Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Hansard source

In summing up the debate on the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014, let me thank all the honourable members for their contributions to the debate and for supporting this important and groundbreaking piece of legislation. It is an article of faith for the government. We promised we would deliver this reform, and, together, this side of parliament collectively has delivered it. This side recognises the unique nature of military service. It is for this reason that all of us on this side have maintained a consistent and principled position on the fair indexation of DFRDB and DFRB military superannuation pensions. We first committed to providing indexation for DFRB and DFRDB scheme members on 27 June 2010, and we have been unwavering since that date in delivering this important piece of justice. Since this commitment, we have committed time and time again. We reaffirmed our belief in providing fair indexation at both the 2010 and the 2013 elections. This unwavering support to veterans and ex-service personnel and their families has not diminished with time. We have not been disingenuous like those opposite; we have stood firm. This is clear proof that this government says what it does and does what it says.

This bill gives effect to the government's election commitment to fairly index Defence Force retirement benefits for DFRB and DFRDB pension recipients aged 55 and over from 1 July 2014. The government's fair indexation commitment addresses a longstanding grievance of the veteran and ex-service community about differing and inequitable indexation arrangements as applied to DFRB and DFRDB pensions compared to age and service pensions. The bill recognises the government's commitment to ensure that age and service pension indexation arrangements apply to pension recipients of the DFRB and DFRDB aged 55 and over at 1 July. As I have said, it is a direct reflection that the government recognises the unique nature of military service. Our commitment to addressing this longstanding grievance is underpinned by this belief.

The new fair indexation methodology calculation mirrors the two-step indexation process for age and service pensions. But it is important to note, for everyone's benefit, that the new fairer indexation methodology will not result in DFRB and DFRDB pensions that are currently less than the MTAWE floor percentage increasing to the floor percentage, or, conversely, a pension that is currently in excess of the floor percentage reducing to the floor percentage. As mentioned in my second reading speech, the bill will exempt DFRB and DFRDB members from the division 293 tax for the one-off capitalised value of the benefit improvement relating to past service as at 1 July 2014.

This will ensure that members with significant past service but modest superannuation pensions will not incur a taxation liability resulting from the changes to indexation. However, superannuants on high annual incomes will not be excluded from an ongoing annual liability under this provision. This government's policy will help approximately 57,000 DFRB and DFRDB members and their families. It will have an immediate impact on some 45,000 current DFRB and DFRDB pensioners aged 55 or over at 1 July.

Those opposite have stood in the way of this important piece of legislation. It is important that the record clearly states the matters they have raised. Before doing so, it is instructive—indeed, it is necessary—to look at the history of Labor's position on the fair indexation of military pensions. During the 2007 election, Kevin Rudd and Labor promised that they would deliver fair indexation. Page 12 of their document said:

A Rudd Labor government will maintain a generous military superannuation system …

But did they? The answer is a resounding 'no'. In fact, those opposite spent their entire six years in government using every excuse in the book to deny veterans and their families the fair go that they deserve. Not once, not twice, but on three separate occasions the former, Labor government voted against, or blocked, the coalition's attempt to legislate for fair indexation. Then there is the discredited Matthews report—a report commissioned by the Labor government in 2008 for the sole purpose of supporting their post-election position of staunchly opposing fair indexation. At 10 seconds to midnight, literally, right before the 2013 election, Labor pulled off one of the most staggering backflips in recent memory and decided, after six long years, to support fair indexation. The only problem, of course, is that they failed to deliver that backflip. Their policy, as all those in the veteran and ex-service community know, was deficient. Labor's new-found road-to-Damascus position was nothing more than a quick fix. In fact, their policy was vastly inferior to the coalition's policy. It was anything but fair; indeed, it was unfair indexation that they proposed, failing to include the critical wages based component—MTAWE—as part of their indexation arrangements.

In response to comments made by the member for Batman, I would first say that it is entirely time for you, too, to remove your rose-tinted glasses. To speak of your party's supposed high stewardship of Defence is to ignore the grand farce of $25 billion worth of cuts that the last six years saw imposed upon Defence. There is no higher hypocrisy than the inflation of one's own history by Labor at the expense of the lived reality of our Defence Force and military capabilities. So I say to the member for Batman: the next time you speak about your passion for Defence, perhaps enlighten us all and have the courage to explain why you sat idly by and watched $25 billion ripped out of the Defence budget. Perhaps the member for Batman could spend more time speaking to the nature of the bill than attempting to rewrite Labor's appalling history.

Then, of course, there is the member for Canberra, who highlighted her achievements in talking to the veteran community and speaking at forums. I say to the member for Canberra: you also, ma'am, were complicit with your colleagues in thrice voting against fair indexation. No degree of engagement will cover that unfortunate truth. The actions of those opposite are telling. Words are cheap; actions tell the truth.

Member for Denison, I note the media release you distributed welcomed the policy from government. I thank you for your support. I also thank you, sir, for your contribution to the debate. The government, as you and I have discussed privately, will not support your amendment. We made a commitment before the 2013 election to provide fair indexation for those DFRB and DFRDB members aged 55 and over. We will keep to our election commitment. It is important to remember that those aged under 55 do not miss out. They will have their pensions indexed under the government's new scheme when they turn 55, which is appropriate.

Before concluding, let me thank many people who have campaigned tirelessly for this historic peace of justice. Let me thank the ex-service community for their support. Organisations like the RSL, DFWA and ADSO have argued fiercely but fairly for this change. I thank them for their ongoing support of past and present members of the Australian Defence Force. Let me thank my colleagues, many of who are in the chamber, who have advocated fiercely and fought rightly over half a decade for the justice delivered tonight.

This bill gives effect to many years of advocacy by colleagues from the Liberal and National parties on this side of politics. Their many years of advocacy lets this government legislate for fair indexation for superannuants and their families. It delivers a key election commitment and addresses a long-standing grievance of the veteran and ex-service community. I am pleased to have introduced this bill into the House on behalf of my good friend and colleague Senator the Hon. Michael Ronaldson, someone whom I have fought long and hard with together to achieve this important historic reform—as in we have fought together to achieve it. I look forward to seeing this pass in the Senate soon so that its full effect can come into force from 1 July this year. I heartily commend this bill to the House.

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