PRESS RELEASE
28 July 2010
MOVING FORWARD … SLIPPING BACK !
As Australian servicemen and women continue to put their lives at risk in Afghanistan on behalf of their country, a partnership of Ex-Service Organisations has called for a better indexation system for defence superannuation which – for more than a decade – has seen defence families receiving less favorable treatment than that given to welfare beneficiaries.
As long as the current indexation formula for their military superannuation pensions remains unchanged, ex-service men and women will continue to bear the brunt of rising costs of living and suffer the continual loss of purchasing power of their modest superannuation benefits.
This inequity has been in place since 1997, when the then Government recognised that a CPI-based indexation system was fundamentally inadequate and in order to protect purchasing power changed the indexation of age/service pensions to a formula that includes a wage index.
Military and public sector superannuation pensions however were not changed and have continued to be subject to a discredited CPI-based indexation formula.
National spokesman for the FairGo! Campaign, David Jamison, said that while successive governments since World War I have acknowledged the “unique” role of the Australian military, the current Labor Government has not been prepared to recognise that by providing adequate superannuation treatment for those who have served their country.
“A major issue with the Labor Government has been the concern that changing the military superannuation pension indexation formula would have a flow-on effect to hundreds of thousands of public sector pensions,” Mr. Jamison said.
“Their focus on an economic flow-on is simply unfair to former military people who have served their country.
“Coalition leader, Tony Abbott, has announced the Liberal and National parties will move to introduce the revised formula for DFRDB and DFRB superannuants over the age of 55. The Greens also support the change and extend it to all military superannuation schemes.
“In this election campaign we call on all the political parties to commit to improve the indexation of all military superannuation schemes without further delay.
“For the Labour Government to claim that the costs are too great, it follows that the cost is too great to send ADF members into combat and to risk their lives implementing government foreign policy.
“It is time for governments to come clean on the true costs of war and for the nation to pay the proper price instead of putting an unnecessary and unfair burden on its service men and women by neglecting them once their service is completed.
“To that end, we will be activating a series of Local Action Groups in 49 marginal electorates and asking candidates to state what their position is on this issue, then letting the voting public know so they can make an informed choice at the ballot box”.
Contact: Allan Yates Maxim Communications 0421 150 229
David Jamison FairGo! Campaign 0416 107 557
SOME FACTS ABOUT MILITARY SUPERANNUATION
• Military superannuation pensions do not keep up with the cost of living. They are indexed using an outdated formula that erodes their purchasing power. This formula is based solely on the Consumer Price Index (CPI). The Australian Bureau of Statistics (ABS) states “CPI is not a purchasing power or cost of living measure.”
• In 1997 the solely CPI indexation formula was abandoned for Age and Service pensions. Their current formula is effectively based on the greatest of CPI, the Pensioner & Beneficiary Living Cost Index (PBLCI) and the wages based measure (Male Total Average Weekly Earnings (MTAWE). As a result, Age/Service Pensioners have their purchasing power and therefore their standard of living protected. Military superannuants do not.
• After 20 years using CPI to index a $20,000 commencing pension, the military superannuant receives far less than they would have received had their pension been indexed in the same way as the Age & Service pensions.
• Military retirement and disability pensions now stand out as being more harshly treated than almost every other long-term Commonwealth payment that is subject to regular appropriate indexing to maintain its value. That’s not fair.
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