David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Hansard source

I am pleased to rise and speak to the ADF Superannuation Bill 2015, the ADF Cover Bill 2015 and the Australian Defence Legislation Amendment (Superannuation and ADF Cover) Bill 2015. This package of bills will create a new superannuation scheme for members of the ADF. The opposition supports these bills and the outcomes they seek to achieve for our future ADF personnel, as well as those ADF members who choose to transfer across from the previous scheme.

In rising to speak today I would primarily like to speak to the provisions in the bills that support the aims of Project Suakin by introducing greater flexibility and portability than was available under the Military Superannuation and Benefits Scheme. Project Suakin was an initiative of the former Labor government. I launched it in August 2011 in my role as Parliamentary Secretary for Defence. It began as a project aimed at enhancing the reserve employment model and the reserve integration with the total force, most particularly in the Australian Army.

However, the scope of the project very quickly grew to encompass the whole of the Defence Force, and indeed the whole of the Defence organisation, including permanent members of the Public Service. The aim of this project was to modernise the ADF workforce environment to reflect the evolving realities and priorities of a more mobile workforce in a way that facilitated member retention, increased female workforce participation and gave Australia the most effective Defence Force and Defence organisation possible. This was a long-term investment in our Defence personnel and our Defence Force capabilities.

In 2011, more than 10,000 ADF members—both permanent members and reservists—provided input into the project through a survey that looked at their priorities and career requirements. In conjunction with other research this survey confirmed that the face of the ADF was changing, as were the workplace requirements. It revealed that our reservists wanted increased opportunities and better career management as well as—insofar as practicable—predictable work patterns. Meanwhile, our permanent members were increasingly looking for greater flexibility and a wider range of service options that more accurately reflected their changing circumstances. It was also clear that for many, service with the ADF was no longer a lifelong career, as periods of service were shorter—often much shorter than the average terms people spend with the public service. There is also greater fluidity, with many members moving in and out of the Defence Force or across service streams more than once during their careers.

So, as Project Suakin rolled out, it aimed to remove the barriers—both legal and administrative—that limited flexibility in the ADF workforce environment and in doing so provide a full spectrum of service options from full-time to part-time for our ADF members. For example, when an ADF member becomes a new parent, or when they take on the responsibility of an aging parent, their circumstances and ability to work will inevitably be affected. In his discussion of Project Suakin in The Strategist, Hugh White gives the example of a young soldier who wants to take a couple of years out of the Army to set up a nest egg and so spends a couple of years working in the mining industry. But we do not want to lose that talent permanently. These personnel, trained by the taxpayer and instilled with the virtues and values of the ADF, should be retained by the Australian Defence Force and should not be lost just because we cannot provide them with the flexibility they need and have indeed come to expect. We also want to encourage greater female workforce participation by facilitating an environment where women can have long and satisfying careers in our Defence forces regardless of whether or not they decide to have a family.

So Labor's Project Suakin set out to transform, over the long term, the workforce environment that these personnel operated in. Despite underhanded efforts on the part of those opposite to try to rebrand Project Suakin as a coalition initiative in 2013, I am glad that this endeavour has continued to be supported on a bipartisan basis. I am particularly pleased to see measures in these bills which complement and facilitate the goals of greater flexibility embodied by Project Suakin. No matter how many times those opposite seek to relaunch this initiative, it will remain supported on a bipartisan basis and a tremendous initiative.

The new superannuation scheme created by these bills moves us away from the rigidity of the Military Superannuation and Benefits Scheme, the previous superannuation scheme which applied to serving members of the ADF and which provided for limited portability. Unlike the MSBS, this new scheme allows members to transfer their superannuation when they move to a new employer. This recognises the point that I raised earlier—that ADF personnel have increasingly been a part of the Defence family for shorter periods, with many pursuing independent civilian careers after providing service to their country. Those personnel who choose to pursue a civilian career can now take their superannuation with them. Likewise, those ADF members who move in and out of the service over the term of their working life will no longer incur the costs of dealing with cumbersome rigidities in their superannuation.

Importantly, these bills also makes changes that will assist permanent members who cannot or do not wish to work full-time. Under the current arrangements, permanent ADF members who wish to work other than full-time must take part-time leave without pay. These bills will remove that requirement. The new scheme also broadens the definition of 'salary' for superannuation purposes and removes the requirement for compulsory employee contributions.

By increasing the flexibility available to ADF members in relation to their superannuation, these bills, and the new scheme itself, support the original aims of Project Suakin. Labor fully support the continuation of the work that we began back in 2011 when we initiated Project Suakin. We therefore support the formation of this new superannuation scheme, particularly its ability to support flexibility and portability.

In this, its final form, the package of bills also achieves an appropriate balance between fiscal responsibility and the full and appropriate recognition of the unique nature of military service. Firstly, these bills bring ADF super in line with the broader Public Service's move away from defined benefit schemes and towards accumulation schemes. This moves us away from the ever-increasing long-term underfunded liabilities that were created by defined benefit schemes. We are advised that this move will reduce long-term underfunded liabilities by some $126 billion by 2050.

Secondly, the appropriate recognition of military service is achieved through the rate of employer contributions. Here I think a bit of background on the history of this package of bills is appropriate. Originally, those opposite proposed a rate of 15.4 per cent for non-warlike service and a rate of 18 per cent for warlike service. Fifteen point four per cent is the same rate that employees of the Public Service receive. This created a two-tiered system that made a distinction between different members of the Defence Force as well as between different duties of the same member of the Defence Force. Labor opposed this two-tiered system, believing it was cumbersome and created an unnecessary distinction.

There are administrative challenges with implementing such as system, including difficulties that may arise when certain duties are retrospectively identified as warlike. There are also practical issues surrounding when exactly non-warlike service becomes warlike service in what is often a fluid operating environment. These administrative issues do not support the distinction required for this two-tiered system and in their practical application would likely create more problems than benefits.

In addition, the Australian Defence Force has a culture of inclusion, where all members are part of a greater total force. Labor believes that making a distinction in this way is unnecessary to the proper acknowledgement of the unique nature of military service. Military service in unique not only in the way members of the ADF put themselves in danger but also because it includes aspects such as the military code of discipline, the regimented lifestyle, being away from family for long periods and regular relocation at the hands of the posting cycle.

It is for these reasons that Labor opposed the original formulation of these bills and the proposed two-tiered system. It is why we welcomed the decision by those opposite to abandon the two-tiered system and adopt an employee contribution rate of 16.4 per cent. A rate of 16.4 per cent is above the employee contribution for the Public Service, thereby recognising the different working environment within which these two groups operate. It is a reasonable compromise that does not create any of the difficulties that would have been experienced in a two-tiered system.

Finally, these bills also create ADF Cover, which replaces the death and invalidity cover offered by the existing scheme. Given the unique and often dangerous work which our ADF personnel undertake as part of service to their country, accessing death and invalidity cover from group insurance arrangements at a reasonable price is often impossible. ADF Cover creates an avenue for ADF personnel to access these benefits in line with the coverage offered under the Military Superannuation and Benefit Scheme.

Labor has been clear in its commitment to work with those opposite in a bipartisan fashion in matters relating to defence. That is as it should be. However, that bipartisanship should and must always have its basis in good, sound, fiscally responsible policy. Here it does just that. This package of bills and the superannuation scheme they create support the work of Labor in our initiation and development of Project Suakin by facilitating greater flexibility in the way superannuation is dealt with. This builds on the project's original aim and purpose of creating a full suite of options for ADF personnel that reflect the changing circumstances and priorities of an individual member's life, particularly in this modern world. It also strikes the appropriate balance between fiscal responsibility and the proper acknowledgement of the proper recognition of the unique working environment within which ADF members operate.

I am very pleased we are supporting this package of bills and the continued work of Project Suakin. I single out the honourable member for Canberra to commend her for her efforts in putting these measures together and in working so constructively and to such good effect with those opposite. I commend the bills to the House.

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