I will make only a few brief remarks about the Defence Force Retirement Benefits Legislation Amendment (Fair Indexation) Bill 2014. I will leave the substantive remarks to my colleague Senator Ronaldson, who is the minister, but I cannot let this opportunity go past without acknowledging the people in the veterans community who have advocated on this issue for many years. Even when I was the member for Wakefield in the other place there were people who were regularly contacting me—often about TPI pensions and indexation but also about the DFRB and DFRDB.
I note upfront that I have an interest in this. When I turn 55, as a DFRDB recipient I will benefit from this. But my years of service in the military also give me an understanding of why people who are in the DFRDB scheme have strongly felt that lack of indexation has disadvantaged them—especially given what our expectations were when we first joined the Australian Defence Force. This legislation implements one of the government’s top election commitments and one of our top commitments to the veteran and ex-service community.
I particularly thank the minister for his advocacy. Given the tight financial situation, it would have been very easy for the government to, yet again, disappoint the veteran community by saying that financial circumstances meant we could not do this. The minister has, however, managed to bring his colleagues in the cabinet with him to make sure the finances are available to follow through with this commitment, which is an important commitment to our ex-service community.
Importantly, not only will this change benefit the ex-service members themselves; the provisions will also apply to reversionary spouses who are aged over 55 on the date of indexation. The provisions will not apply retrospectively. The bill also exempts DFRB and DFRDB members from division 293 tax on the one-off capitalised value of the benefit improvement relating to past service as at 1 July this year. This will ensure that members with significant past service but modest superannuation pensions will not incur a taxation liability resulting from changes to the indexation.
I will leave my remarks there, but I want to acknowledge again the Returned and Services League, the Defence Force Welfare Association and the Alliance of Defence Service Organisations, as well as the many individuals who have contacted me and many other members of parliament over the years to bring about this fair indexation. I commend the bill to the Senate.