Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

Pensions for retired Commonwealth public servants and some military personnel increase twice a year, in line with the consumer price index. But using this indexation is obviously flawed because such pensions, more often than not, are falling relative to the incomes of many other members of the community. It's simply not fair for some people's retirement incomes to increase by an often much smaller amount than increases to wage growth, increases to other government pensions and payments, or the rapidly rising cost of living.

We all know, and economists agree, that the CPI doesn't adequately reflect the real cost of living. Indeed, in the 12 months to December 2017, the CPI increase was 1.9 per cent, but when you look at average weekly earnings over roughly the same period, the increase was 2.3 per cent. That's why the Abbott government's plans to index payments like the age pension and the disability support pension to CPI was such a disastrous policy.

We're often talking in here about people on modest incomes who've worked their whole lives. It's beyond time we stopped talking and did something tangible to help these people. The government must immediately ensure that Public Service pensions and all military pensions are indexed by the higher of CPI and average weekly earnings. That's the fair way to do things.