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Wednesday, 2 June 2010
Page: 4948


Mr GRIFFIN (Minister for Veterans’ Affairs and Minister for Defence Personnel) (12:28 PM) —Mr lowly Deputy Speaker, humble as you are, I have known you for a long time and a fine Deputy Speaker you are. The Governance of Australian Government Superannuation Schemes Bill 2010 and related legislation is legislation that ought to be supported. It ought to be supported by the entire parliament and it ought to be supported across the defence community, because it is actually in the interests of those it seeks to represent. It is in the interests, overwhelmingly, of those who are superannuation scheme members, particularly in the military sector, and it is overwhelmingly in the interests of the government of this nation, the governance of these schemes and the performance of these schemes with respect to those for whom they seek to provide support.

There are some things we can agree on with the member for Paterson. He made mention of the fact that there has been misrepresentation going on. I agree, but I think the agreement stops there, because there is then the question of who has been doing the misrepresenting. In the context of superannuation, a lot of that misrepresentation has in fact been by the coalition in terms of misinterpreting commitments made by this government and acted upon by this government in government and also about the way this debate has developed in the broader community. I will pick up on a couple of points he made as I go through. I will not go to the detail of the amendments, because the member for Paterson outlined some of the key components and we will be dealing with the detail of those amendments in the consideration in detail stage.

As a starting point I will pick up on the issue of consultation. Firstly, and I will make it very clear, I apologise—and I have apologised publicly—to the ex-service community for the way that consultation on this bill initially occurred: it was not sufficient. In fact, it should have been better and there is absolutely no doubt about that. However, having said that—and I will make this point in more detail in a second—when this legislation was explained to members of the ex-service community at the Ex-Service Organisation Round Table, at which some 13 national ESOs were represented, one particular member there described the changes as a ‘no-brainer’. So, frankly, one of the reasons why there was not consultation to the degree that people have sought on this bill and on the aspects of the bill that have been up for discussion is that it just makes sense—that is, the changes that need to be made to the governance of superannuation schemes that we are here to deal with today.

The opposition have tried to separate out issues and say, ‘We’re happy with the good things in terms of the increased performance of investments—we think that’s all fine—but what we want you to do is throw the rest out and just concentrate on that,’ without, I think, taking into account the fact that that does not get you the reforms you need to ensure you have a modern and viable superannuation scheme in place for the ex-service community and the serving service community into the future. I, of course, will concentrate my comments on the military because that is where my responsibilities lie and that is where the concerns have been raised about the operation of the system.

Having made a mistake with the consultation—and I accept that—we took action. We pulled the bills to allow discussions to occur. We went out and started talking to people. I want to particularly thank Ken Doolan, the National President of the RSL, who was the first person to raise with me the concerns the ex-service community had about elements of this legislation. I want to thank him for his constructive involvement as we considered the amendments and tried to work on a way through some of these issues.

Those ex-service organisations and, overwhelmingly, those individuals who have expressed concerns about this legislation frequently used the term ‘symbolic’. They say there are symbolic issues here which go to the issue of how military service should be treated. Many of those people have said to me that in fact it is symbolic. The point about symbolism is that it is often very important, and I understand why. But it is symbolic and in that context it does not go to the central question of how these systems will operate and the sorts of benefits they will deliver to those who are members of these schemes.

Following the concerns that were raised, the government launched itself into a consultative process to ensure we got the views of the ex-service community. There were several things that were done. They were individual discussions with some of the ESOs that have been mentioned about what their concerns were, to endeavour to find a way through to ensure that those concerns were accommodated in the final version of the legislation that is before us today. There was also a discussion around these issues and a briefing of the Prime Ministerial Advisory Council on Ex-Service Matters, which is made up of a range of representatives selected from across the nation to represent to the government issues of concern within the ex-service community.

As mentioned by the member for Paterson, there was also a discussion at the Ex-Service Organisation Round Table, or ESO Round Table, which is another consultative mechanism that this government has for dealing with issues within the ex-service community. I might add that it is one of the consultative mechanisms this government has in place, because when the opposition were in government they never had anything like it to provide the same sort of feedback because they did not want to know. They did not want to know what those organisations thought or cared about. In the briefing that occurred at the ESO Round Table, there was a wide-ranging discussion, and a couple of the points—and I will pick up on what the member for Paterson said—need to be made very clear. Apart from comments like, ‘This is a no-brainer,’ there were concerns expressed by particular organisations. At the conclusion of that discussion, I said—and I know I said it; I was there—very clearly to those present that any organisation there that had concerns and wished to consider the matter further should contact the adviser responsible in the minister for finance’s office to discuss those concerns and that we would happily give them several weeks to provide us with the details and sorts of concerns that they believed should be dealt with in any amendment process. So what we have heard about what occurred at that meeting is a canard; it is rubbish. The assertion that that was the full story is wrong.

I inform the House that, of those 13 ex-service organisations that were represented, three of them felt the need to come back and make representations to the government about the concerns that they had and seek amendments to address those concerns—three out of 13. They were: the DFWA, as has been mentioned; the AVADSC, the Australian Veterans and Defence Services Council; and the RSL. They were the three organisations. I suspect it will be argued that several other organisations may have tasked one of these organisations with conveying their concerns. I can say to the House that, from the discussions I have had with many of those people in the time since, they certainly believed that following those briefings and their consideration of the details they felt much more comfortable about going forward.

As I said, three came forward—three—to say, ‘We want to put forward more views about what should be dealt with here,’ and, overwhelmingly, the concerns that those three organisations raised have been addressed in these amendments. It is fair to say that in terms of the DFWA I suspect that not all their concerns have been addressed, but I can say that the concerns of the RSL have been addressed, as I believe also have been the concerns, as far as they can be, of the Australian Veterans and Defence Services Council. The other 10 organisations represented at that ESO Round Table did not even feel a need to come forward with further details with respect to what needs to be done.

The changes being proposed through these amendments address those sorts of concerns. Much has been made by the shadow minister, and I know will be made by other members on the other side, about that question of uniqueness of military service. I agree with the concept of the uniqueness of military service. I had the privilege of speaking at a DFWA seminar last year which was related to that very issue. The point I made at that time—and it is a point that I will make today—is that I frankly and genuinely believe that the concept of the uniqueness of military service is accepted and agreed across this chamber. The question is: what do you get for it? What are the particular conditions and aspects that need to be taken into account, and to what degree, to ensure that we fully recognise, fully compensate and fully honour that uniqueness of service?

I think the arguments from the other side continually coming back to those particular points are, frankly, rhetoric rather than questions of actual detail. I will use a couple of examples, given the way this debate has developed under the comments from the member for Paterson. He quoted from our policy, Labor’s Plan for Defence, at the last election, and again I will quote that policy. It said:

A Rudd Labor Government will maintain a generous military superannuation system, in recognition of the importance of the ADF and the immense responsibility placed on personnel in securing and defending Australia.

There is a key word there—‘maintain’. Is the system of military superannuation as it currently stands the same as it was under the previous government? Yes, it is. We have maintained it. When those on the other side now say that it needs to be changed, I guess the questions are: in what way, how do they intend to do it, and why didn’t they do it over 10 years? What may well then be raised is the fact that of course they had a review. They did have a review, and I had a bit to say about that review at the time. Frankly, those on the other side have on occasions endeavoured to verbal me about the policy document and what it says in respect of some of these matters.

They had the Podger review into military superannuation and it reported to the then minister in July 2007. The circumstances then were that it was hidden from public gaze. It is fair enough to say that quite often with a substantive report the circumstances are that a government will want to consider it before they release it and then release their response at the same time. But, frankly, this particular report was causing quite a bit of concern within the ex-service and military communities. We did not know what was in it and the circumstances were that we were heading up to an election. I called for the report to be released. I acknowledged that there might not be sufficient time for a substantive government response but my view was that it ought to be released so that people would be aware of what was under consideration. They would have the opportunity to consider what those recommendations were and to provide a view to government about whether that was the way to go forward. In those circumstances, in the lead-up to an election, that is the least that the government of the day could do. But, no, the previous government sat on the report. It refused to release it. It held off until they got into the caretaker period and then that was the end of it.

We made a commitment to release it within a month of becoming the government and to consult publicly about the detail of that report. And that is what we did. We released it publicly on 24 December, I think, just short of the month, and we then set out a process under the then Minister for Defence Science and Personnel, the member for Lingiari, Warren Snowdon, to consult with the broader ex-service community and the military community about whether the recommendations from Podger were the way they thought superannuation should go. Do you know what? Minister Snowdon conducted that consultation and review, and the overwhelming response through that consultation process was that the military community and the ex-services community did not want Podger because the changes involved were not in line with what they saw as the best way to maintain the uniqueness of military service and a proper beneficial system for military superannuants into the future.

That produced a problem for this government. We had a report from the previous government outlining a set of recommendations which clearly, once we consulted, the community did not want. And, frankly, we have been struggling with that issue ever since. I guess my question to the other side is: are you going to do Podger? Is that what you think we should be doing? Frankly, those recommendations did not maintain the sort of beneficial system that you say we should have. Some of the organisations you have talked about—and I mention the DFWA in particular—made it very, very clear to us that they did not want Podger. In fact when I raised this point at that ESO Round Table just the other month, the national president of the DFWA made it very clear that they did not want us to act on Podger.

So there is a point there. When I talked back then about the need to clarify the situation around military superannuation, I made very clear that it was about the intentions of the then government around the changes they were going to make. It was particularly on the issue of where their secret report was, what they intended to do with it, and why they had not released it. Surely, if they were going to be fair dinkum with the defence community, they would have that information out there. They did not. They were not interested in ensuring that there was consultation then.

I want to pick up on a couple of other points about that. Quite often what is being said about the government’s position in this area uses selective quotations out of the policy documents that we had at that time. In fact, words have been used based on a heading in our policy document on veterans’ affairs which talks about ‘restoring the value of compensation entitlements’. But there was not just a heading; there was a series of commitments that were outlined and then spelt out very, very clearly. One of the things that I was continually being told was that the ex-service community and the defence community were worried about what was not said. Well, we said what we would do, we made it very specific and, frankly, we have actually implemented overwhelmingly the commitments that we made. But we did not commit to changing the indexation methodology around the question of military superannuation, and neither did the previous government. The difference is that we said we would have a look at it and would review it; the previous government refused to, for over a decade. But now, apparently, in opposition—and as with so many issues—all of a sudden they think that maybe they have some ideas in this area and maybe there is something they can do. There have been recent comments made by the opposition. I quote the member for Paterson from Hansard on 24 May:

… I want to assure that the veteran community that the coalition remains committed to introducing a fair, equitable, financially responsible military superannuation system and that we will pursue these reforms when in government …

I say to the opposition: you remain committed to it, you are clearly making it clear there that you expect changes to be made, and yet when you were in government you did not. You commissioned a report, which you then refused to release. Then we released the report and consulted with the ex-service community, and they do not want it. So what are you really saying you are committed to?

The Leader of the Opposition, the member for Warringah, made comments on this issue in a recent speech, on 23 April, when he said:

The Government has also reneged on its commitment before the 2007 election to restore the value of military superannuation by rectifying indexation arrangements.

No such commitment was made. Once again, it is Phony Tony off on another sound bite. He then said, in the same speech:

… it will be important to tackle this issue as soon as the budget is back in surplus.

I could go on about ‘gospel truth’ and the issue about prepared remarks and all of that. But what I would say about that is: if they were not prepared to act on this issue over a 10-year period with a series of surpluses that were records, why would anyone think they would act upon it some time in the future when they may be back in government again and may be in the situation of having a surplus to deal with?

The bottom line is that their record in government is not that long ago—a matter of less than three years—and their record in government is very clear. I note the member for Herbert has come into the chamber. He is a recent convert—publicly at least—on the question of the indexation issue. I also know he has quoted from a press release of mine when he has talked about this issue and publicly circulated documentation. Of course, if he had read the full press release he would know it does not relate to the issue as he maintained at the time—and he knows that because it has been raised with him from other sources. In those circumstances, he ought to think about what he has to say when he gets chance to speak.

These bills are important. They deliver significant benefits to the ex-service community and to serving personnel, particularly those who are members of the MSBS. The actuarial service provider Mercer has considered the potential improved net investment return as a result of merging these funds. On the estimations, we are talking about significant differences for individuals. In certain circumstances, depending on their time in and their rank, it can be as much as $20,000 to $50,000 for quite a few. For some at very senior ranks after very long careers, on normal investment estimations it can be up to as much as $200,000. These bills should be passed. (Time expired)