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Tuesday, 21 August 2001
Page: 29858

Mrs GASH (5:20 PM) —Before I address the Veterans' Affairs Legislation Amendment (Further Budget 2000 and Other Measures) Bill 2001, I would just say to the member for Cowan that it is easy to be politically popular, but it is much harder to make those difficult decisions that affect all of Australia. It is easy to say what you will do in an election year. Why didn't the Labor government do it when they had 13 years to do it?

Mr Edwards —You have given three commitments to do it.

Mrs GASH —Member for Cowan, why are you now supporting this bill and then saying in the next breath that you will move an amendment? Typical Labor. I rise to speak on this bill because there are many veterans in my electorate of Gilmore who will be affected by its provisions. On speaking to several of their representatives—

Mr Edwards —You are out of puff. You can dish it out but you can't take it!

Mr DEPUTY SPEAKER (Mr Andrews)—Order! The member for Cowan is not assisting the chair.

Mrs GASH —I listened to you very quietly. You can't take it.

Mr DEPUTY SPEAKER —Order! The member for Cowan will desist or leave the chamber.

Mr DEPUTY SPEAKER —I warn the member for Cowan!

Mrs GASH —On speaking to several of their representatives, they tell me that what we are attempting to do is fair. If the veterans are telling us this, I believe them, because our veterans are right on the ball every time. They do not hold back, even if we get something wrong or there is an unintended consequence of just one clause. With this, we are simply trying to provide some consistency between the various acts that can affect our constituents and bring the criterion guidelines for like payments in line with one another.

For instance, many income support payments are income and asset tested. We need to ensure that there is a consistency between these guidelines to address equity in the treatment of various payees. Specifically, schedule 1 deals with the recovery of compensation. In Australia, for many years all governments have maintained that the income support safety net from the public is to be replaced by compensation payouts where necessary. That is, if a person is entitled to a compensation payout, either in lump sum or in periodic form, the recipient should not be able to double-dip by way of also receiving government income support to the extent of the compensation.

It often happens that it takes a while to sort out compensation, with people having to eat in the meantime, and so the government can provide income support during the waiting period. This payment is then reclaimed from the compensation payout. If it is a lump sum, that includes a payment for time off. However, if the compensation is paid in a periodic manner, such as each fortnight, then any government income support is reduced by a dollar for every dollar of compensation. This is fair, and it mirrors what already would apply if the recipient were on social security.

What we have changed is the formula for when the compensation payment is larger than the government income support payment. Currently, the balance is applied to any government income support received by the veteran's partner, again on a dollar for dollar basis. If there were no compensation and that partner were merely out working and earning more than his own pension could be, then his partner would have their pension reduced on a tapering basis. This tapering formula means that people get more of the extra they earn or receive from other sources because their income support might only be reduced by 70c for every dollar gained from earnings or compensation. It is only fair that in a similar situation the partner of the person being compensated also should benefit from the tapering formula. After all, people do not get compensation payments without some cost, in that there has been or still is some loss suffered, and so why should they be made to pay more? The beneficiaries of these measures are people on invalidity service pensions, income support supplements or partner service pensions.

Schedule 2 deals with returns from unrealisable assets. You often hear the term `income poor, asset rich' and probably think little about it. Imagine, though, having a farm of moderately good country that is suffering the effects of a drought at the moment. How easy do you think it would be to sell this farm or even lease it? It may have an excellent history of income production but, when nobody is making money, few have the money to buy or lease such a property. If world commodity prices in your industry sector were down and demand was dropping, then the farm income could be quite low or, even worse, in the red. Why would anyone in the foreseeable future even be interested in it? The farm might have been valued at $1 million or more, but right now it is an unrealisable asset. You cannot sell it or lease it, and it is not making any money for you. Would it be fair in this situation for a government to say, `Hey, you've got a valuable asset there that can produce X amount of income, regardless of whether it is doing so or not, and so you are not eligible for income support'? Would it be fair for us to deem that you were getting an income of X because of the assigned but unrealisable value of that asset? Of course not, and that is the anomaly we are fixing here under the hardship provisions. These hardship provisions allow us to disregard certain unrealisable assets when determining assets and deemed incomes. Our amendments will allow claimants to provide the actual return on these assets rather than be lumbered with a deemed rate of return.

Schedule 3 has two parts. The first part deals with small superannuation accounts and is drafted to again mirror the provisions under the Social Security Act 1991. Under this provision, small superannuation accounts, deferred annuities and approved deposit funds will be defined and treated as superannuation type investments. They will therefore gain beneficial treatment, such as being exempt from being seen as an asset for veterans who are on income support and over 55 years of age but under the age pension age.

Part 2 of schedule 3 of this bill deals with the treatment of income streams. The income and asset testing of income stream products has had to change to reflect the increasing complexity of these products. Their burgeoning growth has highlighted the way in which people can use the current system in a manner that was not envisaged at the time of its introduction. Most investments are subject to income and assets tests but, with the complexity of some products now available, it can be difficult to identify and quantify income stream from assets. Of course it is in the best interests of all to ensure that our investments for our future last as long as possible. On that basis, we support the favourable treatment of superannuation and retirement income products. But, when these schemes are used to grow funds and then pass them on to others rather than retaining them for retirement, we need to ensure that it is not at the expense of the taxpayer.

There is also a new provision to allow for commutation for hardship but only within very narrow guidelines. We are not in the business of promoting the use of retirement income before retirement. The final schedule changes the guidelines for rounding off to bring them into line with those applied under the Social Security Act 1991. In the past, under the Veterans' Entitlements Act 1986, income support payments have been rounded to the nearest multiple of 10c. In future, payments will be rounded off to the nearest cent. This will not affect payments over time, as recipients who may have `lost' 5c one fortnight and `gained' 5c the next will now `lose' and `gain' half a cent on alternating fortnights. In all, this bill merely adjusts arrangements to the way my veteran constituents are treated in their retirement. It makes the provisions more consistent with those concerning others on similar payments under other acts. It provides for a slightly more generous treatment of our veterans in respect of any compensation income, and it generally just provides a fairer and more consistent regime.

I, too, would like to acknowledge Long Tan Day. In 1995 I visited Vietnam, after reading Tim Bowden's One crowded hour. After reading that book, I had to go to see where our guys fought—and it was absolutely awesome. To visit families and see photos of the families with our troops was also awesome. The respect for our soldiers made me feel very proud and yet very humble. Also, it made me feel somewhat guilty when I considered how they were treated when they came home—and, for that, I am extremely sorry. I use this opportunity to say thankyou to all our veterans. I understand that there is a lot more we need to do. However, we must remember that what we have achieved under this government has been quite incredible.