Letters – DFWA/ADSO and Defence Minister

21 Jun 2012

The following is an exchange of letters between DFWA/ADSO and the Defence Minister, The Hon.Stephen Smith on significant Fair Go Campaign issues:

1. 30 November 2011 from DFWA to the Defence Minister
2. 07 March 2012 to DFWA from the Defence Minister
3. 06 June 2012 from DFWA/ADSO to the Defence Minister

Note that for easier understanding and comparison each issue is highlighted and the exchange between each party recorded in chronological order with the Ministers response in blue italics.

Letter 1

Defence Force Welfare Association
30 November 2011
The Hon Stephen Smith MP
Minister for Defence

Dear Minister,

I am writing to seek your assistance on a number of matters which are of continuing concern to the defence community. As President of the Defence Force Welfare Association and national spokesman for the Alliance of Defence Service Organisations (ADSO)1, I have approached various ministers in this and the previous administration seeking resolution of these concerns. Suffice to say we have been very disappointed with the responses received and the general lack of action by the Government on what we see as legitimate matters needing resolution. Our collective memberships are becoming increasingly disaffected with the present Governments lack of any positive response, which they represent back to me and my fellow leaders as Government neglect of its service men and women and an absence of respect for the professional way they undertake difficult and dangerous missions to which the Government deploys them.

(A summation of the significant matters for which we seek resolution are listed below)

Yours sincerely
David Jamison
National President

The Hon Warren Snowdon MP, Minister for Defence Science and Personnel
The Hon Robert McClelland MP, Attorney-General
Senator the Hon Penny Wong Minister for Finance and Deregulation
The Hon Gary Gray MP, Special Minister of State
Senator the Hon Nick Sherry Minister, Assisting on Deregulation and Public Sector Superannuation


Letter 2

Stephen Smith
Minister for Defence
7 March 2012

Colonel David Jamison (retd)
National President
Defence Force Welfare Association

Dear Colonel Jamison,

Thank you for your letters of 30 N0vember 2011 and 30 January 2012 in which you sought my assistance to resolve a number of matters that are of continuing concern to the Defence community. I have addressed each of the key issues you raised in the order in which they have been raised in your letter.

(Responses are listed below in blue italics)

I trust this explains the Governments position
Yours sincerely

Stephen Smith


Letter 3

Defence Force Welfare Association
6 June 2012
The Hon Stephen Smith MP
Minister for Defence

Dear Minister,

Thank you for your letter in response to mine in which I sought a way ahead for a number of concerns of the Defence community. I appreciate your explanation of the Governments policy and intentions however it does display the gap between these and the expectations of the Defence community on the issues we have addressed. In light of this situation I outline some comments on the topics in question in this letter but again urge you to agree for a meeting between yourself, appropriate government officials and the leadership of the Alliance of Defence Service Organisations to discuss our ongoing concerns and how these might be addressed in a positive way.

Comments on a number of the matters addressed in our correspondence are listed below.

Again we fully understand the budgetary challenges confronting the Government, but never the less are in no doubt that there are opportunities for the Government to fund the fixes required.
I reiterate that I believe a meeting between yourself, appropriate government officials and the leadership of the Alliance of Defence Service Organisations would prove valuable for us all.
Yours sincerely

Colonel David K Jamison AM (Rtd)
National President DFWA
Spokesman for the Alliance of Defence Service Organisations



1. Military Superannuation.

In early-2007 the Howard Government commissioned a comprehensive review of Military Superannuation. The report (RMSA) was completed before the 2007 elections and released by the Rudd Government in late December 2007. The government response to this report has been under consideration for 4 years and is regularly cited as a reason to defer action on any military superannuation matter. (DJ 30/11/2011)

The Government indicated in its 2010 election policy “Labors Plan for Veterans Affairs that it had decided after consultation on Mr Podgers Report of his Review of Military Superannuation Arrangements, not to follow the Podger proposals as a way forward for military superannuation. This decision was reached after considering 103 further submissions including submissions from the ex-Service community received during the consultation period after the report was released. (SS; 07/03/2012)

The decision by the Government not to follow the proposals contained in the Report of the Review of Military Superannuation (RMSA) is accepted and generally aligns with the view of the organisations representing the Defence community put to the Government following release of the report.
Your assurance that the Government is continuing to consider a wide range of complex issues affecting military superannuation is welcome news. However, there having been no consultation on this consideration only serves to heighten the view that once again the Defence community will be presented with policies that fail to its expectations. The need for ongoing dialogue is reinforced by this lack of consultation. (DJ: 06/06/2012)

The issues we have been seeking action on are;

a. Indexation. The current indexation is by the CPI which is a measure of inflation not purchasing power. The Government has recognised this and has adjusted the indexation for the Age Pension so maintains its purchasing power. The issue for us is not the purpose of the payment but long standing “employment” promise to maintain the relative value of the superannuation pension so that (as outlined in the MSBS book) “the $1 in 2011 will be equivalent to $1 in 2028”. We are seeking the same percentage adjustment used for Age/Service pensions be adopted for all components of Military superannuation pensions (DFRB/DFRDB/MSBS) including preserved funds and the total reversionary pension for partners of deceased military superannuation pensioners. (DJ 30/11/2011)

The 1997 change to the age pension indexation methodology was made to honour an election promise that pensioners would share in increases in community living standards and not to maintain the purchasing power of the age pension, which is maintained by indexing to the Consumer Price Index (CPI). This has been a policy objective of successive Governments since the early 1970s

The age pension is a safety net benefit and the only source of income for many older Australians. As such the Government has decided that it is appropriate to index the pension in a different way to superannuation pensions it might provide as an employer.

In his 208 Review of Pension Indexation Arrangements in Australian Government Civilian and Military Superannuation Schemes, Mr Matthews found no conclusive evidence that the CPI understates inflation as it affects Australian households in general. This finding was supported by the views expressed in a paper prepared for the Review by the Australian Bureau of Statistics which is still current.

In light of this and in the absence of an alternative measure the Government accepts that the CPI is a robust measure of general price inflation for the household sector and the best available broad measure of changes in the cost of living faced by Australian households.

The Pensioner and Beneficiary Living Cost Index which is a by-product of the CPI, was first introduced as an indexation factor for income support pensions in September 2009. Thisindex is still being refined and was recently updated from the September 2011 quarter. The Government will continue to monitor progress of the use of the Pensioner and Beneficiary Living Cost Index. (SS; 07/03/2012)

I understand your explanation of the reasons the Government continues to refuse to amend the Military Superannuation Schemes indexation arrangements as these have been articulated previously. On the other hand these explanations have not been supported by a run of Government and parliamentary inquiries starting with Joint Select Committee on Defence Forces Retirement Benefit Legislation (Jess Committee) 1972, all of which up until the Matthews Review of Pension Indexation Arrangements in Australian Government Civilian and Military Superannuation recommended methods other than just using the CPI so that in Jesss words “relativity with average weekly earnings is maintained”.

The Matthews report of 2009 which alone recommended remaining with the present arrangement has been comprehensively discredited as being a superficial analysis of the available evidence, lacking depth and containing deeply flawed conclusions. We accepted his statement that the “purpose of indexation is to maintain purchasing power” but deplored his insistence that despite the declaration by the Australian Bureau of Statistics to the contrary, the CPI fulfilled that purpose.

The entirety of the organisations representing the Defence community have repeatedly rejected the Governments position, that while other Commonwealth funded pensions and superannuation payments are indexed using a matrix formula which moderates the movement of the CPI or are tied to a specific salary level to maintain their value, the CPI alone does the same task for military superannuation. This inconsistency of policy is widely viewed as discriminatory towards the men and women who serve or have served in the ADF.
I reiterate the issue for us is not the purpose of the payment but long standing “employment” promise to maintain the relative value of the superannuation pension so that (as outlined in the MSBS book) “the $1 in 2011 will be equivalent to $1 in 2028”. (DJ: 06/06/2012)

b. Access to employer benefits. This is imposing a significant financial shortfall on members of MSBS who leave the service after a short time and do not have access to the employer benefit to roll over to an approved superannuation fund of their choosing. Members should be given the option of accessing the employer benefit on discharge. Acting on recommendation 8 of the RMSA has the potential to reduce any superannuation liability from the Commonwealth at the time of discharge thereby reducing unfunded liabilities. (DJ 30/11/2011)

In the main all superannuation benefits must be preserved until preservation age, which is between 55 and 60 depending on the individuals date of birth. The Military Superannuation and Benefits Scheme is an unfunded scheme (that is, the government pays its employer contribution when the superannuation benefit falls due for payment). Members of the MSBS who discharge prior to age 55 must preserve their unfunded employer benefit in the MSBS. The benefit is adjusted using the CPI while it is preserved.

This was identifies as a shortcoming of the MSBS by Mr Podger in his 2007 Review. In line with recommendations to close the MSBS and introduce a defined contribution (accumulation) scheme, Mr Podger recommended that the Government fund the employer benefit so that MSBS members could elect to transfer to the new scheme.

The Government guarantees the MSBS employer benefit, while funds invested with private sector superannuation schemes are subject to market volatility. The MSBS also allows members to convert their lump sum benefit (at age 55 or after) to a life time pension. Those conversion rates are significantly more generous than are available within the private sector.

Any move to provide access to the MSBS employer benefit before age 55 would require the Government to fund those benefits immediately. At 30 June 2011, MSBS preserved benefits were valued at just over $6 billion. (SS; 07/03/2012)

The current arrangements significantly disadvantage the member as indexation to CPI will see the purchasing power of their employer diminish over time. Even in 2008 in the midst of the GFC Government Ministers stated that over the past 30 years Australian superannuation returned on average 5% above inflation (ie CPI). While commercial superannuation does suffer from market volatility in the short term, over the long term it is an excellent investment medium.

The proposal does not for a minute suggest that the government fund all employer benefits, only those who leave the ADF should be given the option of rolling over the employer benefit to a scheme of their choice. Such an arrangement would reduce the unfunded liability to be born ultimately by the Future Fund. (DJ: 06/06/2012)

c. Commutation. The continued use of out of date life tables means that the amount of money deducted from each DFRB/DFRDB fortnightly pension payment to repay the lump sum far exceeds the amount that would apply if the latest life tables had been used. We believe that the Government should immediately adopt up to date life tables in calculating commutation and fortnightly payments for all new DFRDB superannuants and rectify the injustices associated with the application of inappropriate life tables over the life of these schemes. (DJ 30/11/2011)

The lump sum paid as a result of the commutation of Defence Force Retirement and Death Benefits (DFRDB) pension is not a loan, but part of the pension benefit paid early in the form of a lump sum. The life expectancy factors in the DFRDB Act 1973 are used to determine the reduction in the ongoing fortnightly pension where a members elect to receive part of the pension early in the form of a lump sum.

The operation of the life expectancy factors was most recently examined by the Podger Review. The Review Team was of the opinion that the conversion factors based on a 1960s life expectancy are substantially more generous than cost-neutral conversion factors that take into account opportunities to earn interest on the commuted lump sum.

The Review Team suggested that if any change were to be made to the DFRDB arrangement it should be to require a substantially larger reduction in pension in return for the commuted lump sum. The Government is not proposing to make this change. (SS; 07/03/2012)

To more fully outline our position on this issue I repeat the view expressed in the combined ESO response to the Podger Review Team view that “The fact is that the conversion factor based on a 1960s life expectancy is substantially more generous than a cost neutral conversion factor that takes into account opportunities to earn interest on the commuted lump sum. A conversion based on current life expectancy would be even more excessively generous”. This introduced the idea of a conversion factor for the first time.

The Jess Report, which led to the DFRDB Act, intended the lump sum to be repaid over the retiring members remaining life. Neither the Jess Report nor the DFRDB Act makes reference to the earning potential of the lump sum or to a conversion factor.

The use of up an up to date and relevant life expectancy factor is a fundamental part of the calculation to produce an outcome that is fair and equitable to the individual member.

The option to commute a lump sum was an early manifestation of recognition for the unique nature of military service. The Jess Report refers to military personnel being compulsorily retired at relatively early ages having been frequently moved and having not had the opportunity to establish a home and needing to re-establish themselves in the civilian workforce.

The need for a lump sum payment being a pre payment of future entitlements was justified against this background. It was not expected that retiring members would be able to invest the lump sum to provide an income stream and there was never any mention of a conversion factor.

It is believed that it was an oversight that the DFRDB Act did not provide for the periodic updating of the life factors. Any other explanation requires us to believe that the Parliament intended the reduction in the DFRB/DFRDB pension to repay the lump sum should become progressively more disadvantageous as time passed and life expectancy increased. (DJ: 06/06/2012)

d. Maximum Benefits Limits (MRLs). I have written to the Minister for Defence personnel on three occasions requesting that consideration be taken to action recommendation 12 of the RMSA that the MSBS MBLs be abolished. Meanwhile loyal long serving members of the ADF continue to be financially penalized. (DJ 30/11/2011)

As I have indicated the Government has decided not to follow the recommendations of the Podger Review as a way forward for military superannuation but remains commtted to considering further reforms. The Government is continuing to conside a wide range of complex issues affecting military superannuation, including the maximum benefit limit. Maximum benefit limits in both the Public Sector Superannuation scheme and the MSBS are indexed each year with increases in Average Weekly Ordinary Time Earnings. (SS; 07/03/2012)

Your assurance that MBLs are included in your consideration of issues affecting military superannuation is very welcome as this matter is of considerable concern to a growing number of long serving and very experienced ADF members. (DJ: 06/06/2012)

e. Extension of Military Superannuation to ADF Reserve Members. We seek more flexible MSBS membership for all ADF reserve members and Commonwealth employer contribution of the legislated % under the Superannuation Guarantee (Administration) Act 1992 for all reserve service not presently covered. (DJ 30/11/2011)

The MSBS only applies to the Australian Defence Force (ADF) members and members of the Reserves on continuous full time service. The issue of superannuation for part time members of the Reserves is being considered in the context of a review into the conditions of service of Reserves as part of the Strategic Reform Program.

Providing MSBS coverage for ADF Reserve members who are not on full time service would require a significant review of the MSBS as a whole, which would have significant implications to funding and benefits for current and future MSBS members. (SS; 07/03/2012)

f. Taxation of Military Superannuation. The only reason the military schemes were classed as “untaxed” was because of a Government convention that it did not pay tax to itself. Had it done so, the net cost to the Government would have been exactly the same. The Better Super distinction between “taxed” and “untaxed” schemes is artificial. However even with the rebate, it leads to distinct disadvantages for military superannuation pensioners in that their pensions are fully taxable and any additional
income is taxed at the individuals marginal rate. We are seeking the removal of income tax on DFRB/DFRDB and MSBS military superannuation pensions for the over 60s, as well as for all invalidity super pensions. (DJ 30/11/2011)

Those DFRB/DFRDB members who retird prior to the introduction of the Better Super tax changes on 1 July 2007 were able to take advantage of the tax laws that applied at the time the benefits were received. Up until 1July 1983, people could claim a tax deduction (or in some years tax rebates) for the amount they contributed for superannuation contributions or paid as premiums for an annuity from life insurance cover, subject to a maximum cap. Contributions over the maximum cap could be claimed as an income tax deduction against the pension received.

The employer superannuation contributions for the military superannuation schemes are paid by the Government when the superannuation benefit falls due for payment. This has effectively been the funding arrangement for all Government superannuation schemes since their inception ( and both the DFRB and DFRDB schemes rely heavily on the untaxed Consolidated Revenue Fund for paying the bulk of the benefit)

Taxation on employee contributions in the military schemes is recovered when the superannuation benefits are paid ( that is, when employer contributions are made). Since 2007 no tax is applied to member funded benefits or to benefits that arise from a members after tax contributions for those over the age of 60 years. (SS; 07/03/2012)

g. Single Governance Structure. The formation of the Commonwealth Superannuation Corporation has been implemented and as such the government has chosen to act on one recommendation of this report but in doing so appears to fallen short of its stated intentions in that Comsuper has not been placed within the Corporation. This would seem to represent a significant departure from the Governments intentions as advised to us and could mean that promised administrative efficiencies and saving targets will not be met. Such shortfalls will be to the detriment of the members of both the military and civilian superannuation schemes.

We understand the budgetary challenges confronting the Government, but never the less are in no doubt that there are opportunities for the Government to fund the fixes required. Additionally we are confident from our consultations across the political spectrum, that positive actions to achieve these would have the support of the Opposition, the Greens and independent MPs. (DJ 30/11/2011)

The consolidation of trustee arrangements was aimed at strengthening governance and providing opportunities for increased efficiencies in trustee operations, consistent with trends in the broader superannuation industry. The consolidation of funds under management provides opportunities for increased scale of operation and more effective and streamlined investment operations. It also assists in attracting and retaining quality board members and staff and provides access to higher service levels and better investment opportunities

These outcomes provide an opportunity for all scheme members and the Commonwealth through lower costs and potentially higher investment returns. It also provides a more sustainable and cost effective platform for delivering Commonwealth Superannuation into the future.

Comsuper is an Australian Government agency responsible for administering the superannuation schemes available to ADF members and the majority of Australian Government employees. The Commonwealth Superannuation Corporation (CSC) is a body corporate with a separate legal identity from the Commonwealth and is responsible for the management of the investment funds of the schemes. I understand your Organisation has been briefed by the Chair of the CSC, Mr Tony Hyams, on the merger of the boards of the military and civilian Commonwealth superannuation schemes. (SS; 07/03/2012)

2. ADF Workplace Remuneration Arrangement 2011 – 2014

Remuneration of ADF members should take account of the uniqueness of military service2, the skill levels required, as well as representing fair recompense for the value of the work carried out by ADF individuals at various rank levels. We campaigned hard to achieve a fair outcome for ADF members. We suggested a fair outcome would have been an 11.5% increase over the three years to retain real salary value and an annual productivity bonus of 1.5% to recognise the efforts of ADF members in achieving efficiencies towards the $20bn saving target under the Strategic Reform Program. In the event the Commonwealth wouldnt budge so an increase of 9.265% was awarded. With the federal budget under further pressure members of the ADF will be called on to provide further “productivity” improvements when the ADF is already under considerable pressure coping with the demands of the Government ordered operational deployments, the demands of the Strategic Reform Program. Considering that the outcome is below the current Employee Living Cost Index and even the projected CPI for the period, we believe the decision represents an effective and unfair reduction in salary. (DJ 30/11/2011)

The original offer of nine per cent in three annual instalments of three per cent per annum was consistent with the ADF Remuneration Framework, which requires that remuneration arrangements within the ADF be consistent with the Governments workplace relations and wages policies and other policies in relation to Defence. As a result of consultation processes with ADF members the offer was revised to a first instalment of four per cent and two subsequent instalments of 2.5 per cent to address some of the concerns that had been raised.

The revised proposal was approved by the Defence Force Remuneration Tribunal on 28 October 2011 after hearing evidence from ADF members and submissions from your organisation and the Returned and Services League. The first instalment of the offer was reflected in the pay of ADF members on 24 November 2011 (SS; 07/03/2012)

We remain disappointed with the outcome of the WRA 2011 – 2014 especially as our initial analysis of the Defence Employee Collective Agreement (DECA) leads us to believe it produced a materially better outcome for the civilian employees than the WRA did for ADF members.

Despite Defence assurances that “parity” of outcome was important and that the WRA matter would be re-raised at the Defence Remuneration Tribunal if the DECA produced a materially better outcome, we have been advised by HQ ADF that it sees no material difference so no further action is contemplated.

Additionally, and again despite assurances from Defence during the DFRT process that service conditions would not be affected, the federal budget provided for just that with the abolition of recreational travel for ADF members over the age of 21.

We would like an assurance that in representing the interests of ADF members, DFWA be given greater access to ADF publications and electronic communication channels to enable us to better canvas the views of serving members to enable meaningful and independent representation of their interests also to ensure in the future there will be effective and ongoing consultation on service conditions. (DJ: 06/06/2012)

Adjustments of Rates for Veterans Disability Payments

With effect from 1 July 2007 the special rate of disability pension was increased by $50 per fortnight and intermediate rate was increased by $25 per fortnight. On 20 March 2008, all other disability pensions paid under the Veterans Entitlement Act 1986 were increased by one-off amounts.

In May 2008 the Government announced that Dr Jeff Harmer would lead a review into measures to strengthen the financial security of seniors, carers and people with disabilities. DVA disability pensions were not part of the scope of the Harmer Review as they are compensation payments and not income support. (Compensation has a component of economic loss)

A major finding of the Harmer Review was that single people living by themselves were the most disadvantaged and their pension rate was too low relative to the combined couple rate. Therefore, the Governments principal reform was a significant one-off increase from 20 September 2009 for the single rate of age pension, service pension, carer payment and disability support pension. Pensioners receiving the couple rate received a smaller increase.

The Governments 2009 secure and sustainable pension reforms included the adoption of the Pensioner Beneficiary Living cost index (PBLCI) as a new, additional indexation factor for income support pension rates. DVA disability pension is indexed in line with increase in service pension in March and September; therefore, movements in Consumer Price index. PBLCI and Male Total Weekly Earnings are also reflected in your special rate disability pension.

Veterans in receipt of disability pension who also receive an income support pension would have received a one-off increase in their income support pension from the reform. Those disability pensioners who do not receive an income support pension generally have other income or assets in excess of the amounts to be eligible.

In summary, all DVA disability pensions increased by a one-off amount on 1 July 2007or 20 March 2008. Disability support pension, and several other income support payments increased by a one-off amount on 20 September 2009. The value of all these payments is being maintained by the application of the same indexation method. (SS; 07/03/2012)

3. Release of Service Records

Under the relevant provisions of the Archives Act 1983 the service records of ADF and former ADF members held by National Archives (NA) are made available for public access during the “open access period” which the Act presently prescribes as 30 years since the creation of the record concerned.

The term of the “open access period” is to be progressively reduced to 20 years, over a 10 year period. This will mean an increase in the proportion of ADF and former ADF members who will still be living at the time when their service records enter the open access period.

We are concerned that the current access provisions have the potential to cause embarrassment and distress to serving and former ADF members and their families where the records released contain personal or confidential information such as medical records, performance evaluations and reports and disciplinary records. The Act does allow exemption for records of a personal or confidential nature and we are asking that exemption be extended to protect the privacy of ADF and former ADF members. (DJ 30/11/2011)

The http://act.rarcorporation.com/committee/issues you raise in relation to this matter are similar to those raised by Mr Bienkiewicz in his letter of 9 November 2010. The Minister of Defence Science and Personnel, the Hon Warren Snowdon MP responded to Mr Bienkiewicz on 21 January 2011.(Incl copy)

I can add to that response by advising you that Defence, in consultation with the National Archives is currently exploring the possibilities of amending the National Archives disposal authorities to allow ADF performance appraisal reports to be destroyed before they reach the open period, or a policy whereby they are given to the member on discharge and not retained on file. (SS; 07/03/2012)

The advice that Defence in conjunction with the National Archives is exploring the possibility of amending the National Archives disposal authorities concerning ADF performance appraisal reports is welcomed and we would hope also that such consideration will be extended to any personnel records on related matters particularly those making any reference to members medical conditions. (DJ: 06/06/2012)

4. Jet Fuel Exposure

We are concerned to ensure that a future study to encompass the Army (& other ADF) petroleum operators/handlers and maintenance workers emerge from the present Jet Fuel Exposure Study which concentrates on F111 maintenance operations. So we are supporting the call for a separate investigation into the petroleum operator and maintenance work related fuel and chemical exposure during tank cleaning and
related operations. (DJ 30/11/2011)

I acknowledge your call for a separate investigation into petroleum operator and maintenance work related fuel and chemical exposure during tank clearing and related operations and understand that DFWA is represented on the Jet Fuel Exposure Syndrome Study Consultative Forum under the Chairmanship of Arch Bevis. I am assured that the Consultative Forum will be advised of any opportunities to expand the Study when and if they are considered. (SS; 07/03/2012)

5. Military Court of Australia (MCA)

Whilst legislation to provide for the Court to be established has been delayed, we continue to strongly oppose the provisions of the Bill which would provide for the trial of serious service offences in the MCA by judge or federal magistrate alone. The right to a trial by jury is the right of every Australian citizen, conferred by s.80 of the Constitution and members of the ADF are citizens of Australia and are no less entitled to receive
fair treatment in the justice system simply because of the nature of their profession. In our view no real or substantial reason which can withstand close scrutiny has been given by the Government for the proposed withdrawal of this right and we have sought to have the bill redrafted to provide that trials in the MCA should be before a judge/federal magistrate and a military jury. To date the Government has not responded to our submission. (DJ 30/11/2011)

Your concerns about the proposed Military Court of Australia focussed on the Governments plan to have charges of service offences under the Defence Forces Discipline Act 1982 tried other-than-on indictment (that is, by judge alone). You wrote that the right conferred on every Australian citizen by section 80 of the Constitution is a right to trial by jury and that members of the ADF remain citizens and should be afforded that right.

While I understand your concerns about an ADF Members right to a fair trial, a narrow focus on this single issue of jury trials has the potential to distract attention from the number of benefits to be offered by the proposed Military Court of Australia.

Charges under the Defence Forces Discipline Act 1982 are for service offences, not criminal offences. The application of the Defence Forces Discipline Act 1982offences, the rationale for charging and prosecuting them, the process for dealing with charges of service offences by service tribunals and many of the punishments available to a service tribunal are unique to those who volunteer to serve. Servicemen and women do not, however become immune from civilian criminal laws.

Service members should and do have the same rights as other citizens if charged with a criminal offence. Like any other Australian citizen, if a service member is charged with a criminal offence and it is on indictment, they will be entitled to a trial by jury. Section 80 does not dictate that trials must be on indictment (and therefore involve a jury). Charges of service offences are distinct and have never been tried on indictment. Additionally, many criminal charges in Australia are brought other than on indictment and do not involve trial by jury.

In the current system, when preferring a charge under the Defence Forces Discipline Act 1982, the choice of court-martial or Defence Force magistrate (judge alone) is made by the Director of Military Prosecutions. There is no right for an accused to choose trial by court-martial. Even if a court martial tries a charge of a service offence, it is not compromised, nor does it operate, in the same way as a jury. For example, court martial panels:
• Are comprised of a minimum of three or five officers, not 12 as with a civilian jury;
• Reach their verdict on a bare majority, not unanimously. As with a civilian jury;
• Are senior in rank to the accused, they are not drawn randomly and are not intended to be representative of the community in the same way as a civilian jury;
• Are responsible for sentencing in the event of a conviction, unlike a civilian jury
• Do not provide written reasons for the the verdict, unlike a judge in a criminal trial without a jury; and
• Do not give reasons for sentence unlike a judge in a civilian trial.

“Military juries” were used during the operation of the Australian Military Court between October 2007 and August 2009. These juries were unlike civilian juries. Although there were some similarities with a civilian jury, they were not a jury in terms of section 80 of the Constitution and the Australian Military Court was not a court pursuant to Chapter III of the Constitution.

Creating a separate court and conducting trial of serious service charges by judge alone who by reason of experience or training, understands the nature of ADF service is the best way to recognise the unique nature of charges of service offences and to maintain the distinction between criminal charges and charges of service offences. Simplistic parallels between the trials of criminal charges by a jury and charges of service offences fail to appreciate the distinct nature of and processes for dealing with charges of service offences.

I would also like to draw your attention to some of the benefits of the proposed Military Court of Australia, such as guaranteed judicial independence and impartiality, an expanded right to elect trial by the Military Court of Australia of any charge brought before a members commanding officer and written reasons for both verdict and sentence. (SS; 07/03/2012)

In my letter to you my comments on this subject were, because of the number of other matters raised in that letter, necessarily general in nature and simply highlighted this Associations substantial objection to the removal of the right to trial by military jury (court martial) of serious service offences, without any amplification or explanation of the grounds or detail of our objection.
In your letter to me you raised various matters in support of the provisions of the Bill which allows only for the trial of such offences by Military Court judge or magistrate alone.
So that you might better appreciate this Associations opposition to those provisions I attach a copy of my letter to the Attorney General dated 7 April 2011 which sets out in detail the grounds for our position in relation to the Bill. I hope that the arguments made in that letter will enable you to understand this associations objection to the Bills proposed removal of the right to trial by court martial of serious service offences and that you will support the appropriate amendments to the Bill. (DJ: 06/06/2012)

6. Unfair Balance of Legal Resources at the Administrative Appeals Tribunal

Veterans, when appealing to the Administrative Appeals Tribunal against the rejection of a claim for compensation (or the Department is appealing against the acceptance of one) are entitled to Legal Aid funding. This funding covers the preparation of the case, one medical report, the appearance of the author of the medical report at the Tribunal to defend it, and a barrister to argue the case before the Tribunal for one day. But more and more cases are not conforming to these limits. More and more cases are lasting two, three and four days and require more than one medical report.

However Departmental legal representatives do not operate within these limits and can take as many days as they like. Neither are they limited in the number of medical reports they commission nor the number of medical specialist appearances at the Tribunal hearing.

To make matters worse, the best qualified doctors are reluctant to provide reports for veterans because Legal Aid funding does not cover their usual fees. They have no such reluctance to provide reports for the Department which pays the higher fees. To make matters even worse, many law firms simply refuse to take on veterans cases citing inadequacy of remuneration but exercise no such reluctance in working for the Department which pays higher fees.

In the interest of fairness, the Department of Veteran Affairs must
restrict itself to employing similar legal resources to those available to the veteran and observe the Model Litigant Rules.

In this proposal we are suggesting a rebalancing of financial resources allocation rather than advocating additional funding to cover this proposal. (DJ 30/11/2011)

It must be remembered that legal aid funding is the responsibility of the Attorney-General. While the Department of Veterans Affairs has an interest in how legal aid funding impacts on veterans it is not directly involved in the policy relating to, and/or provision of, legal aid services to veterans. Your suggestion that the DVA be required to restrict itself to similar resources does not address the adequacy of funding for medical reports and/or legal representation – these are matters for the Commonwealth Attorney Generals Department and the State Legal Aid Commissions.

Your letter appears to infer that the DVA is not observing te Model Litigant Rules and in particular, has access to resources which are not otherwise available to veterans on legal aid. It must be strongly emphasised that the DVA, the Repatriation Commission and the Military Rehabilitation and Compensation Comission (the Commission) are bound by and are fully committed to comply with the Model Litigant Rules in the Legal Services Directions 2005. The Rules place an obligation on the Commonwealth to act as a model litigant and this requires handling matters in an honest and fair manner. Importantly, this includes not taking advantage of a claimant who lacks the resources to litigate a legitimate claim

In addition to the requirements of the Legal Services Directions 2005, the Commissions also have a statutory duty to assist the Administrative Appeals Tribunal – see s 33(1AA) of the Administrative Appeals Tribunal Act 1975. It is important to note that proceedings before the AAT are not adversarial and the role of the Commissions before the Tribunal differ from that of a veteran. The Commissions are required to assist the AAT make the correct or preferable decision. In supporting the AAT in this role, the Commission may obtain medical or other reports and the extent of the further material obtained will depend on the circumstances of the individual case.

Those representing the Commissions do not unnecessarily obtain medical reports, nor is there a trend in the Commission causing matters to last longer and thereby consuming more legal resources. For example, a survey of decisions handed down by the AAT on matters relating to the Veterans Entitlement Act 1986 for 2005, 2006 and again 5years later for 2010 and 2011 indicated that AAT hearings which resulted in written reasons took on average:
2005 1.58 days
2006 1.42 days
2010 1.56 days
2011 1.50 days
As is evident, the length of hearings has remained consistent during the periods surveyed. Any attempt by those appearing for the Commission to unnecessarily extend the length of a hearing would lead to censure by the AAT. (SS; 07/03/2012)

Your assurance that the Department of Veterans Affairs, the Repatriation Commission and the Military Rehabilitation and Compensation Commission are fully committed to comply with the Model Litigant Rules in the Legal Service Directions 2005 is acknowledged and welcomed. From the advice I receive, the matter of legal aid funding remains an issue and will be pursued separately. (DJ: 06/06/2012)

Imposition of an Application Fee for Submissions to the Administrative Appeals Tribunal

Finally, you have raised the subject of the fee for applications to the AAT under the Military Rehabilitation and Compensation Act 2004 (“MRCA”)

The issue was discussed with the AAT who confirmed that the application fee was imposed for MRCA applications. As you are aware this is in contrast with applications under the Safety Rehabilitation and Compensation Act 1988 (SRCA) and the Veterans Entitlements Act 1986 (VEA) as an exemption is given under regulation 19 and Schedule 3 of the AAT Regulation 1976 for applications to the AAT under these Acts.

Advice was received that the Regulations were being reviewed and this includes consideration of an exemption for MRCA. The Attorney-Generals Department has confirmed that action is being taken to include decisions made under MRCA in the list of prescribed decisions in Schedule 3 of the Regulations

The Minister of Veterans Affairs, the Hon Warren Snowdon MP was concerned that MRCA was not included as exempt from the application fee and wrote to the Attorney-General, the Hon Nicola Roxon MP supporting the action to include the Act as exempt from the application fee. (SS; 07/03/2012)

I thank Mr. Snowdon and yourself for helping to ensure the exemption of appeals under the Military Rehabilitation and Compensation Act 2004 from the application fee. (DJ: 06/06/2012)

Meeting to Discuss the Way Ahead

As you can see there are many issues for which we seek Government action and for which we feel a considerable degree of frustration at the lack of progress in seeking to resolve these. I would appreciate the opportunity to meet and discuss a way ahead with you so that we can address these issues in a positive and constructive way. (DJ 30/11/2011)

Editors Note. The minister did not comment on this matter

I reiterate that I believe a meeting between yourself, appropriate government officials and the leadership of the Alliance of Defence Service Organisations would prove valuable for us all. (DJ: 06/06/2012)