The Productivity Commission has recommended the $13.2 billion veterans’ affairs system must undergo its most radical reform since World War II by abolishing the department, making Defence pay insurance premiums and removing the distinction between compensation rates based on types of service.
The Conservative Party supports the recommendation because it will ultimately mean Australia's veterans will be better off.
In a draft report released today, commissioners Robert Fitzgerald and Richard Spencer acknowledge that the unjustifiably complex and cluttered policies for ex-servicemen and women under three pieces of legislation are not just obscure but actually harm veterans.
Mr Fitzgerald said the “time for tinkering is over” and today’s blueprint for reform proposes dismantling the Department of Veterans’ Affairs within four years and replacing its functions with a Veteran Services Commission, while shifting policy oversight to the Department of Defence.
The report is scathing of the Defence Department as the employer of veterans.
“A unique aspect of the current veteran support system is that Defence (the employer) bears no financial responsibility for the cost of compensation, rehabilitation, transition services or medical treatment for service-related injuries and illnesses once a member leaves the service,” it says.
“DVA picks up the tab. The Australian government should recognise that Defence has primary responsibility for the wellbeing of discharging Australian Defence Force members, and this responsibility may extend beyond the date of discharge.”
The commission says this could be fixed by treating the entire system like a modern and best-practice workplace compensation scheme and levying Defence an annual premium worth “hundreds of millions of dollars” to cover the future costs of its employer liabilities. “A premium is, in effect, a price signal about the real costs (lifetime, not short-term costs) of service-related harm. It would complement existing incentives to prevent injury and illness,” the draft report says.
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