Parliament gives Veterans a Fair Go – But only some of them

30 Apr 2014

That does not “do the right thing by those who have served”.

Bert Hoebee, Life Member, Defence Force Welfare Association, 21 April 2014.

In a recent Camaraderie I called on politicians to fix indexation immediately and unconditionally. I stated that Peter Thornton’s work showed the way to use the Future Fund to do so, and I asserted that nothing stood in the way, except their will to have it done. (“Here’s how to solve the superannuation indexation inequity – now!”, Vol 45 No 1, pp 22-23.)

The subsequent passage of the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014 delivered on the Coalition Leader’s promise to take a ‘first step’ forward. Well done, so far. We need to be clear, however, that fair indexation has not yet been restored for all military superannuants.

Predictably, the Government’s Media Release (1) proclaimed grandiosely that:
“This Government has long recognised the unique nature of military service and the sacrifices military personnel and their families make on behalf of all Australians. The Government’s resolve to introduce our fair indexation policy reflects our unwavering commitment to support veterans and their families.”
“By introducing this legislation today, the Government is doing the right thing by those who have served.”

The fact is that Parliament’s action will only restore a superannuation pension that maintains its purchasing power for some 45,000 over 55 y.o. DFRDB/DFRB retirees, out of a total of 57,000. The under 55’s and some 10,000 Military Superannuation Benefits Scheme (MSBS) pensioners are entirely neglected.
Restitution is not even mentioned. This deserves an outcry of righteous indignation. Yes, we know that fiscal conditions are hard. But we have shown at least one way forward using the Future Fund without affecting the Commonwealth Budget, and thus avoiding difficulty in the context of the current fiscal

The initiative clearly fails the very test of fairness that prompted it. After all, if it is right and just to restore a neglected condition of service to some of those affected, how can it possibly be equitable not to do so for all others in a similar boat?

For those under 55 who qualify for superannuation under existing legislation, and all those who serve or have served under the current scheme – the Military Superannuation Benefits Scheme (MSBS) – the purchasing power of their superannuation will continue to spiral ever downwards, until some indeterminate time in the future; as shown in the graph on page 22 of the recent Camaraderie. That does not accord with notions of a “fair go”.

Our Parliamentary representatives must be reminded that members of the ADF on MSBS and the under-55 DFRDB people who have also served and continue to do so, have done nothing different to those now to be properly indexed, except to be born a little later, or choose to go to, or be obliged to go with the MSBS on
the same understanding about their super maintaining its purchasing power – whenever they got it, and however large or little it was. They need to recall that a pension that maintains its purchasing power is a condition of ADF service. It was founded in the Parliament’s establishment of military superannuation
schemes in the early 1970s, and is also reflected in the design and inception of MSBS in the early 1990s. Its
callous casting aside in the early 1990s ought never to have been allowed to occur.

Surely it is unjust discrimination to neglect those under 55 and all MSBS members and retirees whose service is supposedly recognised by the Government? As at 30 June 2013 there would be some 3,000 over 55, out of a total of 9,937 MSBS retirees. Must they all continue to suffer while the Government proclaims
its “unwavering commitment to support veterans and their families”? How cynical is that!

The Parliament should now demand that the second step be taken to close the indexation gap between DFRDB and MSBS military members and superannuants, some of whom still serve with distinction side by side in the ADF. Equity calls for that to be done as soon as possible within the current term of the Parliament. 

Let’s have a just outcome and a fair go for all concerned, not just for some.

(1) – Media Release, MINVA016, Thursday 20 March 2014