House debates

Monday, 24 May 2010

Private Members’ Business

Military Superannuation Pensions

8:05 pm

Photo of Robert OakeshottRobert Oakeshott (Lyne, Independent) Share this | Hansard source

I fully recognise the complexities of this issue of military superannuation pensions for the government. There are budgetary issues at play. That is why I am not bringing this into the House as a private member’s bill, and I am sure that is why it has been an issue of contention for various governments over recent decades. I also recognise that there are contextual issues with regard to the full package of veterans entitlements and how that sits alongside a superannuation scheme. It has taken me 18 months to drill through some of the complexities and the details. But I still find myself coming back to the very broad principles that remain unanswered by government, by the Matthews report and by the minister. So those broad principles, in as simple terms as possible, are what I am putting before the House tonight.

I want it be recognised that Defence service is unique within the Public Service. I would hope that most, if not all, members in this place and those who decide on public policy would agree with that basic principle. I hope I do not have to go into detail, but the uniqueness of Defence service lies in defending the nation, our sovereignty and our freedoms. In carrying out their duties of office in the Defence Force, individuals’ safety and lives are endangered, and therefore the circumstances of their families are put at risk. I hope that is broadly accepted by all in this place. If that is true, I would ask all members to consider revisiting the issue of how we treat military superannuation in comparison to all the other types of superannuation and pension schemes that governments support. If you are willing to consider that, there is then a contentious question to answer—and I know that many members have had contact with members of various Defence welfare groups in their electorates. The question is: where do we peg military superannuation and is that fair and equitable for those who have served within our Defence forces?

Currently, military superannuation is indexed by CPI. But the question now is about using ABS quotes about purchasing power and cost-of-living measures, or whether we go right back to what the CPI itself was really designed for, through Professor Pollard in 1973. I would hope it is generally recognised that CPI is not a good indicator for cost-of-living measures and for purchasing power. The question is therefore whether we as policy makers have pegged military superannuation to the most appropriate index possible—and, if not, what are the alternatives? In my view the alternatives that are worthy of consideration are in the form of the age and welfare pensions, which are indexed by the new living cost index, to reflect the failings of CPI in the pensioner and beneficiary living cost index, or the male total average weekly earnings, whichever is the greater. Those are the two options which age and welfare pensions are indexed by. From 1989 to 2008 the age pension rose by 110 per cent, compared to military superannuation pensions, which over the same period rose by 68 per cent—again making that point that CPI is not an appropriate measure of cost-of-living pressures and was never really established for that purpose. I ask the government to therefore consider the motion. (Time expired)

Comments

Tony Ryan
Posted on 25 May 2010 8:46 pm (Report this comment)

Thank you Mr Oakeshott. Like all those in receipt of Military Superannuation payments I look forward to the day when we receive equity.

John Griffiths
Posted on 26 May 2010 11:38 am (Report this comment)

Congratulations for supporting DFRB and DFRDB military superannuants. The undexation issue has been boiling for many years. Clearly Labour couldn't care less, despite their election promises in 07. At least now, the Coalition is getting behind the cause, although I am concerned that they are worried about finding the funds. The Defence Force Welfare Association has done their homework and concluded that year 1 costs will be $12(mill). That figure was derived by calculating the same formula as for aged pensions by the 63,000 DFRB and DFRDB military superannuants. Later schemes such as MSBS are not effected or included in the calculation. As most of the DFRB and DFRDB superannuants are now aged 60 to 80 years old, we are dying off fast, so this cost if granted will dusappear over the next two decades.$12(mill). THat's half of what Rudd has given to Taliban rehabilitation this year.
John Griffiths
A military superannuant and Vietnam Veteran.

Tony Ryan
Posted on 2 Jun 2010 10:05 pm (Report this comment)

If the first year would cost $12 Million the first three years could be more than covered by the $38 Million Mr Rudd wishes to spend on advertising his proposed Super Profits tax. But then, there is no political gain from appeasing 63,000 DFRB and DFRDB superannuants, so don't hold your breath.

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