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senate vote 2016-09-15#14

Edited by mackay

on 2016-10-01 20:17:37


  • Bills — Budget Savings (Omnibus) Bill 2016; in Committee
  • Budget Savings (Omnibus) Bill 2016 - in Committee - Military rehabilitation & compensation


  • <p class="speaker">Nick Xenophon</p>
  • <p>by leave&#8212;I move amendments (1) and (2) on sheet 7931:</p>
  • <p class="italic"> (1) Page 4, clause 2 (table item 25), omit "Schedules 22 and 23", substitute "Schedule 23".</p>
  • The majority voted in favour of a [motion]( to leave schedule 24 and table item 26 in clause 2 as they are. In parliamentary language, the majority voted for those parts to "stand as printed". The motion was put after Senator Jacqui Lambie moved a [motion]( to oppose them.
  • The parts related to military rehabilitation and compensation. When proposing to oppose them, Senator Lambie explained:
  • > *What the government is proposing under the single appeal pathways, even though it has been amended by Labor, still means that this bill denies veterans a right to legal representation when forced to go against a government body stacked with government lawyers. Important decisions about veterans' entitlements are being made in situations where a veteran and advocate walk into a room packed with government employees holding law degrees.*
  • ### What does this bill do?
  • Learn more about this [bill](;query=Id:legislation/billhome/r5707) in the [bills digest](
  • <p class="italic">(2) Schedule 22, page 189 (lines 1 to 17), to be opposed.</p>
  • <p>These amendments relate to the rates of R&amp;D tax offset. I traversed this in the course of the second reading debate. The concern is that this will impact by ratcheting down the R&amp;D tax offset. It will make it less attractive for small and medium enterprises to invest in R&amp;D. Given the hour I will not restate what I said previously, but this is something that the ALP, less than a year ago, trenchantly opposed because they said it would destroy innovation and affect jobs, and we need this level of R&amp;D at a time that is so critical when we are facing a crisis in our manufacturing sector.</p>
  • <p>The comparison with what is currently being proposed is that under the current law you may obtain a refundable tax offset equal to 45 per cent of eligible research and development. This will cut it down to 43.5 per cent. All other eligible entities may obtain, and, depending on the size of the entity, there is a cut of 1.5 per cent from 40 per cent to 38.5 per cent. That percentage difference does make a real difference in the context of being competitive in the R&amp;D space compared to what other countries are doing in respect of R&amp;D. I urge all senators to support these amendments.</p>
  • <p class="speaker">Mathias Cormann</p>
  • <p>I thank Senator Xenophon for his contribution. The government will not support either of these amendments. The reduction in the rates of the refundable and non-refundable tax offsets for eligible R&amp;D spending will help improve the sustainability of the program. The R&amp;D tax incentive will continue to provide generous, easy to access support for thousands of eligible companies in all sectors of the Australian economy. Companies with a turnover of less than $20 million will still get a 43.5 per cent refundable tax offset for the first $100 million of eligible R&amp;D expenditure. All other companies will still get a 38.5 per cent non-refundable tax offset for the first $100 million of eligible R&amp;D expenditure.</p>
  • <p>The government's National Innovation and Science Agenda is investing $1.1 billion to incentivise innovation and entrepreneurship, reward risk-taking and promote science, maths and computing in schools. Innovative businesses will benefit from a range of other measures, including allowing more businesses to access prior year losses. Changes have been made for operations such as entering into new business activities, and start-ups' intellectual property and other intangible assets will be more attractive investment options through more generous tax deductions through depreciation and connecting more small and medium businesses with researchers by investing $18 million in a new innovation connections initiative.</p>
  • <p class="speaker">Katy Gallagher</p>
  • <p>Labor will not be supporting this amendment. The provisions as set out in the omnibus bill relating to the R&amp;D tax incentive are the same as those that Labor committed to supporting during the 2016 election, with a start date of 1 July 2016. As part of our election platform, Labor said we would support the government's proposal to take savings from the R&amp;D tax incentive. We also said that a Labor government would use the findings of the review to consider whether there are more appropriate methods to achieve the same level of savings. It is disappointing that the technical issues with this measure remain unresolved, despite stakeholders raising them with the government on numerous occasions, but it is the government's responsibility to resolve those technical elements relating to the drafting of these provisions and their interaction with other areas of tax law.</p>
  • <p class="speaker">Nick Xenophon</p>
  • <p>I thank the opposition for the courtesy of setting out their position, but I am disturbed that the opposition acknowledges that there are technical issues in respect to these offsets, in respect of these changes. I just want to reflect on what Mr Conroy, the member for Charlton, said last year:</p>
  • <p class="italic">I do not see how reducing the R&amp;D tax offset provides an incentive to invest in research and development. Surely it does the exact opposite?</p>
  • <p>He went on to say:</p>
  • <p class="italic">It is incredibly short-sighted and it is incredibly silly in an era where we need to grow jobs for the future.</p>
  • <p>My very short question to the finance minister, Minister Cormann, is: has any modelling been done on what the impact of this will be in terms of the level of R&amp;D investment? Has there been an assessment made of the risk of seeing companies doing their R&amp;D overseas, where there may be more generous tax offsets and incentives for R&amp;D?</p>
  • <p class="speaker">Mathias Cormann</p>
  • <p>Consistent with usual practice, the government, through the Treasury, has assessed the budget impact of this measure, and of course that is reflected in this bill. There has not been any further modelling.</p>
  • <p>The CHAIR: I am going to put questions in the same way as we dealt with the previous amendments, so there will be two questions. The first question is that schedule 22 stand as printed.</p>
  • <p>Question agreed to.</p>
  • <p>The CHAIR: The second question is that the amendment be agreed to.</p>
  • <p>Question negatived.</p>
  • <p>The CHAIR: Now we are moving to the final amendments, which are in the name of Senator Lambie and Senator Kakoschke-Moore.</p>
  • <p class="speaker">Jacqui Lambie</p>
  • <p>I move my amendments (1) and (2) on sheet 7924:</p>
  • <p class="italic">(1) Page 4, clause 2 (table item 26) to be opposed.</p>
  • <p class="italic"> <i>[military rehabilitation and compensation]</i></p>
  • <p class="italic">(2) Schedule 24, page 212 (line 1) to page 215 (line 27), to be opposed.</p>
  • <p class="italic"> <i>[military rehabilitation and compensation]</i></p>
  • <p>The big problem we have is the veterans suicide crisis, and the large reason we have this problem is because of the way the veterans are being treated when they lodge claims for compensation. Veterans would rather return to war than deal with the mess the claims system is currently in and has been for many years. What the government is proposing under the single appeal pathways, even though it has been amended by Labor, still means that this bill denies veterans a right to legal representation when forced to go against a government body stacked with government lawyers. Important decisions about veterans' entitlements are being made in situations where a veteran and advocate walk into a room packed with government employees holding law degrees. It is a denial of natural justice and due process, and the government is trying to cover it up by saying they will simplify the process by taking away the lawyers. They are taking away the lawyers all right&#8212;they are taking them away quite nicely because, bloody hell, the veterans are not having one. You are putting them up against nine or 10 lawyers in a Veterans' Review Board. How would you go if you had PTSD, a missing arm, some missing legs, and you are going in there against a lawyer.</p>
  • <p class="italic"> <i>Senator O'Sullivan interjecting&#8212;</i></p>
  • <p>If you want to stand up, Senator O'Sullivan&#8212;</p>
  • <p>The CHAIR: Senator Lambie, address your remarks to the chair.</p>
  • <p>An honourable senator: Tell him to shut up, then!</p>
  • <p>Have some sympathy. You should pull your head in. Senator O'Sullivan&#8212;</p>
  • <p>The CHAIR: Senator Lambie, address your remarks to the chair, not through the chair. Please continue.</p>
  • <p>An honourable senator: Tell the boofhead to pull his head in.</p>
  • <p>The government only did half the job when they drafted this measure. They have taken away the lawyers representing the veterans but not the lawyers from the government. Last time there was such an inequity was when the Christians were thrown to the bloody lions.</p>
  • <p>This measure should be fiercely opposed because it jumps the gun. The Senate has already agreed to an independent inquiry into veterans affairs and the high rates of suicide. By the way, just so we are all clear, there was another one yesterday. I think we are at about 48 so far this year. It is going great guns! Nothing should be changed that disadvantages veterans until the veterans have had an opportunity to have their say in front of a committee. I know many veterans will make submissions which will describe the many injustices inflicted on them by the veterans compensation system, including the VRB and the AAT.</p>
  • <p>So I am asking you, Labor, to stand up for veterans tonight and support my motion to stop the government changing the compensation system to further deny the veterans their rightful compensation and entitlements. Labor, you stood with me and voted to establish a historic investigation into veterans affairs, with particular reference to:</p>
  • <p class="italic">a.&#160;&#160;&#160;the reasons why Australian veterans are committing suicide at such high rates,</p>
  • <p class="italic">b.&#160;&#160;&#160;previous reviews of military compensation arrangements and their failings,</p>
  • <p class="italic">c.&#160;&#160;&#160;the Repatriation Medical Authority's Statements of Principles, claims administration time limits, claims for detriment caused by defective administration, authorised medical treatment, level of compensation payments, including defence abuse, as contained in all military compensation arrangements &#8230;</p>
  • <p>More importantly, the committee will inquire into the performance of Veterans' Affairs&#8212;or the lack of performance over many years&#8212;and other related matters.</p>
  • <p>The government budget measure to establish more savings by adopting a single pathway for veterans compensation claims is jumping the gun. Before any change to the veterans compensation system is allowed by legislation, particularly a change which many veterans and legal experts say will have adverse effects on veterans, the findings and recommendations of the Senate inquiry should be seriously considered.</p>
  • <p>I am sorry, Minister&#8212;I need you to remind me what the cost saving of this measure is.</p>
  • <p class="speaker">Mathias Cormann</p>
  • <p>This is actually not about savings. The saving is absolutely miniscule. It is $3.6 million over the entire forward estimates. The reason we are doing this is to improve the service available to the ex-service community.</p>
  • <p>This initiative will benefit the ex-service community because it will streamline the appeals process presently available to veterans under the Military Rehabilitation and Compensation Act by providing access to the more veteran-friendly appeals process that exists through the Veterans Review Board. This implements the recommendation of the 2011 review of military compensation arrangements which was initiated by, and the recommendations of which were accepted by, the former Labor government.</p>
  • <p>It will achieve savings for the Department of Veterans' Affairs through a reduction in legal costs as a result of the introduction of a single appeals pathway for veterans covered under the MRCA. As I say, it is just $3.6 million worth, but that relates to specific legal costs.</p>
  • <p>The new appeals pathway, supported by a new initiative known as alternative dispute resolution, will encourage and facilitate the resolution of disputed cases at the Veterans' Review Board through case conference discussions. This streamlined process combines the advantages of the two current appeals paths available to veterans under the Military Rehabilitation and Compensation Act. The Veterans' Review Board provides a process that is non-adversarial and veteran friendly and will encourage and support participation in the process to reach a resolution for the veteran at the earliest possible point. This approach is supported by ex-service organisations, which have been consulted on this measure, because going through the Veterans' Review Board is independent. They know and understand the process, which is friendlier and less formal.</p>
  • <p>In the event that an appeal still proceeds to the Administrative Appeals Tribunal, access to legal aid will still be possible, subject to the usual eligibility requirements. The new process will make settling disputes faster, easier and less demanding for veterans covered under the Military Rehabilitation and Compensation Act than is presently the case.</p>
  • <p class="speaker">Jacqui Lambie</p>
  • <p>I was just wondering if the government or the minister here could tell me how much money was spent on private law firms in 2009, in 2013-14 and in 2014-15 to fight against our veterans and to take their legal rights off them?</p>
  • <p class="speaker">Mathias Cormann</p>
  • <p>I do not have that data going back to 2009. As I have indicated to you, the process we are putting forward here is designed to be better for veterans. It is designed to be more veteran friendly. It is designed to achieve resolution of relevant, legitimate grievances more efficiently. This is not driven by seeking to achieve a major saving; this is driven by seeking to improve the veterans' experience in these circumstances and responds directly to relevant recommendations that were made by the 2011 review of military compensation arrangements.</p>
  • <p class="speaker">Jacqui Lambie</p>
  • <p>Minister, in 2009 you spent $4.5 million to take down our veterans. In 2013-14 you spent close to $10 million. In 2014-15 you spent just over $10 million. Can you tell me why you see a problem with changing to one single pathway yet are prepared to go and spend millions and millions and millions of dollars on external lawyers&#8212;taxpayers' money&#8212;denying our veterans their rights to compensation?</p>
  • <p class="speaker">Mathias Cormann</p>
  • <p>We do not want to deny anybody their rights. We want to ensure that people's rights are respected and that the government acts in accordance with people's rights, and we are seeking to improve the process that determines the appropriate resolution of any issues where there is a legitimate grievance. What we are proposing here is to make the process less legalistic, at least in the first instance, to ensure that a larger number of issues can be resolved in a more informal and less adversarial fashion. If there is still an ongoing grievance then of course the current and existing process through the Administrative Appeals Tribunal will continue to be available.</p>
  • <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>