House debates

Tuesday, 25 March 2014

Bills

Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014; Second Reading

5:30 pm

Photo of David FeeneyDavid Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | | Hansard source

I am pleased to speak to the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. This is a bill which has caused some political debate and angst, not only in recent times but indeed over a much longer time frame. So, I think it is useful to contextualise this bill, because this bill—for all of its virtues and indeed some of its challenges, and I will come to those—has been deployed by the coalition as a weapon against the Labor Party for the purposes of undermining the ALP's record in government, and indeed more generally, in terms of its support for veterans and veterans affairs. That political task is one that I think has brought the coalition little joy and little credit, because of course when it comes to defending veterans and their entitlements and indeed their place in our society it remains the Labor Party's view that that is an important and fundamental task. That is why, as recently as today's question time, you have seen the Labor Party speak so earnestly against the coalition government's resolve to cut benefits to orphans and children of veterans. Some facts will form a useful backdrop to the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014.

Let us first of all remember that, during the 11 long years of the Howard government, the coalition absolutely refused to countenance the measure that is being brought into this House today. Those 11 long years of the Howard government were a time of fiscal plenty, a time when surpluses were able to be organised by even the simplest of Treasury officials, so healthy were government receipts at the time. Even during this time of plenty, a boom was something that those opposite struggled to successfully manage, but they did. Even during this time of plenty, the coalition refused to countenance this measure.

Let me quote a letter, sent by Mr John Hevey, of a group called the Aussie Digger Forum, to the then Minister for Veterans' Affairs, Mr Bruce Billson MP, just before the 2007 election:

Bruce, it is long past the pale … that the Coalition Government refuse to acknowledge the injustices that have been perpetrated by the Coalition on the issue of Military Superannuation over the past eleven years, it is long past the pale that the Veteran Community and in particular Military Superannuates have been flagging with the Coalition this very issue for the past eleven years, and now on the eve of a federal election you tell us through a “spokesperson” that the report into this matter will not now be forthcoming until 2008 - the same report that has been in your possession since July.

So, this is not a field of endeavour in which the coalition has a track record to be proud of.

In fact, we can recall some of the champions of the Howard government who worked so vociferously against this measure becoming coalition policy. The most outstanding of those—and I might say my personal favourite—is former Senator Minchin, then finance minister, who of course made very plain the fact that he regarded this measure as fiscally irresponsible and refused to accede to the demands of the veterans community. Whether Mr Billson was right or wrong, it is plain that Senator Minchin had very strong views about the issue. In fact, so strong were his views that, when Senator Ronaldson in another place brought a private member's bill to tackle this issue, in a stunt of a couple of years ago, Senator Minchin was motivated to launch himself out of retirement, make some comments and write a letter to the editor—all of which, you will be delighted to learn, I have kept. Senator Minchin said:

This claim (to change indexation) was properly rejected by the Howard Government, of which I was a member.

There is no inherent logic to the proposition that a public sector employment-related superannuation payment should be indexed in exactly the same fashion as a means-tested welfare benefit in this case, the age pension.

Senator Minchin was making the public policy case—in fact, he has never ceased to do so, notwithstanding the ebb and flow of policy amongst those opposite—that this measure was fiscally irresponsible and was not sound public policy. So, when the government seeks to cloak itself as being absolutely committed to the welfare of veterans, let us all remember that this was a measure long opposed by those opposite. This cloak does not change the fact that this road to Damascus conversion that you have had was purely an electoral device rather than a matter of longstanding coalition principle.

It is also true to say that the former Labor government had a plan to improve the DFRB and the DFRDB schemes. Indeed, that plan is only one part of a much longer and more expansive list of Labor accomplishments in veterans affairs—a list of accomplishments spanning the last six years, which has done extraordinary good in terms of improving the lot of our veterans, their families and dependants.

Let me talk very briefly about the plan Labor took to the last election with respect to the DFRB and DFRD It was on 30 July 2013 that the then Minister for Defence, Science and Personnel, Warren Snowdon, and the then Minister for Defence Materiel, Mike Kelly, announced changes in the way in which military superannuation retirement pay will be indexed for the Defence Force Retirement Benefits Scheme and the Defence Force Retirement and Death Benefits Scheme. It is worth also remembering that both of those schemes were closed respectively in 1972 and 1991—a point that those opposite often forget. These are changes to a scheme that has not admitted a new member since at least 1991 and so any soldier, sailor, airman or woman who has joined the ADF since 1992 is not someone who is a part of these schemes and whose lot is not being improved by this legislation today. That is an important point of detail those opposite like to constantly ignore and/or blur.

As at 30 June 2013, there were 3,349 DFRB superannuants, of which 92 per cent were aged 65 or over, and there were 53,242 DFRDB superannuants, of which 45 per cent were aged 65 or over. Then there were 2,968 DFRDB contributors and 314 DFRDB non-contributors—that is, recipients who returned to service for less than 12 months but who continued to receive payment. Those are the numbers of people we are talking about. Labor's plan was that from 1 July 2014, payments to military superannuants aged 65 and over within those two schemes—the DFRB and the DFRDB schemes—would be indexed to the higher of the Consumer Price Index or the Pensioner and Beneficiary Living Cost Index—the PBLCI. The Labor government at the time estimated that that measure would cost the Treasury some $34 million.

The PBLCI was developed to measure the changes in the prices of goods and services purchased by older retirees. It was first used as an indexation factor for the aged pension in September of 2009, and the then Labor government decided to include it in the indexation of military superannuation and retirement pay for the two schemes—a very practical measure deploying a new public policy tool to a task for which it was perfectly suited.

Since coming to government in 2007, Labor had embarked on—as I said earlier—a comprehensive program of support and recognition for our veteran community. This is a very important set of points, because we see those opposite work assiduously to denigrate the Labor Party's commitment to veterans and the Labor Party's accomplishment in this very important space. Let the record be set very squarely here, because this is a record that Labor can be very proud of and we will enjoy watching those opposite flummox about as they struggle to match what is indeed a—

Photo of Andrew NikolicAndrew Nikolic (Bass, Liberal Party) Share this | | Hansard source

I'll set the record straight.

Photo of David FeeneyDavid Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | | Hansard source

The member for Bass interjects, and I look forward to—

Photo of Andrew NikolicAndrew Nikolic (Bass, Liberal Party) Share this | | Hansard source

I'll sort the record right out shortly.

Photo of David FeeneyDavid Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | | Hansard source

Very good. In the 2013-14 budget, over $12.5 billion in funding for the veteran community was assigned by the government including some $6.8 billion in pensions and income support and $5.6 billion in health services together with $85 million for commemorative activities, which everyone in this place agrees are of extraordinary and lasting importance. When you contemplate the fact that the Defence budget itself is something in the order of $25 billion per annum, you can see that $12.5 billion a year for veterans' affairs is, in fact, a very significant sum of money—one that is entirely appropriate, but it should be acknowledged that it is a significant undertaking by government.

Those moneys in the 2013-14 budget included an additional $26.4 million over the forward estimates to expand access to mental health services for current and former members of the ADF and their families. Expanded eligibility for treatment of certain mental health conditions on a non-liability basis was just one of the outstanding features of Labor's work in this area, and anyone familiar with the challenges in this space would know that PTSD and the scars that conflict can leave on our servicemen and women is going to be a growing challenge going forward. The dedicated staff from the Department of Veterans' Affairs On Base Advisory Service operating on more than 35 Defence bases around Australia provide advice on and support for injury, physical and mental health and compensation issues as part of the support for the wounded, injured and ill, and all have their place on Labor's list of accomplishments in this area.

In February 2013, an MOU was signed between the Department of Veterans' Affairs and the Department of Defence to facilitate even closer cooperation in the support for current and former military personnel veterans during the transition process. This was a very important accomplishment, because there we are able to see that as servicemen and women transition from Defence to DVA—from being soldiers to being former soldiers, sailors, airmen and women—it can often be a very difficult time, and there was very strong support from the two departments to make that as seamless as could be achieved.

The Veterans Pharmaceutical Reimbursement Scheme to help veterans with out-of-pocket expenses for medications for their war-caused conditions cost some $30 million over four years, with initial payments made in the first quarter of 2013. That was another Labor accomplishment. Veterans, partners, war widows and widowers were given a further boost to their payments in March of 2013 for the Clean Energy Supplement, a regular payment made under the Household Assistance Package.

Labor initiated and completed the review into our military compensation and rehabilitation arrangements under the Military Rehabilitation and Compensation Act 2004. In doing that work, the former Labor government accepted 96 of the 108 recommendations. It implemented a number of changes to ensure compensation and health care for our veterans and their families continued to meet their needs—some $17.4 million over four years—and it brought legislation into this place to put into effect recommendations arising from that review on 27 June 2013.

As everyone will remember, more than $140 million in funding for the Anzac Centenary was assigned by the former government including $27 million for an upgrade of First World War galleries, $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. All of the arrangements surrounding the ballot arrangements for Anzac Day 2015 at Gallipoli were also put in place by Labor. This is all part of the very significant record.

But it continues, because from September 2011 there was some $500 per fortnight for the former Prisoners of War Recognition Supplement—$20 million over four years. There was a coordinated veterans' care program—$152.7 million over four years—led by a general practitioner with a nurse coordinator that provides ongoing planned and coordinated primary and community care to eligible Gold Card holders who have chronic conditions and complex care needs and who are at risk of unplanned hospitalisation.

In August 2011 the former Labor government instituted the 'graves of our bravest' program, which provided for the ongoing maintenance of the graves of recipients of the Victoria Cross, the Cross of Valour and the George Cross—all of these sacred places needing maintenance and the respect that they have earned. The graves of these recipients are now maintained by the Office of Australian War Graves, a team that does an extraordinarily good task right around the world.

From 1 July 2011 the Commonwealth Superannuation Corporation, the CSC, became responsible for the investment and management of public sector and military superannuation schemes. The establishment of the CSC as the consolidated trustee was a Labor initiative that helped secure increased superannuation benefits for quite literally thousands of military and civilian superannuants.

In the 2011-12 budget additional funding of some $8 million per annum was provided to the Australian War Memorial—again, an extraordinary institution—and that injection of funds supported its enormous workload. In that same budget some $3.3 million was provided towards a world-first education centre in Washington DC that honours our 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 F-111 deseal-reseal maintenance workers. The parliamentary inquiry report was tabled on 25 June 2009. Also, in the 2010-11 budget the government provided $24.2 million over five years to provide the Australian Defence Force British nuclear test participants with access to compensation under the Veterans' Entitlements Act 1986—justice long awaited for those servicemen. This measure recognised the unique nature of these tests and the fact that service in these operations involved hazards well beyond those of normal peacetime duties. Submariners who participated in certain special operations have also had the qualifying nature of that service recognised.

On 20 September 2009, as part of the government's commitment to secure and sustainable pensions, a one-off increase of $65 per fortnight was made to the single rate of service pension, available from the age of 60 to veterans with warlike or qualifying service and age pension. Smaller increases were given to couples, including the Partner Service Pension.

Since 2009, following the Dunt review, Defence and the DVA have undertaken significant reform in the mental health and rehabilitation programs available to Defence. The DVA provided some $9.5 million and Defence $83 million towards that program.

Another Labor accomplishment is that since 2008 the Department of Veterans' Affairs disability compensation pensions have been indexed in the same way as income support payments, with that legislation passing in September 2007. And in September 2009 an additional indexation factor—the Pensioner and Beneficiary Living Cost Index, which I spoke of earlier, the PBLCI—was introduced for income support payments and for age and service pensions. In addition, the male total average weekly earnings benchmark was increased from 25 to 27.7 per cent at the single rate, and disability pensions and income support pensions continue to be indexed in the same way.

In 2008 Labor established an independent Defence Honours and Awards Appeals Tribunal which, having previously had the privilege of being the Parliamentary Secretary for Defence, I was responsible for. That body has since reviewed the Long Tan gallantry citations, the eligibility criteria for the Australian Defence Medal and recognition of service with issues as diverse as the 4th Battalion of the Royal Australian Regiment in Malaya between 1966 and 1967. It is doing incredibly important work, making sure that the integrity of our Defence honours and awards system is maintained and also making sure that a whole plethora of issues of extraordinary importance to a whole range of different service men and women are given a proper hearing and a proper decision-making process.

Labor can also take credit for the review of unimplemented recommendations of the Clarke Review for memorials of national significance criteria being established, for the conduct of a Vietnam veterans' family study, and for the automatic grant of war widows' pension for widows of temporary, totally incapacitated and intermediate rate pensioners. Labor established a special claims unit within the Department of Veterans' Affairs to improve transaction times, significantly reducing processing times for compensation claims. It was Labor that established a Prime Ministerial Advisory Council on Ex-Service Matters and Labor that provided a funding boost for ex-service organisations, the declaration of Battle for Australia Day on the first Wednesday in September, Bombing of Darwin Day on 19 February and Merchant Navy Day—one of particular significance for my family—on 3 September. And it was Labor that implemented the post-Armistice Korean Service Review recommendations, including the issue of the Australian General Service Medal Korea as well as the Returned from Active Service Badge for eligible ex-service men and women.

So while those opposite will continually seek to denigrate Labor's record, Labor's accomplishments, Labor's passion and Labor's commitment to our veterans and to our ex-service men and women, let that denigration be known for the furphy that it is. And let it be understood that Labor can point to an extraordinary record of accomplishment in this very important area of public policy, because those opposite—try as they might—do not have the single claim to be the custodians and defenders of our former service men and women, our veterans community. As we have seen over 11 long years, the Howard government did precisely nothing. And under the zealotry of people like Senator Minchin they made sure that doing nothing in this space was a matter of high principle for them. Labor has in fact delivered a whole series of reforms in this important space—reforms that mean investment, mean stronger commemoration of our military history, and mean that there are practical solutions delivering real benefits for our veterans every single day of the year.

Turning to this bill that is before us, it is obviously one that Labor will be supporting through this place. It is a bill that the coalition went to the election with, and we accept the fact that it is building on Labor's record in the DFRB and DFRDB reforms page and in the commitments that Labor also took to the last election. But let me finish this debate by raising some questions that we would like to see the coalition answer in terms of making sure that this bill and the spendings it will realise are in fact sustainable. As we are voting for it in good faith, it is our absolute resolve that it should be sustainable.

This bill seeks to triple-index the closed military pension schemes, the DFRB and the DFRDB. These indexes are CPI, the PBLCI that I have spoken of, and the MTAWE. The indexing will be attached to these pensions from the age of 55.

Recently, in response to a question asked in Senate estimates, the Abbott government disclosed that the financial impact of this bill would be a cash balance of $58.1 million, a fiscal balance of around $780 million over the 2013-14 budget forward estimates period, and it would reduce the government's net worth by around $4.4 billion dollars over the same period. These are very significant costs. While in government we estimated the cost of the coalition's scheme to be some $175 million over four years, and we estimated it would increase the Commonwealth's unfunded liability by $6.2 billion. So this is a very expensive measure. We would seek to get some comfort from those opposite when they speak to this issue, as to how on earth that is going to be maintained and sustained. I look forward to listening to their contribution.

It is also worth noting that the coalition, in supporting this bill, has encountered some criticism from various interest groups. This highlights that there are other pensioner groups and other superannuation groups who feel they are missing out. One of the most significant of these is another category of military pensions, the Military Superannuation Benefits Scheme. This is the scheme that remains open and includes most serving members of the ADF today. The DFRB and the DFRDB were closed in 1972 and 1991 respectively, so the great bulk of ADF members serving today are not covered by those schemes. For those on MSBS pensions, today's measure will provide them with no benefit, and it will be a continuing public policy sore for the coalition.

The other disaffected group are retired civilian public servants, who, through the Superannuated Commonwealth Officers' Association, the SCOA, have been lobbying, together with ex-service organisations, for the same indexing arrangements, but, of course, they have been totally unsuccessful. It will be very interesting to watch over the coming days and weeks how the coalition deals with the question of why the DFRB and the DFRDB increases will not be extended to superannuated Commonwealth officers. With those concluding remarks, I look forward to hearing those opposite deal with some of those issues. I am very pleased to say that we will be supporting this bill in the House.

5:55 pm

Photo of Andrew NikolicAndrew Nikolic (Bass, Liberal Party) Share this | | Hansard source

A lot of questions were raised there by the member for Batman, but there certainly were no answers from them over the last six years when it came to redressing an issue of fundamental justice for our veterans. The Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 simply seeks to address issues of gross inequity and unfairness, and it exactly matches our election promise. I am mindful of the significant number of people on the coalition side who want to speak to this bill, so I will keep my remarks relatively short.

As an army veteran with over 31 years of service I confirm that this amendment bill is both important and urgent. If successful its passage through this parliament it will practically redress the single greatest veteran community grievance in current times. The extent of veteran angst and frustration over this longstanding omission is difficult if not impossible to overstate. Such feeling is not only legitimate and widely held, but reflects shamefully on this parliament's inaction to date. Further delays on this matter would add salt to an open wound, noting in particular that for this legislation to take effect from 1 July 2014 it must first receive royal assent by 30 June.

Indexation of DFRB and DFRDB pensions is currently linked to movements in the Consumer Price Index only. Under the proposed changes DFRB and DFRDB pensions will be indexed in a way that mirrors the approach used in calculating age and service pensions. The change to the method of indexation is for superannuants aged 55 and over. If Labor and the Greens support it in the Senate, it will take effect from 1 July 2014. The provisions will also apply to reversionary spouses. I am talking here about widows or widowers who are aged 55 and over on the date of the indexation. The provisions do not apply retrospectively.

I am proud to say that in meeting our promise via this bill, I understand around 57,000 DFRB and DFRDB superannuants and their families will finally get the fair go they deserve. The bill does not and will not give veterans a financial leg-up over other Australians. Nor do they as a group want such an advantage. What this bill will do is align the calculation of their financial entitlements with and to those of other Australians, a majority of whom have not risked their lives in the service of this nation. As I speak all too many Australians live in poverty or eke out a bare existence. That many of these Australian citizens are also veterans or defence retirees, with a minimum of 20 years military service to and for this nation, is doubly galling and deeply wrong.

The member for Batman wants to put facts on the record. Well, let me reciprocate. In opposition, and now in government, the coalition has been unrelenting in its pursuit of justice for the men and women who have served our nation so honourably. We put a private member's bill to the Senate that was designed to deliver fair indexation, but the Australian Greens and the Australian Labor Party voted it down. I understand the member for Batman was a senator at that time, and perhaps he should put on record as to how he voted in relation to that particular private member's bill.

Our motions to achieve justice in this House were also rejected by Labor and the Greens. Our mandate to make this change is abundantly clear. At the last federal election, veterans and their families were confronted with a choice between the government's long-held commitment to deliver fair indexation and Labor's eleventh-hour unfair and inferior indexation commitment. On the eve of the election, Labor backflipped on nearly six years of shameful and dishonourable opposition to military superannuation reform. They only offered to change indexation arrangements for superannuants aged 65 and over, which is 10 years higher than in our policy, but did not include a wage based indexation method, the key legislative element for which veterans and their families have so long fought. We intend to keep our promise and the trust of the veteran community. As my former boss and soon-to-be Governor-General, Peter Cosgrove, used to say, 'Trust and integrity are the glue that bind the leader and the led.'

This bill has a darker side, which should be, for all of us, a spur to action. This darker side runs along these lines. If a nation as fortunate as Australia—fortunate in part because of the peace and stability that was hard earned by our veterans—elects to ignore and shun the veteran community, then what element of Australian society is immune from parliamentary ingratitude and indifference? I call on the Australian Labor Party and the Greens to put their previous opposition to this issue aside and pass this legislation immediately. Let it commence on 1 July—a promise that our veterans deserve and that the Australian people expect you to endorse. I commend this honourable and long overdue bill to the House.

6:01 pm

Photo of Gai BrodtmannGai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | | Hansard source

I welcome the opportunity to speak tonight on this very important piece of legislation, the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. All Australians owe an enormous debt of gratitude to the men and women who serve in our defence forces. Our Defence Force personnel sacrifice their time and risk their lives for the benefit of our democracy. It is only right that they are treated with the appropriate respect and gratitude when they have finished their service. Ensuring that their superannuation pensions are fairly and adequately indexed is one way the government can show this respect and gratitude.

I have long advocated for reform to the indexation of military and Commonwealth superannuation benefits. As members will be aware, Canberra is home not only to many of our nation's current and former Commonwealth public servants but also to many of our nation's current and former Defence Force personnel. This is therefore an issue that is of great concern to the people of my electorate. Since I was elected in 2010 I have been contacted by many constituents about the issue of fairer indexation of superannuation. It has probably been the No. 1 issue that I have been contacted about, apart from local issues. I have attended many forums. I have had many one-on-one meetings. I have had lots of coffees with individuals and groups. I have spent a lot of time discussing this issue with my constituents, getting their views on it. Like most Canberrans, they are very well educated and forthright in their views and they always put a very well-argued case, and there are usually lots of graphs involved. These discussions have been incredibly fruitful. As I said, the arguments have been delivered very forcefully and articulately and they have been well constructed. So I am well and truly aware of the views of my constituents on the issue of fairer indexation for military superannuation and Commonwealth superannuation.

Here I would just like to single out two individuals whom I have spent a lot of time drinking a lot of coffees with over the last three or so years. The first is Peter Thornton, who is not well, but, despite that, he manages to come down to Tuggeranong and sit with me and very methodically go through charts and graphs and the research that he has done over many years in putting his case for fairer military superannuation indexation. I would also like to single out Alf Jaugietis, who has also been terrific. There are a number of other constituents who I will not mention by name but who have been terrific. They know who they are, and I would just like to thank them for all the work they have been doing on this with me over the years, making me well and truly aware of the strength of their views and their commitment to seeing change.

I am proud of the progress made by the previous Labor government on this issue. A number of Labor colleagues have been working on this. My colleague Senator Kate Lundy, senator for the ACT, has been working on this tirelessly since she was elected. My predecessor as member for Canberra, Annette Ellis, also worked on it tirelessly, and there are a group of us in the Labor caucus who have been working on this for many years, with great passion, and we have this great group of constituents who have been informing us all along the way. We have advocated continuously on this issue.

As members will be aware, the Labor government engaged Trevor Matthews, a prominent actuary, to conduct an independent review of the indexation method used to adjust Commonwealth civilian and military superannuation pensions, and it has become known as the Matthews review. I know that my constituents have very varied and strong views about the Matthews review. And last year we announced significant reform to the indexation of the DFRB and the DFRDB schemes. On 30 July 2013, the member for Lingiari, then the Minister for Defence Science and Personnel, together with the former member for Eden-Monaro, then the Minister for Defence Materiel, announced that from 1 July 2014 payments to military superannuants within the DFRB and DFRDB schemes aged 65 and over would be indexed to the higher of the consumer price index or the Pensioner and Beneficiary Living Cost Index, whereas previously they had only been indexed by CPI.

This announcement represented the most significant change to the indexation of military superannuation for decades, with an estimated cost over four years of $34 million. I welcomed this significant reform, as did so many of my fellow Canberrans. However, I welcomed it as a great first step, acknowledging that there remained significant room for reform within Commonwealth superannuation pensions.

Today I acknowledge this legislation that has furthered Labor's groundbreaking reforms. This bill, which I am pleased to support, will allow for the triple indexation of the DFRB and DFRDB for superannuants aged 55 and over, and I welcome this change of heart from the coalition. As my colleague the member for Batman has pointed out, the Howard government repeatedly rejected reform of indexation of military super, despite the strong economic and fiscal position Australia was in at that time. So I welcome this development but acknowledge there is still a long way to go. But it is a great first step.

DFRB and DFRDB are just two Commonwealth superannuation schemes that were indexed only by CPI. Others include the MSBS, which my colleague the member for Batman just mentioned, as well as the Commonwealth Superannuation Scheme, the Public Sector Superannuation Scheme, the scheme under the Superannuation Act 1922 and the scheme under the Papua New Guinea (Staffing Assistance) (Superannuation) Regulations 1973. These other schemes, including military schemes, remain indexed by CPI only. Labor is concerned that in changing the method of indexation to some schemes and not others there is a potential for inequality to arise. We will closely monitor the implementation of this legislation to ensure that none of our veterans are worse off under these changes. I remain committed to continuing the campaign to improve the indexation methods applying to all military and all civilian Commonwealth pensions where it is economically sound to do so. I will continue to work closely with the representative organisations in my electorate, such as the DFWA, SCOA and the ACPSRO.

While I have made it clear that I welcome the changes to indexation enabled by this legislation, I would like to now put a caveat on that by saying that I do not welcome these changes if they are to be paid for by cuts in other areas of Defence. In fact, I do not think there would be a single Defence superannuant who would welcome these changes if they thought they were to be paid for by, say, cutting payments to the children of ADF personnel who have been killed or wounded in action. Yet, we have every reason to suspect that this is, indeed, the case, because the Abbott government is intent on cutting an annual payment of about $215 to 1,200 children of veterans. The Prime Minister says the government cannot afford the $250,000 it would cost to ensure that children of war veterans receive this modest assistance, despite the fact that the cost of this payment is less than providing his paid parental leave scheme to just four high-income earners.

Veterans' representatives have slammed the Prime Minister's cuts. The New South Wales President of the RSL, Don Rowe, said he was absolutely disgusted with the government's mean-spirited decision. Legacy Australia said that Legacy would be disappointed if any of the welfare payments were cut to the families of deceased or incapacitated veterans.

Nor would I support this legislation if it were to be paid for by cuts to the pay and conditions of currently serving ADF personnel. But, yet again, we have every reason to be suspicious because one of the first decisions taken by the Abbott government in the area of Defence was to cut the pay and conditions of Australian Defence Force personnel serving in Afghanistan and the Middle East. These cuts announced by the Abbott government in January this year have left some ADF personnel facing a pay cut of as much as $19,000. The government used the draw-down of troops in Afghanistan as an excuse to cut ADF pay. But the draw-down has not affected the conditions faced by the ADF personnel remaining in Afghanistan, Australia's maritime operations in the Middle East or the support provided through the Al Minhad base in Dubai. Australia's troops in Afghanistan and the Middle East are doing tough, essential work fighting the Taliban, supporting the wider war on terror, as well as anti-piracy efforts. It is up to the Abbott government to fully explain why it has taken this decision and what has changed in these areas of operation to justify these cuts.

I am concerned, also, about the cuts the Abbott government has in store for the Department of Defence more broadly. I was particularly concerned when the Minister for Defence, Senator Johnston, commented on 7 October last year that the Department of Defence is 'too heavy' and needs to be 'trimmed'. These comments left Defence employees fearful of losing their jobs. Understandably, employees of the department wanted to know what these comments will mean for them. How does the minister plan on trimming the department? How much does he intend to trim the department by? How are jobs going to be cut? Are they only going to be cut through natural attrition, as promised prior to the election? Or can we expect to see redundancies? It is now five months since these comments were made and Defence employees are none the wiser.

Just last month, Minister Johnston was reported as saying that the Defence Materiel Organisation had 'shortcomings'. We have heard reports again and again that the Commission of Audit will recommend at least partial privatisation of the Department of Defence's procurement arm. But all that DMO staff have been told is that no decision has yet been made about their futures. This uncertainty is wreaking havoc on staff morale. The Canberra Times has reported that DMO managers are complaining about private companies sniffing around their staff in anticipation of these job losses. DMO is home to highly-skilled specialist staff who are dedicated public servants choosing to serve their country and their government, rather than taking much higher paying jobs in the private sector. My real concern is that when the job cuts come we will lose these highly-skilled staff from the Public Service for good. Minister Johnston has said he wants to see excellence and cost-effectiveness in DMO, but how does he think it will achieve excellence if we lose our best staff?

Both Defence and DMO employees thought that they might get a better idea of their job security when the first report of the Commission of Audit was released in January. But, unfortunately for them, the report was not released in January. Instead, the report, along with the fate of their jobs, has been sitting on the Treasurer's desk for months. The Abbott government is intentionally leaving our public servants in the dark; public servants know that cuts are coming; small businesses here in Canberra know that cuts are coming; the region knows that the cuts are coming—but they do not know when or how deep.

Before the election, the then Abbott opposition promised that there would be no cuts to Defence. They have already broken promise. I would like a guarantee from those opposite that the changes introduced by this legislation will not be paid for by more cuts to Defence or, indeed, by cuts to other pension or superannuation schemes.

As I said at the start of this speech, ensuring that superannuation pensions are fairly and adequately indexed is one way the government can show this respect and gratitude to our service people. There are other ways, too—like providing free basic medical services for Defence families, which Labor introduced through the National Australian Defence Force Family Health Program. Government also has a central role in ensuring the relevant Defence agencies—Defence, Veterans' Affairs, DHA and ComSuper—work seamlessly together to ensure that the transition from service for our retiring or discharged ADF personnel is a seamless one. This becomes especially important when those personnel are medically discharged through injury or illness.

Last year, as a member of the Defence Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I was a member of the inquiry into the care of ADF personnel wounded and injured on operations. The inquiry's report highlights a number of gaps of areas where we need to be doing more to support the health of our returned service people. These include mental health, and specifically female veterans' mental health, improving communications between Defence and DVA in the management of post-service transition and also providing seamlessness between the services. I would like to take this opportunity to urge the Abbott government to respond as a matter of urgency to the recommendations outlined in the report. It is impossible to exaggerate what we owe to our service personnel. In thanking them for their efforts and showing our gratitude for the work they do in securing our nation and preserving the democracy we enjoy here, we have to ensure that we provide the highest standard of care for them upon their return. Of course, this includes superannuation, but there is more we can do.

In my first speech in this place I quoted George Orwell with the saying that we sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm. It is a tribute to those public servants called soldiers, but we also sleep soundly in our beds because invisible heroes ensure that our national interests are protected abroad. Others protect our borders or ensure that our children's toys are safe and our story is kept alive.

All public servants—military and civilian—deserve the respect and gratitude of this country. I congratulate the Abbott government on furthering Labor's reform of the indexation of military superannuation through this legislation. We welcome this further reform; after all, we are the party of superannuation. However, I remind the Abbott government that there are many more Commonwealth superannuants, including some in the military, who would also like fairer indexation of their schemes, so the job is not yet done. I strongly urge those opposite not to pay for this change with cuts in other areas of defence— (Time expired)

6:16 pm

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

I am delighted to rise to speak on the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. I will keep my comments relatively brief in order to allow as many of my coalition colleagues as possible to speak on the bill.

My seat of Eden-Monaro is not the biggest defence electorate in Australia, but it is nonetheless a very sizeable one. There are more than 2,000 defence related workers in the electorate, and there are around 3,500 defence veterans. When you add their dependants to that list, you can see that there is a very sizeable total. And I want to commend the Defence Force Welfare Association in my region, which has done a fantastic job representing its members.

One of the reasons the Liberal Party won the seat of Eden-Monaro at the last election was the shabby treatment meted out to this community by the last government over its dismal six years. And one of the biggest insults to the defence community was the failure to deliver Labor's 2007 election promise to improve indexation for defence super. The former member for Eden-Monaro was actually a frontbencher in the Defence portfolio for almost the whole of the last six years, and he abjectly failed in delivering for the defence community in this area. The poor old soul continues to haunt the corridors of Parliament House as the junior defence adviser for the Leader of the Opposition. The Labor Party has a lot to do to repair the relationship with the defence community. Senator Conroy and his vicious personal attacks on a distinguished general is totally incapable of doing it, and the former member for Eden-Monaro is also a dead weight for the ALP when it comes to the same community. And to imagine that Kevin Rudd thought that he was cabinet material defies belief.

During the last term of the previous parliament, we sought to introduce legislation and resolutions that would deliver on our promise for defence super indexation. Each time, it was rejected by Labor. I think the minister at the table, the member for Kooyong, will remember that famously on one occasion our attempts were defeated by just one vote on the floor of the House of Representatives. In fact, if the then member for Eden-Monaro had stood by his public statements to fight tooth and nail every day for this reform, his vote would have made the difference. And yet he voted against it. So much for fighting tooth and nail; just more empty rhetoric. And that also applies to the completely disingenuous speeches we have just heard on this bill from the other side. The member for Canberra also voted against that resolution. If she had voted for the resolution, it would have got up in the last term of the previous parliament. And the current member for Batman, who was a senator in the upper house in the last parliament, also voted against a similar resolution in the Senate.

So what does this bill deliver that the Labor Party said they would do, but never did? This gives effect to this government's election commitment to fairly index Defence Force retirement benefits, DFRB, and Defence Force retirement and death benefits, DFRDB, pensions for recipients aged 55 and over from 1 July 2014. The measures extend fair indexation provisions to invalidity pensions, reversionary pensions and pensions for those associates in receipt of a pension as a result of a family law split who are aged 55 and over on the current relevant indexation date.

Under the new fairer indexation methodology, which mirrors the two-step indexation process for age and service pensions, the first step would be to calculate the pension that would result if it were increased in line with the better of the consumer price index—that is, the CPI—and the pensioner and beneficiary living cost index. The second step would be to compare the resulting pension to the male total average weekly earnings, often called MTAWE. If the calculated pension is greater than the specified floor percentage—that is, 27.7 per cent—of MTAWE for the single pension, then no further adjustment is made. If the resulting pension is less than the floor percentage of MTAWE, it is increased so that it equals the floor percentage of the MTAWE index.

The proposed changes will have an immediate impact on some 45,000 current DFRB and DFRDB pensioners where the originally entitled member was aged 55 or over at 1 July 2014. Overall, it should help some 57,000 pensioners. This bill gives effect to many years of advocacy by this government, this coalition, for fair indexation of DFRB and DFRDB superannuants and their families. It delivers a key election commitment in full and addresses a longstanding grievance of the veteran and ex-service community. It exactly matches our promises before the election. In Eden-Monaro, there will be 813 direct recipients and some 132 dependants. This legislation will directly benefit around 1,000 of my constituents. I am very proud of the fact that we have made this an early piece of legislation in the life of this parliament. It is a clear sign of the priority we are giving to the defence sector.

In conclusion, may I again appeal to Labor to actually support this bill. Despite the fact that they said it was their policy, they repeatedly voted against it during the last parliament. Indeed, earlier this afternoon they tried to suspend the standing orders to delay the debate on this very bill. I urge them to support it in the Senate and allow this much-needed reform to proceed.

6:23 pm

Photo of Andrew WilkieAndrew Wilkie (Denison, Independent) Share this | | Hansard source

Service in the Australian Defence Force is obviously a far from ordinary job. There are no other jobs in this country where people are trained to deal with being shot at and blown up, and are trained to shoot to kill, when they need to—hopefully not very often, hopefully never. It is not a normal job. It presents great difficulties for those who serve in the Defence Force. Being on operations is dangerous enough, but even in training it is very dangerous. Recently, we had the terrible news that three soldiers were injured, when training with an artillery piece, in the Shoalwater Bay training area.

Unsurprisingly, the people who serve in the military suffer all sorts of injuries and it is not uncommon for people to leave the military and carry those injuries for the rest of their lives. I did 20 years in the Army. I did not see operational service but, through the rigours of training, by the time I left the military, I had had surgery on both knees and on both shoulders, and I had a hearing loss in both ears—and that was without going on operational service. I do not tell you my statistics about my joints and ears to big note myself but I think it highlights that it is a difficult line of work and it often leaves people with injuries they carry through their whole life. Even if they are not injured, just moving around all the time—every couple of years moving interstate or even overseas—places a great burden on soldiers and on their families, on children in particular. It is not uncommon for the children of soldiers to have to change schools on numerous occasions. Sometimes children even have to repeat a year or two as they move from state to state, country to country, and are required to deal with different curriculums in each of the education systems.

It is not surprising that there is a higher incidence of relationship problems in the military because of these absences and soldiers going overseas. We have heard about soldiers who served in Afghanistan two or three times—protracted absences. We have heard about soldiers who served in Iraq, who served in East Timor before that and more recently served in Afghanistan. I am labouring this point because I really do want all members to understand that the military is an extraordinary profession and that those who serve in our military genuinely deserve all the support we can give them. And when they leave the military, they should be looked after.

Regrettably, some of them have not been looked after, in particular because of the way the DFRB and the more recent DFRDB pension schemes have not been indexed properly. Those schemes have only been indexed against the consumer price index. We have probably all seen the charts which show clearly that the real value of their pensions has diminished over time and would continue to diminish over time if we did not fix the indexation. The fact that we need to index government payments and pensions properly is illustrated by the fact that other payments are already indexed better—for example, the age pension, which increases by the greater of the CPI or the pensioner and beneficiary living cost index.

On one hand we have, for a long time, understood the deficiency of CPI indexation of government payments at any time, yet we have not addressed the inadequate forms of indexation for other sorts of payments. In other words, the government's move to remedy the indexation for DFRB and DFRDB is warranted and it is way beyond time that it is done.

I give credit where it is due, to the government, credit for finally acting on this. It is way beyond time that this action needed to be taken. It is a great shame that this positive reform has been surrounded by so much political argy bargy. We have the government saying that they are doing a wonderful job and the Labor opposition fighting a constant confrontational battle over every policy it seems. But do you know what? Neither side in this chamber is covered in any glory when it comes to the indexation of military superannuation. I am not letting the Liberal Party off the that hook here. Why was this not fixed during the Howard government? Why was this not fixed during the Keating government, the Hawke government, the Rudd government, the Gillard government? There has been a succession of governments, both Liberal-National coalition governments and Labor government, all of whom have not addressed this in the past when it should have been. So yes, I give credit where it is due—to the government tonight for finally acting. But I suggest the government should be a little more humble in crowing about its achievement, considering it could have fixed this during the many years of the Howard government and it decided not to.

I am also concerned that the bill does not go far enough. As we have heard already in the speeches in this place, the bill will remedy the indexation arrangement but only for DFRB and DFRDB recipients over the age of 55. In other words, those recipients who are younger than 55 will not enjoy the benefit of the enhanced indexation arrangem ents. That is quite a few peopl There are about 56,000 recipients nationally of DFRB and DFRDB. A small number of DFRB recipients are under the age of 55 and, interestingly, 20 per cent of DFRDB recipients are under the age of 55, so they will not enjoy the benefits of these reforms before the House at the moment. I have an amendment that calls on the government to remove the age 55 threshold for people to enjoy the improved indexation arrangements. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government:

(1) to expand the scope of the bill to include all recipients of the Defence Force Retirement Benefits and Defence Force Retirement and Death Benefits schemes, regardless of age; and

(2) that such a change exclude any Senator or Member of the House of Representatives currently in receipt of a DFRB or DFRDB pension.

Quite simply, this amendment removes the age 55 threshold. In essence, it calls on the government to apply this reform to all 56,000 DFRB and DFRDB recipients, so it will apply to the small number of DFRB recipients currently under age 55 and the 20 per cent of DFRDB recipients under age 55.

I hope this sensible amendment will be agreeable to the government and to the opposition. I suggest that this amendment is fair and logical. There is no logical reason why you would apply this only from age 55 other than as a budget savings measure. Logically, if there is a problem with the indexation for these two forms of military superannuation and we are going to fix it—and it looks like we are trying to achieve that here tonight—then let us fix it properly. Let us not almost fix it; let us try and fix it properly. I suggest this is not going to be at any substantial additional cost to the government. I have heard figures bandied around that perhaps a total additional cost of—

Mr Ewen Jones interjecting

Let us put the politics to the side here.

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

You're the one doing the politics!

Photo of Andrew WilkieAndrew Wilkie (Denison, Independent) Share this | | Hansard source

I am not trying to score political points; what I am trying to do is to cut a better deal.

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

You're trying to promote yourself.

Photo of Andrew WilkieAndrew Wilkie (Denison, Independent) Share this | | Hansard source

I have applauded the government for what it is doing here. What I am saying is: spend that little bit of extra money and let us finish the job. I am not trying to score points. I am putting a request to the government to spend a little bit of extra money and to finish the job. The figure that I have heard bandied around—$40 million over this year and over the forward estimates—I think is a modest amount of money to pay in the circumstances to finally do the job properly.

I have previously declared this conflict of interest in this place and it is in the register of my interests, but I would like to make it absolutely clear that I am a DFRDB recipient myself and I am 52 years old. People like me are the sort of people who would benefit from my amendment if it were to be successful. For that reason, the change in my proposed amendment excludes any serving senator or member of the House of Representatives who is in receipt of a DFRB or DFRDB pension, so there can be absolutely no suggestion whatsoever that I am trying to benefit from this personally.

I and others have tried in this place to bring about these reforms in the past. I was very pleased to second a bill by the member for Kennedy in the 43rd Parliament that did seek to fix the problem with the indexation of military superannuation. Unfortunately, that bill did not see the light of day. I do not even think it was debated, let alone voted on. However, it does illustrate that there has been an interest in this place for some time for this to be remedied. I call on the government to support my amendment. I call on the opposition to support my amendment. I ask them to understand that I have moved this amendment in good faith to genuinely try and improve what is mostly a very good move by the government, and I do give the government credit for that.

Of course, once we have dealt with this issue, there is the other issue of Commonwealth superannuation more broadly. I applaud the many lobbyists, defence welfare organisations and activists who have done a very good job over time of lobbying for this particular reform that is now being debated in the chamber. I have no criticism of them whatsoever. They have done a good job of lobbying for defence superannuants. I applaud them for the good job they have done, which is resulting directly in pressure being on us and us seeking to deal with it in the chamber tonight.

Regrettably, the broader Commonwealth superannuant community has been less vocal and perhaps less effective as lobbyists. When this matter is dealt with the focus will shift, as it should, to the government looking at the indexation arrangements for Commonwealth superannuants more broadly. They have a similar problem. Their pension is also only CPI indexed and it is falling behind in real value as well. Yes, that will have a bill and that will cost, but I think it is entirely reasonable that the people who served this country in the Defence Force and in the Commonwealth Public Service get a fair deal.

I make the point again that the federal budget this financial year is close to $400,000 million—an enormous amount of money—and that is more than enough money to pay for the things we really need to pay for, including our defence and Commonwealth superannuants. It is all about priorities. Yes, savings will have to be made, but it is all about priorities. If we cannot look after our Defence superannuants, if we cannot look after our Commonwealth superannuants, then I do not know what that $400,000 million dollars is there for.

I ask again for the government and the opposition to support my amendment. I will certainly support their bill, and I will certainly applaud the federal government for finally moving to fix the superannuation indexation for Defence retirees, but I call again on people to support my amendment which at the end of the day is logical, rational and affordable. Thank you.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

Is the amendment seconded?

Photo of Cathy McGowanCathy McGowan (Indi, Independent) Share this | | Hansard source

I second the amendment and reserve my right to speak.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Denison has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

6:38 pm

Photo of Scott BuchholzScott Buchholz (Wright, Liberal Party) Share this | | Hansard source

I rise to speak on the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 which will deliver this government's election commitment to fairly index Defence Force retirement benefits, Defence Force retirement and death benefits and pensions for recipients aged 55 and over from 1 July 2014.

It would be remiss of me not to follow on from some of the comments, in particular the amendment that has been put forward by the member for Denison. I remind the House that the member, in the 43rd parliament—the parliament immediately preceding this parliament—was an influential player, as were most of the crossbenchers in a hung parliament. I put it to this parliament that if the intent of the member for Denison was truly honourable, if the intent of the member was to benefit the DFRDB recipients, then that would have been dealt with and pushed through on the back of his hearsay in the last parliament.

The reality is that there is a legacy that has been left behind not only by Labor but also by the crossbenchers in their inability to get this situation resolved. It is truly only the coalition who have been resolved in our capacity and resolved in our commitment to ensure that our brave men and women—who have served and who today provide us, as a nation, with a blanket of security that we sleep under every single night—are those who are honoured. It is they who we should not leave behind. It is they who need to be indexed fairly.

I would also like to acknowledge the advocacy work of Stuart Roberts, the member for Fadden. He has travelled the length and breadth of this country advocating. He has been the champion of the course not only in Queensland but also throughout my electorate. He was only there recently in his capacity as Assistant Minister for Defence, again, advocating for this very issue.

I am proud to say that there are over 1,300 eligible people in the electorate of Wright. In addition, there are nearly 19,000 people in Queensland who will be eligible as a result of this.

The coalition government first committed to delivering fair indexation on 27 June some 10 years ago. But at each step, we were blocked and there were hurdles in front of us. Despite losing the 2010 election, a private senator's bill was introduced, and in 2011 this bill was voted down by the Labor-Greens alliance—the very alliance that had power from the crossbenchers who are now seeking to move amendments to this bill.

In 2012, Prime Minister, Mr Tony Abbott, signed the coalition's Fair Indexation pledge—a pledge that today we have stood by and a pledge that we will deliver on, because that is the coalition way. When we say we are going to do something, we do it. It is a far cry from what we have seen time and time and time again from those on the other side of this place, who continually say one thing before an election and do another after.

There is still evidence of that misrepresentation even surrounding this bill. Let me take you to a time frame: on June 16 2011 Labor cemented its position as an anti-fair indexation party when it combined with the Greens in the Senate to vote down the coalition's fair indexation bill. Then on 22 August 2012, Labor again combined with the Greens to block the coalition's second attempt for fair legislation indexed to the military superannuation pensions. And on 13 March 2013, Labor yet again blocked the coalition's third attempt to legislate for fair indexation of military superannuation by blocking debate in the Senate.

But there was a last-ditch effort. The then Minister for Veterans' Affairs reaffirmed his fair indexation policy in a letter from his office dated 12 June, 2013 which stated, 'The government has no plans to change the current arrangements.' But at the 12th hour, we saw a private member's motion from the then Defence minister saying that he would have a look at fair indexation. But that private member's bill was far inferior—so inferior—to the bill that is before us now. Today, in 2014, I stand before you proud that we are finally able to address the egregious inequities for men and women who served this nation.

I would also like to acknowledge, wholeheartedly, those RSL and sub branches in my area who have advocated tirelessly through my office for what they believe is a fair deal. It would be improper for me not to acknowledge their contributions: in particular, the Mudgeeraba-Robina President, Steve Boyle, who hosted the then shadow Defence minister, Senator Ronaldson, who came through and advocated when we were in opposition: 'Give us the chance of government and we will deliver for you.' We have done it, and we will continue to do it. There is also Tamborine Mountain president, John Brookes—thank you to all those guys; Kooralbyn Valley, John Forbe-Smith—a personal friend of mine; Jim Bumba; Sandy Lloyd, who I know from a previous life to this House—Sandy is an exceptional president; Laidley president, Brian Ranse; and Logan Village president, Terry Flanagan. All of these guys have been tireless in their pursuit of this endeavour.

I thank Errol Guilfoyle, from Beaudesert, who hosted a forum attended by Senator Ronaldson, who gave an overview of this issue. I thank the Helidon president, Neville Watterson; the Gatton president, Les Nash, who, during lunch after an Anzac Day ceremony, asked that if I do nothing else for the branch I should deliver this reform. Les, tonight I am proud to be able to stand in this House and implement these reforms that I gave a commitment to you that I would. I thank the Boonah president, Geoff Whittet; Grahame Drynan, in Rathdowney; Peter Prenzler in Kalbar; the Forest Lake president, Peter Foley; the Grantham Ma-Ma Creek President, Donnie Nielsen—none of these people get paid. They do it because they believe in the cause, and they believe in the position of the coalition. Thank you to all those guys.

Of course I extend my appreciation to the RSL branches, to Nerang president, Geoff Stephan, and to Canungra president, David Day; and to Ronny Smith in Withcott for the work that he does over there with the Withcott Progress Association, which is an outstanding monument. Ronny has enhanced an outstanding Anzac Day community spirit in that community. I also want to recognise the National Servicemen's Association in Beaudesert; Johnny Crauford, from the Springbrook War Memorial; and Veterans Support and Advocacy Service Australia, which operates throughout Wright. It would also be remiss to not acknowledge the advocacy work of those that have fallen, for whom we have attended funerals this year, who would be proud to know that we are producing on this.

In order to ensure that I do not consume time and to allow my colleagues to give their contribution, let me conclude by saying that this is a good day. We have delivered on a commitment that we have been steadfastly committed to for many years. It is a shame that we have been blocked at every step. It is somewhat disingenuous for a previous speaker to say that those on the other side of this House are proud of the work that they have done in this space. All I remember of the work done in this space by those on the other side of the House is a defence budget which is as low as it has ever been since 1938. We will fix defence and we will fix indexation, because that is what we were elected to do. I commend this bill to the House.

6:47 pm

Photo of Tony ZappiaTony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | | Hansard source

The opposition supports this legislation, and so do I. Before I get to my remarks about the legislation, I want to say that I listened to the contribution of the member for Eden-Monaro earlier in this debate. It is my view that the comments that the member for Eden-Monaro made about his predecessor—Dr Mike Kelly, the former member for Eden-Monaro, a man who served in the defence forces, and served this place very well—were in very poor taste. In fact, I thought they were very ungracious and derogatory. It is my view that they reflect adversely and poorly on the current member for Eden-Monaro.

I support this legislation and I have always supported fair indexation for our defence veterans. This legislation effectively does three things. It retains the current indexation methodology for pensions paid for persons under 55 years of age. It uses the triple indexation system of either the consumer price index, the pensioner and beneficiary living cost index, and the male total average weekly earnings in determining the amount by which DFRDB and DFRB pensions are increased. It also ensures that DFRDB and DFRB members with significant past service are not required to pay division 293 tax on the value of past service as a result of this legislation.

The legislation, as other members have quite rightly pointed out, is the result of a very long campaign by Australian defence veterans who have pursued this matter relentlessly. Their fighting spirit and their never say 'die' attitude, I believe, are testament to their military training. I know of no community group who have campaigned harder and longer over a single issue—certainly not in my time in this place. They have been one group that have been truly relentless and have persevered with the campaign that they embarked on. They have done so across all electorates—I have heard other members speak about that—but certainly in my own electorate of Makin. I have spoken with defence veterans to discuss this very issue at different functions. I have at all times supported them, by taking up their cause in writing to the relevant ministers of the day with arguments supporting their case. I am quite comfortable in saying that I have made representations on their behalf from the day that I was elected to this place. I did so because I saw merit in their arguments.

This is a complex matter. When reading the bills digest for this bill, I find that there are still matters in there that are not very clear. It is not as simple as it is sometimes portrayed by people who have spoken in respect of this legislation. Not surprisingly, the former Howard government—I make no criticism of them about this—did not accept the arguments being put to them at the time. Senator Nick Minchin, whom I know as a fellow South Australian, even after having left this place—from memory—still maintained that the position that his government took in respect to this matter was the correct position to take. I think that simply highlights that this was not a case of one side versus the other in this House, but rather that this is truly a complicated matter and that neither side was absolutely convinced that the change needed to be made. The current government have decided that they will bring in the legislation, and I support it, because I am of the view that the change did need to be made.

The Rudd government, on being elected in 2007, ordered a review of the current arrangements. The review was carried out by Trevor Matthews. There were four recommendations in that review and I am familiar with all four. The government chose not to make any changes as a result of that review. As the shadow minister quite rightly said in his comments on this matter today, the DFRB and DFRDB schemes ended in 1972 and 1991 respectively and so the consequential arrangements made with respect to this legislation relate to a very limited number of veterans.

Why have I supported the veterans in their campaign? I have done so because I have been persuaded by one very simple argument. It is my view, and always has been, that the sole purpose for indexing pensions—it does not matter what pensions we are talking about—is to ensure the purchasing value of those pensions is not eroded by inflation. That was reaffirmed by recommendation 1 of the Matthews review. Originally, the index used for pensions was the consumer price index. It was the index of the day and it was the index of the time. I assume that it served the scheme well for many years. As time passed, it became clear that the consumer price index no longer provided a fair representation of the actual living cost increases being incurred by the people on the various pensions. The Labor government acknowledged that point when it brought in a Pensioner and Beneficiary Living Cost Index. That index better reflected the cost increases affecting veterans and other pensioners or retired people, because where they spent their money was not necessarily the same as where the broader community expenditure occurred and, therefore, the CPI did not always accurately reflect the cost of living increases incurred by pensioners and retired people. The former Labor government also factored in the male total average weekly earnings as a third measure to help work out a fair income for people living on retirement incomes. Again, I believe it was the right move. This legislation takes in all three of those measures and as a result I support the legislation. The legislation takes into account a formula based on the best ingredients that we have available to us today to ensure that the increase in the pension granted reflects real purchasing value, taking into account the prices of today.

I represent an electorate that has a lot of veterans living within it and I have a very good relationship with all of the veterans groups in my electorate. I have the utmost respect for them. Over the years, I have been able to spend time with them, listen to their stories and look at the way they live their lives and integrate into the community, and I have come to truly respect what they have done for this country through their service. In this case, my support for them does not stem from my respect for them. Rather, it stems from my belief that the system we are currently using is not right. We have shown that is not right through the way we now treat other pensioners and, therefore, we accordingly need to change it for them as well.

I have been approached by Commonwealth superannuants and Commonwealth pensioners who argue the very same case. They argue that their pension, resulting from their service, should be treated in the same way as another person's pension. That is, if one indexing arrangement is fair for one group then it should be fair for others. I have taken up this cause for them because again I am persuaded by their argument, based on maintaining the purchasing value of the pension. This is a matter that the government needs to consider, as we, in opposition, will need to consider it. I accept the argument of these superannuants and pensioners and so I have taken up their case by making representations on their behalf, and I will continue to do so.

I want to finish on the matter that other Labor members have raised in recent days. We have been painted as a party that does not care for and has very little interest in the defence community of this country. Nothing is further from the truth. No-one in this House has greater support for the veterans of this country than we do. It is fair to say that everyone in this House genuinely supports our defence personnel, both serving and retired. But the decision by the Abbott government to take away the $215 payment to some 1,200 defence families was a low point in the decision making of this government. The amount of money is insignificant in the scheme of the total federal budget but for the families the money taken away is not insignificant. I have no doubt that, to them, $200 is worth $200. If the argument is that it will make so little difference to those families, then why take away the money in the first place. That argument works both ways. If it is such a minimal amount, why not leave it there? This is a decision that the government should reconsider, because I believe it was the wrong decision to make. The government will be judged on this decision harshly by the community at large and it will be judged harshly, as it has been, by the defence people of this country. I would certainly urge the government to reconsider that decision.

I conclude where I began. This legislation comes before us after a very long campaign. I am aware of the private members' bills that were bought into this place when Labor was government and I am aware that they were rejected. I am also aware that the legislation probably was prompted by nothing more than the government thinking it was good political campaigning on their part. I do not criticise them for that; that is what good political campaigning is. But it took an election for this commitment to be made. Yes, our side of politics came back with an alternative which was somewhat different; nevertheless, we have finally got there with legislation that I believe satisfies most of the veterans' representations to me and other members of this parliament for years and years.

7:00 pm

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

To start with, let us pin down what qualifies a person to be a DFRDB recipient: 20 years of continuous service in the Defence Force. You have to shift around the country; you have to do a lot of things. There is a lot of inconvenience and a there is a lot of sacrifice. What we always say about defence brats is thank goodness for Facebook, because until then they lost friends every two years; and they end up with a great collection of school uniforms.

When I was a candidate in 2010, I was doorknocking in Kirwan, and there was a bloke in his front yard, mucking around in his tinny. I asked him what was bothering him. He said: 'Don't worry about bothering me, mate. I'll vote for the people that bring in DFDRB fair indexation.' Now, at that stage, I did not even know what DFRDB was, let alone fair indexation of it. I asked him about it and he said, 'In 2007 Kevin Rudd got our votes by saying that he was going to bring in fair indexation, and we believed him. He did not. He brought in the Matthews review and it is just the same old.'

I am not going to blame the Rudd-Gillard-Rudd government for not bringing this about, because this problem started in the seventies with Whitlam. So Gough Whitlam and the Labor government in the 1970s could have fixed that up. Fraser in the 1970s and the 1980s could have fixed it up. Hawke could have fixed it up. Keating could have fixed it up. Howard could have fixed it up. Rudd-Gillard-Rudd could have fixed it up. We went to the 2010 election saying that we would bring about fair indexation for veterans who had done 20 years service. Of course, at the moment DFRDB is only indexed to the CPI. Fair indexation will bring it into line with other Commonwealth pensions—that is, with male total average weekly earnings and the Pensioner and Beneficiary Living Cost Index.

Even though we have brought this about, even though we signed the pledge, even though Tony Abbott said it must be done and even though Senator Ronaldson went around the country telling everyone that we would so this, there are still veterans out there saying that we are not going to do it. That is how far entrenched the feeling against us is when it comes to this issue.

I have to say thank you to my veterans. I have to say thank you to my veterans for educating me on what it is to be a proponent of fair indexation. I want to single out one person, because I know that he will deflect the blame to absolutely everyone else. The person probably most responsible for getting me up to speed on this and making sure I was passionate about it is Brigadier Neil Weekes. I see the member for Longman entering the chamber. Brigadier Weekes was a constituent of mine; he is now a constituent of the electorate of Longman.

My office organised a petition in favour of this reform. We got 14,000 signatures from people all around the world—even people from South America signed the petition. I am very proud that the policy we took to the electorate in 2010 was also the policy we took to the electorate in 2013. I am very proud that today we are bringing it to fruition. I am very proud of this moment in time. I will be going back to my veterans and saying, 'We have done this.'

What I will not cop is the amendment from the member for Denison. I have here a press release from the member for Denison dated 30 July 2013. He stated in this chamber that he wants DFRB to be fair indexed for all recipients, and yet in July 2013, when Labor brought in their policy of fair indexation for recipients over age 65, the member for Denison sent out a press release congratulating the then Labor government, not once criticising the fact that the policy was limited to over 65s and contained no male total average weekly earnings indexation as part of the scheme. So the member for Denison comes in here with his pious amendment and stands up seeking another opportunity to put out a press release lionising himself as the person sticking up for all veterans. This should be seen for what it is: an act of shameless self-promotion. He should be ashamed. He should drag his backside back in here and withdraw the amendment. He should bring this to a head. In my entire time in this place, I have never seen a more flagrant display of self-promotion at the expense of others than that I have just witnessed with that amendment to this bill.

I stand by our commitment to veterans. I stand by Tony Abbott, the Prime Minister of this country, who just said to Senator Ronaldson, 'It is time; it is right.' We should be doing this. It is only right. Veterans are not asking for anything extra. All that my veterans and the veterans around Australia are asking for is what is fair. That is all they are asking for. Once we get this done, Neil Weekes can start coming at me on something else. I thank the House.

7:05 pm

Photo of Karen McNamaraKaren McNamara (Dobell, Liberal Party) Share this | | Hansard source

I rise to support the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. This legislation implements the government's commitment to veterans and their families. This legislation will index the Defence Force Retirement Benefits, DFRB, scheme pensions and the Defence Force Retirement and Death Benefits, DFRDB, scheme pensions using the same methodology as age and service pensions. From 1 July 2014, these new arrangements will apply to superannuants aged 55 and over.

We are fulfilling our commitment because this government acknowledges the unique nature of military service. It is important that those who have served our nation not be treated differently from age and service pensioners. We have long believed in the need for fair indexation, first announcing our policy on 27 June 2010. We took fair indexation to the people at the 2010 election. Despite Labor retaining government, it was the coalition who introduced fair indexation legislation in the Senate on 18 November 2010. We did this because military superannuant recipients had waited too long for fair, just and equitable indexation. Unfortunately, our legislation was not supported by the Greens and Labor, who used a Senate inquiry to oppose the fair indexation and then voted to defeat the legislation on 16 June 2011. Since this time, members on this side of the House have remained committed to the introduction of fair indexation for military superannuants. As the then Leader of the Opposition, and now Prime Minister, Tony Abbott, rightly said in September 2011:

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.

On 5 March 2012, Mr Abbott, together with the then shadow minister for veterans' affairs, signed the coalition's pledge to deliver fair indexation. In July 2013, I was honoured to join with the then shadow minister for veterans' affairs, Senator the Hon. Michael Ronaldson, and representatives from the Alliance of Defence Service Organisations—the ADSO—to sign the coalition's pledge to deliver fair indexation to 57,000 military superannuants and their families.

The ADSO has always been a staunch advocate for fair indexation. The ADSO was formed to protect and represent the Defence family's past and currently serving Australian Defence Force members and their immediate families. I am fortunate to have met and worked with the Central Coast ADSO members for over three years, and I commend them on their campaign and fight for fair indexation. I personally thank Robert Ihlein and Cliff Hobson of the Central Coast ADSO for taking the time to educate me on this important issue.

On 28 July 2010, the alliance launched the Fair Go Campaign, which championed the need for the fair indexation of military superannuation pensions. I would like to take a moment to share with the House the story of Robert Ihlein, the New South Wales ADSO state action group leader and a local resident of Dobell. Robert joined the Army in January 1968 and by October 1968 had completed his training and was posted to South Vietnam as a Sapper driver. Robert's career in the Army spanned 20 years, and in 1988 Robert took his discharge hoping that the DFRDB superannuation would keep pace with price increases over the following years. Unfortunately, this was not the case.

Robert first became involved in fighting for fair indexation of military superannuation in June 2011, shortly after the Senate rejected the coalition's bill. Robert remembers this time as quite an emotive one, after the betrayal of senators who had revoked their support for the legislation. In June 2012, the frustrations of Robert and the ADSO's fight for fair indexation was heightened when it was revealed that the DFRDB pension increase would be $0.81 per fortnight in line with the CPI increase. The ADSO has welcomed our legislation, and they have stated:

The Alliance of Defence Service Organisations (ADSO) thanks the Government for today introducing legislation to the House to restore fair indexation to DFRB and DFRDB military superannuation pensions.

They have also asked that all political parties and the Independents are encouraged to not block this long-awaited legislation.

In Dobell, this bill will benefit 329 individual recipients and their families. As the member for Dobell, I am honoured to be in this parliament representing members of the Central Coast community who committed their careers and lives to protect Australia's freedom. Our veterans and their families deserve fair indexation. The government has made the pledge to deliver this legislation, and I have personally made the pledge to deliver fair indexation to my community. It is now incumbent on those opposite to back what is fair—to back fair indexation and to allow the parliament to confirm our commitment to our nation's military superannuants. I commend this bill to the House.

7:11 pm

Photo of David ColemanDavid Coleman (Banks, Liberal Party) Share this | | Hansard source

I am particularly proud to speak on the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 this evening, because this legislation really goes to values and priorities. What this legislation says very clearly is that the government places a very high priority on those who have served us in the military.

We all know that the financial situation the government is confronted with is a very difficult one due to six years of flagrant mismanagement by those opposite. We do find ourselves in a very difficult financial situation. But the government made a very firm commitment back in 2010—and reaffirmed in 2013—that the veterans of Australia absolutely deserve fair indexation of their pensions. What the government has done in progressing this legislation is to keep faith with that commitment.

It is entirely appropriate because people who serve our military are often putting themselves at risk. They are often in dangerous situations and, by signing up in the first place, they are certainly accepting that potential eventuality. Most of us do not do that. Most of us do not serve in the military and most of us in our day-to-day jobs do not take any physical risk—we do not put ourselves at risk in that way. I know that in this job I do not do that, and I have not in previous jobs either, but the men and women of our military do that very frequently. That above all makes them, as a group, the greatest Australians, because in times of war and peace they are charged with our protection and security. We should always place the service that they provide us on a pedestal.

You would think it would be self-evident that fair indexation of the military pensions should be supported and that there should not be any discrimination in the way that these increases are calculated relative to those for aged pensioners and others. It is probably fair to say, based on comments from those opposite, that there is a widely held view that that is a fair proposition. The only reason not to do it—and it is not the right reason, but it is the only potential excuse—is that you have not got the money and you cannot afford the cost.

What we saw under six years of Labor was such extraordinary financial mismanagement that Labor was willing to spend hundreds of millions of dollars—billions of dollars—on different programs but could not find the much more modest—though significant—amount required for this indexation arrangement. When you have blown $6½ billion on your lack of border security, when you have spent $100 million because you closed down the live export industry overnight and when you have wasted literally billions of dollars on the tragic pink batts program, money is tight.

Labor, in failing to provide this indexation in those six years, really got its priorities all mixed up. It could find funds for all sorts of extraordinary government programs—very poorly managed programs with no operational or implementational skill whatsoever—but it could not find the money to do something as fundamentally right as indexing military pensions in a similar manner to age pensions. We said we would do that because it is the right thing to do. We said it consistently over a number of years. We even introduced legislation in the previous parliament to try to make it happen. Now that we are a government, we are able to do it. I am proud to speak in favour of this legislation and I commend it to the House.

7:16 pm

Photo of Luke SimpkinsLuke Simpkins (Cowan, Liberal Party) Share this | | Hansard source

I really do welcome the opportunity to speak on this bill tonight. I spent 15 years in the Army and I have met so many veterans and ex-service men and women out there who really believe that this is a measure way past its time. This will be a historic moment. We often hear in this place people talking about a 'historic moment', but this is about a promise, a commitment and keeping faith with people who have pulled on the uniform and been prepared to put their lives on the line for this country. It is time that this job got done; it is going to get done now, and I am very pleased about that.

When we look at what is coming as part of this bill tonight, it is for DFRDB pensioners over the age of 55 and it is about fair indexation. I remember very clearly back in 2007 meeting with some peak veterans' and ex-service organisations in Perth, and they were talking and delighting in the fact that Kevin Rudd had promised them fair indexation. It was hard going to counter that. It was a point made very clearly to me. There were those in the veteran community who were still with us, but many decided that this was the point they would swap sides and go over to the other side—the Labor side—and they were betrayed. There is no doubt about it. They were told clearly what was going to happen, and Labor just never delivered for them.

I was very happy that we made that commitment to people in 2010 and were prepared to back it up. We bargained in good faith. We made commitments in good faith to the veteran community and, after 2010 when we did not quite get there, we came through. We had said we were going to do it and we came through with two bills in this place—one here and one in the other place—where we demonstrated our commitment to the cause.

We are keeping faith tonight with the veteran community. People like Mike Gilmore, the president of the Ballajura RSL. Graham Woodford of the Perth North branch of the Naval Association, and Wendy Tuffin of the Wanneroo-Joondalup RSL. We are keeping faith with those ex-service people, and I applaud the government for that and thank the Prime Minister for his strong support.

I said before that we had bargained in good faith when we had made that commitment in 2010 and that there were attempts to bring it in the House and then in the Senate. I contrast that to the lack of good faith shown by the member for Denison who came in here, attempted to highlight himself and tried to springboard some sort of political favour in the veteran community. If he were for this in good faith, committed to this and in doing the right thing, he would have gone to the minister and said, 'Minister, I am in favour of this, but I think it should be extended and I think it should be different,' but there is no evidence of that happening, and it did not happen. So what we have when he comes into this place is nothing but political grandstanding and self-promotion. I think it is very bizarre for a former serving officer to have those sorts of character problems. It is disappointing.

Again, this is legislation that is past its date. It is important that we do this. It is about keeping our commitments and keeping our promises, which is exactly what this government has done. We will be judged by what we say and do in the future. Tonight is a good night because this job is going to be done tonight in the House of Representatives. I thank the Prime Minister and the minister for their efforts for veterans and ex-service people.

7:21 pm

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

I am pleased to rise and speak on the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. I am conscious of the long list of speakers who want to speak on this historic night as we pass this bill in the House of Representatives, so I will keep my remarks brief. This bill seeks to implement the coalition's strong commitment to Australia's veteran community that was pledged before the last election to those who served. This strong commitment was borne out of our recognition of the unique nature of military service and Australia's service personnel past and present. After giving so much to their nation, they deserve to live their lives out in the knowledge that they have financial security.

I note that, consistently with this belief, I and a long list of my coalition colleagues voted in favour of a similar bill in the last parliament, which unfortunately was not supported by the then Labor government. I spoke with many veterans, veterans groups and RSL sub-branches all across my electorate, and the reason that they were so disappointed with the Rudd and then Gillard and Greens government was not just their broken promises on the carbon tax; the one that really hurt them was their broken promise on giving them fair indexation on their veterans pensions.

I am proud to stand here tonight because this bill delivers on the coalition's commitment to our veterans community. We are here in this chamber tonight doing exactly what we said before the election that we would do, which is a very refreshing change from the previous six years. This government's commitment to this policy was so strong at the last election that the Minister for Veterans' Affairs, when he was in opposition, organised for the coalition MPs and candidates to sign a pledge that we would stick with this commitment. This pledge was first signed on 5 March 2012 in Bendigo by our now Prime Minister and our now Minister for Veterans' Affairs.

I was pleased to sign this coalition's pledge on 3 December 2013. I signed the pledge in the presence of the president and the vice president of the Australian Commando Association of New South Wales, the President of the Woronora River RSL, the President of the Sutherland and Districts Sub Branch of the National Servicemen's Association and the president of the Sutherland United Services Club, along with veterans from across the seat of Hughes. I am proud to stand here tonight. We are delivering on that pledge and that promise we signed.

Why is this commitment so important? I was at a memorial service on Sunday to rededicate a monument honouring the thousands of national servicemen who were conscripted between the years of 1951 and 1959. I must admit that I was not aware of the number. There were actually 287,000 Australians who were compulsorily called up for the Navy, Army and Air Force during the National Service Scheme we had between those years. It was their sacrifice and it was their commitment to their nation that gave us the freedom that allowed this economy to progress and allowed our society to progress as we have. The indexation to the CPI was not enough. It is because of the sacrifices that they made and the freedoms that we have today that, during the years of the Howard government, the Howard government increased real wages by 21½ per cent. That is the pay-off that these people deserve to get in their annual pensions.

That is what we are delivering tonight. We are delivering fair indexation. I am very pleased to speak on this bill. I commend it to the House. I look forward to the contributions of my many colleagues who wish to speak on this bill tonight.

7:25 pm

Photo of Wyatt RoyWyatt Roy (Longman, Liberal Party) Share this | | Hansard source

As I rise to speak on the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014, I cannot let it pass that for the speakers list for this legislation the Labor Party have found three speakers. One is the former minister. To put it frankly, their silence says more than any of us ever can.

This legislation, the Defence Force retirement benefits legislation amendment bill before the House, is very close to my heart. But, far more importantly, it is close to the hearts of the 1,046 veterans in my community, who have spent years fighting for a fair go on their military superannuation pensions—a fair go which the Labor Party has refused to provide. This legislation represents a deserved victory, at long last, for these local veterans and their families.

The coalition has stood shoulder to shoulder with them. And now, in government, we are delighted to be able to deliver. The changes give effect to a key coalition election commitment and, on a personal level, come after a protracted campaign to secure Longman veterans a fair go, via correspondence, meetings, representations in parliament and veterans' forums with the then shadow minister and now Minister for Veterans' Affairs, Senator Ronaldson. During one such event at the Bribie Island RSL last August, Senator Ronaldson and I signed a pledge that we would deliver rightful indexation after all those years of Labor shunning our ex-service men and women.

Currently, 57,000 veterans aged 55 and over have their Defence Force Retirement Benefits Scheme, or DFRB, and Defence Force Retirement and Death Benefits Scheme, or DFRDB, superannuation pension increases tied to the consumer price index only. Twice the coalition tried to pass legislation through the last parliament to achieve fair indexation for them. Each time, the Labor Party, the Greens and the Independents combined to stop that move.

But from 1 July we will index DFRB and DFRDB pensions for superannuants aged 55 and over in the same way as age and service pensions. That means a calculation based on a formula that factors in growth in the CPI, male total average weekly earnings and the pensioner and beneficiary living cost index. The fair indexation provisions will also extend to widow pensioners aged 55 and over.

This commitment recognises the unique nature of military service. It recognises that those who have served our nation should not be treated differently from age and service pensioners. And this commitment is yet another example so far as this government's record on trust is concerned. Making sure our veterans were treated with fairness and respect was an article of faith for us when we took up the treasury bench.

Caboolture-Morayfield and District RSL Sub Branch president Mr Bruce Miller told me, upon hearing that this legislation was a reality, that many veterans had been short-changed thousands of dollars by inadequate indexation. He said:

We're glad that the government has stuck to its election promise and carried through on this …

… It's been a long time coming.

It has indeed. And yet the coalition has sustained the logical argument that, if it is inadequate to lift Centrelink pensions just by the consumer price index, it is even less fair to apply only that index to those who have risked their lives for our country.

In the lead-up to the 2007 election, prime ministerial candidate Kevin Rudd also promised fairness to the recipients of DFRB and DFRDB pensions. But instead, with Mr Rudd's election, veterans got nothing except another broken Labor promise.

We of the coalition have long acknowledged the unique nature of military service and the sacrifices military personnel and their families make on behalf of all Australians. We believe that Australia should protect and watch over its veterans and their future in the same way that our veterans have protected and watched over our country. We have stood by our pledge. We have kept our word. Australia's veterans, who have risked life and limb, deserve better than a government that says one thing before an election and does another thing after.

We now call upon the opposition leader and the Labor Party to finally do what they should have done three years ago and support this legislation. It is an honour to commend this bill to the House.

7:30 pm

Photo of Jane PrenticeJane Prentice (Ryan, Liberal Party) Share this | | Hansard source

I rise today to speak on the Defence Force Retirement Benefits Legislation Amendment Bill 2014, noting that unlike those on the other side of the chamber, the coalition government is honouring its election commitment and following through on our pledge to support the brave men and women who have served our country and fought for our country. They have been prepared to sacrifice their lives for our freedom.

The previous Labor government promised back in 2007 to give a fair deal to ex-service men and women and subsequently had six years in which to deliver a fair go for our veterans. But yet again they simply chose to break their promise—refusing to repay the loyalty that veterans have given to all Australians. The coalition took to the 2010 election, and again to the 2013 election, a policy that would see the fair indexation of DFRDB and DFRB.

I have spoken several times in this place about the importance of fair indexation of Defence Forces Retirement Benefits and the Defence Force Retirement and Death Benefits military superannuation pensions. My office has been contacted by many members of the veteran community asking what the coalition is doing for military superannuants. In my electorate I represent many groups, including the Returned Services League with sub-branches at Gaythorne, Kenmore-Moggill, The Gap, Toowong, Bardon, and Indooroopilly-Sherwood, as well as the Australian Army Aviation Service Australia and the Veterans' Support Advocacy Service Toowong branch, the Australian Army Training Team Vietnam Association, and many members of the Australian Defence Force at Gallipoli Barracks in Enoggera.

The defence community and the veteran community want fair indexation, and I was honoured to be one of the many coalition members to sign the pledge in 2012 that says, 'The coalition will ensure DFRB and DFRDB military superannuation pensions are indexed in the same way as age and service pensions.' All DFRB and DFRDB superannuants aged 55 and over will benefit. I am proud to stand on this side of the chamber with my coalition colleagues, who understand and value the contribution by veterans to our great nation. We have pledged our commitment to the fair indexation of military superannuation.

Under the coalition government's policy for fair indexation, 57,000 military superannuants and their families will be better off. This is set to be delivered and funded in the government's first budget, with the new measures to be effective from 1 July 2014. In June 2012, veterans received the news that military superannuation pensions would increase by just 0.1 percent, as opposed to the 0.9 percent increase announced in March 2012 for age and service pensions. Many veterans received an increase of less than $1 a fortnight—a shameful action as the cost of living increased and Labor introduced an economy-wide carbon tax. Sadly, Labor ignored the veteran community when they introduced the carbon tax. They provided a household assistance package to pensioners, low-income individuals and families and students; however, veterans—men and women who fought for our country—did not receive one single cent of assistance. How disgraceful is that?

As all Australians know, the coalition government is committed to the repeal of the carbon tax, having already introduced a bill—only to have it blocked by the Labor and Greens alliance. It is obvious that Labor and the Greens do not care about the high cost of living for Australian families and for Australia's veterans; otherwise they would respect the mandate the Australian people gave to the coalition government at the last election and support the repeal of the carbon tax.

The coalition government is determined to repeal the carbon tax, which will reduce the cost of living pressures for all Australians, veterans in particular. We are also committed to fairly indexing veterans' DFRB and DFRDB pensions, because that is the right and just thing to do. It is just and right because of the enormous contribution that these brave Australians have made. It is just and right because when a nation asks its service personnel to go to war, to put themselves in harm's way, we as a nation have an overwhelming obligation to provide proper support on their return. It is just and right because it is the Australian way.

I am proud of the commitment this government has made to our veterans. I am proud of our veterans—heroes all—who put themselves at serious risk in the defence of Australia and the freedom we all enjoy. We must never begrudge this support and never forget their sacrifice.

7:35 pm

Photo of Bob BaldwinBob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | | Hansard source

I rise today to speak to the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) bill 2014. This is about doing the right thing, the fair thing, for those who served our nation in a very unique way.

I apologise to the veterans in my community and, indeed, across Australia for the delays in implementing this policy. I know this policy well. It had its beginnings with the Podger review. The Podger review, the review into military superannuation arrangements, was commissioned by the Howard government but unfortunately we had to go to an election and did not have the opportunity to adequately implement the measures.

I remember the first shadow minister for veterans' affairs, Bronwyn Bishop, taking the Podger review and looking at what could be done. My colleague the member for Macquarie, Louise Markus, who is in the House now, was the subsequent shadow minister for veterans' affairs and I filled the role as the shadow minister for defence personnel. We worked on this policy. We built up a business case and we took it to the then Leader of the Opposition, Tony Abbott. It took a lot of convincing to get this through the ERC but Tony Abbott knew this was the right thing to do. We took this policy to the 2010 election. Nothing made me happier than that after 2010 the very first policy that the coalition recommitted to was the DFRDB policy, because it was about doing the right thing by those who had given so much to our nation.

By contrast, look at the Labor Party. In opposition with the Podger review they put out a commitment, and that commitment was in 2007 to prevent further erosion of veterans' pensions due to unfair indexation. But given each and every chance when in government to do something, whether it was coalition members, whether it was notices of motion, each and every time they walked away with feeble excuses: it was not affordable. If it was affordable to do pink batts, if it was affordable to spend excess money on BER programs, if it was affordable to blow budgets, then why couldn't they do it for our veterans? That is the biggest question. That is one of the reasons why I feel I need to apologise to the veterans in our community.

I think that Stewie Roberts and Michael Ronaldson in their ministerial roles have done a tremendous job in advocating this policy through to the last election and I congratulate them on their great efforts, particularly Michael Ronaldson with the pledges. When I was asked did I want to sign a pledge at my RSL club in front of hundreds of people, I jumped at the opportunity, because I, like other members of the coalition, was committed to this policy.

Through the process of time and development of this policy we worked very hard with people such as the Defence Force Welfare Association, the DFWA; the RSL; the Naval Association of Australia; the Royal Australian Air Force Association; the Royal Australian Regiment Association; the Australian Special Air Service Association; plus countless thousands of individuals who sent representations that had to be replied to, just questioning one thing: why is it that we as politicians sat here with the increases we had in our pensions when the greatest danger we had was falling off the chair at our desk when those who put their lives on the line were being treated this way? Quite frankly, I was embarrassed. So today with honour I put my pledge of support to this legislation, this legislation long overdue.

If members opposite had one ounce of moral fibre in their body, there would be no hesitation in supporting this policy, this legislation. At the end of the day it is about doing the right thing by your mates, and our soldiers, our sailors and our airmen are our mates who stood to defend our freedoms and democracy, to keep us out of harm's way. I think it has been a shambles the way they have been treated, particularly with broken promises. If we think the broken promise on the carbon tax was bad enough, can I tell you that the broken promise to them in not delivering on their DFRB increases cut an even harder rapier through their chest. It is with some pride and relief that I commend this bill to the House.

7:41 pm

Photo of Louise MarkusLouise Markus (Macquarie, Liberal Party) Share this | | Hansard source

It is with great pride that I rise to speak today on the Defence Force Retirement Benefits legislation. This legislation is the collaboration of years of hard work and an ongoing determination and commitment by many of my colleagues on our side to recognise the unique place of veterans in our nation. I rise with a tinge of sadness, though, because I look at the benches opposite and I look at the number of speakers and their numbers are few. I question their support of the veteran community in this nation.

This bill has a long and important history and is a firm statement of the coalition's commitment to veterans and their families. For me personally this legislation is of special significance. For anyone in this House or outside of this building, or indeed in the other place, that has any connection with our Defence Force, with our military personnel, whether they be Navy, Army, or Air Force, we understand the sacrifices, the commitment, the dedication, the risks that they take and indeed the sacrifice and the impact on their families.

I have always been a passionate advocate of our veterans and involve myself in every way possible to fight for the best outcomes for them locally and indeed across the nation. I was fortunate and privileged to serve in the shadow ministry for veterans' affairs from 2008 to 2010. During this time I worked hard with my colleagues, the member for Paterson being one, to ensure that these changes were put at the front and centre of the coalition's agenda. At this point I would like to acknowledge that there were many of my colleagues prior to me stepping into that particular position, during my time serving in that position and since who have fought for this legislation to become a reality.

This legislation is also the result of important contributions from key veterans organisations. In particular I would like to acknowledge the Returned Services League National President, Rear Admiral Ken Doolan AO RAN. I would also like to acknowledge the Defence Force Welfare Association, which worked tirelessly to advocate for their members, in particular Colonel David Jamison. This is not to exclude other ex-service organisations. They worked tirelessly as well to advocate and lobby various governments of the day for this change.

This legislation has been long awaited and the benefits will be felt by our veterans community immediately. The key part of this bill is that we will index the Defence Force Retirement Benefit, DFRB, scheme and Defence Force Retirement and Death Benefit, DFRDB, scheme pensions in the same way as age and service pensions are indexed. These new arrangements will apply to superannuants aged 55 and over from July this year. I am pleased to note that in the electorate of Macquarie, 604 DFRB and DFRDB superannuants aged over 55 will immediately benefit from these changes come July. In New South Wales alone there will be 13,699 veterans better off because of these changes.

While in government Labor made promise after promise to the veterans community but they never kept those promises. In fact, Labor are on the record as actually opposing the introduction of fair indexation on two occasions—in the Senate in 2011 and in the House of Representatives in 2012. The coalition has played no such games with the veterans community. The veterans community and their families deserve nothing less than the facts. They want it straight. They want you to keep your word—if you say it, do it; if you are not going to do it, do not promise it.

I was proud to be in attendance in Penrith when we first announced this measure prior to 2010 with the then Leader of the Opposition. We took this commitment to the 2010 election and once again to the 2013 election. It is such a privilege and an honour to be able to stand in this place and speak of the commitment of this side of the House to keeping our promise. We are committed to ensuring that the people who serve and have served our nation will get the utmost respect and honour in a tangible and real way. They, more than anyone else in this nation, deserve to live out their lives in the knowledge that they have financial security.

This bill recognises overall that military service is unique—there is no other service and no other job in this nation like it—and, as such, deserves unique solutions to ensure that Australia's service personnel, past and present, are looked after in their retirement. I commend this bill to the House.

7:46 pm

Photo of Ann SudmalisAnn Sudmalis (Gilmore, Liberal Party) Share this | | Hansard source

I rise on the matter of the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 because for a period of almost two years prior to the 2013 federal election I have been in meetings; talking to veterans; hosting forums with the shadow minister, now Minister for Veterans' Affairs, Senator Ronaldson; and talking to members of my local RSLs, Legacy and many families of men and women who have served our nation. It is with a great sense of national pride that I attend functions at HMAS Albatross and HMAS Creswell in the seat of Gilmore, but my sense of patriotism must be miniscule when compared to the emotion and sense of service I detect when speaking to our veterans.

We committed to this legislation well before the election. In fact, the Kiama-Jamberoo RSL has a large A3-size poster signed by Senator Ronaldson and myself on this very commitment. There are 57,000 military superannuants and their families who will now be better off. Members of the defence forces already receiving DFRB and DFRDB aged over 55 years will finally get the indexation they deserve. From the many veterans in Gilmore who have emailed me, I have learned of the high level of anxiety surrounding this issue. We have made this commitment and we will follow through. Despite some very erroneous and emotionally charged emails being shot around our veterans' communication systems, we are firm in our commitment to bring this legislation through. This indexation will help our veteran community. More importantly, this is recognition of the part they have played in war theatres around the world. It is proposed to have these pensions indexed twice a year—March and September—and to take into account the changes in the consumer price index, the beneficiary living cost index and male total average weekly earnings.

I have been working closely with our most famous veteran, Nobby Hall OAM and the many members of the local RSL sub branches: Stuart Christmas of Berry; Bob O'Grady of Bomaderry; Mrs Iris Selby of Callala Beach; Mr Ron Sheldon of Culburra Beach-Orient Point; Mr Bill Popple of Gerringong; Mr Don Handley and Barry Edwards of Huskisson; retired Colonel Ian Pullar and Dennis Seige of Kiama-Jamberoo; Rick Gallagher of Milton-Ulladulla; Rick Meehan and Fred Dawson of Nowra-Greenwell Point; Max Flohr of Shoalhaven Heads; Lorraine Bament of St Georges Basin; Alan Beasley of Sussex Inlet; Peter Vincent and Clyde Poulton of the Vietnam Veterans; and Bob and Mavis Morris and Alice Burns, working with the Korean War Veterans. They will all welcome this legislative change.

Most importantly, I have been in close discussion with 'Dingo' Glen Chamberlain, 'Deekay' Danny Kennedy and 'Trapper' Gary Fittel. They will be delighted to have this legislation passed. I thank the Veterans Angels for protecting Trapper, who was in a recent motorcycle accident. His bike is trashed, but he survived with 17 breaks in one leg, a break in the other, a broken arm and a dislocated shoulder. I wish Trapper a speedy recovery. This legislation will be well received by him and his family, as well as his mates—the Vietnam Vets. There is something particularly special about these young men, and I am proud to support this bill in the House on their behalf.

There is one other most significant supporter of this legislation, and that is Keith Payne VC. The last visit he made to Gilmore was to celebrate the traditional Anzac rugby match called 'Digger Day Rugby'. Keith is the recipient of a VC. He is quiet yet authoritative. He came up to me in 2013 at the game and said, 'You will of course be supporting the DFRB and the DFRDB, won't you? I will be coming after you if you don't.' I acknowledge that he was joking—but I am not. I fully support this legislation that will benefit almost 1,000 veterans in Gilmore. I commend this bill.

7:51 pm

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | | Hansard source

This is about keeping faith with the veterans—the people who look after us, who laid their lives on the line to look after Australian people—and I am very pleased and proud to support this important legislation in the House tonight. The Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 will finally deliver fair indexation to our veterans and deliver on the promises made by this government prior to the 2010 and 2013 federal elections.

Fair indexation was an article of faith by the now Prime Minister and indeed the entire coalition going into the past two elections. Six months prior to the last election, Tony Abbott, as well as the Minister for Veterans' Affairs, signed a pledge unambiguously committing the coalition to delivering this reform for veterans and their families. The pledge headed 'The coalition's clear commitment to our veterans' read:

A Coalition Government will deliver fair indexation to 57,000 military superannuants and their families.

The Coalition will ensure DFRB and DFRDB military superannuation pensions are indexed in the same way as aged and service pensions. All DFRB and DFRDB superannuants aged 55 and over will benefit.

Only a Coalition Government will deliver fair, just and equitable indexation for DFRB and DFRDB pensions.

With your support, Australia's veterans and their families will get the fair go they deserve.

As many in the veteran community and the wider community would be well aware, this particular issue has been fought for long and hard by a number of people over many years. I have spoken numerous times in this place on the need to provide fair indexation, and this is a significant issue for the people of the Riverina—especially in Wagga Wagga, a tri-service city where many veterans reside.

Providing fair indexation to our veterans so that military pensions adequately reflect increases in cost of living is absolutely the right thing to do. After all, veterans and their families sacrifice so much in our hours of need and for this nation—this really is the least we can do for them. Fair indexation for our veterans acknowledges that military service is unique and forces demands on our service women and men, and their families, in a way that other types of service simply do not do.

Last Thursday, I had the privilege of seeing a joint Sydney Theatre and Australian Defence Force production, The Long Way Home, here in Canberra. It is a moving story based on the real lives and experiences of our service men and women. This story tells of how our injured and wounded veterans recover from the scars of war and post-traumatic stress syndrome, and tells of the challenges to and the sacrifices made for us by many veterans and their families. It tells the real life story of servicemen such as James Duncan, who was injured by an improvised explosive device in Afghanistan in February 2011, and the story of Sarah Webster of the Royal Australian Signal Corps, deployed to Baghdad in 2006, who was severely injured by the blast impact of a missile hitting the wall of her concrete barrier while she slept. This is the story of our veterans, and, whilst the production is confronting, I would urge everybody here to see it if they get the opportunity.

I am therefore proud to be part of a government actually delivering this important and necessary reform—in fact, to be from the only side in this parliament to have made this commitment and actually delivered it. Every member and senator, and certainly every veteran I have met with, remembers Labor's campaign promises in 2007 to deliver fair indexation prior to that election. And we all know what happened after the election: how Labor shamelessly scurried away from and broke this solemn promise—like they did with many of the other promises they made.

The coalition has been committed to introducing this reform since 27 June 2010. We made the announcement in support of fair indexation before the election that year. Despite not forming government, the coalition nonetheless remained firmly committed to this important initiative. In line with that commitment, we introduced legislation into the Senate on 18 November 2010.

Rather than grasp the opportunity to finally deliver much needed fair indexation to our veterans, as their own election policies promised, Labor and the Greens delayed, dithered—and then called for yet another Senate inquiry into this issue. This was despite more than half a dozen parliamentary inquiries conducted previously supporting fair indexation.

But that Labor-Greens inquiry was never really a genuine inquiry designed to objectively consider the merits of fair indexation as a policy. The conclusions and single recommendation of this inquiry, being run by a Labor-Greens stacked committee, were already predetermined and foregone before the inquiry even started. The committee made parliamentary history by recommending against fair indexation—disgraceful! This Senate inquiry was nothing short of an unprecedented attack on Australia's veterans by Labor and the Greens. Well, what could you expect?

On 16 June 2011 the Labor-Greens alliance in the Senate voted down the coalition's fair indexation legislation. This legislation, this particular bill, when enacted will change the way the Defence Forces Retirement Benefits and the Defence Force Retirement and Death Benefits schemes are indexed—as it should. This measure will benefit 57,000 veterans and their families across Australia, 13,699 in New South Wales and 512 in the Riverina. I commend it to the House.

7:56 pm

Photo of Andrew LamingAndrew Laming (Bowman, Liberal Party) Share this | | Hansard source

Tonight will be remembered as a day of shame, a day of dishonour, for the Australian Labor Party, when they evacuated the scene on this bill, the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. It has history. The coalition fought for this. Ever since John Howard introduced fair indexation for pensioners, the momentum began—to look after our veterans. Consistently, the coalition has argued for this. We put it to the Australian people in 2009 and 2010. It was defeated on 16 June 2011—a shabby display from the Labor government.

And tonight, none but three have come down to this chamber to defend their actions. Tonight I was going to criticise those who spoke on the Labor side, but they were the ones who had the courage. Tonight I want to read into Hansard a dishonour roll of shame: those Australian Labor Party members who were not here, those who did not show, and those who did not stand up for their veteran communities.

Let us start with the no-show: Sharon Bird, member for Cunningham, who will be recorded in Hansardand found, for eternity, by searching Hansardas not showing up tonight. Yes, her name does now appear in Hansard under this bill, for all of her voters to see. The did-not-attend was Anna Burke. The did-not-arrive was Terri Butler, member for Griffith. The sick-leave was Jim Chalmers, member for Rankin. The special-leave: Nick Champion, member for Wakefield. Someone got a pairing, perhaps! There was Lisa Chesters from Bendigo. We have Sharon Claydon, on tour somewhere; Julie Collins—classified information; we don't know where the member for Franklin is—

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

Order! I request the member to refer to the member's correct parliamentary title.

Photo of Andrew LamingAndrew Laming (Bowman, Liberal Party) Share this | | Hansard source

We are including the correct parliamentary titles, Mr Deputy Speaker. In the dining room, presumably, is the member for Melbourne Ports; detained somewhere else, the member for Isaacs; distracted somewhere, the member for Richmond; diverted somewhere, the member for Werriwa; redeployed somewhere, the member for Hunter; somewhere else when he needed to be here, the member for Scullin; taking a tea-break somewhere, the member for Bruce; having smoko, the member for Shortland; gone fishing, the member for Fowler; navel-gazing, the member for Chifley; simply nowhere to be seen is the member for Throsby; running away, the member for Ballarat; fleeing, the member for Fraser; retreating, the member for Jagajaga; surrendering, the member for Perth; folding, the member for McEwen; flailing, the member for Blair, who you can normally not shut up; floundering, the member for Gorton; fading, the member for Hotham; vanishing, the member for Parramatta; in hiding somewhere, the member for Fremantle; limping away, the member for Oxley and the member for Sydney; scurrying away, the member for Moreton; dithering somewhere, the member for Greenway; dissembling somewhere else, the member for Lalor; dodging somewhere else, that member for Lingiari, who should be down here to defend his actions in the last six years; ducking away, the member for Lilley, who held up this entire process; running away, the member for Wills; weaving somewhere else, the member for Kingsford Smith. Member for Calwell, Member for Gellibrand, you are just so lucky—I have run out of adjectives.

7:59 pm

Photo of Keith PittKeith Pitt (Hinkler, National Party) Share this | | Hansard source

I would like to thank the member for Leichhardt for his good grace. I rise to speak in support of this bill to fairly index Defence Force retirement and death benefits. This bill will benefit more than 56,000 ex-service men and women across Australia, including 556 in my own electorate of Hinkler. During the 2013 federal election, the Palmer United candidate, Rob Messenger, told Hinkler constituents that the coalition would never deliver on its commitments to fairly index DFRB and DFRDB pensions. But today we are doing exactly what we said we would do. We are addressing the longstanding grievance of the veteran and ex-service community about differing and inequitable indexation arrangements that apply to these pensions—that is, compared with the age and service pensions.

We first announced our policy in June 2010. We have not flip-flopped or made unrealistic promises, like our opponents have. There have already been more than half a dozen inquiries, all of which supported fair indexation. So my message to the veterans of Hinkler is this: the time for inquiries is over. Australia's veterans and their families are finally getting the fair go that they deserve. Countless constituents in my electorate have been requesting these changes for years. However, I acknowledge that some veterans argue that these changes will not benefit every age group concerned. This has been an ongoing issue for decades and, despite numerous changes in government during that time, little has been achieved. No piece of legislation will ever keep every person happy, but this bill is a hell of a good start.

Under the legislation there will be no change to the way these pensions are indexed for those the under age of 55, until they reach the age of 55. And as part of the DFRB and DFRDB pension that is currently unindexed, it will continue to be unindexed. Members with significant past service, but modest superannuation pensions, will not incur a taxation liability resulting from the changes to indexation. At the end of the day, this bill recognises the unique nature of military service, and it ensures that recipients have their pensions indexed in the same way as the age and service pensions. This means more money in the pockets of people who have proudly served this nation.

8:01 pm

Photo of Warren EntschWarren Entsch (Leichhardt, Liberal Party) Share this | | Hansard source

I certainly welcome the opportunity to speak on this bill today. Australia's veterans have waited a long time for this reform. This government was elected with a four-pillar policy for veterans and their families, which included recognising the unique nature of military service, maintaining a stand-alone Department of Veterans' Affairs, tackling mental health challenges faced by veterans and their families, and providing adequate welfare and advocacy support. Underpinning this was our commitment to deliver fair indexation for the Defence Forces Retirement Benefit and the Defence Force Retirement and Death Benefit for military superannuants aged 55 and over.

In Leichhardt we have 588 recipients who can take advantage of the new arrangements from 1 July. This bill recognises that those who have served our nation should not be treated differently from age and service pensioners. Our determination to introduce our fair indexation policy delivers on a very legitimate grievance of the veteran and ex-service community and is a significant win for them. Mark Cernaz from Bayview Heights wrote to me yesterday and thanked the government for finally correcting this long-running issue but cautioned that there is a need to continually monitor Defence superannuation schemes to ensure that they comply with the intent of the original legislation and that appropriate and fair indexation methods always remain in place. I would like to emphasise to Mark and others that this will continue to be a work in progress, particularly with the number of younger veterans returning from areas of conflict.

Unfortunately the past six years have demonstrated Labor's lack of commitment to the veteran community, together with a legacy in the form of a budgetary mess.    By ending the previous government's wasteful spending, paying off debt and restoring the economy to a robust position, we will be in a far stronger place to consider better support for veterans and their families in the future. We are also undertaking a range of other measures now to show our support for veterans and ex-servicemen and ex-servicewomen.

Firstly, the provision of mental health services is an issue that is very close to my heart. Each year the DVA spends about $166 million on dedicated mental health services. We have also reconstituted the Prime Ministerial Advisory Council on Ex-Service Matters, with renewed focus on veterans' mental health. Secondly, we will restore Labor's $1 million funding cut from the BEST program, meaning that, as of 1 July, veteran and ex-service organisations will have up to $3.75 million to support advocacy and welfare services. Thirdly, maintaining a stand-alone Department of Veterans' Affairs is critical. The DVA is actively working to change the way it operates so that it better meets the needs of younger clients as well as its traditional clients. Fourthly, the government remains committed to the Veterans' Children Education Scheme and the Military Rehabilitation and Compensation Act Education and Training Scheme.

Lastly, we are fast approaching the 2014-18 Anzac centenary. I know there has been commentary in the media that the Anzac remembrances are coming at the expense of care for our veterans and their families. This is certainly not the case. Over the four years of the centenary of Anzac we will spend $650 million on dedicated mental health services and $50 billion on providing support for veterans and their families. This is a very significant investment and certainly one that has been very well earned. Over that same time, financial commitments to the centenary of Anzac amount to $145 million. As the veterans' affairs minister, Michael Ronaldson, said recently:

By 2018, we must have left a legacy in the minds of younger Australians, in particular, about the service and sacrifice of past generations, of the responsibilities to care for those who have defended our rights and way of life.

He goes on to say:

… we must ensure that we do not repeat the mistakes of the past, particularly the appalling manner in which Vietnam veterans were treated upon their return.

Here it is timely for me to mention that, as an ex-serviceman and a patron of the Vietnam Veterans' Motorcycle Club in Far North Queensland, I have a very good knowledge of the needs of our older veterans, particularly our Vietnam veterans. I am also the patron of the Avenue of Honour at Yungaburra, which was recently dedicated by Gordon Chuck and his wife in commemoration of their son, Ben, who lost his life in Afghanistan. Ben was one of the 40 of our wonderful soldiers who lost their lives over there. It is a beautiful place of reflection and something very, very special. And I am very proud to say that I was a significant financial contributor to the establishment of this memorial on Lake Tinaroo. I have got to say that Gordon and Susan Chuck have done a fabulous job in leading the campaign to have this established, and I am very proud to now be the patron of the Avenue of Honour at Yungaburra. It also provides me with an opportunity to work with and talk to a lot of our younger veterans.

For many of our veterans it is not about money; it is about recognition of service. That is why this bill is so important. We must never stop looking at ways to improve the support that we provide to those who have served our nation. I certainly commend this bill.

8:07 pm

Photo of Dennis JensenDennis Jensen (Tangney, Liberal Party) Share this | | Hansard source

The Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 addresses a serious anomaly that Labor tried to hide and talk around for six years. That anomaly is the unfair, non-indexed retirement benefit situation constraining our aged veterans. Fair indexation is something that I have personally championed for many years, including in the party room during my first term in the Howard government.

Labor broke its 2007 election promise to fix the issue of military superannuation indexation. Labor lost its way on reform of military superannuation. In 2007 Labor promised to release the findings of the previous coalition government's review into military superannuation arrangements, otherwise known as the Podger review. Labor's release of the Podger review was seen by Labor as the end of their commitment to reform. Their consultation produced no outcomes. Labor's wasteful and reckless spending in so many other areas left them unable to meet their 2007 commitment to prevent the further erosion of veterans' pensions due to unfair indexation.

After spending so much money on pink batts, green loans and the failed BER school halls program, Labor was unable and unwilling to find the funds necessary to meet their commitment to veterans on military superannuation reform. It is very easy to talk of nominal increases, or gross increases, or even annual increases. Viewed in a vacuum all of the above are very helpful and welcome for veterans. However, life does not operate in a vacuum. Any increase must be viewed in the context of the rising cost of living pressures and the threat of relative deprivation. The key question is: is my quality of life at least as good as it was last year? The question then becomes: what is the real increase or net gain?

I will not indulge the members opposite by providing them with a basic education in economics. Suffice to say that when costs of inflation are taken away, and the relative increase in purchasing power is factored in, the unfair CPI fat lady is very much exposed. Labor lies can never hide the truth that the previous Labor government never prioritised the military or defence personnel in any way. If it was so, how could they have cut defence spending back to levels which, when measured as a percentage of GDP, were last seen in 1938?

The coalition listens to expert advice and acts. The original DFRDB scheme contained a wage based indexation element that was removed in the mid-1970s when the government decided to apply the CPI to a wide range of social security and superannuation pensions. In recent years, the government has changed indexation arrangements for social security pensions to include a wage based component. CPI indexation does not maintain relativity with community incomes. As the federal member of the seat of Tangney in Western Australia, this aspect is of particular concern to my constituents.

The effects of the mining industry in WA are far and away positive. However, one significant drawback is the effect of a two-speed economy on wage growth. The bill is good for WA, and especially good for veterans and defence personnel in my electorate of Tangney. Labor have been saying since 2011 that CPI is not a good measure, and that the current system is broken. Yet, typical of Labor, they saw a problem but were incapable of fixing it. Like the budget, not only did they fail to fix it but they actually made it worse. In 2010 the coalition promised fair indexation. Before the 2013 federal election this commitment was restated, and from 1 July 2014 57,000 DFRB and DFRDB superannuants aged 55 and over will have their benefits indexed in line with age and service pensions.

As promised the fair indexation provisions will also extend to reversionary pensioners aged 55 and over. The government has long recognised the unique nature of military service and the sacrifices military personnel and their families make on behalf of all Australians. In summary, it comes down to real versus nominal, trickery versus delivery, Liberal versus Labor.

8:13 pm

Photo of Karen AndrewsKaren Andrews (McPherson, Liberal Party) Share this | | Hansard source

I am very pleased to outline my strong support for the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014, which delivers on a key coalition election commitment to provide fair indexation to the members of the Defence Forces Retirement Benefits scheme, the DFRB, and the Defence Force Retirement and Death Benefits scheme, the DFRDB. As we methodically work through delivering our election commitments, it is a reflection of our values that we have put this promise high on the list of priorities.

The coalition has a very proud history of advocating on behalf of our defence personnel and of affording the utmost respect to those who have served our nation in this noble way. We are very proud of the job our defence forces do. As a result we are determined to strengthen our nation's defence forces rather than weaken them, as Labor did in office. It is a national shame that under the Gillard and Rudd governments defence force spending as a proportion of GDP fell to just 1.59 per cent, the lowest level since 1938.

We are committed to stopping the defence budget cuts and to putting forward legislation like this bill where we ensure our ex-service men and women are treated fairly. Put simply, this legislation will ensure that indexation for DFRB and DFRDB pensions is calculated in the same way that age pensions currently are. Linking the indexation not only to CPI but to the Pensioner and Beneficiary Living Cost Index and male total average weekly earnings will mean a better deal for some 57,000 military superannuants.

Some of those listening at home might consider it an odd quirk that this has not already occurred. Why would you change age pension calculations to make them fairer and not extend that to military superannuants? But there is quite a history to this issue. I note that it was actually Labor that promised to introduce fair indexation for DFRB and DFRDB recipients, before they were first elected in 2007. But, as was to become their style, they did not actually deliver on their promise.

So the coalition made a commitment at the 2010 election to deliver indexation fairness if elected. Even after we narrowly lost the 2010 election, we introduced legislation to the Senate in November 2010 to provide fair, just and equitable indexation for DFRB and DFRDB military superannuants. And what was the Greens and Labor's response? In March 2011, they called for a Senate inquiry into the legislation, in typical Labor style, when there had already been more than half-a-dozen inquiries, all of which supported fair indexation. The Greens and Labor then used the inquiry to oppose fair indexation, the first time the parliament has ever opposed fair indexation. Then in June 2011, with Labor and the Greens voting it down in the Senate, the coalition's fair indexation legislation was defeated. So there is quite a history, and this bill finally reverses the injustice of that very shabby episode. There is a long list of what Labor did wrong during their terms in office, but the decision to oppose fair indexation of veterans' pensions was really a low point. And yet they stand up in this place and move an MPI like they did today and expect us to forget the shabby treatment they meted out to our veterans.

My electorate of McPherson is home to a very strong and active ex-service and veterans community. I note that some 483 McPherson residents are DFRB or DFRDB recipients. It is one of the most rewarding aspects of this job to be able to deliver just benefits and make our system fairer. I am very proud to support this legislation, just as I am always proud to support the work of my local RSLs and other veterans organisations. It is something very dear to my heart. My late father was a World War II veteran and became a tireless advocate as National Secretary and Treasurer of the Australian Federation of Totally and Permanently Incapacitated Ex Servicemen and Women. As someone who believed in a fair go, he would have been very pleased and proud that I have the opportunity to support this legislation today, to provide a better deal for deserving military superannuants. I wholeheartedly commend this bill to the House.

8:17 pm

Photo of John AlexanderJohn Alexander (Bennelong, Liberal Party) Share this | | Hansard source

I rise to support this bill which honours this government's election commitment to aged pensioners who have made the most selfless of decisions, to serve in our nation's defence forces. I am conscious of a very long list of coalition members who wish to speak on this important issue and will therefore keep my comments very brief. In contrast, I note a total of just two opposition speakers have taken an interest in this important issue.

This bill amends the Defence Forces Retirement Benefits Act 1948 and the Defence Force Retirement and Death Benefits Act 1973 to deliver the government's commitment to fairly index Defence Forces Retirement Benefits and Defence Force Retirement and Death Benefits pensions for recipients aged 55 and over from 1 July 2014. The veteran and ex-service community have long been advocating for governments to implement this change. This was an election commitment made by the previous Labor government in 2007. Yet, after the Labor government was elected, this commitment, like so many promises made by those on the other side, was not honoured. This represented a major slap in the face to those who have served our nation. In 2010 the coalition adopted this policy and, despite not winning government, we twice presented bills in this place to implement this change, only to be rejected by the Labor government. It is a pity it has taken this long to finally get to this point we are at here today, but it is not a surprise that it took the election of a coalition government to implement fair indexation for DFRB and DFRDB recipients.

I was honoured to sign a pledge that I would ensure, if elected, that this change would be presented to parliament. We have kept our word. Australia's veterans have risked all for our nation and they deserve better than the previous government, who said one thing before an election and another after. This bill shows that the coalition government understands the unique nature of military service. The bill will ensure recipients with significant past service but modest superannuation pensions will not incur a taxation liability resulting from these changes. Those on high annual incomes will not be excluded from an ongoing annual liability. The new measures extend fair indexation provisions to invalidity pensions, reversionary pensions and pensions for those associates in receipt of a pension as a result of a family law split who are aged 55 and over on the current relevant indexation date. From 1 July this year the proposed changes will immediately impact approximately 45,000 current DFRB and DFRDB pensioners aged 55 or over.

On behalf of all those Bennelong residents who have served our nation, and those who currently serve, I applaud the minister and this government for acting so quickly in our first term to honour this commitment. I commend this bill to the House.

8:21 pm

Photo of Stuart RobertStuart 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.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

The question is that the member for Denison's amendment be agreed to.

A division having been called and the bells having been rung—

As there are fewer than five members on the side for the ayes in this division, I declare the question resolved in the negative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Wilkie, Ms McGowan, Mr Bandt and Mr Katter voting aye.

Original question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.