Coalition Senators' Dissenting Report
INTRODUCTORY COMMENTS
These bills represent a significant change to the management
of superannuation arrangements for the Australian military and veteran
community.
In the short period allowed for this inquiry, many veterans'
groups and individuals have made plain their opposition to the amalgamation of
the military superannuation boards with civilian management boards.
This opposition has been based on several factors, including
the failure of the Government's proposal to recognise the unique nature of
military service, the lack of consultation, the fear that it will dilute the
representation of defence members and the composition of the new board.
Coalition Senators oppose the recommendation of the
Government majority of the Committee to support passage of these bills in their
current form.
THE UNIQUE NATURE OF MILITARY SERVICE
One of the issues raised by many veteran groups was that
this proposal undermined the longstanding commitment to and understanding of
the unique nature of military service. As outlined by Colonel David Jamison
(Retd), National President of Defence Force Welfare Association (DFWA):
... the provisions of this intended legislation are such that
they will diminish and compromise this important philosophical foundation to
the detriment of present and future members of the ADF and also that of those
whom these members leave behind when they pass on[1]
This understanding is particularly important to veterans and
their beneficiaries and has underpinned the fact that there have been distinct boards
and schemes for the military and veterans for many years. As submitted by the
Returned and Services League:
The Parliament has thrice legislated for separate military
superannuation schemes, and has thrice decided to include in this legislation
the need for a separate military board of governance for the schemes. No
reasons have been advanced as to why this will of Parliament should be
overturned.[2]
LACK OF CONSULTATION
The above issue is compounded by the distinct lack of
consultation undertaken by the Government regarding this proposal.
This claim was substantiated by the Returned and Services
League as well as the Defence Force Welfare Association.
The Defence Force Welfare Association submitted:
Noting that the Government chose not to consult with DFWA or
other Ex-Service Organisations on this issue...[3]
Representing the DFWA at the hearing into the bills, Col
David Jamieson (retired) stated:
I will go to our specific concerns. Firstly, there was no
consultation with the memberships of the schemes.[4]
The RSL submitted that:
The Government did not consult the RSL about these proposed
changes to the governance of military superannuation schemes affecting many RSL
members.[5]
Representing the RSL at the hearing into the bills, Rear
Admiral Doolan (retired) stated that:
We have been left completely in the dark on this particular
issue. We were not consulted, our members were not consulted and they are the
people who are actually drawing these benefits every fortnight.[6]
Such a lack of consultation with veteran groups is of significant
concern to Coalition Senators. Given the unique nature of military service,
Coalition Senators believe that such consultation should have been a priority
for Government in developing this proposal.
Membership of the Defence Forces is not comparable to a
normal employee-employer relationship, and the extremely high degree of concern
that exists regarding this proposal within in the military and veteran
community, as expressed by groups that represent significant numbers of them, provides
a strong argument to not proceed with these bills in their current form.
The amalgamation of military and civilian Commonwealth
superannuation and benefit boards represents a significant shift from Australia's
historical approach. Such a shift must, at a minimum, involve substantial and
meaningful consultation with military and veterans and their representative
organisations.
LACK OF DEMONSTRATED BENEFIT
The lack of consultation is compounded by the concern of
veteran groups that the purported benefits of these bills have not been
demonstrated.
Just as amalgamation of military and civilian Commonwealth
superannuation and benefit boards should involve substantial consultation, it
must also demonstrate a benefit to affected members.
The RSL submitted that:
"...assertions about prospective improvements resulting
from the proposed merger are not substantiated;"[7]
And:
"A review of the four sources of information about the
proposed merger of the superannuation boards made available to the RSL has
failed to find any factually based reason why the merger must take place"[8]
And:
"There were lots of reassuring words...but no hard facts
backing up the need for change."[9]
In its submission, the Defence Force Welfare Association
stated:
Noting that the Government chose not to consult with DFWA or
other Ex-Service Organisations on this issue, DFWA can find no evidence of any
benefit, tangible or intangible, to serving or former members of the ADF. Nor
can DFWA identify any material or financial benefit to the wider Australian
community.[10]
Coalition Senators are of the view that the Government has
failed to clear two hurdles in this regard:
- It has specifically failed to demonstrate the value of the
amalgamation proposal to military and veteran superannuants and beneficiaries;
and,
- That it has generally failed to demonstrate the need for this
amalgamation to the wider community, many of whom share the concerns raised by
veterans' groups.
Assertions about the proposed benefits are not sufficient to
meet Coalition Senators' concerns about this proposal and these bills.
Coalition Senators share the concerns of affected groups and
remain to be convinced of the benefit of amalgamating the management boards of
military and other forms of Commonwealth superannuation.
COMPOSITION OF PROPOSED BOARD
Coalition Senators do not consider that the interests of serving
and former ADF members are well served by the proposed board composition of the
Commonwealth Superannuation Corporation.
The committee was presented with evidence that the composition
of the proposed new entity would undermine the understanding and reflection of
the unique nature of military service.
The 2007 Military Superannuation Review states:
For military superannuation, as well as these skills and
integrity standards, the board needs a blend of experience and knowledge to
best serve the military environment, including understanding the unique nature
of military service. Therefore, a central consideration of the Review Team is
to ensure military superannuation trustees collectively have the legislated
skills, knowledge and abilities, as well as an appropriate knowledge of
members, ex-members and Defence interests. [11]
The concern surrounding the relative reduction in the proportion
of military and ex-military interests is echoed in evidence given to the
committee by the Returned and Services League:
Rear Adm. Doolan—Prima facie, if you
are increasing the number of board members and you are decreasing the
percentage of military representatives on the board, then the military voice
must be more muted.[12]
Similarly, at the hearing into the bills, the National
President of the DFWA stated that:
"the representation on that board will not give adequate
voice to the military superannuants, whether they are contributing members or
recipient members."[13]
This flaw in the bills is exacerbated by the proposal for
the Australian Council of Trade Unions to have the power to appoint three
members of the new board, as opposed to only two coming from the military
community. Coalition Senators do not support the provisions relating to the
role of the ACTU in this bill.
This diminution in the voice of military members further
undermines the historic commitment to understanding the unique nature of
military service and potentially sees the reduction in serving board members
who come from the defence forces.
Given
the concerns within the veteran community, this further undermines the case for
the bills proceeding in their current form.
POSITION
OF EX-SERVICE ORGANISATIONS
Given the failure of the Government to undertake detailed
consultation with affected military and veteran members, it is important to
note the position of relevant representative groups in this regard.
The proposed amalgamation is opposed by the Returned and
Services League, as illustrated at the hearings into the bills:
Senator RYAN—With the information you have at hand
now, with the committee having to make a determination upon this legislation,
what is your position as it stands now?
Rear Adm. Doolan—It follows from what I have said
before that at this point in time the Returned and Services League would oppose
the merger.[14]
The RAAF Association recommends that the bills:
...be deferred until the ESO community is afforded an opportunity
to engage with the Government on the issues identified by the RAAF Association.[15]
The Defence Force Welfare Association recommends that:
The Government not proceed with its proposal to merge
military and civilian superannuation boards [16]
Recommendation 1
Coalition Senators recommend that the bills not be
supported in their present form.
Senator Scott Ryan (Deputy Chair) Senator
David Bushby
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