Following the public meeting on Monday, I wanted to post the notes from my presentation for your reference:
(Check against delivery) I want to thank the SCOA (Superannuated Commonwealth Officers’ Association) executive committee and to DFWA (Defence Force Welfare Association) for inviting me to talk and to listen to you. I am representing the Government here today as Minister Tanner is necessarily in Bathurst for a Community Cabinet meeting. However I would like to introduce Adrian Warner, the Minister’s new adviser on ComSuper and Defence pension matters. He will be listening to your arguments and concerns and will take these back to the Minister, as I, of course, will also.
I acknowledge my ACT Senate colleague, Senator Humphries. I know my colleagues Mike Kelly, Bob McMullan and Annette Ellis would also have been here were they able so I too convey their apologies.
Dr Annette Barbetti and Les Bienkiewicz have outlined for us the issues rising from the Matthews Review. SCOA and DFWA have prepared reasoned critiques of the Matthews Report and its conclusions and recommendations, and I commend these to you. I want to acknowledge the time and expertise that the representatives of your organizations have devoted to this campaign. I might particularly mention here of course, Annette Barbetti, John Coleman and Ewan Hazell from SCOA, Les Bienkiewicz (National Secretary DFWA) and Ron Dean from ACSPRO (Australian Council of Public Sector Retiree Organisations).
Over the years in which I have been involved in this campaign I have had many meetings with these and other members of your organizations and it would be fair to say that they have been instrumental in shaping my commitment and ideas on this and related issues. In Opposition we fought hard to promote the recommendations of the Senate committees for a change in the method of calculating the indexation of ComSuper and Defence pensions.
Earlier this year, in view of the continuing pressure from constituents, growing impatience for the public release of the Matthews Review, and after consulting SCOA and others, I decided to set up an interactive website, or blog, to gather suggestions and ideas regarding the indexation campaign, and to promote the issue to my parliamentary colleagues generally. We have been able to provide links to SCOA, DFWA and other relevant websites, and many of their websites have provided links to ours. Through this we have been made aware of individual case histories, and gained constructive and informed opinions. In particular the hardship cases point to the need for social justice to be considered. Of course, some people have used the website to vent their anger and frustration, but I guess that is understandable.
Submissions to the Matthews review were made by the organizations represented here today. Nonetheless it appears that the submission from the Department of Finance and Deregulation may have had most influence.
The Matthews Review, as we know, rejected any change to the indexation method and system, and the immediate Government reaction was to accept its recommendations.
Reacting to the release of the Report, Mike Kelly, Bob McMullan, Annette Ellis and I presented a letter to Minister Tanner outlining some of our concerns, and suggesting that action could still be taken in terms of Recommendation 4 of the Report . This says:
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.
We argued that in terms of this Recommendation, the Pensioner and Beneficiary Living Cost Index (PBLCI) which had been developed after Matthews had reported in December 2008, could well represent a better index than the CPI, and we submitted that, as an immediate step, the PBLCI index could be included as an indexation factor in the calculation of ComSuper and Defence pensions.
Mike Kelly and I had a follow-up meeting with Minister Tanner in which we pressed our view that the ALP pre-election commitment was not just for a review of the indexation system, but at least implied that it was to be a review for the purpose of creating a fairer indexation system.
Many of you will have already seen, on my website, the full text of the letter to Minister Tanner, and my comments on the follow-up meeting with him.
Also on the website now are my comments on the Senate Estimates Committee hearing of 20 October, at which Senator Sherry represented Minister Tanner and replied to the questions of the opposition. At the Estimates Committee hearing, Mr Tune, Secretary of the Department of Finance and Deregulation, said in terms of Recommendation 4 of the Matthews Report that there is an index that is produced by the Australian Bureau of Statistics, but [quote] “we do not consider it as being a reliable index at this stage”.
Mr Tanner’s reply to our letter, which I received some time after the Estimates hearing, went further in stating that “the PBLCI is not an index in relation to the living costs of superannuants. It has not been derived from the self-funded retiree ALCI (Analytical Living Cost Index), which was the index that Mr Matthews discussed in his report”. I will post this letter on my website later today.
It is my view that the door is still open for the development of an Analytical Living Cost Index which does focus on the changes in the living costs of superannuants, and to this end I am seeking information on how far the development of such an index has proceeded already, and what costs would be involved in its further development. I am writing to the Australian Bureau of Statistics to this effect.
Meanwhile, I support the work of SCOA, DFWA and other organizations and individuals – Peter Thornton is one of note — in exposing the flaws in the Matthews terms of reference, methodology and the conclusions drawn.
Too often in the Report , Matthews makes statements such as, for example on page 39: “ I have been unable to ascertain …” and “However there was no information available to the review about …” and “ A current estimate of clawback …was not available to the review”. I believe that the underlying financial assumptions behind government costings of the indexation change need to be transparent so they can be discussed and debated. Issues such as taxation clawback need to be considered and I congratulate Dr Barbetti’s diligent work in this regard and on tax treatment.
I am working with you in this challenge, and I shall continue to represent your concerns to the Minister and the Government. I am pleased to announce that Minister Tanner has agreed to meet with and hear the views of SCOA and DFWA in the next sitting fortnight and I will be assisting to organize this.
I believe that a united front by the organizations here, including SCOA, DFWA, ACPSRO, together with the CPSU and supported actively by your local parliamentarians will hopefully have an impact. I know that this campaign for fairer indexation will not go away!
