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Monday, 20 June 2011
Page: 3319

Senator FEENEY (VictoriaParliamentary Secretary for Defence) (19:52): I am pleased to have this oppor­tunity to speak on these bills: the Governance of Australian Government Superannuation Schemes Bill 2011, the ComSuper Bill 2011 and the Superannuation Legislation (Consequential Amendments and Transitional Provisions) Bill 2011. These bills will reform governance arrangements for Commonwealth government superannua­tion schemes in line with trends in the broader superannuation industry. They will also serve to modernise some aspects of these arrangements. The purpose of these bills is to improve the superannuation arrangements for the men and women currently serving in the Australian defence forces.

Since I assumed my current responsibilities I have had the opportunity of meeting many of these fine Australians and I have acquired a better understanding of the uniquely difficult tasks with which we task them. We have an obligation to see that their service and their sacrifices are appropriately recognised, and one way to do that is to ensure that the superannuation arrangements we put in place for our service personnel are the very best possible. This legislation demonstrates the Gillard government's commitment to improving the super­annuation arrangements for our service men and women under the Military Super­annuation and Benefit Scheme.

These bills will increase the super­annuation returns for the majority of our serving members. In fact, they will increase the take-home superannuation of over 90 per cent of our current serving personnel as well as future members of the ADF. Let me give an example. An increase of 0.5 per cent in the net investment return for a member of the RAAF who joins as an officer cadet and retires as a group captain would lead to an increase in superannuation benefits of some $41,000 over 10 years of service or $95,000 over a full career.

Recently in the Senate we have seen a series of shameless stunts by the opposition in relation to the retirement income of our Defence personnel. Senator Ronaldson has brought in a private member's bill which seeks to change the method of indexing Defence pensions for certain categories of Defence retirees. In the course of so doing, he has been highly critical of the government for not supporting his bill. Of course, what Senator Ronaldson has not explained to the Senate—nor, I might say, to anyone else—is why the Howard government, of which he was a member, did absolutely nothing about this issue for the whole 11 years it was in office. He has not told the Senate that the Minister for Veterans' Affairs in the Howard government, the Hon. Mr Billson, com­missioned a report on this very matter. Nor has he told us that this report, the Podger report, recommended against the course of action which the opposition is now putting forward and that Mr Billson accepted that report. He has not explained why he went to the 2007 election supporting a policy which was the very opposite of the one he now purports to support. I am still waiting for the opposition to explain their extraordinary inconsistency on this issue. In government, they accepted Mr Podger's finding that changes to the indexation system for Defence pensions could not be justified. Now, in the safety of opposition, they have discovered that all of this is a monstrous injustice for which the Labor government is obviously to blame.

Senator Ronaldson and his colleagues have some explaining to do. I am, of course, astonished to find that they are opposed to the simple and straightforward improve­ments to our Defence superannuation arrangements that are contained in these bills tonight. Last week it seemed vitally important to them to change the system for indexing Defence pensions, because our military retirees were suffering erosion of their standards of living, but, this week, when the government brings in legislation that would bring about an increase in superannuation benefits to the average ADF member of perhaps $41,000 over 10 years or $95,000 over a full career, they are opposed to it. This is quite astonishing and I think it is a real insult to the intelligence of the men and women of the ADF and the wider Defence community. How can Senator Ronaldson and others in the opposition possibly imagine that the antics of last week and their position tonight will not be matched against one another?

What grounds are the opposition using to oppose these bills tonight? Apparently it is because these bills provide that the ACTU will nominate three members of the board of the Commonwealth Superannuation Cor­pora­tion. What a shocking idea that is! The vigilance of the opposition is truly extraordinary! The notion that the peak body representing Australian employees, an organisation with more experience of administering superannuation than anyone else in the country—indeed, it lays claim to inventing modern superannuation—should have a voice on the governing body of the main Australian government civilian and military superannuation schemes. Well, how remarkable!

So now we know what the real priorities of this opposition actually are. We know that pursuing their obsessive and irrational vendetta against the Australian trade union movement is far more important to them than the welfare and standard of living of our retired public servants and Defence personnel. What a marvellous juxtaposition this is with their outlandish rhetoric of only last week.

The Liberal Party is, after all, the party that brought us Work Choices and would, of course, bring us 'Son of Work Choices' if they ever got back into power. They are opposed to anything which brings benefits to employees. But I am sure that current serving members of the ADF will note that the opposition is trying to deny them the very real benefits of this legislation on the basis of what can be described as nothing more than an ideological vendetta.

Let us now return to the bills which we are debating. The Governance of Australian Government Superannuation Schemes Bill 2011 implements the government's decision to establish a consolidated trustee for the main Australian government civilian and military superannuation schemes. The consolidated trustee body is to be known as the Commonwealth Superannuation Cor­pora­tion. The CSC will be a Com­monwealth authority for the purposes of the Commonwealth Authorities and Companies Act 1997. The bill requires the governing board of CSC to have regard to the unique nature of military service as provided for in the schemes established by the relevant military superannuation acts when it is performing functions under those acts.

The bill will also provide for the CSC to be governed by a board, in line with the common model in the broader super­annuation industry. The board will comprise 11 directors—a chair, five member directors and five employer directors. The ACTU and the Chief of the Defence Force will nominate three and two member directors respectively. This representation is consistent with the size of funds in the scheme—$19 billion in the civilian scheme and some $4 billion in the military scheme. The Minister for Finance and Deregulation, after appropriate consul­tation, will choose the five employer directors. The minister will consult with the Minister for Defence in selecting suitable candidates for these positions. By merging the existing civilian and military super­annuation trustee boards into the CSC, this bill will improve the economies of scale to generate potentially higher investment returns and lower investment administration costs and combine all of the funds under the management of a single trustee board. These changes will be of significant benefit to military scheme members because of the smaller size of the military superannuation benefits fund—as I said, some $4 billion—as compared to the civilian schemes—as I said, some $19 billion. Without this consolidation, members of the MSBS, who comprise over 90 per cent of current serving ADF personnel as well as all future serving personnel, will be disadvantaged as superannuation industry funds continue to consolidate. This would reduce the MSB fund's ability to obtain good investment value and, of course, good value with respect to fees.

The ComSuper Bill 2011 implements the government's decision to modernise and clarify the governance of administration arrangements for the above schemes. It does this by establishing ComSuper as a statutory agency under the Public Service Act 1999 and replacing the Commissioner for Superannuation with a chief executive officer.

The Superannuation Legislation (Con­sequential Amendments and Trans­itional Provisions) Bill 2011 amends a range of Commonwealth legislation to take account of the new trustee arrangements and the changes to governance of administrative arrangements. It also includes transitional arrangements to facilitate these important changes. The reforms will also, through consolidating funds under management and reducing administration costs, improve the superannuation returns to members, partic­ularly defence superannuants.

After these bills were announced, the government became aware of some concerns held by ex-service organisations about some of their provisions. As a result, the government has introduced amendments to address these concerns. The following changes were made: first, amendments were made to recognise the unique nature of military service. A new objects clause and an amended functions clause were included to require the trustee to have regard to the unique nature of military service when performing a function under the military superannuation legislation. Second, the bill was amended to provide that at least one board member appointed by the Chief of the Defence Force must be present when the board is considering a matter related solely to the military schemes. Third, the establishment of the Defence Force Case Assessment Panel has now been made mandatory, with the legislation prescribing its membership. Previously the legislation gave CSC discretion to establish this panel to review decisions which are the current responsibility of the DFRDB Authority. I notice you are nodding, Madam Acting Deputy President Moore. You are obviously very familiar with these questions. Fourth, an amendment was included to provide for consultation between the finance minister and the defence minister in relation to the five employer directors of the board. This is in addition to the Chief of the Defence Force being responsible for nominating two member directors of the board.

Let me conclude by saying that the government is doing the right thing by its current serving Defence Force men and women as well as those who will serve into the future by providing the superannuation benefits for the majority of those in uniform. We have consulted with military and ex-service organisations and made several amendments in response to their concerns to further recognise the uniqueness of military service and to make changes to the operations of the trustee board when they consider military matters. This is positive legislation that will provide further support for our men and women in uniform. It is a great pity, though hardly a surprise, that this opposition, who do nothing but oppose for opposition's sake and who engage in the most irresponsible and hypocritical kind of stunting on the issue of Defence pensions, should be opposed to this worthwhile and uncontroversial legislation. They are doing so solely because of their consuming hatred of the trade union movement. They should stop. They should reconsider their attitudes and place the interests of our ADF personnel ahead of their own lonely ideological fixations. I commend the bill to the House.