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Friday, 5 October 1984
Page: 1777


Mr LEO McLEAY —On behalf of the Standing Committee on Expenditure, I present an information paper of the Committee inquiry entitled: 'Invalidity Provisions of the Commonwealth Superannuation Scheme', together with the minutes of proceedings, and seek leave to make a short statement in connection with the paper.

Leave granted.


Mr LEO McLEAY —The subject of superannuation, together with its extent, format and cost of its coverage, has drawn wide attention in recent times. Much of this attention has focused on public sector superannuation schemes, some in New South Wales and some within the Commonwealth service. Reviews relating to various aspects of public sector schemes have recently been conducted in several States. At the Commonwealth level there has been an examination of the Superannuation Fund Investment Trust. Given the degree of interest shown in the Commonwealth superannuation scheme and its charter to review areas of government spending, the Expenditure Committee decided that an information paper focussing on the extent and cost to the taxpayer of invalidity retirement through the Commonwealth superannuation scheme should be prepared.

The paper outlines the invalidity provisions of the scheme and summarises the available information on the level and cost of invalidity retirement and the factors underlying trends in their magnitude in recent years. The cost or extent of invalidity retirement is not insignificant. As at 30 June 1983-the date at which the latest figures are available-the total annual pension liability of the scheme with respect to invalidity pensions in force was $268.8m, representing 46 .4 per cent of the scheme's total annual pension liability. In 1982-83, about 39 .1 per cent of all exits, excluding resignation from the scheme, resulted from invalidity retirement compared with 36.2 per cent due to age retirement, with early retirement and death accounting for the remainder. Moreover, although there has been a sharp decline in invalidity retirements from 1979 on, the acceleration of invalidity retirements in the immediate period following the introduction of the scheme in 1976 has altered the composition of the pensioner populations and the annual pension liability of the scheme to the extent that, even if a downturn in invalidity retirements were to be experienced, it would take some years before the proportion of invalidity pensioners in the pensioner population would be reduced.

The Committee believes that the paper raises sufficient issues to warrant further inquiry. Those issues will be taken up by the Committee at the end of its current work schedule. In conclusion I would like to record my appreciation of the work of David Worthy and Helen Fleming of the Committee secretariat in the production of this paper.