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Friday, 25 May 1973
Page: 2710

Mr BARNARD (Bass) (Minister for Defence, Minister for the Navy, Minister for the Army, Minister for Air and Minister for Supply) - 1 move:

That the Bill be now read a second time.

The purpose of this Bill is to increase existing pensions under the Defence Forces Retirement Benefits Act 1948-1971. When I introduced the Bill for a new retirement benefits scheme for members of the defence forces a short time ago, I explained that provision had not been made in that Bill for the adjustment of retirement benefits as proposed by the Joint Select Committee on Defence Forces Retirement Benefits legislation, and that the whole question of adjusting benefits paid under both the old and the new schemes was still being examined. The main reason for this is that there have been recent developments in pension updating arrangements in other Commonwealth pension schemes and I want these developments investigated and assessed in relation to their implications for the defence forces scheme. The investigation is proceeding but it may be some little time before a method can be found which is suitable for application to persons who retired under the old scheme and for those who retire under the new scheme.

As there has not been an adjustment of DFRB pensions since 1 October 1971, the Government has decided that rather than delay the granting of a much needed increase, an early adjustment should be made in the pensions of those who retired under the conditions of the old scheme, that is, before 1 October 1972. The adjustment is to be made in accordance with the measures adopted in relation to Commonwealth Superannuation Fund pensioners, a Bill for which is currently before the Parliament. My colleague the Treasurer (Mr Crean) announced the details in this House on 2 May 1973. In effect, the adjustment to superannuation pensions is to be made to the Commonwealth share of those pensions. Because of the more complex nature of the DFRB benefits structure, however, the Commonwealth share of each pension cannot be calculated without considerable difficulty and, if this were to be done, there would be a further long and unacceptable delay in the actual payment of the pension increases. So the Government has decided, as an interim measure, that 77.5 per cent of a DFRB pension is to be adjusted in precisely the same manner as the Commonwealth share of superannuation pensions. The method was explained in some detail by the Treasurer in his speech on the second reading of the relevant Bill. This will produce an overall effect that is consistent with the superannuation adjustments and compatible with the sharing arrangements provided under the existing legislation.

The pension adjustment will take effect as from the first pension payday in July of this year. I should like to make it quite clear that the method to be used on this occasion for adjusting DFRB pensions may not necessarily apply in the future. As I have already mentioned, this is a matter currently under examination and I shall announce full details of the method to be used as soon as the present inquiries are complete. I commend the Bill to the House.

Debate (on motion by Mr Bonnett) adjourned.

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