injuries or diseases from the terms of the compensation settlements'.

So there are a few aspects of that in relation to this very first paragraph of the addendum to the explanatory memorandum. Firstly, is it anticipated that there will be changes, if not to the current operation of the compensation offsetting provisions in a direct and strictly technical sense then in the way that compensation settlements are drawn up, given what the government is seeking to do with the amendment to schedule 2 of the act? In other words, it has been anticipated, has it not, to directly quote from the department, that, 'those seeking future compensation payments could circumvent the offsetting provisions by exclusion of specific injuries or diseases from the terms of the compensation settlements'? Is that what the amendment will do in the context of how schedule 2 will operate? Given what the department has said, won't that in some way change the current operation of the compensation offsetting provisions, if not in a strictly technical sense then in a practical sense?