The disease is carried by native fruit bats, called flying foxes. Horses can catch the virus and in seven instances it has been passed on to humans - the last two fatal cases involving attending veterinarians.
"We call for all Australian governments to implement a scheme to reimburse veterinarians for the biosecurity costs of investigating suspected Hendra cases," said the association's president, Dr Barry Smyth.
"Both flying foxes and horses travel around the country, and it's possible that the disease could appear anywhere in Australia. This is a national issue.
"Today, we have three Hendra virus incidents being investigated in Queensland and two in New South Wales. This is an unprecedented number of simultaneous incidents that have emerged in the space of just over a week.
"More than 30 people may have been exposed to the virus and are awaiting test results. This dangerous disease is clearly on the rise, and private veterinarians are in the firing line.
"Two of the four people who have died from this disease were veterinarians, another was the husband of a vet helping with a horse post mortem, and a veterinary nurse has also been infected.
"A number of the signs of Hendra infection mimic those of much less serious illnesses which makes it very difficult to avoid exposing ourselves to this zoonotic disease."
Smyth said there are fewer government veterinarians who are paid to investigate suspected cases of diseases like Hendra, so private veterinarians fill the gap.
"With our proposed scheme, when each horse is sampled for Hendra testing, the veterinarian would be entitled to claim a reimbursement of $250 to cover personal protective equipment for the vet, horse holder and anyone else assisting.
"At the same time, the scheme would support vets in their role of educating horse owners about the virus at the time that the samples are taken. These are services to the public.
"At an estimated cost of $A500,000 each year for the scheme nationally, it is a small price to pay for ongoing Hendra disease surveillance and maintaining public confidence," Smyth said.
The Australian Veterinary Association eagerly anticipates the availability of the Hendra vaccine for horses and believes all horses should be vaccinated against the disease.
Vaccination, when combined with identification by microchips, would provide veterinarians, horse owners and handlers a high level of protection against Hendra infection.