PRIVATE MEMBERS' BUSINESS Military Superannuation

Mr McCORMACK (Riverina) (12:55): This Labor government has not done the right and proper thing by veterans as far as their superannuation entitlements are concerned. I acknowledge what the member for Chisholm has just said. If that is so, let us work together as a parliament for those people she rightly praised in her speech.

For people who have bravely and willingly laid their lives on the line for their country, the present indexation levels are unacceptable and need to be rectified. The government's continued refusal to pay adequate and fair compensation to ex-service personnel raises many questions. Why does the government continue to discriminate against military superannuants by not indexing their superannuation to retain purchasing power, as promised by their employer when they joined their respective service? Why do the minister and his department continue to neglect the nation's obligation to honour enlistment conditions—contract vested property—and engage instead in continuous extraneous rhetoric, spin and political posturing? Serving and retired members of the Australian Defence Force should not be treated as second-class citizens. 

This is a big issue for the Riverina and for Wagga Wagga, a triservice city, because many defence people retire to the region because of the quality of the regional lifestyle. If fair indexation is affordable for some 3½ million age pensioners and other welfare beneficiaries, and if generous indexation is affordable for certain parliamentary and judicial superannuation pensioners, why is fair indexation not affordable for military superannuation pensioners? 

Australian Defence Force people deserve substance, not a so-called fact sheet, the contents of which can be disputed all the way through. Our veterans served their country selflessly and at great personal risk, as we all know too well. In retirement, they, their widows and their families deserve to have their employment conditions honoured as faithfully as they provided their gallant service. As a condition of employment, fair indexation must be a nondiscretionary obligation in the budget. Surely in a country such as ours, where a fair go is one of the cornerstones of our culture, just things such as this are always affordable. When will the government take real action to fix this? Why does the government permit a military condition of service to continue to be breached? The Minister for Veterans' Affairs, who claims to be well aware of the concerns of the veteran community, would surely understand this. 

This condition of service provides for retirement pay, a superannuation pension which maintains its purchasing power. Service people themselves compulsorily contribute to it. The nation is duty bound to honour that employment condition; ipso facto, the budget should provide—veterans argue—for fair indexation as a nondiscretionary item before other discretionary items. 

Fair indexation of military superannuation pensions is not a new or improved benefit but a condition of employment. It has been and remains a condition of military service that superannuation pensions maintain their purchasing power. That is why the parliament made provision for that to be done when the schemes were established. This was an employment condition, if you like, or contract which established vested property at the time of enlistment. The cost to provide for fair indexation to meet that condition of service is estimated by the coalition at $100 million over four years before clawbacks—a figure supported by renowned economic commentator Peter Thornton. Of course, any cost to the taxpayer is moot given that proper indexation was a condition of employment and is thus, or should be—according to those who stand to lose out if this issue is not addressed—a nondiscretionary obligation on the public purse. 

The government's continuing refusal to address this issue cannot be reconciled with Labor's current platform which says it will 'continue to explore equitable and affordable mechanisms for the improvement' of military pensions. 

Failure to justly index military superannuation pensions comes at a significant cost to veterans' purchasing power. That cost for an average superannuant on $23,000 per annum who has been retired for 15 years is the loss of some $280 per fortnight in real purchasing power which they would have had if their super had been justly indexed at the same rate as age pensioners. With the cost of living increasing all the time and the carbon tax—certain to place even greater pressures on those relying on a pension to make ends meet—real purchasing power becomes an even more burdensome, everyday issue. Fair indexation of military superannuation pensions to maintain their purchasing power is a founding principle of the Defence Force Retirement and Death Benefits, and Military Superannuation and Benefits acts. This purchasing power is a condition of service and veterans plan their lives in retirement on that basis. 

Australia has a magnificent record of service in war and peacekeeping operations since Federation, with nearly 1½ million serving. The sacrifice made by their families has also been enormous. It is now time to honour that service with fair indexation. I support this motion and I call on the government to do the right thing by our retired military personnel. This is about equity and justice for those frustrated veterans who are out of pocket and because they have been let down, unfairly, by this Labor government.