Comments on: The Matthews Report

By: Kate Lundy

Kate Lundy — Fri, 24 Jun 2011 05:11:48 +0000

As a result of the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill not passing in the Senate, I understand many people are frustrated.

Throughout my advocacy on this issue I have made it clear that I am bound to vote with the Labor Caucus decision. Asserting that I personally held a deciding vote for this bill is incorrect and misleading.

For those interested, I explain Labor’s opposition to the bill in my Parliamentary Speech. In summary, this bill did not provide a sustainable, fair and funded solution to the inadequacy of CPI indexation. http://www.katelundy.com.au/2011/06/17/parliamentary-speech-on-the-defence-force-retirement-and-death-benefits-amendment-fair-indexation-bill/

I will write another blog post on this issue in the future, but due to recent inappropriate and threatening comments (which unfairly reflect on many passionate and constructive advocates for fair indexation) I am closing comments for the time being. Please read the code of conduct for my website if you are interested in what we are trying to achieve through the blog http://www.katelundy.com.au/website/

You can continue to contact me about this issue through my email address senator.lundy@aph.gov.au or write to me at 11 London Cct Canberra 2601 ACT.

I would like to thank those individuals and organisations who have worked with me on this issue to date. I will continue to campaign for an indexation system that reflects the cost of living, as I have for many years.

By: R K Richards

R K Richards — Tue, 10 Nov 2009 17:06:19 +0000

Hi Jim,
Your comments are inline with my thinking. There are quite a few of us with similar thoughts. Unfortunately we are all acting indepently. We need organization to present a united front to politicians so we become a force for change.
Bob Richards

By: james smith

james smith — Sun, 13 Sep 2009 15:16:43 +0000

“If the Coalition promises (it must be a core promise!) to index DFRB/DFRDB etc to MTAWE, who will the ex-service community vote for at the next election?”

Well this is a no-brainer for sure.

By: James Wain

James Wain — Sun, 23 Aug 2009 08:00:34 +0000

The Coalition refused to index Service Pensions to MTAWE during the last election campaign. The Labor Party promised to do so. The Labor Party was elected. One would not suggest that the ex-service vote was wholly responsible but it must have helped.

If the Coalition promises (it must be a core promise!) to index DFRB/DFRDB etc to MTAWE, who will the ex-service community vote for at the next election?

Jim

By: Jeff Beaton

Jeff Beaton — Sun, 23 Aug 2009 00:30:43 +0000

I agree with you Bert!

Alternatively, immediately implement Recommendations 2 & 3 and apply the same adjustment method to MPs super as well.

By: Joe Clark

Joe Clark — Sat, 22 Aug 2009 08:21:35 +0000

How can we even try to understand social injustices imposed by a Labor Government. As Dickens wrote: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness— it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us—”

I think what upsets me most is that Lindsay Tanner has hidden behind the incorrect, immoral and unjust statement that change is not warranted “especially as it would come at a significant cost to the taxpayers”.

Joe Clark

By: Bert Blink

Bert Blink — Fri, 21 Aug 2009 21:44:42 +0000

I believe the Government should immediately accept Recommendation 4 of the Matthews report & Index Commonwealth & Military Superannuation pensions as per the method used to index the Age pension.

By: David Buck

David Buck — Fri, 21 Aug 2009 07:36:19 +0000

A long wait for no result, the more things change the more they stay the same.

By: Consie Larmour

Consie Larmour — Fri, 21 Aug 2009 07:28:27 +0000

Comment on the Matthews Report, released today
Its Disappointing Recommendations
1: That pensions from the Australian Government civilian and military superannuation schemes continue to be indexed against the effects of inflationary price increases.
2: That the same indexation methodology continue to apply to all civilian and military pensions.
3: That pensions from the Australian Government civilian and military superannuation schemes continue to be indexed by the CPI as the most suitable index to protect pensions against inflationary price increases available at this time.
4: That, if a robust index which reflects the price inflation experience of superannuants better than the CPI becomes available in the future, the Australian Government should consider its use for indexing Australian Government civilian and military superannuation pensions.
The Report’s conclusions are listed as:
1. The occupational nature of the schemes does not provide a case for enhanced pension indexation
2. 2. The form and value of the benefits payable under the schemes do not support a case for change
3. Indexation arrangements in similar defined benefit schemes in Australia on the whole are not more generous than the indexation arrangements for civilian and military pensions
4. The interaction with government safety net benefits does not support a case for change
5. The full cost to the Commonwealth of changed indexation arrangements is high and would need to be justified.
The Government’s Response
The Rudd Government fully supports the findings and recommendations outlined in the Matthews report.
The Government has accepted the recommendation that pensions from the Australian Government civilian and military superannuation schemes continue to be indexed by the CPI. This is in line with the indexation of most other similar pensions in Australia, including all equivalent State Government schemes.

Comment
The report rejected arguments linking the changes to the indexation of the Age pension and other needs-based pensions or benefits with the case for changes to “occupation” or service-related schemes. “Age and Service Pensions and superannuation are two separate but supportive components of Australia’s retirement income system. However, they are different benefits provided for different purposes and are not comparable” [Section 8.4, p. 45].
The Matthews report has a section which notes the arguments of financial pressures faced by superannuants, but argues that civilian and military pensions are not based on needs, and it is not a feature of superannuation that it will provide an income that will be adequate in all circumstances [Section 6.11]
What are our options now?
This office will continue to work with SCOA in this campaign. We need to study the Matthews report in more detail. At first reading, my impression is that some of the assumptions on the costs of the proposed change to the method of indexation could be questioned. Informed comment on this aspect could be very helpful.
A new CPI?
Since the Matthews report was finalised in December 2008, the Australian Bureau of Statistics has developed a new Pensioner and Beneficiary Living Cost Index (PBLCI) in response to the Harmer Review. This will be used to index the base rate of age pension where it is higher than the CPI. The PBLCI aims to specifically reflect changes in the living costs of age pensioners and other carer and disability support recipient households.
At this stage, it appears that the PBLCI would not be a more appropriate index than the CPI for adjusting Australian Government civilian and military superannuation pensions. The Matthews report found that, in the long run, inflation for self-funded retirees is less than for age pensioner and, in the short term, could disadvantage retirees. Consequently, the recommendation was that the CPI should be retained as the basis for indexation, unless a better measure of changes in the cost of living for superannuants is found.

By: Consie Larmour

Consie Larmour — Fri, 21 Aug 2009 07:26:42 +0000

Yes, we have had a reply today, but not the one we were hoping for! See below, and Senator Lundy’s comment on her webpage..