Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

It is with great pleasure that I bring this motion before the House this evening. By way of history, the Labor government, at the 2007 election, promised to fix military superannuation. They said that they would address the inequity of the indexation arrangements. So many things were promised in 2007; so many things have simply not been delivered. The Rudd Labor government at the time led the veterans to believe that they would address this glaring inequity, which is the difference in indexation arrangements between those of an age pensioner and those of a military superannuant.

The Gillard Labor government, in the 2010 election, was conspicuous by the absence of any military superannuation policy at all. Unlike Labor, the coalition has now consulted widely. We have listened carefully to the views put forward by veterans, by those who are ex-service, by ex-service organisations and by current serving ADF personnel.

Labor has failed its veterans; the coalition provides them with hope. We actually believe in the unique nature of military service. We believe that our service personnel, past and present, after giving so much for their nation, deserve to live out their lives in the knowledge that they have financial security to the maximum degree possible. Indeed the submission made by the Alliance of Defence Service Organisations to the inquiry of the Senate Legislation Committee on Finance and Public Administration into the coalition's DFRDB bill notes:

In no other calling, occupation or profession has the State the power to accept or demand the surrender of these rights—

the universal human rights—

The Unique Nature of Military Service deserves unique solutions and also places a great burden on the Government as the "employer" to ensure that ADF members are looked after both during and after Service.

The Vietnam Veterans Federation of Australia also noted:

Members of the Australian Defence Force have suffered conditions of service far less favourable than civilians including:

If that is not unique I am not too sure what is. The submission by the RSL further states:

An examination of legislation for the Australian Defence Force shows that in almost all respects, the Parliament has been consistent since Federation in regarding the nation's armed forces as a separate and quite distinctly different part of Australian society.

The coalition is committed to the concept of the unique nature of military service. We believe it; we have seen it in action; we have experienced it; we are committed to it; and we are also committed to the process of military superannuation reform.

That is why the coalition made a commitment on 27 June 2010 to provide fair indexation for the Defence Force Retirement and Death Benefits Scheme and the Defence Force Retirement Benefits Scheme, the DFRDB and DFRB, superannuation pensioners. The Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010 was subsequently introduced into the Senate by my colleague Senator Ronaldson on 18 November 2010 and backs up and reaffirms and stands as a beacon of the coalition's commitment to its word, as opposed to the shallow, hollow promise of the Rudd Labor government in 2007. The private member's bill that we submitted to the Senate affirms the coalition's commitment to introducing a fair, equitable and fiscally responsible military superannuation system. The bill also reaffirms the coalition's recognition of the unique nature of military service. These changes have long been sought by veterans' organisations as part of a wider, fairer indexation system. The changes would bring indexation arrangements for these superannuants into line with the age pension. It is the right thing to do considering the unique nature and the risks of military service.

Widows of superannuants of this scheme will also benefit from the announced changes. The coalition are simply calling on all senators and members who have been vocal supporters of such measures for the indexation regime to support the motion and, indeed, support the coalition's bill. We ask no more than that. We know the Labor Party were not true to their word; they broke it in 2007. We know they treat veterans with great disdain. But those who have stood in this place and said publicly that they will support fairer indexation, we simply call on them to honour their word.

From 1 July 2011 the coalition's bill will ensure that DFRDB and DFRB superannuants aged 55 and over will have their superannuation pensions indexed in the same way as Australian government income support pensions. Twice yearly, pensions will be indexed to the higher of the CPI, the Male Total Average Weekly Earnings or the Pensioner and Beneficiary Living Cost Index. Currently, DFRDB and DFRB members have their superannuation indexed only in line with the CPI. This bill will provide over 56,000 retired Australian Defence Force personnel who are members of these now closed DFRDB and DFRB schemes with an indexed superannuation pension that better reflects changes in the cost of living.

The Senate Standing Committee on Finance and Public Administration's report was the ninth such report into the indexation arrangements. Of the 17 submissions recently received by the Senate committee, only two did not support the bill. The two that did not—surprise, surprise!—were Labor's Department of Finance and Deregulation and, of course, the Department of Defence. Every other veteran and ex-service organisation unanimously supported the coalition's bill. It seems like the whole nation is on board except the Australian Labor Party. All ESO submissions contended that military service is sufficiently unique that those serving should be entitled to special financial and non-financial benefits and that a fairer indexation regime would satisfy this objective. I agree. The coalition passionately agrees.

The two submissions that did not support the coalition's bill reached different conclusions on our bill. Each reached a different conclusion regarding the scope of the bill. In their respective submissions each of the departments differently and selectively quoted advice from the Australian Government Actuary with regard to how provisions in the bill will apply to DFRDB and DFRB members. For instance, the Department of Defence, in submission No. 15, said:

On 13 January 2011 the Australian Government Actuary (the Actuary) provided Defence with an analysis of the increased costs involved in changing from current indexation by the Consumer Price Index to the methodology proposed in the Bill. The analysis indicated that the Bill, as drafted and amended, does not deliver indexation for the best of the Consumer Price Index, Male Total Average Weekly Earnings and the Pensioner and Beneficiary Living Cost Index. Instead it falls short of that objective.

Yet the Department of Finance and Deregulation said:

However, as reflected in the AGA's advice to the Department of Defence it appears that the Bill would provide for better indexation arrangements than those currently applying to Age and Service Pensions.

Defence says it would not help; Finance and Deregulation says it would help. I suggest their responses were rushed. Clearly they did not look at the content of the private member's bill and they came to vastly different conclusions.

The coalition believes, as we took to the election, that this would cost $98 million over the forward estimates. Even if we were to believe the government that it would cost $175 million over the forward estimates, this is easily funded by reducing the growth of Australian Public Service full-time equivalents in the Department of Defence, including DMO, by 33 per cent. If we simply reduce the growth by 33 per cent over the forward estimates it would save well over $175 million and we would be able to fund the requirement. This will still see the number of staff in the department grow in size by a staggering 8.3 per cent by financial year 2013-14 compared to a budgeted 12.6 per cent. I still find 8.3 per cent a staggering growth for APS civilian bureaucracy but cutting it from 12.6 to 8.3 easily funds the coalition requirements. The coalition believes the government has not justified the expansive growth in the civilian defence bureaucracy. The project forecast to grow by 12.6 per cent over the forward estimates simply is indefensible. This growth is taking place at the same time the government's strategic reform program is designed to reduce expenditure by approximately $2 million per annum over 10 years. Accordingly it is fitting that a savings measure to provide a more equitable indexation regime for retired defence personnel should be funded from the Department of Defence.

The private member's bill is quite simple. We stand for fairer indexation for those who have served our country as recognition of their unique service. The question is: what will Labor and the Independents do?

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

The indexation of military pensions and superannuation is an issue that, as the member for Fraser, I am very familiar with. Over at least the last year I have been working with colleagues Senator Kate Lundy, Mike Kelly, the federal member for Eden-Monaro and Gai Brodtmann, the member for Canberra, along with the Defence Force Welfare Association, the Superannuated Commonwealth Officers Association and the Australian Council of Public Sector Retiree Organisations, in making representations regarding the indexation of military superannuation pensions as well as those for Commonwealth employees.

This is an important issue that affects the lives of many in my electorate and others who have given committed service to the Australian public and the interests of our nation. Reforms to the indexation of military superannuation pensions must be undertaken in a responsible and sustainable manner, one that requires the economic understanding and responsibility that the Labor government has shown in guiding Australia through the global financial crisis and returning the budget to surplus in 2012-13.

The Defence Force Retirement and Death Benefits Amendment Bill 2011 demonstrates yet again the divisive approach of the opposition and the fact that once again they cannot be entrusted with fiscal matters and matters as important as the ongoing funding of military superannuation pensions. Those who have served in the protection of our nation deserve better than fiscal incompetence and recklessness in their retirement livelihoods.

Military service is a special vocation with unique requirements. These include the compulsory and continuous liability for combat operations; being subject to both the civil legal code and a separate Defence Force disciplinary code to support command structures for effective conduct of combat operations and training; the requirement to work long and irregular hours for which no overtime is payable; separation from families, sometimes for considerable periods of time, which as I know with many Defence Force members in my electorate can be a cause of stress to both members and their families; the posting of members at regular intervals to meet Australian Defence Force manning requirements; and the requirement to maintain a high standard of both physical and mental fitness required to meet operational tasks and training for combat.

In recognition of the demands these requirements place on Defence Force personnel, military superannuation is one of the key elements in the competitive remuneration and conditions of service package provided to Australian Defence Force members. Established by the Keating government in 1991, the Military Superannuation and Benefits Scheme was introduced to address major changes the government had made to both the regulatory system and the regulations governing superannuation. The Defence Force Retirement and Death Benefits Scheme provides an indexed pension calculated on a combination of salary and length of service. Members who discharge after 20 years are able to take an immediate lifetime pension based on 35 per cent of the member's salary at discharge. These pensions, which can be taken as early as 38 years of age, continue to be paid even if the former member returns to the workforce. The percentage of final salary increases with each year of service. For example, at 30 years of service the pension is 51.25 per cent of final salary and at 40 years of service it is 76.5 per cent of final salary.

As at 30 June last year, there were 3,978 pensioners in the Defence Forces Retirement Benefits scheme, and 4,246 contributors and 53,003 pensioners—15,193 of those under the age of 55—in the Defence Force Retirement and Death Benefits scheme. Military superannuation arrangements are based on salary and the length of a member's period of service. They are not based on, nor do they aim to reflect, a member's needs in retirement. To change military superannuation indexation arrangements would effectively mean a change to a member's preretirement conditions of service after the member has retired.

If allowed to proceed, the opposition's bill would present several issues. First, a proposed law that would appropriate revenue or moneys cannot originate as a private member's bill, and a bill for such a law cannot originate in the Senate. Second, the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill as introduced by Senator Ronaldson would have a fiscal cost of $1.7 billion over four years and an underlying cash cost of $175 million over four years. It would increase the Commonwealth unfunded liabilities by $6.2 billion. Yet it would provide nothing more to recipients of the Commonwealth civilian superannuation pension. Indeed, the opposition's view of public servants was made clear by the member for Fadden, who clearly suggested that savings to pay for these pensions should be made up by Public Service cuts. The opposition's bill would also provide nothing to many recipients of military pensions.

On 9 February 2011, along with Senator Lundy and the members for Canberra and Eden-Monaro, I wrote to Senator Penny Wong asking that the Department of Finance and Deregulation estimate the costs regarding indexation changes in Commonwealth government civilian and military superannuation scheme pensions. The department's estimate stated that the cost of indexing military and civilian pensions by the age pension methodology would be $322 million for the period 2011-12 to 2014-15, with an immediate increase in unfunded superannuation liabilities of $32.9 billion. The cost of indexing military and civilian pensions by the higher of the consumer price index, the pensioner and beneficiary living cost index and the increase in male average total weekly earnings would be $614 million for the period 2011-12 to 2014-15, with an immediate increase in unfunded superannuation liabilities of $47.8 billion.

Third, and most importantly, the proposals in this bill would only benefit a minority of military superannuants. The bill does not provide any indexation change for the 3,978 benefit recipients from the Defence Forces Retirement Benefits scheme. The bill does not provide any change for any of the 7,684 pensioners under the Military Superannuation and Benefits Scheme. Nor does this bill provide for the 15,193 Defence Force Retirement and Death Benefits scheme recipients under age 55. Nor does it provide for the needs of Commonwealth civilian superannuants.

The coalition's policy to index military pensions for members of the Defence Forces Retirement Benefits scheme and the Defence Force Retirement and Death Benefits scheme who are aged 55 and over would not provide financial security for Australian Defence Force personnel. Superannuation pensions paid by the government to its retired military personnel are indexed twice annually to reflect quarterly changes in the price of a basket of goods and services which account for a high proportion of expenditure by the consumer price index population group.

The Gillard government honoured its 2007 election commitment to review the indexation arrangements for superannuation pensions that it pays to retired civilian employees and military personnel. The review of pension indexation arrangements in Australian government civilian and military superannuation schemes was conducted by Mr Trevor Matthews. In December 2008 the Matthews report of the Review of pension indexation arrangements in Australian government civilian and military superannuation schemes recommended that pensions continue to be indexed against CPI to protect against inflation increases. The report also identified very significant additional costs that would be incurred if indexation methodology were changed. The Australian Government Actuary has also pointed to significant additional costs if the coalition policy, the subject of this bill, were adopted. The significant costs of higher indexation would have to be found from the Consolidated Revenue Fund or from the existing defence budget. This would jeopardise the funding of other initiatives.

Over recent years, various groups have campaigned to change the indexation of Public Service and military pensions from the CPI to an analytical cost of living index. They have argued that compared to other pensions their level of indexation is not fair or equitable in terms of being able to maintain contemporary living standards, and that the CPI is ineffective as a measure of the change in the cost of living. Recommendation 4 of the Matthews review indicated that if a more suitable index became available the government should consider its use. With the adoption of the pensioner and beneficiary living cost index for age and other pensions, I am hopeful that such an index for Commonwealth superannuants, including those on defence pensions, will soon be developed.

ADFA and the Royal Military College of Australia are in the electorate of Fraser, and on 10 April I represented the Prime Minister and laid a wreath commemorating the 70th anniversary of the siege of Tobruk at the Rats of Tobruk memorial. I had the privilege of sitting next to Peter Collins, a veteran who was a signal operator at Tobruk. I am proud of the commitment and dedication of the men and women who provide military service to our nation every time I meet with them in my role as federal member.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

The member for Fraser should learn to come into this House and be more than an apologist for a lacklustre Labor government. In fact, it could be argued that the Rudd government in 2007 was elected on the back of a promise to the members of our Defence Force. In fact, their 2007 election policy document said that they would:

… maintain a generous and military superannuation system in recognition of the importance of the ADF and the immense responsibility placed on personnel in securing and defending Australia.

So I say to the member for Fraser, there is more in caring for and having concern about the members of our Defence Force than simply laying wreaths. That is the easy way out. The tough way is developing up a policy and looking at a costing that truly reflects the unique nature of their service. I would also point out to the member for Fraser, who has talked about the cost at some length, that the wastage on the pink batts program could have well and truly funded this program—not the total cost, just the waste. The waste in the Building the Education Revolution would have funded this program twice over. But the member for Fraser, like his Labor colleagues, has no respect for the unique nature of service contribution by the members of our military. I agree with David Jamison, the President of the DFWA, who summarised the uniqueness of service in this way:

In volunteering for military service, the individual accepts the surrender of his or her basic rights under Article 3 and places his or her life, liberty and security of person in the hands of the State. This surrender is not conditional, though in extremis, it is absolute.

These people give more than is asked of them. With our diggers, their word is their bond. They stand by their mates—and they lay down their lives for their mates—so how do you think they feel when they listen to the mealy-mouthed excuses of government members like the member for Fraser? That promise made in 2007, which the Rudd Labor government surfed into power on the back of, I suppose is no different from the promise laid down by the current Prime Minister just days before the federal election, when she said there would be no carbon tax under a government she leads.

I and the member for Fadden were the architects of our policy going into the last federal election. We checked the numbers with the actuaries in briefings. We came up with the assessment that it was going to cost $98 million over the forward estimates for four years. How do you think our service men and women feel when $10 million is given out of the budget this year for the development of union websites, but there is not a cracker for increasing the pensions of those who have served our nation, or indeed for the wives of those who have lost their lives for the nation? The reality is that you are prepared to use the military personnel for your own benefit but when it comes to standing up for them it is another matter—and remember it was the Labor government who made the promise in 2007 that they would address this issue.

Here we are, 3½ years on, tomorrow, from when the report was tabled. What has been done? Short of an excuse from the former minister for finance that nothing could be done, this government has failed to address the requirements of service men and women. The cost of living has gone up. In fact, it was the Labor government who, during 2007, identified the cost of living increases and said that they would result in downward pressure. Madam Deputy Speaker, I say this to you: there is no downward pressure when you do not increase the pensions. The reason that the move was made to go from CPI to CPI MTAWE or PBLCI was to make sure that the cost pressures that are borne by the ex-service men and women of our community are more able to be met.

I get sick and tired of hearing speeches like that from the member for Fraser, who will come in and talk about the uniqueness of service and the sacrifice of the many—there are so many on the Labor side—and how they are working through the issue. Three and a half years after the promise was made, it is time to deliver. Our policy going into the last election was to do exactly this.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Why didn't you fix it?

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

We put forward the policy. It was truly costed. We were actually in surplus in 2007 and could have done it. But the reality is that you, the Labor Party, were the party that promised the defence men and women of this country and you reneged on that promise, you failed to deliver and you are nothing more than apologists. (Time expired)

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I did not renege on anybody. I understand that you do not use the word 'you' in speaking through the chair and in saying 'you, the Labor Party'. I understand it is a passionate debate, but this is a very small chamber and I would like to leave it with my hearing intact. The question is that the motion be agreed to. The member for Page has the call.

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

There are some things I want to say about the private member's motion of the member for Fadden on the indexation of military pensions. But in response to what the honourable member for Paterson said about what we were elected on, if my memory serves me correctly, there are a lot of things that people get elected on, and a big one was to get rid of Work Choices. I think the honourable member for Paterson has forgotten that, so I want to put that on the record. Then he went into areas of waste. We can always go into areas of waste if you want to throw the stone at each government. In this chamber we try not to interrupt each other, but I could have thrown out Seasprites and a whole range of other things to direct and target at the coalition when they were in government. Part of this motion talks about unique military service, and I think we owe it to service men and women to try to conduct this debate with a bit more civility, no matter what we think and what side of politics we are on.

The motion notes three things and then calls on members to support two things. Firstly, it notes that 'military service is unique and comes with inherent risks not applicable to other Public Service jobs'. That is true and it is something that all members in this place are very mindful of. The unique nature of military service means that it is compulsory and it is a continuous liability for combat operations. There is a requirement to work long, irregular hours, for which there is no overtime as we know it, and the requirement to work extra hours can be unpredictable and often arise at short notice. Members have to be deployed at short notice, for example, on operational tasks and in giving assistance to the civil community. I was recently at Amberley air base, where I met with some of the Air Force men and women who recently deployed to Japan at very short notice in the C-17s. That was a living example of how that can happen. Also tied to the long working hours, there is separation from families, sometimes for considerable periods of time. Families often have to move a lot; that is how the service is. That can cause stress to members and to their families. There is also a requirement to maintain a high standard of both physical and mental fitness to meet operational tasks and training for combat. This type of fitness standard is not generally a requirement in the private sector.

The issue of indexation of pensions for service men and women has been around for a long time. It is a contentious issue, as I can see from looking as far back as the Jess review in, I think, around 1972. There have been a lot of reviews about this issue. There were changes in 1977, and there has been contention around the indexation of pensions. I have particular sympathy with the servicemen and women who want the indexation changed and who want the best deal that they can get.

The coalition's policy, which is reflected in this private member's motion, does not achieve what the service men and women have been asking for. In fact, it is quite divisive, and the security that the opposition talk about is not in the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010 either. It would only benefit a minority of military superannuants. Of course they would be appreciative of that—I understand that—but the original draft of the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010 did not provide any indexation change. I note that that was recently changed with an amendment to the bill—I saw something there—but it does not provide any change for the over 7,500 pensioners under the Military Superannuation and Benefits Scheme.

With the greatest sympathy to those who are desiring it, I cannot support the— (Time expired)

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I rise this evening not only to join with my parliamentary colleagues Senator Johnston, Senator Ronaldson, the member for Fadden and all the coalition in recognising that military service comes with dangers that other public servants never face and that this service to our country is valued by every Australian but also, more importantly, to join in the fight to see a fairer way of indexing the closed DFRDB and DFRB pension schemes.

To serve in the Australian military is to serve and protect every single Australian. The very nature of this service deserves recognition in the form of financial security that is fair and reasonable in meeting living standards now and in the future. The men and women of Australia who had to be prepared to make the ultimate sacrifice for their country should be treated fairly and equally, like age and service pension recipients are.

On Anzac Day, when our country commemorates the brave deeds of Australians and New Zealanders, servicemen in my electorate of Swan spoke to me about the unfairness of the indexation of the DFRDB and DFRB Schemes. Their expectations for fairness had been raised at the 2007 election, and this government should honour the commitment it made then. The government has broken many other commitments, but this commitment was to men and women who served our country and helped to preserve our way of life and the freedoms we enjoy. There is not too much that I agree with this member on, but I do acknowledge the member for Lyne for being a vocal supporter of changes in the way that these pension schemes are indexed and call for his support in pushing Labor to follow up on their promise, made in 2007 election.

This is a shameful episode of Labor thinking it is perfectly acceptable to give hope to people who genuinely deserve a fairer indexation of their pensions by promising in 2007 to do just that and then completely ignoring them. That is why the coalition made a commitment on 27 June 2010: we promised to provide a fair indexation for superannuation pensioners under the DFRDB and DFRB Schemes because it is the right thing to do. It is the right thing to do because the coalition believes in the unique nature of military service. Australia's service personnel deserve to know that they have financial security.

There is a bill currently before the Senate, the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010, which from 1 July 2011 would see DFRDB and DFRB superannuants aged 55 and over have their superannuation pensions indexed in the same way as Australian government income support pensioners have their superannuation pensions indexed. Twice yearly, pensions will be indexed to the whichever is highest of the consumer price index—the CPI—male total average weekly earnings or the pensioner and beneficiary living cost index, the PBLCI. Currently, DFRDB and DFRB members have their superannuation indexed only in line with movements in the CPI. The bill before the Senate will provide over 56,000 retired Australian Defence Force personnel who are members of the now closed-off schemes with an indexed superannuation pension that better reflects changes in the cost of living. For those personal not yet aged 55, the benefits of the coalition's commitment will be felt in the future, when they do turn 55. The Future Fund established by the previous coalition government will be pivotal in meeting this commitment. The Future Fund was established by the previous coalition government to ensure that the long-term cost of Australian civilian and military superannuation liability was made affordable. This was to be done by locking away today's savings for tomorrow. I heard the member for Oxley tonight speaking on another bill criticising the coalition for doing this. He spoke about borrowing as being okay. He said we should all be out there borrowing, all businesses do it. Well, they do not all do it, and if he knew anything about businesses he would be aware that not all companies in Australia borrow. What he failed to mention was the profligate spending and utter waste of taxpayers' money by this economically incompetent government.

The coalition believes changing indexation arrangements is the first and most important step in a wider process to reform military superannuation arrangements. We need ongoing dialogue with the ex-service community to work out further areas for reform, particularly those which seek to improve the lives of those most in need of support. The coalition has consulted widely and listened carefully to the views put forward by the veterans, ex-service people, ex-service organisations and current ADF personnel. Labor would do themselves no harm by at least attempting some sort of consultation with these people. Labor had no military superannuation policy at the last election and continues to have no policy on military superannuation reform. Labor has forgotten about our service men and women. It is time for Labor to get real on this issue and with bipartisan support veterans and ex-service people across Australia can look forward to more fairly indexed payments, a fairer outcome which reflects the unique nature of military service. I encourage people who support this important coalition policy to contact the Independents and let them know this is important to them. (Time expired)

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Matters relating to Australian Defence Force personnel have long had bipartisan support, and the question of the nature of military service is no exception. It is because of this unique nature that ADF personnel receive the competitive remuneration and allowances not available to others in the community. ADF personnel receive housing, health, family support, service allowance, ADF specific leave and in some instances tax-free salaries and allowances for warlike and non-warlike service. Central to this motion is the call for members to support the indexation of Defence Force retirement and death benefits and Defence Force retirement benefits the same way in which age and service pensions are indexed.

Superannuation pensions which are paid by the government to retired military personnel are indexed twice annually to take into account changes in the price of a basket of goods and services and this form of indexation applied also to those who are recipients of age and service pensions until this government brought about its historic pension reform package. As a result of that reform the government now indexes these pensions twice a year using the tried and tested CPI and male total average weekly earnings, whichever is greater in the half-year. When this occurred it seemed to many that those beneficiaries in the Defence Force retirement and death benefits and defence forces retirement benefits were being left behind. The reality, though, is that those beneficiaries are now in receipt of a benefit that they are entitled to as a result of their employment conditions when they were in active service. If the government were to change military superannuation indexation arrangements, it would effectively be changing a member's pre-retirement conditions of service long after the member has retired. I have to point out that the age and service pensions are provided to the community as a safety net and are therefore treated differently to superannuation pensions.

Each of the military superannuation schemes reflects the unique nature of military service and provides members with benefits such as lifetime indexed pensions and death and invalidity benefits. They also revert to eligible surviving spouses. Superannuation is a means by which Australians can manage their living standards in retirement. It is not designed to provide a replacement for income earned over a working life. There are some military pensioners who receive only small pensions from this scheme. However, this may be for a range of reasons, including salary level at the time their service ceased, shorter periods of engagement or election to convert part of a lump sum entitlement to pension. A retired ADF member may qualify for age or service pension subject to age, income and assets test should their superannuation pension be below minimum income levels. If this motion as passed, there would be significant additional cost to the government in administering the schemes. The significant cost of indexation would have to be paid for from consolidated revenue or by diverting funds from the existing defence budget. This would no doubt jeopardise the funding of other important defence initiatives. After listening to some of the contributions tonight I want to make the following points. I listened to the member for Paterson claim that this issue had been politicised, but there has been no simple answer dealing with this issue from either side of politics. When the opposition was in government, it had no difficulty in being abor to— (Time expired)