Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

I, in common with many Australians, have family and friends who have given military service to this country and know the sacrifices that not only those individual personnel make but their families make. Military life can be quite difficult on families as military personnel get moved around the country and overseas, and their partners and children have to keep up with that. It often means that military personnel do not buy a house or settle down in one particular area until they retire. That has financial implications. So I have great sympathy with the notion that military personnel should be more than adequately compensated for the service that they give to their branch of the armed forces and to the country generally.

I understand that this is a very contentious issue, and I understand the attitude of the Labor Party when talking to military personnel in making an undertaking to examine this very carefully and look at any ways that their superannuation could be supported. There is no doubt in my mind that on this kind of pension, where you only get the CPI increase, over a relatively long period of time the value of that pension could get eroded to some extent. So it is an issue that deserves serious consideration and to be looked at carefully.

The Matthews report did indeed do that. It looked very seriously at it. It was a substantial review into the indexation of all Commonwealth pensions. Trevor Matthews, the author of the review said that:

Superannuation pensions are a retirement income related to prior employment. These pensions are not based on need, just as the salaries on which they are based are not linked to need. Those receiving superannuation pensions who are over pensionable age are able to supplement their retirement income with the age or service pension, if they meet the relevant qualifying and eligibility tests.

The opposition argues that the CPI indexation is not sufficient. However, this does not support Mr Matthews’s findings, and the advice to the government from Mercer Australia and the Australian Government Actuary is that it is irresponsible to propose Senator Johnston’s amendment on a fiscal level. That is what I want to explore a bit. There is willingness on both sides to address this issue, but the fact of the matter is that we have to operate within our budget and within the bounds of fiscal responsibility. In this and the previous parliament we have seen the opposition propose to make drastic cuts and deferrals on a range of programs while having this bill, the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010, and another sitting in parliament proposing additional spending. The thing is, as we on this side of the parliament keep pointing out, you cannot have it both ways. You cannot constantly knock back bills proposing spending cuts or program cuts by this government and then put up additional spending measures. It is completely nonsensical.

This was not the only bill introduced. Senator Nash also proposed the Social Security Amendment (Income Support for Regional Students) Bill 2010, which contained another $317 million over four years. There have been a couple of propositions by the opposition on how these bills of theirs might be funded, but it has been comprehensively shown by government ministers and independent advice, such as from the Australian Government Actuary, that these are entirely incompetent propositions from the opposition and that the proposals that they have put forward for funding their measures or for substituting for cuts have been wrong either in actual numbers or in policy.

One of the measures proposed was the deferral of water buybacks for the Murray-Darling River system. I have not heard South Australian opposition members stand up and oppose this, but I presume they do; I hope they did in their party room. That deferral of buybacks from the Murray-Darling River system would have postponed once again an urgent issue. This is the kind of proposal we have seen from the opposition to fund their program. It is hardly surprising given that the Liberal-National opposition went to the election last time with a budget black hole of $10.6 billion. Labor, fortunately, was able to form government, because it seems that the Labor Party is the only one committed to responsible economic management.

I know that the Liberal-National Party continue to see themselves as responsible economic managers living off a surplus generated by the Howard-Costello government but, in the absence of former Prime Minister John Howard and former Treasurer Peter Costello, they have shown themselves as being a very irresponsible economic party. It is interesting to see what happened. Either they had a very good leadership and a very poor remainder or being in opposition has such a poor effect on their collective economic judgment that we have seen the sorts of propositions put forward by the opposition.

The opposition’s proposal to reduce growth in civilian numbers in the Department of Defence, including the DMO, over the forward estimates is such a vague, fuzzy and uncosted proposal that even the people who are proposing this change would see it as almost unachievable. The fact of the matter is that the Department of Defence is increasingly reliant on civilians to perform a variety of support functions, but those support functions are not non-essential functions; they are key functions very critical to the operation of the Department of Defence.

There is no shortage of sympathy on this side of the house for what superannuants are saying. The government has certainly looked seriously at it and is proposing ways to address efficiencies in the management of the superannuation system and in the way that there are returns to current superannuation so that there is a reasonable level of superannuation for these military personnel. The establishment of the independent review of pension indexation arrangements and the report that looked into the issues of changing the current consumer price index methodology led to recommendations that pensions from the Australian government civilian and military superannuation schemes should be continued to be indexed against the effects of inflationary price increases, which is very important, but that the same measure of indexation should continue. So again I emphasise that government members are sympathetic, but we must do everything within the context of budget restrictions. It would be no good for superannuants to have a budget that collapses and an economy that is failing.