Linda Reynolds (WA, Liberal Party) Share this | Hansard source

If Senator Lambie gives me time, I will explain exactly how, in great detail, this is a retrograde bill.

Following the announcements, Senator Nikolic, myself and other colleagues quietly but very persistently advocated to the minister and the Prime Minister that we thought the initial 1.5 per cent pay increase was insufficient. We also worked with them very hard to find where the additional $200 million would come from out of the Defence budget. Once we had done that and we had found the money, we also put another very persuasive argument to government about why this was equitable. The reason was that, under the last government—the Labor government—the wage increase of ADF uniformed personnel lagged behind those of the APS by 25 per cent. We believe, therefore, that this recommendation was not only appropriate but that we had found the money to pay for it. Subsequently, on 4 March, the Prime Minister announced the government's intention to seek a variation to the ADF Workplace Remuneration Arrangement—the WRA—to provide an increase to the pay to two per cent per annum each year over the three-year life of the arrangement. The cost of the existing WRA is $634 million over the life of the agreement, and, as I said, the increase was an extra $200 million that has now gone to our ADF personnel.

The DFRT endorsed the government's new proposal when it handed down its determination on 9 June 2015 and the additional increase was reflected in ADF pay packets from 30 July and it was backdated to 12 March this year. Importantly, the DFRT decision kept ADF pay well above the current annual inflation rate of 1.5 per cent, which, in fact, as we have just heard from the speakers opposite, is what ADF pay would drop to under Senator Lambie's bill—not two per cent but 1.5 per cent.

There are three major reasons why I believe this is a very well-intentioned but ill-drafted bill and it would have devastating consequences on the incomes of our Defence Force personnel. The first reason is the linking of pay rises for members of the ADF to one of two things: either to CPI or to MP's salaries—option A or option B, and nothing else. Let's have a look at these options. Option A is tying it to politicians and senior public servants. The fundamental flaw in this is that we have all had our salaries frozen to zero, so option A that is proposed under the bill is zero. I am assuming that the drafter did not realise this when this bill was drafted. So, option A is zero per cent and is tied to politicians. Option B under the bill is tied to CPI, which, as we know from current CPI figures is well below the current two per cent. In fact, it is about 1.5 per cent. So it would be either option A or option B—zero per cent or 1.5 per cent.