House debates

Monday, 24 May 2010

Private Members’ Business

Military Superannuation Pensions

8:21 pm

Photo of Shayne NeumannShayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

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.


Rodney Ross
Posted on 25 May 2010 11:04 am

Why on earth doesn't this man advocate using CPI to adjust Parliamentary pensions??

Tony Ryan
Posted on 25 May 2010 10:00 pm

Mr Neumann would not advocate parliamentary pensions being indexed to the C.P.I. because he, like the rest of us, knows he would be worse off. As for his comment that "Superannuation is one aspect of the total remuneration package available to ADF members", that takes no account of the inequity which exists currently in respect of retired members.

John Griffiths
Posted on 28 May 2010 11:35 am

This Labor politician is another one who toes the Party line. Labor has shown it has no regard for the welfare of military superannuants. The promises they made prior to the 2007 election were just lies to get our vote.
Tony Ryan is right. If CPI is so appropriate, why don't Labor adopt CPI as the indexation formula for all pre 2004, parliamentary pensions?
The Matthews report is seen as a quick and poor solution designed to give this Labor Government the answer they wanted. Matthews was engaged by Nick Sherry, who was a mate of David Harris, who assisted Matthews to prepare his report. Senator Sherry had a previous visit to the UK (fares and accomodation) paid for by Harris. This has led to questions being asked about the transparency and probity of Matthews being engaged. The National President of the Defence Force Welfare Association wrote to the Prime Minister many months ago asking for clarification on this matter. Despite several hasteners for a reply, no response has been made by the PM. If the Matthews engagement was above board, why won't the Government be transparent and accountable on this issue?
One thing is for sure. Military superannuants will be voting liberal this year. A number of their party members have given commitments to address military super indexation, if they are elected to Government this year.