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Foreign Affairs, Defence and Trade Legislation Committee - 05/05/99 - DEPARTMENT OF VETERANS' AFFAIRS - Program 1—Compensation

CHAIR —We now move to topic 1 on compensation, which covers pensions, pensioner concession cards for veterans, tax information mail[hyphen]outs, BCOF and allied veterans, and people infected with malaria as medical experiments.

Senator SCHACHT —Some of my questions will be related to answers given to questions on notice in the estimates hearing in February. I appreciate the department's providing the answers. However, I have a number of follow-up queries. I presume that the department has the document that we have in which the secretariat of the committee has collected all the answers together in an order which we can use. This is volume 1 of the additional information received from the Defence portfolio, which includes the Veterans' Affairs portfolio.


On page 52 it refers to a question which was put on notice by Senator Faulkner on page 3 of Hansard . Two questions on page 52 refer to page 3 of Hansard . One question on the Compensation program was about the use of the database for the political campaign purposes of the government in the last election. Senator Faulkner asked:

. . . have we ever had a situation where the database has been used by a minister or a parliamentary secretary from another department, not Veterans' Affairs.

The answer says to see the answer to the previous question. On the same page, above that, Senator Faulkner asked whether a mail[hyphen]out using the DVA database had gone to Veterans' Affairs pensioners before without DVA knowing about it. In the third paragraph of your answer you say that available records do not indicate whether DVA was consulted in respect of each such mail[hyphen]out. They are listed above that in the second paragraph. You then say that readily available records indicated that the use of the database provided by DVA to DFCS and its predecessor for Age Pension News had been directed to that purpose. Do you mean that you do not keep a record of the requests that come in from DFCS for the use of the mail[hyphen]out? Do you not have a record at all?

Dr Johnston —We do have records, of course. What is said there is that, from the records that we have been able to check, we cannot confirm that we have been consulted on each mail[hyphen]out, but we are certainly consulted where there is an article that is specifically relevant to veterans matters. Indeed, on occasions we have authored such articles. But we are not customarily consulted on every issue of Age Pension News .

Senator SCHACHT —Have you ever felt the need, where you have not been consulted, once the mail[hyphen]out has gone out and you have seen the content of the mail[hyphen]out, to take up with the DFCS some concerns. Or do you just note that they have sent out matters that they may have got marginally wrong or where the information may not been absolutely 100 per cent ridgy[hyphen]didge correct?

Dr Johnston —My impression is that it is usual for us to see a draft at these times. I am not aware of any such concerns.

Senator SCHACHT —So you do see the Age Pension News as traditionally being your responsibility—the editorial policy—so that you do see it when it covers veterans issues?

Dr Johnston —That would be normal practice. Where it has specific regard to veterans matters, it is usual practice for us to see a draft of the material.

Senator SCHACHT —Do your records show in any way that, even on some occasions where the mail[hyphen]out was used by the minister for the purpose that we had explained to us at the previous estimates in February about the mail[hyphen]out that went out without consultation, that was the only occasion when this occurred and your records show that there was no consultation?

Dr Johnston —The written answer that we have given indicates that we cannot give an unqualified answer to that question.

Senator SCHACHT —Have you taken action now—being a quality assurance department, with good processes, et cetera—that in future the records will be kept in a way that indicates clearly that you have been consulted?

Dr Johnston —As I think we mentioned at the last hearing, at Centrelink's initiative there is an intention to establish a memorandum of understanding guiding the use of the database that we provide to Centrelink.

Senator SCHACHT —Has that memorandum of understanding now been completed?


Dr Johnston —I do not believe so, not yet.

Senator SCHACHT —Will it be completed by the next election?

Dr Johnston —I would hope so.

Senator SCHACHT —We would certainly hope so too. Can you take on notice that, when that memorandum of understanding between the departments is completed, it be provided to the estimates committee.

Dr Johnston —Certainly.

Senator SCHACHT —On page 53 of the answers to questions on notice, Senator Faulkner asked a question about the costs in relation to the tax mail[hyphen]out. The answer was that the only cost is handling the investigations by the Privacy Commissioner and by this committee. I presume that is cost of hours allocated to staff chasing what actually happened in this extraordinary circumstance. Is that correct?

Dr Johnston —It is basically the cost of time and staff in handling the process with the Privacy Commissioner and preparing briefs and so on.

Senator SCHACHT —Internally, again in this new age of accrual accounting, do you keep a record of how many hours have been spent on this?

Dr Johnston —We do not have a record of the hours spent specifically on this set of activities.

Senator SCHACHT —Do you keep a record? Is that a standard policy? You do not want to spend hours filling in logbooks, but is it standard practice that it is very difficult to allocate what time staff and senior officers spend on these sorts of matters?

Dr Johnston —As you would be aware, with the publication of the new accrual budget we have a quite detailed attribution of staff time by activities, but that would not necessarily go to this level of detail or across organisational functions.

Senator SCHACHT —So when we come back for Senate estimates for the coming budget next week under this new system, if we asked at that stage how much staff time had been spent in monetary terms and hours on handling the investigation into this extraordinary matter, you will not able to tell us?

Dr Johnston —No, but if you are asking us if we would keep records on this particular activity in future months, we could do that for the committee if it were thought to be important.

Senator SCHACHT —I do not want you to spend too much time on it. I do not want officers chasing it, when they have to service their constituents of the veterans community. If it is not too difficult—and if you say to me that it is too difficult, I will not berate you about it—I would not mind seeing what are the indirect costs in the time taken by officers to handle investigating this extraordinary matter. The answer you gave to Senator West on page 54 says:

The next issue of APN—

that is the Age Pension News

will contain advice to veterans about how to request exclusion from the list. Similarly DVA pensioners who are not selected using the criteria detailed above can request to be put on the list.

Since that political letter went out, how many requests did you receive from people who either complained or asked to be taken off the list?

Dr Johnston —We will have to take that on notice, Senator.


Senator SCHACHT —Thank you, if you would.

Dr Johnston —We have had the practice for some time, in the cover sheet of the mail[hyphen]out of Vetaffairs , for veterans to indicate whether they want to continue to receive our particular publication. In the next issue of Vetaffairs we will be drawing attention to the availability of choice for veterans in whether they continue to receive the magazine.

Senator SCHACHT —In the answer you gave you said there are 179,000 service pensioners who receive the Age Pension News . How many of those have requested it and how many people who receive the APN complained about the material they received last year without—we raised it at previous estimates—the material that went out in the election campaign?

Minister, in your other portfolio as Minister for Family and Community Services, and referring to page 59 of the answers given, which is on Hansard page 7, I ask you to take on notice to check with Dr Rosalky whether he had any consultation with the Minister for Veterans' Affairs over the drafting of the letter. The answer was, `This question was addressed to Senator Newman.' I know it was addressed to Senator Newman; she was sitting at the table and I asked her. That is not quite the answer I expected. Have we any answer—the Department of Veterans' Affairs cannot speak for you because you are not their minister—whether Rosalky had any consultations with the Minister for Veterans' Affairs with the head of your department?

Senator Newman —I cannot answer you, Senator. You asked this question in the veterans affairs estimates and that is not the appropriate place for it to be asked. You have been a minister; you would understand that perfectly well.

Senator SCHACHT —All right, technically, because I was in the wrong committee and not at the social security one, but I will ask the secretariat of this committee to make sure that this question is lodged formally through the Department of Family and Community Services to you as Minister for Family and Community Services. I await the answer in three weeks time.

I now turn to the question on the pensioners concession card mail[hyphen]out, on which I have to say that I appreciate, Dr Johnston, your frankness and your staff's frankness at the meeting in February in accepting that it was not a moment of highest glory for the department in handling that issue, and you put into place arrangements to make sure that it does not occur again. Your answer on page 62, Hansard page 11, to a question from Senator West says:

At present, the department is developing an improved project plan which will include a schedule of data and printing test to be agreed with the mailing house and more involvement of senior management in the project.

Who in senior management is now taking direct responsibility that the mail[hyphen]out will be done in a timely manner without these problems occurring again?

Dr Johnston —Given the experience, I would want to say that I am taking direct responsibility.

Senator SCHACHT —Who is your Boswell, Dr Johnston, who is assisting you in this area?

Dr Johnston —I will ask Mr Reece to speak to that.

Mr Reece —Mr Hay is the branch head responsible for this area.

Senator SCHACHT —Mr Hay, can you tell us when you are planning that these pensioner concession cards will arrive at the recipients in the mail towards the end of 1999?


Mr Hay —We anticipate that the card will be available to pensioners by early November, late October this year.

Senator SCHACHT —Very good, and thank you for putting it on the record here at the estimates so that that target is known to everybody. If you can meet that target, everyone will be very happy. I asked a question on page 63 about the British Commonwealth Occupation Forces in Japan about how many had served in the Hiroshima[hyphen]Nagasaki Prefecture. The answer says, `Approximately 20,000 who served between 1946 and 1951 were located in the Hiroshima Prefecture.' As I understand it, the prefecture was more than just the city area of Hiroshima, but most of the service people would have been within reasonable geographic proximity most of the time to Hiroshima itself where the atomic blast took place. Is that correct?

Mr Douglas —We cannot really give you an answer without going back to Defence to see who served in what areas. That would require some research for us to do.

Senator SCHACHT —Again, I do not want to give the department extra work, but surely most of them must have been in a clearly defined army base or service base that is geographically well known. Would it have been 10 kilometres outside Hiroshima city area or was it five kilometres? I cannot image that they were living in tents for six years spread to the winds in the Hiroshima prefecture.

Mr Douglas —Without going and seeing where the units were based we could not really answer that, but we do know that most of the people were based at Kure, not simply in Nagasaki or Hiroshima.

Senator SCHACHT —Kure is in the—

Mr Douglas —I believe it is in the prefecture, but do not test my geography.

Senator SCHACHT —Kure is another significant city further along the coast of the inland sea, as I understand it.

Mr Douglas —Yes.

Senator SCHACHT —I do not have the map in front of me. How far from Hiroshima is it?

Mr Douglas —About 20 kilometres.

Senator SCHACHT —That is what I thought. I would appreciate it if you could provide a bit more information because I am interested in the difference between the prefecture area and Hiroshima city. I think there will be great arguments about whether people with illnesses visited Hiroshima—how close and how regularly—and have been affected by radioactivity from the blast. I understand there is some expert opinion being consistently put by the department that anybody arriving in Hiroshima after 1 January 1946 would not have been affected by any levels of radioactivity from the Hiroshima blast. Is that correct?

Dr Horsley —That is correct. We have received a variety of expert opinions over many decades that in fact by the time our BCOF people arrived in the Hiroshima prefecture the level of radiation had returned to a point where it would not have caused any adverse health effects.

Senator SCHACHT —But was the level of radiation still higher than the normal levels of background radiation that is normally in the atmosphere and the soil in an area other than a uranium mine itself?

Dr Horsley —Yes, it was, and it was in a very special way. You could detect that there were certain trace elements of radioactive compounds present in the buildings—and, indeed, you
can still do so today. Some of these radio isotopes have very long half[hyphen]lives and, as such, you are able to make estimates about the level of radiation that occurred. But the quantum of radiation that was caught that was being made by these radioactive isotopes was very small. For example, if you were to spend a day there, if would be much less than getting a chest X-ray.

Senator SCHACHT —How many chest X-rays have you had in your life, Dr Horsley?

Dr Horsley —Some hundreds, I would think.

Senator SCHACHT —Hundreds? You have? Personally? Have you got TB and leprosy all rolled into one?

Dr Horsley —As a child I was sick, yes.

Senator SCHACHT —I see. I am sorry. I am not trying to be offensive. I can only recollect having about two or three chest X-rays in my life. I know I am lucky, but maybe statistically I am an aberration. Senator Newman would say I am a political aberration, and I am more than happy to be a political aberration compared with the Liberal party. But I would be a little cautious about saying that it is less than the dose of a chest X-ray. As I understand it, in modern radiology there has been a real clampdown compared with what was available and what people accepted in the fifties and the sixties about the use of X-rays, et cetera. Is that correct?

Dr Horsley —That is correct, yes.

Senator SCHACHT —Has anyone in any of the cases from the BCOF veterans put scientific evidence from reputable experts to the tribunals in their appeals that has raised a doubt about the view that the department has so far taken? I am not asking you to agree with it; I am just asking whether reputable scientific people, medical people, have put evidence.

Dr Horsley —Yes, there have been. There have been many hundreds of cases going over 20 or 30 years, but I can recall some cases where people of prima facie standing have opined that there was a different view than the broadly accepted view about the effects of radiation at Hiroshima.

Senator SCHACHT —Does the department and the medical advice within the department—before Hiroshima there was no bomb anywhere or any experience of one; this is the first experience and, as you have mentioned, half[hyphen]lives run into thousands of years in regard to some of these isotopes—have a view that really we are still in uncharted waters about the effect of ongoing levels of radiation from such isotopes?

Dr Horsley —To some extent yes. The Hiroshima cohort remains a cohort under active study, and it remains under active study because it is conceivably possible that new things will be discovered. It is, as you say, still to some extent uncharted waters, although I would add that there has now been a broad range of research that has gone on around the world associated with atomic testing—in the United Kingdom, in the United States, in the former Soviet Union and, to a lesser extent, in places like China. Looking at the totality of that information, I think we can be more confident about what we can know of the long-term effects of radiation. But it remains, for example, true to say that the children who were in Hiroshima on the day that the explosion went off are still moving into uncharted waters. They are now getting quite elderly, and it remains of interest to see what health effects, if any, that exposure will have in those children.


Senator SCHACHT —The standards of what is a safe level that were set in the forties and fifties have been significantly reduced downwards as each decade has gone by, as more evidence becomes available generally about issues of radiation. Is that correct?

Dr Horsley —Yes.

Senator SCHACHT —Does that mean that there is actually no safe level yet? How do we know that next decade the level will not be further reduced by medical opinion?

Dr Horsley —It is in the nature of radiation that you can never reach a point where you can say that it is completely safe. It has somewhat of a random effect but, the lower the level of radiation, the lower the risk. But it is the nature of radiation that you can never get to a no[hyphen]risk position. What the various regulatory authorities around the world do is set a standard where they believe the risk becomes insignificant compared with the risk that we all have in our everyday lives. The earth itself is radioactive. Granite, concrete, is radioactive. There is a continual stream of radiation coming from the cosmic radiation in the solar system. When you get levels of ionising radiation which are down to that that you would experience by standing next to a cement wall, people think that it is a matter of practical necessity to regard that as being safe. But in absolute theory that is not safe.

Senator SCHACHT —You said about 20,000 served in Hiroshima prefecture. Do you have any evidence yet that, amongst those veterans, the death rate from cancer and associated cancer diseases is any higher, one, than the average in the Australian population or, two, amongst other veterans who did not serve in Hiroshima?

Dr Horsley —We have no evidence in the sense that no study has been done of this cohort of veterans. But, from extrapolation of other cohorts that have been studied, such as cohorts of American veterans who participated in the above[hyphen]ground nuclear testing in the United States, it would seem unlikely in the extreme, from what our knowledge of the Hiroshima radiation was, that this cohort should experience increased mortality or morbidity from radiation related illnesses.

Senator SCHACHT —I think I may have mentioned this at the February meeting of estimates: earlier this year I attended a meeting of the BCOF veterans group based at Tweed Heads in northern new South Wales. The medical officer, welfare officer, for that group claimed that, out of nearly 40 who had died since the late eighties, over 30 had died from cancers. Whether that is the natural average for people living at Tweed Heads or above the average for the population, I do not know. But it did seem to me to be rather a high figure—if his figures are correct, for a start. He put this to me. Would you find those figures amongst a group of veterans of BCOF who did serve in Hiroshima prefecture—over 30 out of nearly 40?

Dr Horsley —Yes, that would be higher than expected. As a rough rule of thumb, about a third of us will died from some form of malignant disorder. You are describing a cohort in which—

Senator SCHACHT —A third of us? Looking around this room—one, two, three. Thanks for the good news, Doctor. Which ones of us are going to keel over?

Dr Horsley —Sorry, Senator.

Senator SCHACHT —So the ongoing efforts by BCOF veterans to get the issue accepted—if they do get a cancer, automatically that is accepted as related to their service—is still being resisted by the department?

Dr Horsley —I think the term `resisted' would be not a term I would like to use.


Senator SCHACHT —What term would you use?

Dr Horsley —We remain openly interested in the question and we scour the literature. If we were to find evidence that things were changing, we would refer that material to the Repatriation Medical Authority. They would consider the evidence and, if need be, modify the existing statements of principle.

Senator SCHACHT —Has any veteran from the BCOF who served in the Hiroshima prefecture individually won a case that their cancer—or disorder, as you call it quite correctly—was related to their service?

Dr Horsley —Yes, there have been several cases. I would think the number would be a score or so over many years. It would be cases where something like the VRB, the Administrative Appeals Tribunal or the old Repatriation Review Tribunal have accepted the argument, perhaps based on those medical experts that you were referring to earlier, and the commission has decided that, for various reasons, it was not appropriate to appeal that decision.

Senator SCHACHT —So we have, you might say, the luck of the draw of getting a good case accepted. You can have it accepted and get the appropriate compensation, pension, et cetera. But if you strike a bad day at the appeals tribunal you will not get it accepted.

Dr Horsley —Not now. The system was changed in 1985, with bipartisan support, for the statement of principle system, so now there is a consistent approach.

Senator SCHACHT —But they still have to show—and win a case to prove—that their cancer or related disorder was as a result of serving in the Hiroshima area?

Dr Horsley —Yes.

Senator SCHACHT —If a third of the 20,000 in a normal population—that is about 6,000 or 7,000—are going to die from cancer, they individually have to take their case.

Dr Horsley —Their association or, indeed, the Repatriation Commission, would be quite happy, if we found a body of evidence that supported this notion, to put the argument to the authority.

Senator SCHACHT —But if the tribunal does find in a score of these cases and if you say that you do not accept the body of opinion, it is a bit odd, isn't it, that people win their case and then you do not appeal it? Isn't that giving a signal that there is a case that they have won and that has merit?

Dr Horsley —In many of these cases, the veteran had won their case at, say, an AAT and was in the last stages of dying from their cancer. In those sorts of circumstances, the commission often takes the view that, whilst not accepting the merit of the argument, it is the humane and relatively just thing to do to let the matter lie.

Senator SCHACHT —Could you take the following on notice, because I think it is proper that you get time to consider it: do you think it is necessary that there be some study about the cancer rates amongst the 20,000 BCOF veterans?

Dr Horsley —To some extent that is a question that would be resolved at a higher level than what I am.

Senator SCHACHT —That is why I am putting it on notice to you and the minister. I would like your response. Do the minister and the department think it necessary to do a mortality study, which may be useful, because I suspect the issue amongst the BCOF veterans is not going to go away. From the meetings I have been to with them, they are going to be around for a while yet. This is not going to be an issue that will die—politically, that is. I put that
on notice to the minister. Could we get some response of whether the government and the department think that is necessary? I would appreciate your answer.

I think it may be appropriate to address this to Mr Reece: in the answer on page 64, I note that the cost, if we gave the same benefits to BCOF veterans as to others, Gold Card, et cetera, that it is $22.2 million over four years in the outlays—so approximately $5[half ] million a year, most of which is Gold Card, I see.

Mr Reece —Yes, that is correct.

Senator SCHACHT —On page 65, in the answer the department gave to my question about the number of service people from allied countries, you stated:

No nationality indicator exists on the DVA database. The estimates below are based on an extrapolation of known "service country" for Allied and Commonwealth service pensioners.

Can you explain to me how you got the information, where you say it is `based on an extrapolation of `known service country'? Where did you get these figures?

Mr Reece —As I understand it, our database has different flags to identify different categories. Unfortunately, we do not have a flag for these people, so we just take a general figure from, for example, other forms of pension which are available to these people and just make a deduction.

Senator SCHACHT —I see. And you extrapolate from that?

Mr Reece —Yes.

Senator SCHACHT —For example, I notice the figure for Russia. My colleague Mr Danby, the member for Melbourne Ports, has a very large number of Jewish emigres from Russia. He has discovered that several hundred of them served in the Soviet army in the Second World War. They have come to Australia in the last 10 years as part of the emigre arrangement. So I suspect, for example, the extrapolation of 340 Russians may actually now be considerably higher as a result of that emigration in the last 10 years or more from the old Soviet Union. I notice you do not mention Belarus or the Ukraine, and I do not know how you would. But I appreciate your effort in making those figures.

I will turn to a couple of other questions. Dr Johnston, I understand that every department has an endorsed suppliers list which you should purchase from. Is that correct?

Mr MacKrell —There are Commonwealth lists.

Senator SCHACHT —The Commonwealth list that is provided to the department. Is that right?

Dr Johnston —It would depend. I am hesitating in answering your question, because I think we would need to check some of the structures. But it would be usual in different areas of government. For example, in the IT area for financial and personnel processing systems, the government has indicated some common service suppliers for the service. In other areas of our business—

Senator SCHACHT —That is the one I wanted to get to: information technology services. You have been provided with an endorsed list by, I presume, the Department of Finance and Administration, as it seems to be in charge of this policy area, of what their preferred and endorsed suppliers are. Is that correct?

Dr Johnston —We were aware of that list, and the new systems we are installing have been obtained from suppliers on that list.


Senator SCHACHT —I have only heard this as a rumour, and Canberra is full of gossip and rumour, so one should be very cautious about the veracity of suggestions, but the suggestion I have heard within the information technology community is that your department is using suppliers which are not on the endorsed list. Has that rumour got any validity at all?

Dr Johnston —This is in respect of what type of systems?

Senator SCHACHT —Information technology services—I presume it is hardware, software, consultants—

Dr Johnston —I think you would have to be more specific for us to answer that question. I do not think we can answer that question.

Senator SCHACHT —The Commonwealth government has circulated a list, under the provision of information technology services, of what the endorsed suppliers are to be selected from or asked to tender for. Is that correct?

Mr Harrison —The reference made earlier about HR and financial systems was a tender process by the Office of Government Information Technology, now called the Office for Government Online, which was then under the wing of the Department of Finance and Administration and is now with the Department of Communications, Information Technology and the Arts. They went through a process that provided a list of agreed product suppliers for HR and financial software packages. We purchased off that list for those particular systems.

Senator SCHACHT —Do you have any knowledge of where, at any stage, there would be any cause for suggestion or gossip within the industry that Veterans' Affairs is not using the procedures as laid down by the government for how to put out tenders to the industry to those who are on some preferred list?

Mr Harrison —I certainly have no such knowledge.

Senator SCHACHT —Mr Reece, there is a very complicated bill before the parliament, introduced in the House of Representatives. I think it is also going before a Senate committee—and for my pain I have been seconded onto the Senate committee for that piece of legislation—where the questions would deal with compensation, particularly payments of benefits when people get injured and for `economic loss'. The veterans community has lobbied for many years that there is a certain category of veterans pension in which the pension is still counted in terms of income and therefore there is a reduction in their other entitlements. The veterans community has lobbied—and I have to say previous governments as well as this government—for that to be changed. I understand that in this legislation the government has not taken the opportunity to meet the veterans community's expectation and that those veterans entitlements will still be counted as sources of income and therefore reduce their other payments. Is that correct?

Mr Reece —That is correct. The difference is that veterans obtaining a service pension do not have their disability pension counted as income in the income test, but if those are not service pensions and they are ordinary veterans without qualifying service, and they are on the age pension, the means test for the age pension does count with their disability pension at present as income under the test.

Senator SCHACHT —Can you tell me what it would have cost the government in outlays if the government had accepted that the adjustment would be made that it would not count?

Mr Reece —The simple cost, which would be to the minister's portfolio of Family and Community Services, just for pensions would be about $19 million a year if it were exempted in total. There are some flow[hyphen]ons in terms of Health and Aged Care and so on as well.


Senator SCHACHT —Minister, is there any reason why the government did not use this opportunity to make the change to give the veterans who do not receive a service pension the same benefit?

Senator Newman —Mine is probably the sort of answer that you would have given in government. You work your way through the priorities of the returned service organisations and the veterans community. They have had higher priorities than this one. The gold card is clearly one example of that, which they saw as being a very important initiative and which was also very costly. That came ahead of this issue.

Senator SCHACHT —As I remember—I may be incorrect—at the 1996 election the coalition indicated that this was one of the matters they would review. Has that review been completed as part of consideration for this piece of legislation?

Senator Newman —No, it is not to do with this legislation. The two departments have worked together on this and that is how the figure of something like $19 million was produced, I believe.

Senator SCHACHT —So the coalition's promise to review this is still under way, even though the legislation that deals with the matter is now before parliament?

Senator Newman —No, this is not the legislation that deals with the matter. That is a misstatement of the circumstances.

Senator SCHACHT —There was an opportunity; you could have made the change.

Senator Newman —There was an opportunity for 13 years too, if we want to talk about opportunities. I am not trying to get into a political debate with you but, yes, that was perhaps another one.

Senator SCHACHT —When will the review be completed?

Senator Newman —The review is completed to the stage where we know what the cost is in indirect terms. As Mr Reece suggested to you, there is more to it than that. There are a lot of flow[hyphen]on costs involved.

Senator SCHACHT —I think because this legislation is going before the appropriate legislative committee of the Senate—whether the minister will be there or someone else I do not know, but I suspect Mr Reece will be there with Dr Johnston and others answering questions in much greater detail—I will not take up any more time of the estimates. Thank you for that figure.

I want to raise a couple of matters, and again I am happy to have these taken on notice to save time. In only last weekend's Adelaide paper, the Sunday Mail , there was a major story about nurses who served in Vietnam seeking pension entitlements and having the support of the veterans community. What is the policy position of the department on these nurses? They say here in the story that about 450 medical personnel recruited from major metropolitan and country hospitals flew to Vietnam and worked in dangerous conditions caring for wounded, civilian soldiers and Vietcong prisoners of war, yet 30 years on they are still without service pensions despite being awarded Australian active service and Vietnam logistics medals.

Mr Reece —There is a clear distinction between those people of a civilian nature who were attached to the forces and those who were not. These nurses and many others in general terms were recruited by the Department of Foreign Affairs and others and by charitable organisations to work in Vietnam. As we understand it, they were nowhere near the war zone. They were engaged in civil aid projects and have never had coverage under the Veterans' Entitlements Act.


Senator SCHACHT —Nowhere near the war zone? I thought the whole of Vietnam was a war zone. If you happened to be in the wrong spot in the main street of Saigon and a bomb went off, you were dead. Is that not a war zone?

Mr Reece —That may be true, but they were not attached to the Defence Force and therefore they do not have coverage under our act.

Senator SCHACHT —So that is the definition?

Mr Reece —That is the definition.

Senator SCHACHT —But they are still able to get the Australian active service and Vietnam logistics medals?

Mr Reece —Yes. Decorations are not an indication of entitlement for compensation. There is not necessarily a nexus on every occasion.

Senator SCHACHT —I understand that. So you are saying that it is the actual act that prohibits them from being given any consideration?

Mr Reece —Yes. They would be covered for compensation naturally, if they went under the Safety, Rehabilitation and Compensation Act, for example, but not under the Veterans' Entitlements Act.

Senator SCHACHT —I do not know whether you have seen the article in the Sunday Mail . I can give you a photocopy of it. There is a photograph of former Vietnam nurse Yvonne McLaren with her service medals. I suspect most ordinary Australians seeing that story would say that she was actually in service in Vietnam. She got the medals. It was not the most comfortable place to serve in as a nurse.

Mr Reece —Absolutely. The perception is a very strong one, but this has been the case for many years. In fact civilians were often engaged in the Second World War. You will notice that, in the Gulf War, McDonnell Douglas and British Aerospace had technical crews there who were working as civilian contractors maintaining aircraft. They were involved in the defence effort, but they are still not treated as Defence personnel, whom our act covers.

Senator SCHACHT —The article says that it took World War I nurses 30 years to get compensation from the government. I do not know whether that is correct or not, but were they Army nurses in World War I?

Mr Reece —I presume they would have been attached to the forces. There would have been a formal attachment to the forces in the same way as the Salvation Army, the Red Cross and some philanthropic organisations still are. The minister has a power to declare them as being attached to a defence force and thereby attracting the benefits of the act.

Senator SCHACHT —The story says:

Adelaide woman Yvonne McLaren was a 26-year-old civilian nurse—

that is clear—

when she was posted to Bien Hoa in Vietnam with an Australian surgical and medical team in 1969.

Bien Hoa was unarguably an active area. They put rockets into the airport regularly and so on. She was a civilian nurse. You are saying there is a discretion for the minister.

Mr Reece —The question would be whether she was attached to the ADF or engaged on a civil aid project assisting the Vietnamese government to train doctors and nurses and help run their hospitals and all those sorts of things. You would have to know the circumstances of her deployment.


Senator SCHACHT —What you suggest is that this might be a matter I should take up with the foreign affairs department. You say they authorised some of these people to go and work in these civil programs. Were they AusAID programs?

Mr Reece —They could have been aid programs, SEATO—there could have been a whole range of commitments that Australia had as a government to send assistance of a civil kind to South Vietnam, but not attached to defence forces per se.

CHAIR —How often does the minister exercise his discretion to declare that somebody or a group of people has been attached?

Mr Reece —Probably very rarely; only in the context of a particular deployment. For Vietnam, for example, clearly Red Cross, Salvation Army and other philanthropic groups assisting the troops in the field, if you like.

CHAIR —Does the minister exercise his discretion of attachment for an individual person?

Mr Reece —Yes, he could.

Senator SCHACHT —Can you take on notice where the minister has exercised this discretion, not just for the last two or three years but going back over several governments?

Mr Reece —How far back—Vietnam?

Senator SCHACHT —Let us go back to the Korean War. You have got a whole range of little services. Go back to the Korean War.

Mr Reece —Okay. This is done by notice in the Gazette , Minister, so it should not be that difficult.

Senator Newman —You have got a good researcher.

Senator SCHACHT —I do have three staff members, that is true.

Senator Newman —It is a public document.

Senator SCHACHT —You have a big department.

Senator Newman —They are engaged on a whole lot of things, aren't they?

Senator SCHACHT —I do not think it is an unreasonable request and if it is easy to get out of the Gazette list you have better access to the Gazette than I do. I just ask you to take that on notice. We can see from the article that what people clearly are pressing for is to get access to the gold card. This is something that every group wants, because access to the gold card is of such benefit for coverage of medical benefits, private medical coverage and so on that there is going to be a big demand from large parts of the community if they think they can get access to it. I have to say, without being soft[hyphen]hearted about it, that war nurses who served in one form or another in Vietnam, even in civilian areas, may well have a reasonable case.

I want to raise the question of where we are at with repatriation services provided by hospitals to the department. There was a press story early last week and a comment by the shadow minister for health in the state parliament in South Australia, my colleague Lea Stevens, directed at the state government, that it is going to reduce by up to 90 beds and other services the Daw Park Repatriation Hospital—I think it has a different name now. This would reduce services for veterans. Does the department have any view about that and whether we have completed the agreement with the state government of South Australia over the provision of health and medical services in hospitals run by the state government to the Department of Veterans' Affairs.


Dr Johnston —The department has been working closely with the health administration of South Australia looking at the circumstances of Daw Park specifically and the related issue of access of veterans to private hospital treatment under the Repatriation Private Patients Scheme. Recently a discussion paper was circulated for community comment identifying two options that seemed most realistic for future directions of Daw Park and veterans' access to public and private hospitals. That has been subject to public discussion, but that process is not yet completed. The state minister for health about a week ago suggested publicly that there might be another alternative, and we are still seeking clarification of that to see whether a further option can sensibly be put to the veteran community.

Senator SCHACHT —Is it true, Dr Johnston, that at Daw Park there is going to be a reduction in beds available?

Dr Johnston —I do not think I am well placed to speak to the detail of the Daw Park circumstance, but it is true to say that the level of veteran utilisation at Daw Park and the pattern of community use of Daw Park and other state hospitals in Adelaide are impacting on the viability of some treatments at Daw Park, and that is basically why the South Australian administration are now having to review possible approaches to veteran access at Daw Park. Our interest is our commitment to see ongoing viability of Daw Park as a hospital with a special interest in the care of veterans, but also our interest is in implementing an effective Repatriation Private Patients Scheme.

Senator SCHACHT —But is it true that there is apparently going to be a 90-bed reduction of capacity at Daw Park Hospital?

Dr Johnston —I do not believe I can clarify the basis of the statements of the state minister in recent days. We are currently seeking clarification.

Senator SCHACHT —This is what the shadow minister said about Mr Brown's statement:

Mr Brown foreshadowed that the Hospital would concentrate on palliative care, rehabilitation and psychiatric services.

Would that statement, if it is true, suggest a reduction of services available to veterans at the Daw Park Hospital, if that hospital did concentrate on palliative care, rehabilitation and psychiatric services?

Dr Johnston —In the discussion paper that has to date been considered by the veteran community and the public, one of the options seeks a commitment from the veteran community to preference for treatment at Daw Park and gives assurances of level of treatment and maintenance of standards of treatment at Daw Park for the next five years. The other option, in the case that it is not realistic to expect that level of commitment, looks at some scaling down of services at Daw Park, some increased focus on community type hospital services, as you have just listed, and increased access of veterans to private patient treatment in private hospitals in Adelaide.

Senator SCHACHT —So it appears that there is pressure from the state government on Daw Park, which has a historical significance, going back to the First World War, of being the repatriation hospital, and up to 10 of 15 years ago it was the repatriation hospital. The state government is saying, `We will spread the services provided away from Daw Park,' and they are claiming, I presume, that services will be equally well provided in other state government hospitals, both public and private. Is that what they are moving to?

Senator Newman —Not only state government hospitals.

Senator SCHACHT —I said state government and private hospitals.


Senator Newman —Yes, whether public or private.

Dr Johnston —I do not know whether it is accurate to characterise it as the state government pushing in a certain direction.

Senator SCHACHT —Well, who is it? They run the hospital, don't they?

Dr Johnston —I would suggest that there is a genuine attempt being made by the state and the Department of Veterans' Affairs to lay out a range of realistic options for veterans and seek veterans' preferences on the best means of getting hospital care in Adelaide. The latest comments from the state minister have raised the possibility of another way of strengthening the scope of Daw Park to provide ongoing services. Until we know the details of that, it will be difficult to comment further.

Senator SCHACHT —Is it true that in 1995 the veteran community was promised by both Commonwealth and state government that the full range of repat services would be maintained in an acute teaching hospital of about 300 beds?

Dr Johnston —That is a fair statement, but with the passage of time circumstances can change.

Senator SCHACHT —I notice in the answer you gave me to my question on notice on page 91, and on page 36 of the Hansard , in relation to Health Care and Services you list the status of the various agreements between state governments and the department. For my state of South Australia, it says:

The first phase on the South Australian arrangement is to expire on 1 July 1999. Currently, negotiations are occurring for the remaining part of the ten year arrangement. The arrangement includes payment for special veteran services at the former Repatriation General Hospital.

That is, Daw Park. We are less than two months away from 1 July. Will you reach agreement with the state government of South Australia by 1 July?

Dr Johnston —That remains to be seen. If we cannot reach agreement by 1 July, I am sure we will find a mechanism to roll over the current agreement until those details can be finalised.

Senator SCHACHT —How much do you pay the South Australian government for provision of the services?

Dr Johnston —I think we will have to take that on notice.

Senator SCHACHT —But it would be tens and tens of millions of dollars a year, I presume?

Dr Johnston —There is a substantial budget, yes

Senator SCHACHT —Would it be $100 million?

Dr Johnston —I do not have a figure.

Senator SCHACHT —I am not going to get you to swear in blood, but it is clearly many tens of millions of dollars a year.

Dr Johnston —Yes.

Senator SCHACHT —So it is a significant and substantial payment by the Commonwealth to the state health service?

Dr Johnston —Which includes more than Daw Park, of course, under the new arrangements.

Senator SCHACHT —Yes, of course—but it is the total arrangement?

Dr Johnston —Yes.


Senator SCHACHT —In three weeks time when we are back again, I would appreciate having more details about where we are at with South Australia and what is happening at Daw Park. I think you are going to find that the veterans community in South Australia will take a dim view if Daw Park, which has historical significance for them, is wound down, the services are spread to the winds of other hospitals and you do not maintain a critical mass at one hospital. I think that is a reasonable request, quite frankly.

Dr Johnston —I should advise you that a reference group has been established to consult with government officials and with the veterans community and, until the state minister put the possibility of another option on the table, the preference of the reference group was in fact to look to greater use of the private hospital system in the state.

Senator SCHACHT —I hope that reference group will be very active—and I am sure it will be. Mr Reece, at the last estimates hearing you provided advice that Treasury had advised you that the GST of 10 per cent would apply to membership fees of all veterans organisations. Is that still the case? Have you received any further advice that they have changed their minds?

Mr Reece —No. That is still the advice, the only qualification being that that would be the case where that organisation had registered.

Senator SCHACHT —Presumably the RSL will register.

Senator Newman —Excuse me, Senator, I think we have had a few questions now which stretch the friendship a bit. They are certainly not things that have been listed for consideration today. I ask you to have a look at that.

CHAIR —I think Senator Schacht is ranging pretty broadly over the topics.

Senator SCHACHT —Overwhelmingly; these questions came out of the answers I was given at the last estimates hearing. I have referred to them page by page. I would have thought that this supplementary hearing, above all else—

Senator Newman —No. The standing orders require that this committee lists the issues that it wants to pursue in these supplementary hearings.

CHAIR —I was trying to help you, Senator Schacht.

Senator SCHACHT —I am sure you are, Mr Chairman, which is more than the minister is trying to do. I will not take long on this; I just want to ask a couple of questions about it, and it may be only one. Has the department received any information from the veterans' organisations as to the additional income they will be receiving as a 10 per cent levy on their membership fees?

Mr Reece —No. We have been keeping the ex-service organisations as informed as we can on the effects of the GST on their business or their operations, if you like. But the bottom line is that that is a matter for them to consider in the full knowledge of their business. It really does depend on their size, their sources of income—whether it is from donations—their commercial activities, their level of membership and so on. We are not in a position to advise them on that; we simply give them the policy framework in which to make those judgments for themselves. So it may well be that, for example, on memberships, where they are small and they decide not to register, there will be no impact. But certainly for the larger ones that have considerable undertakings it would be to their advantage to register to get the input tax credit back, and then they would attract the tax.

Senator SCHACHT —I am sure this issue will come back in three weeks time at the full estimates hearing and in other committees as well. I did list a question about the publicity given about medical experiments conducted for malaria at the end of the Second World War.
There were some claims made that these people should now be eligible for some form of compensation. Has the department received formal applications and consideration from these people and is there any validity to the claim that they were involved in these medical experiments and that their health may have suffered?

Mr Reece —These people as members of the Defence Force at the time have always had an entitlement to compensation, and they have always been able to claim.

Senator SCHACHT —So they have now put forward claims individually?

Dr Horsley —Yes, some of them have. We have not got a complete list of all the participants as yet. We have a list of most of the participants and we have looked at some of those people, who have become clients of the department. In certain cases they have put forward claims based on their participation in the malaria experiments, and in some cases the conditions have been accepted on the basis of their participation in the malaria experiments. Most obviously the claim that they put forward is that of being infected with malaria, and we have accepted that on other occasions.

Senator SCHACHT —From your records, were there any people involved in the experiments who were not service people covered by the present legislation?

Dr Horsley —From our records, there were no civilians at all. All were serving members of the Australian Army.

Senator SCHACHT —Thank you for that. I do not know whether this question about the Malayan Emergency—the inquiry into the naval service and others—should wait until I have Defence along here with Major General Peter Dunn. I presume that is an issue for them, Dr Johnston. There is a review.

Dr Johnston —I can advise you that my minister is putting out a press release today announcing a review of the FSER.

Senator SCHACHT —Is he putting it out as the Minister for Veterans' Affairs or as the Minister Assisting the Minister for Defence?

Dr Johnston —As the Minister Assisting the Minister for Defence, so it would be more appropriate to direct detailed questions—

Senator SCHACHT —So the question goes to Major General Peter Dunn. I am glad we had an estimates hearing today to get the statement out in time. It is not the first time this has happened, but I will wait until that stage. The questions I want to ask now are on the second topic, Mr Chairman. I have been covering both these areas under the first two subheadings and have used the answers given to questions on notice to range across some of those areas.