House debates

Wednesday, 5 June 2013


Appropriation Bill (No. 1) 2013-2014; Consideration in Detail

10:54 am

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | Hansard source

I am pleased you asked that, because it is now time to put to rest some of the furphies we have heard over an extensive period of time. Let us be clear in the first instance that superannuation retirement pay is not income support. Superannuation retirement pay cannot be seen as equivalent to a pension, an age pension or an invalidity pension. They are totally different things.

The opposition, through its spokesman on veterans' affairs, has conflated these two issues and led people to believe that somehow or another the superannuation entitlement they receive as payments as a result of their service is equivalent to the age pension. It is not a valid comparison. I know it. You know it. The shadow minister knows it. Minister Minchin, in a previous government, knew about it. He canned the whole idea. Even the Leader of the Opposition, Mr Abbott, has confused the issue. Earlier this year in Queanbeyan, New South Wales, he said, 'What is good for civilians is good for former Defence personnel.' Does he know what former Defence personnel get. Does he know the arrangements they have entered into when they join the Defence Force.

This fair indexation policy, which you are supposedly advocating, is anything but fair. Nobody who joined the Australian Defence Force after 1991 is covered by the opposition's proposal. The 150,000 members of the MSBS, those people who have served in Iraq, Timor-Leste, the Solomons and Afghanistan, who are not in the DFRDB scheme, are not covered. Indeed I was at an event recently where a former very senior and distinguished serviceman was talking with a currently serving man, who is very distinguished in his own right. The former serviceman said to me, 'What are you doing about our pensions?' I said, 'Nothing. We are not going to change it in the way the opposition has proposed.' He said, 'It is all about helping our young blokes. It is all about these young blokes here.' The young serving person said, 'No it's not. It has no impact on me at all.'

Yet we have this masquerade, this policy, as if somehow or another the whole of the veteran community is going to be impacted by it. Despite the opposition's posturing, the DFRDB scheme is a good one. Let me just explain what the benefits are. The payment benefits on retirement after 20 years of service are: 75 per cent, under 45 years of age; 75 per cent, retired after 20 years of service, before 45 years of age; and 40 per cent with 35 to 40. They have the ability to commute five times the annual retirement pay in exchange for a reduction in retirement pay. This option has been taken up by 99 per cent of members. There is a higher employer contribution than other schemes: 30 per cent, against the community average of nine per cent. Adopting the opposition's policy would increase the government's contribution to closer to 40 per cent and this is just not sustainable. The scheme has a higher percentage of final salary superannuation retirement pay compared to other Commonwealth schemes: the military is 51.25 per cent at 30 years; the civilian equivalent is less than 40 per cent.

So what is Mr Abbott wanting? Does he want us to bring back the entitlements under DFRDB to make them equivalent to public servants. If that is his intention he should say so.

Since 1988 a separate three per cent productivity benefit has been paid fortnightly, and that is available as a lump sum on retirement. Let us get to the nub of this. What does this mean for people currently leaving the service? A colonel equivalent who retired at the beginning of 2012 after 30 years service got a retirement pay of $68,000, converted to a lump sum of around $340,000 in exchange to reduced annual payment of $55,000. That is supposed to be equivalent to the age pension. (Time expired)


Rodney Ross
Posted on 6 Jun 2013 10:30 am (Report this comment)

We will never get anywhere with this Minister and hopefully we will not have to deal with this Minister any more.
I joined the Defence Force in 1955 and served for 33 years. I don't care about this Ministers semantics all I know is that I was told that provided I contributed from day 1, I would get some form of payment on retirement and that payment would keep pace with the cost of living.
There is a very simple graph that shows very clearly that that has NOT happened.
That is unfair.

Craig Johnson
Posted on 6 Jun 2013 11:41 am (Report this comment)

This is not wholly true.
My father served 24 years in the Army, and has been quite well looked after.
One thing he NEVER complains about is the Pension and entitlements he is paid (as a TPI).
Maybe some soldiers have been shortchanged, but he certainly doesn't see it - although I personally don't think his health issues are worth any amount of money.

Rodney Ross
Posted on 6 Jun 2013 1:29 pm (Report this comment)

Craig you are talking about a completely different thing. You are expressing satisfaction with Vet Affairs ( TPI ) type pensions. The majority of this debate and the Ministers statement relates to Military Superannuation. These are people who served in the Defence Force but don't have a DVA recognisable disability as a result of active service.
Two completely different departments. I know it is confusing