Budget Review 2021–22 Index

Kelsey Campbell and Michael Klapdor

No final response to Productivity Commission report

In June 2019 the Productivity Commission (PC) sent the Government its final report on the inquiry into the system of compensation and rehabilitation for veterans: A Better Way to Support Veterans. In February 2020 the Minister for Veterans’ Affairs, Darren Chester, stated that the report ‘will be fully responded to in the matter of [the] next few months’. An interim response to the report was released in October 2020, which the minister said addressed 25 of the 69 recommendations. However, as discussed in the Parliamentary Library’s 2020–21 Budget Review, some recommended actions that the interim response claimed had been implemented or were ‘underway’ were not consistent with the PC’s recommendations. The minister stated the final response to the PC’s report would be provided as part of the 2021–22 Budget.

The 2021–22 Budget does not include a final response to the PC report. In a media release, the minister noted that the Budget addressed several of the PC’s recommendations either in full or in part and that the Government ‘will finalise any outstanding matters from the Productivity Commission report as part of its response to the Royal Commission [into Defence and Veteran Suicide] once it is finalised’ (see the ‘Defence’ article in this Budget Review for information on the royal commission). An information sheet published by DVA stated that the remaining PC recommendations ‘primarily relate to structural and legislative reform’ and these recommendations will ‘now be pursued via a legislation reform roadmap that will be developed in consultation with the veteran community’.

The PC’s report had found that the veterans compensation and rehabilitation system ‘is not fit-for-purpose—it requires fundamental reform’ (p. 2). The PC’s structural and legislative reform recommendations were intended to address key problems with the current system which it found is:

• overly complex—both legislatively and administratively with the three main statutes providing different entitlements and overlapping in terms of eligibility
• difficult to navigate—there are a large number of different benefits with complex eligibility criteria and rate structures
• inequitable—the level of support differs for those with similar needs depending on what legislative scheme they are covered by and
• poorly administered—placing unwarranted stress on claimants (p. 2).

It is unclear why the Government is waiting to finalise outstanding matters from the PC report as part of its response to the royal commission. The consultation document for the royal commission’s terms of reference state that the commission ‘will not be required to inquire into matters that it is satisfied have been dealt with by other inquiries’. The PC inquiry spent more than a year examining the entire system of veteran supports and the royal commission may determine that many matters were adequately dealt with by the PC. A delayed response to the PC report may delay improvements in support for veterans.

Additional resources for the Department of Veterans’ Affairs

The Budget includes $302.8 million over four years to support the operations of DVA (p. 194). One component of this measure is $164.6 million over two years from 2021–22 for DVA’s operations and to support claims processing. There has been a significant increase in claims for compensation made by veterans over the past two to three years, which DVA says has ‘created a backlog’ (p. 1). There were 121,000 claims in 2019–20, more than double the number in 2017–18 (p. 15). As at 30 September 2020, there were close to 16,000 more claims for initial liability under the Military Rehabilitation and Compensation Act 2004 and the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 than DVA had the capacity to allocate to an official for processing (the department’s measurement of a backlog).

Veterans’ families and advocates have recently been critical of the long processing times. The PC report also raised concerns about the claims administration process, citing a general lack of training and guidance for assessment staff, slow claims assessments and high error rates (p. 393).

The additional funding in the Budget will allow DVA to increase its average staffing level by 28%—from 1,615 in 2020–21 to 2,062 in 2021–22 (p. 159). DVA has been criticised by members of its own staff for its reliance on contractors inexperienced in dealing with veterans’ issues. In its 2019–20 Annual Report, DVA stated that $20 million in funding in 2019 for additional contracted staff had helped the department ‘achieve excellent results’, even though many processing-time targets were not met (p. 37). The Community and Public Sector Union has argued the Government’s staffing cap prevented DVA from hiring more permanent staff to meet the increased demand.

Other components of this additional funding include:

• $55.1 million for the continuation of the Veteran Centric Reform program, which includes ICT upgrades, decommissioning legacy systems and digitising files for clients from the Vietnam War
• $40.7 million (plus $3.1 million from the Department of Defence) for a data sharing platform between DVA and Defence—information gathered through this platform is to be used for ADF injury prevention and management and planning future DVA support services. The platform was developed by DVA as an alternative to the PC’s recommendation for a levy on Defence to fund veterans’ support services (see the 2020–21 Budget Review) and
• $21.4 million for improved data analytics, including a focus on the characteristics of veterans who die by suicide; targeted health interventions; and improved forecasts of long-term liabilities.

Veterans’ health and wellbeing measures

The Budget includes funding for a range of health and wellbeing measures, primarily the extension of existing programs or trials:

• $61.9 million to increase the DVA fee schedules for podiatry and occupational therapy to address concerns current fees are below market rates, and to review DVA’s Home Care and Community Nursing programs
• $16.9 million to extend the Provisional Access to Medical Treatment trial for two more years—the trial commenced in 2018 and provides access to DVA-funded medical treatments for those waiting for their liability claim to be accepted (where the claim is for one of the 20 most commonly accepted conditions under military and defence compensation schemes)
• $6.0 million to establish an ADF Firefighter Scheme for around 300 firefighters exposed to hazardous substances at RAAF Base Point Cook between 1957 and 1986—the scheme will automatically accept claims for a list of 31 prescribed conditions and provide annual cancer screening
• $23.3 million to establish the current Wellbeing and Support Program pilot as an ongoing program providing intensive case management for highly vulnerable veterans transitioning from the ADF to civilian life, or with complex-care needs after leaving the ADF and
• $10.7 million to establish two Veteran Wellbeing Centres: in Tasmania and South East Queensland. The centres provide DVA services alongside other support from community services, ex-service organisations and private providers. Six centres were established following a 2019 election commitment by the Government (p. 1). The Australian Labor Party had committed to seven centres—six in the same areas proposed by the Government and an additional centre in Ipswich in South East Queensland (p. 8).