Don Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | Link to this | Hansard source

I rise to support the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. This bill will allow for what is described as triple indexation of the DFRB and the DFRDB military superannuation pensions in the same way that we index age and service pensions.

Approximately 57,000 retired military personal aged 55 and over will receive a $160 million boost to their pensions from 1 July if this legislation passes this afternoon. As I indicated, it is with much pleasure that the opposition indicates that it is going to support the bill. We will continue to support improving the circumstances of our ex-servicemen and ex-servicewomen, just as we did in the lead-up to the 2013 federal election.

The Labor Party believes that one of the greatest responsibilities for a country is to be proud of its veterans and its ex-servicemen and ex-servicewomen, and to ensure that they are looked after in times of need. We are proud of our veterans and grateful that they have helped protect our nation and its interests. The Labor Party has a proud record of looking after veterans. In our last budget we committed a record $12.5 billion to veterans, including mental health programs and greater support for veterans and their families. We worked to make steady improvements to veterans' pensions and supports, even in the face of the enormous challenges posed to our budgetary situation by the global financial crisis.

Prior to the election, the Labor government announced the addition of the Pensioner and Beneficiary Living Cost Index—the PBLCI—indexation mechanism to the consumer price index for the DFRB and the DFRDB pensions, cutting in at the age of 65. This would have cost $34 million over four years, and would have increased unfunded liabilities by $1.1 billion. We were committed to looking for opportunities to make further improvements within the bounds of fiscal responsibility. We are therefore happy to support these measures.

It would certainly be helpful to this side of the chamber if the government could give some indication as to the funding of these changes. We remain concerned about the impact of the legislation on the Future Fund and unfunded liability. We would like some explanation from the minister—I am pleased he is here this afternoon—as to how the government intend to manage the issues associated with the Future Fund, and how that will develop in the years ahead.

While in government we estimated the coalition's indexation plans to cost $175 million over four years, and increase the unfunded liabilities by $6.2 billion. In Senate estimates, the government indicated the financial impact of the legislation: on the cash balance, $58.1 million; on the fiscal balance, $780.1 million over the 2013-14 budget forward estimates period; and the government's net worth would be reduced by around $4.4 billion over the same period.

We are seeking assurances on the potential for inequality with other types of military pensions. We will closely monitor the implementation of these changes to ensure that none of our veterans are worse off under these changes. While these pensions apply mainly to ex-service men and women, it is important that the conditions of our current soldiers are not undermined in order to pay for these changes. The government needs to explain how the measures are going to be dealt with in terms of the Future Fund.

In supporting this legislation, it is appropriate to explain some of the achievements of Labor in the area of veterans' affairs and particularly the role that the former minister, Mr Snowdon, played in those achievements. In the 2013-14 budget, there was over $12.5 billion in funding for the veteran community annually, including $6.8 billion in pensions and income support, $5.6 billion in health services and $85 million for commemorative activities. This includes an additional $26.4 million over four years to expand access to mental health services for current and former members of the ADF and their families. We expanded eligibility for treatment of certain mental health conditions on a non-liability basis and VVCS counselling. Thanks to Labor, dedicated staff from the On Base Advisory Service of the Department of Veterans' Affairs operate on more than 35 Defence bases around Australia to provide advice and support on injury, physical and mental health and compensation issues as part of the support to wounded, injured and ill.

In February 2013, a memorandum of understanding was signed between DVA and Defence to facilitate closer cooperation in the support for current and former military personnel veterans, including the transition process. Our Veterans' Pharmaceutical Reimbursement scheme helps veterans with out-of-pocket expenses for medications for their war caused conditions—$30 million over four years. Initial payments were made in the first quarter of 2013. Veterans, partners, war widows and widowers were given a further boost to their payments from March 2013 for the clean energy supplement, a regular payment under the Household Assistance Package.

We initiated and completed the review into our military compensation and rehabilitation arrangements under the Military Rehabilitation and Compensation Act 2004 and the government accepted 96 of the 108 recommendations. We implemented a number of changes to ensure compensation and health care for our veterans and their families continues to meet their needs—$17.4 million over four years. Legislation putting into effect recommendations arising from the review were passed in the parliament on 27 June 2013. Obviously that date was very close to the rising of the last parliament. More than $140 million in funding was provided for the Anzac centenary, including $27 million for the upgrade of the First World War galleries, which are magnificent, and I hope you have had a chance to see some of the work that has been done there. There was $100,000 per federal electorate for the Anzac Centenary Local Grants Program; $5 million for the Australian Memorial in Wellington, New Zealand; and $10 million for the Australian Remembrance Trail in France and Belgium. Over the weekend I had the privilege of catching up with the Belgium Buglers, who are in Australia, and they are a very proud group indeed. There was the announcement of ballot arrangements for Anzac Day 2015 at Gallipoli.

From September 2011, there is $500 per fortnight for the prisoner of war recognition supplement—$20 million over four years. The Co-ordinated Veterans' Care Program—$152.7 million over four years—provides ongoing, planned and coordinated primary and community care, led by a general practitioner, with a nurse coordinator, to eligible Gold Card holders who have chronic conditions, complex care needs and are at risk of an unplanned hospitalisation. In August 2011, the government instituted the Graves of Our Bravest program, which provides for the ongoing maintenance of the graves of recipients of the Victoria Cross, the Cross of Valour and the George Cross. The graves of these recipients are beautifully maintained by the Office of Australian War Graves.

From 1 July 2011, the Commonwealth Superannuation Corporation became responsible for the investment and management of public sector and military superannuation schemes. The establishment of the CSC as the consolidated trustee helps to secure increased superannuation benefits for thousands of military and civilian superannuants. In the 2011-12 budget, additional funding of $8 million per annum was provided to the Australian War Memorial. I commend people to see some of the tremendous ways in which that has improved the Australian War Memorial. In the 2011-12 budget, $3.3 million was put towards a world-first education centre in Washington DC honouring Vietnam veterans. In the 2010-11 budget, the government provided $55 million over five years as part of its response to the recommendations of the parliamentary inquiry into the concerns of F111 deseal-reseal maintenance workers. The parliamentary inquiry report was tabled on 25 June 2009.

In the 2010-11 budget the government provided $24.2 million over five years to provide Australian Defence Force British nuclear test participants with access to compensation under the Veterans' Entitlements Act 1986. This measure recognised the unique nature of these tests and the fact that service in these operations involved hazards beyond those of normal peacetime duties. Submariners who participated in certain special operations have also had the qualifying nature of their service recognised.

On 20 September 2009, as part of the government's Secure and Sustainable Pensions commitment, a one-off increase of $65 per fortnight was made to the single rate of service pension—available at the age of 60 to veterans with warlike or other qualifying service—and the age pension. Smaller increases were given to couples, including the partner service pension.

Since 2009, following the Dunt Review, Defence and DVA have undertaken significant reform in the mental health and rehabilitation programs available to Defence members during their service life and when they transition to civilian life. DVA provides $9.5 million and Defence provides $83 million. Since 2008 the Department of Veterans' Affairs disability compensation pensions have been indexed in the same way as income support payments. That legislation was passed in September 2007.

In September 2009 an additional indexation factor, the pensioner and beneficiary living cost index, was introduced for income support payments. In addition, the male total average weekly earnings benchmark was increased from 25 per cent to 27.7 per cent at the single rate. Disability pensions and income support pensions continue to be indexed in the same way.

Labor's other achievements in this area include:

As you can see, Mr Acting Deputy President, Labor has achieved much in this area. I am very proud of our veterans and grateful they have helped to protect our nation and its interests. I am very pleased to indicate our support for the bill today.

Penny Wright (SA, Australian Greens) Share this | Link to this | Hansard source

As Greens spokesperson for veterans' affairs I am pleased to rise in support of this bill, the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014, which sets out to index certain veterans' pensions more fairly. This legislation has been a long time coming. It relates to pensions under two closed schemes: the Defence Forces Retirement Benefits Scheme; and Defence Force Retirement and Death Benefits Scheme. This bill would bring the indexation method for these into line with the age pension and comparable benefits. These pensions take into account not only the consumer price index but also male total average weekly earnings and the pensioner and beneficiary living cost index.

It is important to note that only recipients aged 55 and over will be eligible for this change in indexation from 1 July 2014. The Australian Greens support this bill in accordance with our long-held policy position on this matter. We acknowledge the work of the many people in the veteran community who have campaigned tirelessly on this issue—and I can certainly bear witness to the effectiveness and assiduity of their campaigning. This includes the Defence Force Welfare Association, the Returned and Services League, the Alliance of Defence Service Organisations and the Vietnam Veterans' Federation. Three Senate inquiries in recent years have recommended this change in indexation. We note that the measure is costed at a significant $4.4 billion over the forward estimates and that the government has introduced the bill in order for it to take effect from 1 July 2014. As I said, it has been a long time coming, it has taken many inquiries and a lot of campaigning, and I am pleased to be supporting the bill today.

When it comes to supporting veterans the Greens believe that if we are prepared to make the significant decision to send people away to serve Australia in our name, often in situations that are hazardous and distressing, we have a full responsibility to accept the decision that we have made and to care for them properly when they return home. We must be responsive to the needs of the veteran community and invest in robust solutions to meet the challenges they face when they return to Australia and when they leave the services, which can be a difficult time of transition for many veterans. Caring for veterans means ensuring they can access proper support, including mental health and wellbeing services, and ensuring their financial needs are appropriately supported.

When the Greens presented our fully costed election platform in relation to veterans' affairs last year, we devoted a number of elements to supporting veterans and the families who support them. The Greens recognise that veterans' families face unique challenges as a result of their loved one's service in the ADF but do not always receive the care and support they need. We know that carers play a crucial and often unrecognised role in the welfare and support of veterans who have been either physically or psychologically injured.

From 1 July 2014, this legislation will apply only to veterans aged 55 and above. I acknowledge that many in the community would have been hoping that the eligibility would be broader and not limited to those of that age. I understand this legislation will benefit approximately 45,000 veterans and that extending the changes to those aged under 55 would mean that another 160,000 veterans would enjoy fairer indexation. I acknowledge the work of those who have advocated for fair indexation for veterans, regardless of age, and invite the government to consider their arguments further.

The Australian Greens stand firm in the conviction that, if we are prepared to commit people to military service as a nation, we must then be prepared as a community to support them appropriately and properly upon their return. It is only fair, it is only just, it is only right. We have long advocated for the support of veterans and their families in the unique challenges they face. Fair indexation is an important step on this journey and I look forward to working with the government on all the issues that will make a difference to veterans—fair indexation, support services and others. I commend this bill to the Senate.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I will make only a few brief remarks about the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. I will leave the substantive remarks to my colleague Senator Ronaldson, who is the minister, but I cannot let this opportunity go past without acknowledging the people in the veterans community who have advocated on this issue for many years. Even when I was the member for Wakefield in the other place there were people who were regularly contacting me—often about TPI pensions and indexation but also about the DFRB and DFRDB.

I note upfront that I have an interest in this. When I turn 55, as a DFRDB recipient I will benefit from this. But my years of service in the military also give me an understanding of why people who are in the DFRDB scheme have strongly felt that lack of indexation has disadvantaged them—especially given what our expectations were when we first joined the Australian Defence Force. This legislation implements one of the government's top election commitments and one of our top commitments to the veteran and ex-service community.

I particularly thank the minister for his advocacy. Given the tight financial situation, it would have been very easy for the government to, yet again, disappoint the veteran community by saying that financial circumstances meant we could not do this. The minister has, however, managed to bring his colleagues in the cabinet with him to make sure the finances are available to follow through with this commitment, which is an important commitment to our ex-service community.

Importantly, not only will this change benefit the ex-service members themselves; the provisions will also apply to reversionary spouses who are aged over 55 on the date of indexation. The provisions will not apply retrospectively. The bill also exempts DFRB and DFRDB members from division 293 tax on the one-off capitalised value of the benefit improvement relating to past service as at 1 July this year. This will ensure that members with significant past service but modest superannuation pensions will not incur a taxation liability resulting from changes to the indexation.

I will leave my remarks there, but I want to acknowledge again the Returned and Services League, the Defence Force Welfare Association and the Alliance of Defence Service Organisations, as well as the many individuals who have contacted me and many other members of parliament over the years to bring about this fair indexation. I commend the bill to the Senate.

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I wanted to associate myself with the acknowledgement of the work done by representatives of the veterans' community on this issue, in particular the DFWA and Mr Peter Thornton, who, for many years, has been a very articulate advocate on these issues.

Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

I thank those who have spoken on the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 and I particularly thank Senator Fawcett for his fantastic support. I acknowledge the presence of Alf Jaugietis from the DFWA in the gallery. I thank the DFWA for their great support. I intended coming here today to talk more about the bill, but I cannot let go past without comment the contributions from Senator Farrell and Senator Wright on behalf of their political parties. I also cannot go without saying some words about our good senator from Canberra Senator Lundy.

This is a great day for 57,000 military superannuants and their families. This is a great day that has been a long time coming. It is a great day that should have occurred a long time ago. In particular, it should have occurred on 16 June 2011 when, in this very chamber, the very same bill was put to many of those people who are in the chamber today. On that day, the Australian Labor Party and the Australian Greens let down a group of people who deserved better. The veteran community knows full well who was on the fair indexation ship when it set sail that day and who refused to climb on board. The veteran community knows full well those who are trying to run up that rope now to get on the ship of fairness. They will be judged appropriately.

Senator Lines interjecting—

I cannot believe the interjections from someone like Senator Lines. How dare you interject during a speech on fairness! How dare you interject when we are finally giving 57,000 families fairness! You sat there three years ago and voted against it. How dare you come in here now and talk about what you have done!

What you have done is let down a group of people who should have been supported by this chamber three years ago. What you have done is let down a group of people who have done no more and no less than serve this nation at the nation's request.

All they asked for was fair indexation; all you gave them three years ago was unfair indexation when you refused to support the very bill which is in the chamber today. There is no difference between the bill that is in the chamber today and the bill that was in the chamber three years ago when you voted it down. Please do not come in here and cry crocodile tears for those military superannuants. They are undeserving of that sort of contempt. If you had come in here and said one thing, I would have been prepared to accept it. If you had walked in here and said, 'We are sorry for what we did three years ago,' I would not be making the speech that I am making now and I would have said to you, 'Thank you, for acknowledging what you did three years ago and finally saying you let this group of men and women down.' But no, instead, you have come in here with the platitudes, but you have not come in here with the apologies.

I know I speak for the whole of the coalition when I say this, but I particularly speak on behalf of my colleagues Assistant Minister Stuart Robert and the Minister for Defence, Senator Johnston, and I very particularly speak on behalf of this nation's Prime Minister, because this nation's Prime Minister has helped us drive this. It is this nation's Prime Minister who personally took ownership of the fairness debate. I want to repeat the words of this country's Prime Minister—the then opposition leader—on 20 September 2011 at the RSL National Congress:

It has long been to me and my colleagues in the Coalition, verging on the scandalous that defence retirees do not enjoy the same indexation arrangements as other people who have retired.

I have described 16 June 2011 as a day of great shame—a day that this chamber let down those 57,000 military superannuants and their families. It is with pride that I stand here today representing a government that has fought for the delivery of fairness, and it is to the eternal shame of those opposite that they did not have the dignity or the grace to come in here and say sorry.

I signed a clear commitment on behalf of the coalition with the Prime Minister, and that was our commitment to those military superannuants. As my colleagues know, that commitment now has the word 'delivered' on it. We have delivered on this promise. We have delivered on the Prime Minister's commitment. I say to this chamber that this is a great day for this country. This was an election commitment, along with the restoration of BEST funding and other commitments, that this government is proud to keep. We went to the last election saying we would not make commitments unless we were prepared to keep them. This was a firm commitment made to these families. It is a commitment and a promise that has been kept today on 27 March 2014.

Question agreed to.

Bill read a second time.