Peter Thorntons Open Letter to Eden-Monaro Candidates

23 Aug 2013

Peter Thornton attended the Queanbeyan Community Forum last Tuesday night when in Dr. Kellys answer to his question, Peter tried to interject because he felt it was absolutely necessary because the answer being given was not factual and perpetuated comments that Kelly had given the previous day on ABC NEWS24.

This open letter intends to set the record straight. It presents a part transcript from NEWS24 and then some facts for candidates to consider in their role as guardians of the truth for the 15,425 affected constituents of Eden Monaro, and by broader affiliation to all affected constituents nationally.


Michael Rowland (ABC): ” Speaking of Defence, I have been speaking to a lot of veterans who are, and you see some behind me, who are very concerned that the government hasnt really gone all the way in improving their pensions. There was of course an announcement by Kevin Rudd at the outset of the campaign and they still argue, they argue very very strongly that this has not kept up the cost of living and purchasing power”.

Dr. Kelly: ” Yes, look this is an issue. I have fought very hard for the last six years and certainly the Howard Government did nothing on this issue, including my opponent, who was in the Howard Government and advocated in 2005 that veteran pensions should be cut including the abolition of the Department of Veterans Affairs. But in that six years I have achieved improvements in pensions, so our veterans are in fact fixed. Weve introduced a triple indexing mechanism to fix their pensions, also TPI compensation recipients – triple indexed now. So I have now achieved the next step which is adding the PBLCI mechanism to DFRB and DFRDB pensions which is a mechanism designed to keep pace with the cost of living.”


Notwithstanding some of Dr Kellys efforts, efforts that have been stymied by 6 years of continued Government intransigence and recalcitrance resulting in rather limited and inadequate outcomes, here are some of the real facts: –

Fact 1: It was in fact the Howard Government that introduced legislation in 2007 that directly aligned the indexation of Veterans Disability Pensions to that of the Age Pension …. indexation arrangements that have been refined over time to protect the purchasing power of those pensions; an indexation arrangement that is the government standard for pension updating.

Fact 2: The legislative intent of that 2007 legislation was to ensure that all DVA disability pensions were to maintain relative parity to all increases in the Age Pension (i.e. any structural adjustments and/or the updating of those pensions).

Fact 3:  Not withstanding Labors introduction and application of a third indexation element into the Age pension (i.e. the PBLCI), its direct application to Veterans disability pensions is nothing special (as claimed) because the application is/was consistent with the original legislative intent of 2007.

Fact 4. In September of 2009, and contrary to the intent of the 2007 legislation, the Labor Government specifically amended the Veterans Entitlements Act to deny disabled Veterans a structural adjustment to the base of their disability pensions that should have occurred when the Age Pension was increased from 25% to 27.7% of MTAWE. Therefore, Veterans disability pensions are NOT “fixed” as claimed by Dr. Kelly because the Rudd Labor Government reneged on the legislative intent of maintaining the parity of Veterans Disability pensions and this has cost our most disabled Veterans (i.e. TPI pensioners) approximately $3,300 p.a. since.*

Fact 5: The legislative intent of both Military and Commonwealth Defined Benefit superannuation was to ensure that the value and Purchasing Power of those retirement benefits were to be protected and maintained for life. This is as true today as it was when the various older legislations were struck because the current Military Superannuation Handbook states, and I quote: $1 in 2011 will be equivalent to $1 in 2028. The graph below lays waste to such statements and false advertising!

Fact 6: Statements that imply that the PBLCI will fix the situation are false because Purchasing Power is loosely defined as income and wealth in real terms (please see here for an authoritative reference). PBLCI only reflects the expenditure patterns of age pensioners & welfare beneficiaries and it is essentially just a re-weighting of the same price inflation elements that underpin the CPI. PBLCI does not contain or reflect a wage or income component, and so by itself, it cannot be directly associated with purchasing power or the maintenance thereof as implied.

Fact 7: PBLCI has only had a 3% cumulative beneficial effect since its 2009 introduction. Therefore, the erosion of Military and Commonwealth superannuation benefits will continue to exhibit the same trend as illustrated in the graph below if only the higher of PBLCI or CPI is applied.

Fact 8: Whilst life expectancy has improved over the last 100 years, the fact remains that according to the World Health Organisation (2011), the life expectancy of a male in Australia is still only 80 years of age and a female is only 84 years of age. Suggestions that people will live to 120 years of age in the context of current Military and Commonwealth retirement schemes that are substantially closed is just fanciful and deceptive.

Fact 9: Apart from the Palmer United Party, no pre-election commitment has been given to protect the purchasing power of the 9,082 retirees who exist in the current military superannuation scheme (i.e. MSBS); approximately 55% of whom have been formally retired due to invalidity. What could possibly explain indefensible policies that herald the service of one military retiree above another?

Fact 10: No Commonwealth retiree (e.g. former long serving Customs Officers who might have patrolled and protected our borders, or Federal Policemen who might have protected us against illegal crime & drug gangs, or intelligence officers both foreign and domestic who might have protected us from international terrorism, or the humble Centrelink Officer who invariably helped and assisted our elderly) will benefit from any pre-election commitment to fix and protect their retirement!!!!! #


I hope this information sets the record straight and I hope that you and your national affiliates will now take up and carry the torch of truth into the future.

Yours sincerely

Peter Thornton
Independent Researcher and Commentator for Military and Commonwealth Retirees/Veterans.
02 6169 6873
0406 1944 69

“All for One … and … One for All”

* Whilst Labor remains utterly condemed for this 2009 atrocity, the Opposition does not assume the moral high ground because they have not provided a pre-election policy commitment to redress this grevious issue … all the while our most disabled Veterans continue to suffer further and significant financial deprivation.

# As in previous election years, the Greens pre-election commitment this time around is percieved as just another time wasting exercise. No further index is required to be developed because the Commonwealth already has a refined standard upon which the purchasing power of pensions are updated, maintained and protected. This standard just needs to be implemented for Military and Commonwealth superannuation!