I think the VE key has a metallic bump on it the should line up and make contact with a half moon ring around the ignition barrel itself. IIRC, this allows the key to be powered and thus signal the anti theft system as you turn the key to start.
Not sure of the mechanics of the ignition barrel itself but if the half moon ring is missing, it must have fallen off and could be under your seat (if you are lucky). If you do find the ring, it may be possible to push it back on so that it makes electrical contact with the appropriate bits around the ignition barrel. As such, the key may now be able to disarm the security system and allow the vehicle to start.
Obviously, if it can be “McGivered” it will be a cheap and possibly permanent fix as compared to the dealer suggestion of may be a new ignition barrel at who knows what cost. But then again may be such a “McGiver” fix is not be possible as I’d think the RACQ would have looked at it in a cost focused way
