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Wednesday, 12 August 2009
Page: 35


Ms NEAL (12:00 PM) —I rise to speak on the Veterans’ Affairs Legislation Amendment (Budget Measures) Bill 2009. The measures introduced by this bill will improve the arrangements of veterans currently operating in Australia. Members of the nation’s service and ex-service communities will receive substantial benefits from these measures. The bill will deliver greater simplicity and greater levels of support in three important areas. The first of these provisions will extend the eligibility criteria for the Defence Service Homes Insurance Scheme. This will allow a greater number of serving Defence Force members and ex-service people to get access to cost-effective home insurance. The second provision provides a far more convenient and cost-effective way to pay pensions and allowances into the bank accounts of defence personnel living overseas. The third set of amendments will cease payments from the old and outdated dependants pension scheme—a scheme that has outlived its usefulness to members.

Before I speak about the details of the reforms before the House, I wish to say that many veterans and their families living on the Central Coast of New South Wales will welcome the measures laid out in this bill. The Central Coast, where my electorate of Robertson is situated, has long been a favoured retirement destination for people from Sydney. This was especially the case in the decades following World War II. As a result, the electorate of Robertson today is home to a very large population of veterans, their families and their dependants. In fact, in April 2009 the Gosford City local government area, which is almost contiguous with the area of my federal electorate, was home to 5,282 Department of Veterans’ Affairs pensioners and cardholders. This is by far the highest veteran population of any local government area in New South Wales. The number is exceeded only by four local government areas in South-East Queensland, making Gosford City the fifth-largest concentration of veterans in Australia. As at April 2009, there were 4,545 people in Robertson receiving a Department of Veterans’ Affairs pension or allowance or holding a DVA treatment or pharmaceutical card. This group includes nearly 1,500 disability pensioners and more than 1,400 war widows. They have an average age of just under 80 years. It is clear from these statistics that reforms to the way veterans’ entitlements are assessed and delivered have a direct and important impact on many thousands of my constituents.

There are 20 separate veterans associations represented in my electorate. These include a wide range of DVA benefit recipients, including the War Widows Guild, several RSL sub-branches, the Australian Nuclear Veterans Association, the ex-POW welfare associations and two ex-servicewomen’s associations, just to name a few. I have the great honour of being a patron to the local branches of both the National Servicemen’s Association, the ‘nashos’, and the Vietnam Veterans Association. I am also an honorary member of the Gosford branch of the World War II Veterans Association. I have worked very closely with all these associations to ensure their concerns are brought to the attention of the Minister for Veterans’ Affairs and the Department of Veterans’ Affairs, and I have to say that, in turn, they have been extremely responsive. Rick Johnson from the Australian Nuclear Veterans Association is a Central Coast local and a tireless campaigner for his members. Rick has had many dealings with my office and we have assisted to the best of our ability in his struggle to better the lives of Australia’s nuclear veterans.

This year, we assisted Richard Gray from the Vietnam Veterans Peacekeepers and Peacemakers Association with funding for a memorial that was unveiled on the waterfront at Ettalong Beach. Another grant was secured for the Malaya and Borneo Veterans Association to erect a memorial at Woy Woy Memorial Park. One of my greatest pleasures throughout this year was hosting the presentation ceremony for the Australian defence medals at the Gosford RSL club. This new honour for past and serving Defence Force men and women has proved a great success over the past two years. It is an opportunity for the people of Robertson to recognise and reward those in our community who have given so much to make this country a better place.

The attendance at Anzac Day ceremonies across the Central Coast has been on the increase over the past few years as well. It seems that the people of Australia are now understanding and embracing fully the contribution that serving and ex-service men and women have made to this nation. In March this year, I also had the great pleasure of participating in the Australian Defence Force Parliamentary Program in East Timor. I spent five days in uniform in East Timor and went on foot patrol at night with ADF members of the International Stabilisation Force. An ADF recruit from the Central Coast was part of my section, which was very interesting for me. I was also lucky enough to fly on a reconnaissance mission in a Black Hawk helicopter, which was pretty exciting—even for me, used to the ups and downs of parliamentary life. Another memorable experience was visiting and talking with village leaders and local policemen in remote settlements. This visit was a great way for me to familiarise myself with the conditions our soldiers experience on the ground, including the difficulties and hardships they undergo on a daily basis in the field.

The trip was also important because it was a strong demonstration of support from the federal parliament for our troops serving abroad. I can say from my experience in East Timor that they are doing a terrific job in very difficult circumstances. The service men and women I spent time with will be the veterans of tomorrow. That is why I am pleased today to be speaking in support of this bill. Even today, our currently serving defence personnel will gain some significant benefits from the measures being brought forward in this legislation.

The bill before the House introduces new arrangements in three main areas, as I have said. Firstly, the eligibility criteria for the Defence Service Homes Insurance Scheme will be extended. This will allow a greater number of serving Defence Force members and ex-service men and women to take out cost-effective home insurance. Under current laws, veterans, currently serving members, peacekeepers, widows and widowers can obtain building insurance through the Defence Service Homes Insurance Scheme. This scheme provides insurance for their home, right of residence in a retirement village, land, building materials, home improvements and home contents. There are currently 80,000 policyholders in this scheme, but numbers are reducing by about four per cent per year. To improve the scheme’s long-term viability, a 2007 review recommended that the scheme be extended and its range of products expanded. In response to this review, the Department of Defence created a new home loan subsidy scheme called the Defence Home Ownership Assistance Scheme, which began operation on 1 July 2008.

Under the new measures in the bill, members of this scheme will be eligible for defence service homes insurance. This will mean greater access for many Australians to a home insurance scheme that has been designed specifically for the defence service and ex-service community. It offers discounted insurance products to eligible persons. It is estimated that approximately 7½ thousand ADF and Reserve members will be eligible to take out this cost-effective insurance option. The home loan subsidy scheme was initially introduced as one of the measures designed to improve the recruitment and retention of ADF personnel. Achieving this goal will be made easier by the extension to these personnel of a competitive home insurance scheme as well. This package, which now includes subsidised home insurance in addition to the existing subsidised home loan, will bring benefits to both serving and ex-service personnel. It will also help to ensure the long-term viability of the scheme itself.

The second area of reform the bill addresses is the arrangements for paying pensions and allowances into the bank accounts of defence personnel living overseas. A more convenient scheme in this area will greatly assist veterans and other DVA income support pension recipients. These include war widows and widowers, service pensioners and disability pensioners who live permanently overseas. Currently these people must have their DVA payments deposited into an Australian bank account. Money subsequently transferred from that account overseas can then incur relatively high bank transfer fees. The bill puts in place a mechanism through which clients can have their money paid directly into an overseas account, thereby avoiding these fees. This convenient and money-saving scheme is very similar to the way Centrelink supports its overseas clients.

This reform is a practical and supportive measure that will assist approximately 2,000 overseas clients currently residing in 70 countries around the world. This measure delivers on a promise by the Prime Minister in 2008 to review and improve payment structures for veterans living permanently overseas. It is expected that direct payments to DVA clients’ overseas bank accounts will be available from March 2010, with payments and transfers being handled by the Reserve Bank of Australia. This will ease the burden on a sizable group of Australian ex-service men and women and will reduce the economic hardship of relatively high bank transfer fees.

The third major area of reform contained in this bill relates to the cessation of the dependants pension. This scheme is an outdated and barely functioning arrangement which has outlived its usefulness and delivers diminishing benefits to clients. The purpose of the payment when it was introduced in 1914 was to provide financial support to the dependants of veterans. The dependants pension is not indexed and, as a result, the rates paid to dependants of veterans or members on a disability pension have not changed in decades, except for some GST compensation in 2000. For example, fortnightly payments to children have not changed since 1952, 57 years ago, and today range from a top payment of $2.86 down to a minimum rate of just 29c. That is not going to buy you a lot in this day and age. Fortnightly payments for partners and widows have remained unchanged since 1964, or 45 years ago. Fortnightly payments for partners and widows range from a top rate of $8.42 down to just 84c. These payments are clearly of little real value in today’s terms.

New entrants to the old dependants pension scheme were suspended in 1985. Clients still in this scheme at that time were given the option to cease their payments in exchange for a lump sum equal to three years payment. Some clients took up this option but some 26,000 recipients remain in the scheme today. The dependants pension goes nowhere near meeting the original aim of the scheme. It clearly fails to adequately support the dependants of veterans in today’s economy. Indeed, the scheme’s function is largely redundant, having been superseded by other, better targeted means of income support. Clients are now far better served by the income support provisions of the Veterans’ Entitlements Act 1986 and the Social Security Act 1991.

It is proposed that the dependants pension scheme be phased out on 22 September 2009, but the 26,000 people remaining in this scheme will not be worse off than they are at present. The small pension payments will cease, but these amounts do little to support dependants due to their diminished real value over time. The value of these payments is expected to be further eroded in the future, which would make the scheme increasingly inefficient and costly as time progresses. The clients will instead be offered a lump sum payment on 24 September this year which will be equal to three years pension payment. A lump sum payment will be of more use to many of those pensioners than a rapidly devaluing fortnightly amount. The lump sum payment will be exempt from income tax. War widow and widower pensions and orphan pensions will not be affected by this measure. Dependant pensions granted to people without adequate means of support are not affected by these measures.

The three measures contained in the Veterans’ Affairs Legislation Amendment (Budget Measures) Bill will do much to improve the economic and social welfare of DVA pensioners, veterans and currently serving ADF personnel. The more efficient transfer of DVA payments to overseas recipients is long overdue and was promised by the Prime Minister, and I am pleased to see that this bill delivers it. The cessation of the outdated pension system for veterans’ dependants will bring to a close a rapidly diminishing payment that has outlived its usefulness. The opening of the Defence Service Homes Insurance Scheme to larger numbers of current service personnel is a step forward. It will encourage new recruits to the Defence Force and retain those already serving. I feel confident that the reforms contained in this bill will be beneficial to all members of the defence and veterans communities.

To the many veterans who live in the electorate of Robertson, I say thank you for your contribution towards making Australia a better place. Your contribution to the community of the Central Coast is notable and I very much speak on behalf of everyone else who lives there in saying thank you. I commend the bill to the House.