Kate Lundy (ACT, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

Congratulations on your election to your new role, Mr Deputy President. Since the Senate debate on 16 June on the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill, my constituents and those of senators in other states have expressed frustration and anger at the bill's failure. I understand this. Their indexation campaign has been a long one, and I have worked over the years to help promote it.

The reasons for the bill's failure were, firstly, the present budget situation and the need to return to a surplus by 2012-13; and, secondly, that the bill itself was so flawed. I took part in the debate on 16 June to point out some of the problems of this bill and why I was voting against it. In summary, this bill did not provide a sustainable, fair and funded solution to the inadequacy of CPI indexation. Unfortunately a lot of misinformation has since been circulated, either from ignorance or malice. One of these myths is that before the last election I and the Labor Party had promised to vote for this bill.

The facts are that in June last year the opposition put out a press release announc­ing that a coalition government would index DFRDB superannuation pensions by the same factors as used for aged pensions. This indexation would include a wage related or MTAWE factor, which the coalition government had so strenuously opposed throughout its 11 years of government. However, before this announcement the then Minister for Finance and Deregulation had announced that our government, the Labor government, had accepted the Matthews report and its recommendations. In essence the Matthews report recommended that the method of indexation for Commonwealth defence and civilian pensions should remain indexed by CPI alone, unless:

… a robust index which reflects the price inflation experience of superannuants better than the CPI becomes available in the future.

So at the pre-election meetings last year my colleagues and I were bound by the terms of the Matthews report and, of course, we were criticised by some for this stand. In a pre-election meeting in Canberra organised by SCOA and DFWA on 16 August last year, specifically on the topic of indexation, I acknowledged the government's acceptance of the Matthews report and I said:

And so my work and that of my colleagues has been to find a way to use the Matthews report to still achieve our basic aim of fair retirement incomes for all ComSuper and Defence superannuants.

Firstly, recommendation 4 of the Matthews report gives us the green light to implement a new and fair indexation method. The shortcomings of the CPI alone as a measure of the cost of living have been acknowledged—even by Matthews! The government in introducing its new index for the aged pension (the PBLCI—Pensioner and Bene­ficiary Living Cost Index) acknowledged this also, so it is not a point of argument.

I also said at that pre-election meeting:

I do not consider, as the coalition does, that a changed indexation applying to only one section of defence pensions is a fair solution. Of course they deserve it, and of course we owe a debt to those who have served Australia, but we should not seek to water down this campaign, or to divide those involved, by choosing to benefit only one group and not the others. I agree with David Jamison and the DFWA that this political football with veterans should stop.

At this same pre-election meeting Senator Humphries admitted that the coalition had no plans to extend the indexation provisions to other similarly disadvantaged groups, such as the over 7,200 Military Superannuation and Benefits Scheme members or those in the CSS or PSS schemes. I thought it fairly ironic to see that Senator Nick Minchin, who throughout the 11 years of the Howard government so vigorously opposed any change whatsoever to the indexation of military and civilian pensions, was on 16 June paired on the side of supporting the private member's DFRDB indexation bill.

As I have noted, I have supported the campaign to improve the indexation factors applying to all Commonwealth military and civilian pensions and have sought ideas on how to achieve this within the terms of the Labor government policies. This has included setting up a campaign section on my website. Through this website we have been able to gather information and ideas, to compile some case histories and case studies, and to gauge major areas of need, such as those on the lower pensions. I thank contributors who have made constructive suggestions and comments and those who have raised legitimate criticisms and aired their frustrations.

Unfortunately, because of recent inappropriate, inaccurate and abusive comments which unfairly reflect on many passionate and constructive advocates for fair indexation, I have decided to close this comments section for the time being. Of course, I could have filtered out the abusive comments, but that would bring accusations of censorship. Those interested in the history of the campaign to date can still access it on the website, and comments can still reach me by mail or email.

Together with many other senators and members, I continue to seek ways to improve the superannuation outcomes for those on Commonwealth, military and civilian pen­sions. Our work in persuading our colleagues of the merits and necessity for this action has, I think, been hampered by a daily barrage of abusive, sometimes racist and inaccurate emails apparently sent to all senators and members as well as staff. This is counterproductive to the campaign, and it has been recognised by the DFWA, who have apologised and disassociated their organisation from such action.

We need to remember that the Labor government, in so successfully tackling the impact of the global financial crisis, took major initiatives to help those on the lowest incomes, and these were welcomed by the superannuants organisations. They partic­ularly noted the benefits, such as the increase in the low-income tax offset, the increase in the tax-free threshold for low-income earners and the 50 per cent tax discount on interest on savings and deposits of up to $1,000. Those on ComSuper and Defence pensions, like others in the community, benefited from the economic stimulus plan and received either the $900 tax bonus payment or the earlier Economic Security Strategy payments to pensioners and carers of $1,400 for singles or $2,100 for couples. They have shared the benefits of the Labor government's investments in health reform and aged care services. Australians in general, including those on Commonwealth defence and civilian pensions, would not have fared so well under a coalition government and its cuts.

That said, we recognise there is still more to do. That the CPI no longer provides fair indexation is no longer in dispute, and I have sought advice on the development of a new analytical living cost index, or ALCI, as foreshadowed in the Matthews review, to reflect more accurately the cost of living of military and civilian superannuants, including the DFRDB recipients to whom this bill would have applied.

I will continue to consult and to work with representative organisations such as DRWA, SCOA and the peak body, ACPSRO, to whom I am indebted for ongoing advice. A priority of my advocacy within government will be to make the case for recognition of specific cost of living impacts on Commonwealth defence and civilian superannuants and to alleviate the tax burden of those on the lowest incomes. This is a campaign I feel very strongly about, and I commend this issue to all of my colleagues and believe that the campaign is at its best when it is bipartisan in its character.

Senate adjourned at 22 : 26