Monday, 24 May 2010
Private Members’ Business
Military Superannuation Pensions
We engaged Mr Matthews, an international leader in the global pensions and life insurance industry—an Australian citizen, Past President of the Institute of Actuaries of Australia and currently a prominent actuary in the United Kingdom; he was eminently qualified to carry out the review. We have heard this feigned moral unction from those opposite in relation to this issue, and you heard the comment of the Leader of the Opposition in April this year. Why would you believe a word he said when he served in the cabinet of the Howard government all those years? You only have to hear what he said about this. We engaged Mr Matthews to undertake the review, and he undertook it. He looked at schemes throughout the world. In fact, the review went on to look at military pensions in Canada, South Africa, the United States and the United Kingdom, all indexed to increases in the consumer price index in those countries. In at least two cases—the United States and South Africa—the relevant pensions were increased annually by less than increases in the local version. He looked at this in detail. His recommendations were that pensions from the Australian government civilian and military superannuation schemes continue to be indexed against the effects of inflationary price increases. The same indexation methodology would continue in relation to civilian and military pensions.
Pensions from the Australian government civilian and military superannuation schemes continue to be indexed to CPI. This is the most suitable index, according to Mr Matthews. If there is a more robust index, he said in recommendation number 4, that justifies a change in the scheme, the government should look at that in the future. I heard what the member for Werriwa had to say about the issue. If the veteran community want to have some discussion about that and want to keep advocating for their position, in a democracy they are entitled to that. I want to thank the veteran community for what they have done in relation to their service. We have made it plain that we will listen to the veteran community. We have acted on what we said, and that was to have a review. We have done that.
The member for Paterson talked about Podger. The government committed in 2007 to make public the Podger review into military superannuation. The coalition refused to release it. We have done so and the government is considering it. They refused to release it at all. The government also committed in 2007 to the independent review. We have held that. We have a strong record in this area, going back to the Hawke government, which established the Military Superannuation Benefits Scheme in 1991, recognising that the previous schemes had served many members poorly. The Labor government did that back in those days. The Rudd government has acted on it now. Superannuation is one aspect of the total remuneration package available to ADF members. We have made that clear and we have acted on that.
With respect to the Matthews findings, we have acted on the basis that the most appropriate purpose of indexing an occupational superannuation pension is to protect the purchasing power of those pensions from the effects of price inflation. And that is what happens overseas. That is exactly what happens in the OECD and the countries that I listed before. That is the reality. We followed the independent advice of Mr Matthews, which was the appropriate thing in the circumstances to do.