Thursday, July 29, 2010

Battle Lines Drawn

The Defence Force Welfare Association (DFWA) is in a battle with the Federal Government to inprove the retirements benefits of our serving and exserving members. Win Fowles is leading the push from our end. Please visit the DFWA web site and if you can show your support by writing to the Minister of Veterans Affairs ( Alan Griffin )and let him know how you feel about this issue. Remember we were all once Soldiers and our mates need a hand now.

Below is a letter Win sent to the Minister its long but worth the read:


Thank you for your time last night at the Caloundra RSL. It was and is appreciated.

Attached as we discussed and you requested is DFWA's response dated 30 Sep 2009 to the Matthews Report, as well as the covering letter to Minister Tanner. The response was and is supported by many other ESOs.

As you would know, further issues casting significant doubt on the depth and veracity of Mr Matthews' review have come to light since the attached response was written over nine months ago.

DFWA's attached response was posted on its website ( ) immediately after the response's dispatch to Minister Tanner. It is still there. So is other pertinent material.

Despite a number of requests from DFWA, all of which were suitably polite, Minister Tanner has never seen fit to reply or comment upon the demonstrated flaws in Mr Matthews report as evidenced in the DFWA paper. Nor to my knowledge has anyone else at ministerial level in your government.

Common courtesy normally dictates that a reply will be made, even if it is merely to tell the requester to go away. In this case and at this level, it seems reasonable that Minister Tanner would have at least acknowledged receipt of the DFWA response and that through his staff he would have addressed at least the key issues therein. He has not.

If I heard correctly, you said last night that you have requested more indexation costings from Finance before making a superannuation announcement in coming weeks. Given that Finance has a questionable track record under governments of both colours, and given that Finance under two governments has never chosen to reveal the methodology it uses to make its demonstrably questionable financial forecasts re indexation, and given that there is no evidence in Mr Matthews' 80 page report of any independent research on his part, what confidence can serving or former servicemen & women have in your coming announcement?

Your government's unquestioning and sole reliance on figures provided by Finance is disturbing. Your predecessors did the same. So did Mr Matthews.

You also said, again if I heard correctly, that an ABS inquiry to establish a suitable indexation formula for military super pensioners would cost around $80m and take up to four years, which is too expensive to contemplate. Noting that PBLCI reportedly cost around $18m to develop, may I ask that you enquire of your source the veracity of the $80m figure? And even if $18m or $80m is true, your Catch-22 argument is consigning military super pensioners to more decades of pension erosion and falling living standards, a situation that I once believed a Labor government in particular would find abhorrent.

I do ask - entreat - you not to accept and promulgate Finance's numbers at face value. Please, unlike Mr Matthews or others on both sides of the House, be sceptical. Ask for evidence. Ask for Finance's methodology. If it is robust it will withstand scrutiny.

And put Finance's alleged numbers in perspective by asking them for comparative numbers so that the indexation issue can be put in context, e.g. what is the 45 year unfunded liability for pre-2004 MP (PCSS) super pensions? What is the 45 year projection for the Age Pension? Medicare? What effect will the new military super scheme have on the alleged $15b unfunded liability for DFRDB/MSBS per Matthews page 66? When this liability declines, as it dramatically will, what is the positive effect on the Future Fund's projections? And more.

Mr Matthews used Finance's unverified scare numbers with no context. I do hope that your coming announcement will not fall into the same trap. The men and women of today's ADF will suffer directly if you do so, exactly as their predecessors have done under governments of both colours. All deserve better.

When all the politics and Politics are put to one side, neither your government nor the previous government has ever chosen to address the gross hypocrisy evidenced by the indexation method that applies to pre-2004 PCSS MPs. It is simply unconscionable for Finance Minister Tanner and previous Finance Minister Minchin, both of whom retire shortly, to each stonewall indexation reform for military super pensioners on cost grounds while personally enjoying an expensive indexation regime that is tied to today's and future MP salaries. I don't begrudge them the dollar value of their initial super pensions. I do begrudge them their indexation regime, as should any fair minded Australian regardless of political persuasion. You and they know it is hypocritical, indefensible and wrong.

Finally, all inquiries - including Matthews recently and Pollard & Melville & Jess decades ago, and all inquiries in between - acknowledged that the purpose of indexation is to protect pension purchasing power. Today's CPI does not do so. You know it. So does every other parliamentarian who has ever looked at the indexation issue for more than 30 seconds. Please fix it.

Thanks again for your time last night. The Caloundra RSL did a great job in hosting everybody.

Win Fowles

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