Fairgo4Veterans is about raising public awareness of the neglect of military pensioners shown by successive Australian governments by continuing to index superannuation pensions at the Consumer Price Index (CPI), replaced over a decade ago for age and other welfare pensions.
Welfare pensions are effectively indexed to Male Total Average Weekly Earnings (MTAWE).
Members of Parliament (pre-2004) superannuation pensions are generously indexed to the salaries of today's MPs.
In the period 1989 to 2008, Old Age pensions increased by 110% and MP pensions increased by 131% while military superannuation pensions rose 68% - hardly equitable, and does not maintain purchasing power. The comparison graph shows the difference.
63,000 military superannuation pensioners – compared with 3.3 million Age and other welfare pension beneficiaries who are effectively linked to MTAWE.
Military superannuation is indexed at the consumer Price Index (CPI). The Australian Bureau of Statistics (ABS) said in 2001 that "...CPI is not a measure of the cost of living." Six parliamentary inquiries since 2001 all recommended replacing CPI with a fairer index. Even the Jess Committee in 1972 recommended that military superannuation pensions "...be adjusted annually so that relativity with average weekly earnings is maintained."
The current Government set up yet another inquiry (by actuary Trevor Matthews) in mid-2008. Matthews reported Dec 2008. His findings, released Aug 2009, failed to fix the issue.
The Government tasked ABS to develop PBLCI for welfare pension calculations because CPI by itself does not protect pension purchasing power. But military super pensioners were again totally ignored – CPI will do for them was the inference. The Government has already said that "Age and welfare pension rates will continue to be tied to community living standards." Except the military superannuants.
As there are over 3 million old age pensioners, there are more votes there than in the military superannuants' community. Age pensions, correctly, rise by the greatest of CPI, PBLCI or MTAWE. The purchasing power of military superannuation pensions must be protected in the same way.
Military superannuation pensions must increase twice annually by the greatest of CPI, PBLCI or MTAWE, the same method used for the Age pension. Despite the unique nature of military service and despite our compulsory contributions of 5.5% of our pre-tax pay while in uniform, we do not seek special indexation treatment - we only want equity with our fellow Australians, not with MPs. The erosion of military super pension purchasing power must be addressed by Government. Although we are small in number compared with old age pensioners, we also vote.
A misconception and fable propagated by the misinformed is that military superannuation looks after veterans and ex service members in their retirement years by generous adjustments and conditions. This is not true. The median DFRDB pension, usually benefiting a couple, is under $20,000 and taxable. The couples Old Age pension is $26,338 and tax free.
Let your local MP know that many veterans and ex-service members are facing hardship in their living conditions because their superannuation 'purchasing power' is being eroded by Government inaction, despite the many reviews that recommended changing the indexation to a more equitable scheme, not to the extent of the very generous parliamentarians' scheme, but something more in tune with the Aged Pension scheme – not asking too much. You could suggest that veterans should get a fair go in their superannuation, which they have funded during their years in the ADF, many of which were in operational and wartime conditions.
You could also remind your MP that the Fair Indexation is affordable. Remember the $42bn stimulus package, the schools building projects to keep unions employed, the major age pension increases in the 2009 budget? And you may recall that Future Fund assets (June 2008) were $64.18bn.
Ask the MPs: If fair indexation is affordable for 3.3m Australians why is it not affordable for 63,000 former servicemen and women?