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Thursday, 17 December 1992
Page: 5534

(Question No. 2451)

Senator Newman asked the Minister representing the Minister for Veterans' Affairs, upon notice, on 26 November 1992:

  With reference to the 1992-93 appropriation of $700,000 for an increased hourly rate payable to commercial limb manufacturers, and the 1992-93 appropriation of $66,000 for a demand increase in the provision of artificial limbs:

  (1) How was the set rate per hour calculated.

  (2) How were the final appropriations arrived at.

  (3) Why is the set rate per hour at variance with that recommended by the January 1992 KPMG Peat Marwick report.

  (4) To whom will the appropriations be applied and how are they to be applied.

  (5) Has the new hourly rate been increased for the CPI/award changes effective from 1 July 1990 to 30 June 1992; if not, why not.

Senator Tate —The Minister for Veterans' Affairs has provided the following answer to the honourable senator's question:

  (1) The decision to grant an increase in the hourly rate paid to commercial limb manufacturers was taken by the Government having regard to the consultants findings and the prevailing economic circumstances which saw the lowest CPI and economic growth for many years. Against this background the Government decided to award an increase of $9.05 (20 per cent) bringing the hourly rate up to $58.78 and to index it annually in accordance with the Manufacturers Price Index (as notified by the Australian Bureau of Statistics).

  (2) The final appropriation, an increase of $700,000 was derived by multiplying the expected work by the new hourly rate. There was a small allowance for growth for both manufacture and repair given that, as the Artificial Limbs Scheme has been in operation for two years, many limbs would be reaching their normal expected life of three years. It was funded from savings in RALAC operations. The figure of $66,000 was a provision for similar expected increases in artificial limb production in the RALACs.

  (3) See (1) above.

  (4) Funds are paid to commercial limb manufacturers on presentation of invoices for work done for veteran and Artificial Limbs Scheme patients. They will receive the new rate for all work manufactured from 1 July 1992 and will be paid on submission of invoices. The $66,000 was applied to RALACs.

  (5) No. The new rate is all inclusive and adjustments in the future will be made in accordance with the Manufacturers Price Index.