Veterans groups use Anzac centenary to fire up over pension reforms

21 Apr 2015

SMH article by Heath Aston Political reporter 21 April 2015

Prime Minister Tony Abbott is under fire from groups representing military pensioners and war widows who say the government’s proposed changes to veterans’ payments threaten the quality of life and dignity in retirement of nearly 300,000 people who sacrificed for Australia.

Mr Abbott, who is en route to Turkey for the Anzac centenary at Gallipoli, met with the leadership of the RSL last month but refused to back down on a decision to index payments to the rate of inflation rather than wages.

Veterans groups have been working behind the scenes since the budget but recent meetings between the Federation of Totally and Permanently Incapacitated Ex-Servicemen & Women (known as TPI), the Defence Force Welfare Association and the Alliance of Defence Service Organisations resolved to increase the pressure to coincide with Anzac Day and as Treasurer Joe Hockey finalises his second budget.

“It’s all very well to commemorate the fallen – and we support the centenary commemorations – but we have to fully support the living as well,” TPI national vice-president Pat McCabe told Fairfax Media.

The TPI wrote to Mr Abbott this week, reminding him of the words of Prime Minister Billy Hughes who said in 1917: “We say to them, ‘You go and fight and when you come back we will look after your welfare’ … we have entered into a bargain with the soldier, and we must keep it!”

“It’s that bargain they have broken,” Ms McCabe said. 

McCabe Pat

In its letter, TPI also pointed to comments by members of the Howard Government in 2007 when they boasted of a decision based on “fairness” in switching indexation of disability pensions, including veterans’ pensions, from CPI to the generally higher rate of average male weekly earnings.

At the time, then veteran’s affairs minister, Bruce Billson, called it a “more rational and equitable method of indexation”.

The “fairer” indexation remained in place until the first Hockey budget when veterans’ payments were put in the same basket as general welfare and the aged pension to be indexed with CPI from 2017.

At the same time, the Abbott government honoured a pre-election pledge to index retirement benefits for military superannuants from CPI to wages.

“The government has delivered its election indexation promise to military superannuants and their families, which the former government failed to deliver,” a spokesman for Mr Abbott said.

“We will continue to talk with all Parliamentarians, including crossbench senators, in good faith in order to make pensions sustainable and available to all who need it, and to fix the debt and deficit mess created by Labor.”

The decision to move superannuants on to the wage indexation at the same time as knocking veterans’ pensions down to inflation has baffled RSL president Rear Admiral Ken Doolan.

In his latest newsletter, he said the legislation for existing military superannuants “explicitly acknowledged that indexing by the CPI was unfair”.

“Logic dictates that if this was unfair so too is the change to indexing by CPI from 1 July 2017 to the service and aged pension, income support supplement, disability pension, war widow(er) pension and equivalent MRCA payments. The RSL calls on the government to redress this inconsistency in policy by revoking the changes due to take effect on 1 July 2017,” he told members.

In its 2015 pre-budget submission, the RSL said: “The budget measure will have a detrimental effect on the quality of life of those in the veteran community whose only source of income is the service pension. To qualify for the service pension, veterans must have had qualifying service, which by its definition implies that the veteran faced danger from the enemy and was prepared to pay the ultimate sacrifice.”

Ms McCabe said veterans’ payments were a form of compensation under law that acknowledges sacrifice, not welfare.

The change is expected to save $65.1 million in 2017 but the cumulative effect will erode the value of veterans’ pensions by more each year as time goes on. Legislation to facilitate the change has been introduced in the House of Representatives but is yet to be tested in a hostile Senate.

Government sources said the past two pension increases were higher because CPI was higher than wages.