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Wednesday, 22 August 2012
Page: 9513

Mr CHESTER (Gippsland) (09:17): Thank you, Madam Deputy Speaker. I take pleasure in joining in the debate on the Veterans' Affairs Legislation Amendment Bill 2012. As other speakers from this side of the chamber have indicated, the legislation proposed by the government makes a series of minor, technical amendments to various pieces of legislation which affect veterans. It is non-controversial in nature and the coalition intends to support the measures contained within it.

But there is another aspect to the legislation, and amendment put forward by the member for Fadden, which is somewhat more controversial and has been the subject of great debate, both in this place and in the broader community. We believe there is an opportunity before the House today to make this legislation better, and the coalition is seeking to do so. We are seeking to legislate for fair indexation as a requirement for the passing of this legislation. As a member who represents a large constituency of Defence Force personnel, with the RAAF base at East Sale, and also as a member who regularly attends Anzac Day services and participates in a whole range of activities in commemoration of the service provided by men and women of the armed forces throughout Australia's history, I believe very strongly in the unique nature of military service—as I believe those opposite do. Australia's service personnel, the men and women both past and present, have given an enormous amount to our nation. I believe that they deserve to live out their lives in the knowledge that they have financial security. And that is the very essence of the amendments put forward by the member for Fadden and supported so strongly by members on this side of the House.

As I said, the bill before the House makes a number of important legislative changes, which the coalition will support. However, we believe that the government has the opportunity now to introduce fair, just and equitable arrangements for military superannuants.

We are in a position in this place to make a very real difference here today. The time for fair indexation has come, and it is time this parliament delivered it. I am sure members and senators on both sides would be very much aware of the ongoing campaign by individuals and veterans groups regarding this important issue. There would not be a member in this place who has not been approached by a veterans group expressing concerns with the current situation. The coalition has committed itself to beginning the process of military superannuation reform. That is why the coalition made the commitment, more than two years ago now, to provide fair indexation for Defence Forces Retirement Benefits and Defence Force Retirement and Death Benefits Scheme superannuation pensioners.

The coalition's commitment will see DFRB and DFRDB military superannuation pensions being indexed in the same manner as the aged and service pensions. This commitment will benefit in the order of 57,000 ex-service men and women and their families. It concerns me that as we stand here today, and as I speak to the chamber, the coalition—the Nationals and the Liberal Party—are the only parties in the Australian parliament that have shown their commitment to fair indexation of DFRB and DFRDB military superannuation pensions. To be fair, there are members from other parties and within the ranks of the crossbenchers who have expressed strong support for the position taken by the veteran community. But, as we stand here today, only the Liberals and National Party members are prepared to actually vote in support of this measure. It remains to be seen what happens when the crossbenchers enter the parliament later on today.

To show why this is important, I would like to refer to a very practical example in my own electorate. As I said, I have had the chance to meet with members of the veteran community in the Gippsland region, who have expressed their concerns with the current situation. To say that they are angry and disappointed would probably be an understatement. A typical letter is the one I have here from a Mr Ken Phelps in Traralgon, who outlines the process as it currently stands and then goes on to say:

The purpose of pension indexation is to maintain the purchasing power of our pension. Until 1997 CPI was considered the relevant index but the Australian Bureau of Statistics (ABS) concluded that 'the tight nexus between movements in the CPI and wage and salary adjustments no longer exists.' In 2001 ABS said that '… CPI is not a measure of the cost of living.'

It goes on to say:

In 1997 the Government acted to maintain the purchasing power of Age and other Welfare pensions by changing indexation to CPI or MTAWE whichever was the greater. More recently it included another index factor, the New Pensioner and Beneficiary Living Cost Index (PBLCI).

Nothing however has been done for Military Superannuants, even though a number of Senate inquiries have recommended a form of wage-based indexation be introduced.


Military retirement and disability pensions now stand out as being more harshly treated than almost every other long-term Commonwealth payment that is subject to regular indexing to maintain its value.

Mr Phelps goes on to say, in conclusion:

Service in the ADF is unique and it must be treated that way. It is the military who use every firepower resource available to kill or capture the enemy. The military endure the greatest hardships and it is the military who give up their personal freedoms to carry out the Government's orders. We must not contaminate the uniqueness of military service by including other non-military members or organisations. If the DFRDB superannuants are treated separately funds could be available to provide a higher benchmark for indexation.

Mr Phelps attached his DFRDB benefit statement from 20 June 2012. It is the most bizarre situation of all that we have Mr Phelps receiving a statement saying that his fortnightly pension increase is going to be the princely sum of 62c. He is going to receive a pension increase of 62c. And I can only describe as bizarre that the end result for Mr Phelps is that, because he gets tipped into another tax bracket, he actually ends up being worse off. His net fortnightly payment drops by $23.38.

So I have written to the Minister for Veterans' Affairs and Minister for Defence Science and Personnel, Mr Snowdon, on this matter to explain the situation, and I attached the documentation to go with it. I wanted to make the case on behalf of one constituent of mine—and there are about 20 who have contacted me on this issue—that we have people like Mr Phelps who rightly feel aggrieved that they are actually going to be worse off under the current arrangements. He is concerned that he and his fellow military superannuants are being unfairly penalised at a time when everyone in the community appreciates the cost-of-living increases and other increases related to government policy, such as the carbon tax. The military superannuation is simply not keeping up with those costs. I have written to the minister and sought his advice on that matter, and I look forward to hearing what he has to say.

I have another example that concerns a veteran named Ralph Faber, from Stratford, who in an email to me puts it somewhat more dryly. He writes:

A few weeks ago I told my good wife that when 1 July comes we would get an increase in our DFRDB pension. I salivate at the prospect of no longer having to share our one serving (two slices) of raisin toast with our coffees.

Well, notification arrived today and advised that I will receive the princely increase of 88 cents … that's right, 88 bloody cents. Even a mini dim sim costs a dollar. 88 cents … that is about as useful as being the world's tallest midget. Oh well … back to sharing the raisin toast.

At least Ralph has kept his sense of humour, but I believe he has every right to be angry, frustrated and disappointed with the current situation. I appreciate that in the contributions from those opposite they have asked why we did not fix this situation, given that we had the opportunity during more than 11 years in government. Perhaps that is a valid argument. I think I heard the minister himself make that argument. Perhaps we could have done better in that regard.

But we stand here today trying to make an improvement to the situation. We have the capacity in this place to actually make a difference for people like Ken and Ralph and about 20 other people in my electorate who have directly contacted me on behalf of other ex-service personnel.

The coalition has been committed to beginning the process of military superannuation reform. I am concerned that the government took a position before the 2007 election that, if not a direct promise, certainly gave a nod and a wink to the veterans community that the government would be taking action in this regard. But the government has failed repeatedly to deliver on its commitment before the 2007 election. The coalition, and I imagine every member in this place, has probably had the same experience as me in that they would have been approached by veterans, ex-servicemen and ex-servicewomen, ex-service organisations and current ADF personnel expressing concern about this issue.

I fear that not only has Labor failed veterans when it comes to military superannuation reform but if the vote does not go the way we would like it to go in the coming days and weeks this parliament will continue to fail veterans when it comes to military superannuation reform. I acknowledge that members opposite may say the cost of fair indexation is too high. But I do suggest that we have a situation where we have a government with twisted priorities in that regard. We have seen the government's home insulation debacle, whereby it cost $1 billion to put the insulation in and another $1 billion to take it out. We have seen the wastage associated with the school halls program: a $16 billion program that was not based on needs but was based on shovelling the money out the door to provide some level of economic stimulus. Even Ken Henry admitted as much as a year or two later that the first priority was not to achieve value for money for taxpayers' dollars—which I found to be quite a staggering admission. So we had the wastage associated with that program and the home insulation debacle, and right now as the government attempts to recover its position in the polls we are seeing $36 million being spent on carbon tax propaganda. So we are telling veterans that we cannot afford to assist them with fair and equitable indexation of their superannuation payments but we can afford to find $36 million for a carbon tax propaganda campaign. That is a government with a twisted set of priorities.

The cost to the Commonwealth of fair indexation over the next four years is something on the order of $100 to $150 million. It is not the inflated $1.7 billion that the Labor Party claims. I think the minister should be honest with the veterans community in that regard. The coalition has already come up with savings proposals in terms of how you could find the funds necessary to implement this important change. As we have this debate I want to stress that there does not appear to be any philosophical divide in this chamber in relation to this issue. There are members opposite who we know want to do the right thing by our veterans. Also, members of the cross bench have indicated they want to do the right thing by our veterans. I note that in his speech even the member for Eden-Monaro—and I acknowledge his service to our nation in the armed forces—after going through his attack lines on the coalition concluded with what I would say was quite a remarkable statement on the coalition's commitment to fair and equitable arrangements for military superannuants. I will quote the last line from the member for Eden-Monaro's comments:

I am intent on actually delivering a result. I really believe we can do this, we can find a way to do it, and I will never cease my efforts to achieve an outcome in this respect. I am committed to work for as long as it takes to achieve that result.

I say to my good friend and electoral neighbour the member for Eden-Monaro that this is exactly what we are attempting to do today. The member for Eden-Monaro can actually help us achieve the result he so obviously believes in and spoke about in his own contribution in this place.

So there is no philosophical divide on this. This is about the government being prepared to make this a priority, to find the savings, if necessary, to support our veteran community and to recognise the extraordinary contribution they have made to our nation and the uniqueness of the service they have provided to our country. There is no philosophical divide. If we want to find the money, we can find the money and we can provide a fairer outcome for our veteran community.

In conclusion, as I said, the coalition announced this fair indexation commitment more than two years ago, in June 2010. We have been strong and consistent in our support for veterans and in our advocacy on this issue in the chamber and in the wider community. Our commitment extended fair indexation to superannuants aged 55 and over to DFRB and DFRDB scheme members. Under a Liberal-National government their pensions will be indexed in the same manner as age and service pensions. We took that commitment to the 2010 election.

It is history now that we did not quite achieve a majority or secure the opportunity to govern with the crossbenchers. Despite losing that election we introduced our legislation to the Senate on 18 November 2010 to provide fair, just and equitable indexation for DFRB and DFRDB military superannuants. There have been already more than half a dozen inquiries, all of which supported our approach towards fair indexation.

As I have stressed in my contribution here this morning, there is no philosophical divide on this issue. There are members opposite who strongly believe in what we are trying to do. There are members on the crossbench who strongly believe in what we are trying to do. And, of course, members of the Liberal and National parties are also advocating very fiercely on this issue. The time for action on this important issue is now.

In closing, I would simply like to congratulate the member for Fadden for his dogged pursuit on behalf of the veteran community. I thank the House.