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

My question is to the Leader of the Government in the Senate, Minister for Employment and Minister assisting the Prime Minister for the Public Service, Senator Abetz. Will the minister explain to the Senate how the Australian Defence Force personnel and their families will benefit from the government's decision to increase its pay offer to two per cent?

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

Can I thank 'Brigadier' Reynolds for the question and acknowledge her long and distinguished service to the ADF. As announced by the minister and the Prime Minister today, the government is committed to increasing the ADF pay offer to two per cent per annum over the life of the agreement with effect from the next pay day. Today's decision follows considerable consultation and representations from the defence community. Over the decade from 2004 to 2013, annual ADF pay increases have totalled 38 per cent while annual median wage increases for Commonwealth public servants totalled 42 per cent compared to CPI, totalling 28 per cent. In other words, public servants have done around four per cent better than members of the ADF.

ADF personnel fell behind the Commonwealth public servants under the previous Labor government. In the years 2008 to 2013, annual ADF remuneration increases totalled 21 per cent while APS increases totalled 26 per cent. Further, defence as a whole suffered. The government now needs to find an additional $16,000 million just to replace what Labor stripped out of defence in its six years of government.

Increasing ADF pay by two per cent per annum will increase the likelihood that, going forward, ADF members do better than inflation and politicians. Salary is, of course, only one important component. ADF personnel also receive competency-based allowances, free medical and dental treatment, subsidised housing and a range of other benefits. This increase allows the ADF to catch-up with the cuts they suffered under Labor. (Time expired)

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

Mr President, I ask a supplementary question. Is the minister able to advise the Senate of any representations which were made to the government on the issue of ADF pay?

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

There have been many representations to the government and, if I might say, none as strong as those from 'Brigadier' Reynolds herself and her brigadier colleague Andrew Nikolic, the member for Bass, in the other place, along with a whole host of other members such as the member for Solomon, Natasha Griggs; the member for Herbert, Ewen Jones; the member for Eden-Monaro, Peter Hendy; and the member for Hughes, Craig Kelly. I notice Tasmanian colleague Senator Lambie walk into the chamber. She of course has also genuinely pursued this issue in the public space, as has the member for Gilmore, Ann Sudmalis.

Opposition Senators:

Opposition senators interjecting—

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

With all this interjection and commentary from the ALP, those ALP senators in this place might like to know that their own leader has just congratulated the Prime Minister on the increase. (Time expired)

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

Mr President, I ask a further supplementary question. Will the minister explain to the Senate how ADF members are likely to benefit from this offer as compared to inflation and as compared to a wage increase for politicians?

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

Senator Reynolds is right to ask for such a comparison because, as we speak, parliamentarian's pay is frozen. There will be no increase in 2014-15. Evidence from the Australian Public Service Commission at Senate estimates last week noted that recent government pay offers should be seen in the context of falling inflation. Inflation for the year to December 2014 was 1.7 per cent with the RBA forecasting inflation to June this year of 1.25 per cent, while the National Australia Bank is forecasting a rate to December 2015 of only 1.2 per cent. If this is the case, ADF members who were awarded a 1.5 per cent increase last November, and will get further increases, would already be keeping level with inflation for these years. The two per cent pay rise is therefore likely to be better than inflation.