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Tuesday, 9 June 1970

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - It is pleasing to see the relatively impartial manner in which the honourable member for Mitchell (Mr Irwin) is approaching this legislation and the proposal made by the Deputy Leader of the Opposition (Mr Barnard) that a joint committee of senators and members of the House of Representatives should be appointed to investigate and report on the Defence Forces Retirement Benefits Fund. The honourable member for Mitchell has had a long and enduring interest in the welfare of ex-servicemen. He has referred tonight to Colonel Stokes, the former honourable member for Maribyrnong, who it is readily conceded also took an interest in these matters. Colonel Stokes, like the honourable member for Mitchell himself, frequently has drawn attention to the anomalies in the Defence Forces Retirement Benefits Act. I think it is fair to say that every honourable member who has spoken tonight has also taken the opportunity to do precisely that.

Great concern has been expressed about the inadequacy of the responsible department to deal with the very complicated ramifications of this pension scheme. Concepts are changing and we realise that it is time the whole thing received a complete overhaul rather than yet another patch-up. The honourable member for Wills (Mr

Bryant) referred to the number of patchups that have been made. The Bill confers benefits on the more senior members - the officer members - of the defence forces who contribute to the Fund under the Defence Forces Retirement Benefits Act. Regrettably, the Government has failed to take advantage of this opportunity to update all benefits. After all, in the face of the inflationary state of the economy it is just as much the expectation and the right of the serving members of the forces, including the junior members of the forces, to receive increased benefits as it is of such people as airline pilots, university academics and others.

The effect of this Bill is to provide increases in benefits to senior personnel. The benefits will increase from 50% of the salary of serving members to 60% of the salary. In other words, it is not a very significant benefit. A development of this kind is comparable to changes effected in the Commonwealth Superannuation Act which became operative on 4th January 1969. Likewise, the benefits of the Bill will have retrospectivity to the same date. We wonder why the Government has been so intent over the period I have mentioned on providing a comparable relationship between the Defence Forces Retirement Benefits Fund and the Commonwealth Superannuation Fund. They were running parallel in most of their provisions in the period from 1963 to 1969. Much of this legislation is designed to bring the Defence Forces Retirement Benefits Fund back to parity with the Commonwealth Superannuation Fund. When all is said and done, as pointed out by the honourable member for Wills, we are catering for entirely different types of people so far as careers are concerned. Servicemen and servicewomen often are required to retire when they have many years of working life ahead of them, many years in which they could go off to serve in some other capacity. How often do we see serving members forced out of the Army, maybe at the rank of captain or major, because they have not reached a certain rank by a certain age? The Army is getting younger. It is necessary for people to be fit in certain circumstances. It is necessary for them to be academically accomplished in other circumstances in order to occupy a senior rank in the Service. They are forced out if the required rank is not attained.

This does not happen in the Public Service. Conversely, the situation is that people stay on until their retirement. One sees it often in departments like the Postmaster-General's Department. The Director-General attains the DirectorGeneralship for the 6 months or so left of his retirement age. He continues right up to retirement age. It is not an unreasonable thing to have comparable benefits for retirement in situations of this kind. We see the retirees of the Services - lieutenantcommanders, colonels or squadron leaders - in the suburbs taking up such occupations as real estate agents, public relations officers or fund raisers. This is further evidence of the fact that so many of them are forced to retire. But how often does one see a public servant forced to retire because he has failed to achieve a certain classification by a certain age? I understand, and I am indebted to my colleague, the honourable member for Wills, for this information, that 1 in 300 public servants reaches the Second Division, which is a high classification and a generously remunerated classification. One in 300 is the ratio in the Public Service. In the defence Services - the Navy, the Army, and the Air Force - only 1 in 1 100 reaches a comparable classification measured in terms of salary, which is up to a senior officer's classification. Surely this indicates that there is a need for differential treatment. Regrettably, the Government has as yet failed to see the need for discriminatory benefits. This glaringly anomalous position has been referred to by honourable members on both sides of the House year in, year out. lt is referred to constantly by members of the Services and their representatives. The fact that it has not been heeded is probably sufficient justification to support the amendment proposed by my colleague, the Deputy Leader of the Opposition.

The significance of the Defence Forces Retirement Benefits Scheme is demonstrated by the fact that the number of contributors is in excess of 84,000. It includes all male and female personnel who serve on a full time and continuous basis for over 1 year. At 30th June 1969 there were 8,122 persons receiving a pension from the Fund. This number is increasing at the rate of approximately 1,000 a year. I mention these figures to show that we are dealing with a very significant number of people both in regard to the coverage of the scheme and the number of beneficiaries. For the last financial year, 1968-69, the benefits amounted to $10. 5m. As I have mentioned, that amount has been extended to 8,122 persons. It is interesting to note that, regardless of the number of benefits paid, the balance of the Fund at 30th June 1969 reached the figure of $1 10m. It is certainly not a fund which is heading for insolvency. This is the first time that the balance of the Fund had been in excess of SI 00m. It is able to render very valuable service through its investments by making funds available to the securities of the Commonwealth, by lending money to local government, by Joans prescribed under trustee legislation, by mortgages on land and by short term money market lending. It earns, for the Fund, an interest rate of just over 5.9%.

If the Parliament decides to set up the committee proposed by the honourable member for Bass on behalf of the Opposition so that we can go into all the ramifications of this scheme, we will probably have the opportunity to look al some of the provisions that prevail in other parts of the world. In Australia our serving members of the forces, as I understand it, contribute 20% to the Defence Forces Retirement Benefits Fund and the Commonwealth meets the balance. In Britain, the United States of America, Malaysia and West Germany the ex-servicemen, or veterans as they are called in some countries, are covered for retirement benefits and gratuities without any contribution at all. 1 suppose it ought to be necessary and useful for us to take these overseas situations into account. In the United States the .veterans receive retirement benefits equalling, after 20 years, half the current pay being received by a member in the forces and, after 30 years, a much higher proportion Still. The details escape me but after 30 years a proportion considerably in excess of half the pay is received by American veterans without a requirement to contribute at all. Surely this should cause our Government to recognise the prima facie evidence that we are dragging the chain in our treatment of ex-servicemen.

Perhaps a realistic approach to this matter could have the effect of obviating the need for conscription. Perhaps it could assist to make the forces so attractive that we would never be short of suitable volunteers. The United States automatically adjusts retirement pensions during the period of retirement and updates the pension rate as the salaries of serving members are increased. There is only one other matter to which I want to refer. It is another one of the present anomalies, but it is an anomaly so inhuman in my view and so unprecedented in pension schemes that it justifies some special mention. It concerns section 53a of the principal Act which states:

If a person to whom a pension, being invalidity benefit, is being paid engages in employment at a remuneration the rate of which is not less than two-thirds of such rate as is determined by the Board to be the rate of pay that corresponds with the rate of pay, as determined in accordance wilh the regulations, that was payable to [he person immediately before his retirement and the pension is not cancelled by force of sub-section (3.) of section 69 of this Act, the Board may suspend the pension and, upon the Board so doing, the pension ceases lo be payable so long as he continues in employment at such a remuneration. .

That sounds highly complicated and, in fact, it is, but it becomes a very realistic matter when it affects an ex-serviceman. I have a particular case in mind, though I have had several cases of this kind brought to my attention. A young man enlisted in the Royal Australian Air Force in November 1 955 when he was aged 22 years. He served for 3i years when he lost his right leg above the knee in a road accident at Amberley base in Queensland. He received no compensation at all for the loss of his leg but he was paid an A class pension under the Defence Forces Retirement Benefits Act at the rate of £13 a fortnight. In 1958 Che pension paid to him dropped to £6 4s 8d a fortnight. In 1963- he thinks it was then because he told me on the phone about an hour ago that he believes it was just before an election - the pension was increased to $28 a fortnight to 2nd May 1969. So he was receiving a pension at the rate of $700 per annum. But under the provisions of section 53a immediately his income reached $2,329 per annum his pension was cut out entirely. He is a young man with 3 children who has decided not to throw in the towel but to continue to make the best of his situation and the best of the circumstances that descended upon him. He went to work under difficult circumstances and he continues to do so, but because his salary has now reached the level of $2,329 he is deprived of any benefit whatsoever under the Defence Forces Retirement Benefits Act.

He pointed out to me the unfairness of the decision to take away his pension. He has to use a car, essentially for the reason that he is troubled by the loss of his leg and this costs him $641 per annum. Last year the treatment of his stump cost him $219. The artificial leg and appliances cost him $250 in that year and sundry costs, including special shoes and special treatment of his clothing, amounted to $78. So he is spending $1,200 in order to go to his employment. He has lost his leg, but having made an effort to earn something for himself he has been affected in this way. It is amazing how these people are plagued. The letter to which I am about to refer does not relate to the gentleman I have mentioned; it refers to a gentleman in similar circumstances. He has not had his pension taken away but he is threatened with having it taken away. This letter reads:

The report of your review medical examination on 7th January J 970 has now been considered and it has been determined that, for the present, you shall remain classified Class B with pension entitlement of $956 per annum.

However, your attention is invited to section 53a of the Defence Forces Retirement Benefits Act (please see copy attached) in which provision is made for the suspension of pension when the rate of remuneration exceeds two-thirds of the current equivalent of Service pay at retirement; that is, Service pay at retirement as increased by subsequent variations in the Services Pay Code.

The letter goes on to indicate what will happen to him if he does not disclose changes in his salary and so on. I assume from this letter that all the people who are receiving the invalid pension under the Defence Forces Retirement Benefits Act are similarly plagued and similarly threatened that if they succeed in overcoming the disadvantage to which they are put, their pension will be taken away. Many of these people, as I indicated by the earlier case I mentioned, spend a great deal of money in an endeavour to overcome their disabilities. 1 know that we have a lot of business to get through in the remainder of this session and that other honourable members want to speak, but there are many other anomalies in the Act that I could mention. The one to which I have referred represents, I think, a most inhuman set of circumstances, the like of which could not be found in any comparable legislation enacted under the laws of the Commonwealth or any State in Australia or, I should think, in any other country. Since there are such a large number - 1,701 to be precise - of persons who, according to the report of the Department for the year ended 1969, receive invalid pensions under the provision of the Defence Forces Retirement Benefits Act, it is likely that that number of people are being threatened with the loss of their pension if they succeed in earning incomes. I hope that the Minister will have serious regard for what I have said and will take away from these people the worry which has plagued them for such a long time in respect of a pension which ought to be their entitlement considering the disabilities they have suffered in the service of this country.

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