Chapter 5 - Current conditions of service
Introduction
5.1
Chapter 1 referred to the unique nature of
military service. Media coverage of ADF operations in Timor, Bougainville and
the Solomon Islands has enabled Australians to witness this service and
recognise its hazardous qualities. More recently, the ADF has played a major
role in handling illegal immigrants and has been put on notice to assist in a
multinational campaign against terrorism. It should be no surprise, then, that
ADF personnel expect special conditions of service in return for providing
unique service. Over the past decade, a collection of departmental and
independent reports and surveys have indicated that many ADF personnel do not
believe they receive adequate remuneration for their service. The commonly held
view is that conditions of service are being ‘eroded’ and that this is causing
experienced people to separate from the ADF. Unfortunately, this belief was
repeated in the evidence presented to the Committee during this Inquiry. This
chapter discusses specific conditions of service that are affecting recruitment
and retention of full-time ADF personnel.
Pay and allowances
Background
5.2
Under present remuneration arrangements, ADF
personnel receive a rank-based salary. Allowances are added to this salary
according to the nature and location of duty being conducted by the member. The
Committee notes that ADF pay and allowances are currently being adjusted and
reviewed in accordance with the ADF Enterprise Productivity Arrangement. This
Arrangement was heard before the Defence Force Remuneration Tribunal on 11–12
November 1999 and resulted in a two-year program of adjustments to ADF salaries
and salary-related allowances. This included a 3.5 per cent per annum
salary increase to be phased in between 11 November 1999 and 9 May 2002.[1]
5.3
At the time of preparing this Report, the
Committee was aware that Major General Barry Nunn was reviewing remuneration
arrangements for ADF personnel. The Nunn Review was handed to the Minister for
Defence on 31 August 2001. Unfortunately, the fact that the recommendations of
the Nunn Review have not yet been made public has prevented the Committee from
taking them into account when preparing this Report.
5.4
The Committee received a variety of views on ADF
pay and allowances whilst conducting this inquiry. Many respondents indicated
that pay was not as significant a retention issue as career management and
family support.[2]
However, an equal proportion argued that the level of ADF pay and allowances
was the single most important retention issue.[3]
The Committee was not structured to investigate all aspects of ADF pay and
allowances in the same manner as the Nunn Review. Therefore, rather than
microscopically exploring all remuneration entitlements, the Committee took the
broad approach of investigating those strategic factors that influence ADF pay
and allowances.
Base Salary: discrimination by rank
or responsibility?
5.5
The ADF salary structures have a number of
salary increments at each rank.[4]
In broad terms, these increments represent a time-based progression entitlement
and are designed to recognise the level of competency, experience and
responsibility usually associated with the rank. However, in real terms, the
level of responsibility associated with the rank varies between appointments.
For example, the Commander (RAN) appointed to HMAS Anzac carries a greater
degree of responsibility for personnel, finance and materiel than the Commander
(RAN) appointed as an instructor at the Australian Command and Staff College.
Yet each rank level receives the same base salary regardless of responsibility.
5.6
The Committee does not accept the Acting
Director–General, Personnel Policy and Conditions Branch view that ‘the
additional responsibilities of command can be recognised through non–salary
benefits such as the provision of a vehicle or allocation of a tied residence’.[5] Under existing arrangements, a
vehicle is only provided for duty hours and very few Defence Housing Authority
(DHA) houses are tied to ADF command appointments. Salary discrimination is
clearly a retention issue. An ADF member is discouraged from service if they
cannot associate a tangible benefit with additional rank and responsibility.
The Committee came to the view that the Department of Defence should develop a
system of remuneration that recognises responsibility as well as rank. This
view was reinforced by the fact that the issue of salary discrimination was
reflected in a great deal of the evidence presented to the Committee. For
example:
Another issue is pay, which is probably not given the attention
that it warrants. I understand that it is restricted to, say, Public Service
rates of pay. But at the key levels, such as commanding officer, there is a lot
of risk associated with being at that level, yet the pay does not necessarily
reflect the risk which is part of that rank.[6]
Taxation
5.7
Taxation is another broad issue impacting on ADF
pay and allowances. Members of the ADF accept that their salary is taxed at the
same rates as other Australian Government employees. However, evidence from
hearings and submissions indicated that new taxation procedures for ADF
allowances have had a detrimental impact on morale. Some allowances are taxed
and this reduces the benefit originally intended by the allowance. For example,
the 15–year retention benefit of one year’s salary is taxed.
5.8
A greater problem occurs when a member receives
a reportable fringe benefit. Benefits are only reported when the total taxable
value of fringe benefits for a member in a Fringe Benefit Tax (FBT) year exceeds
$1000. This is the case with allowances such as Reimbursement of Removal
Expenses when moving from Defence Housing to Own Home in the same locality. The
Committee is aware that on 16 February 2001 the Minister Assisting the Minister
for Defence announced the Government’s decision to exempt Defence personnel
from reporting a fringe benefit removal carried out at Department expense,
however this does not apply to removals to Own Home in the same locality.[7]
5.9
The fringe benefit amount is not used to assess
the amount of income tax paid. However, according to Mr Adrian Wellspring, the
Acting Director–General Personnel Policy and Conditions Branch, ‘it will be
used in certain tests for Government benefits and obligations such as the
Medicare levy, superannuation surcharge, termination payments surcharge, HECS
repayments and child support obligations’.[8]
For example, a Private in Darwin with a spouse and two children suffers a drop
on $890 per annum in Family Tax Benefit Part A by reporting fringe benefits of
District Allowance and Remote Locality Leave Travel.[9] Another soldier said that his
Centrelink family and child support payments increase by reportable fringe
benefits on his payments certificate. The general debilitating impact of
taxation on benefits is summed up by one witness as follows:
Fringe benefits affects members in many different ways. Once it
is shown on the group certificate, although the member is not required to pay
any more tax on his income, what happens is that the ATO see that amount of
fringe benefits and they add it to the member’s taxable income for the year. If
the member is paying child support – which I happen to be paying - their income
for that year increases by the amount of the fringe benefit; therefore my child
support payments increase. Also what happens is that my family tax benefit,
which I receive for the childe I am looking after, decreases. ...they are not
really fringe benefits at all.[10]
Remote locality
5.10
As a result of the Force Structure Review many
ADF units are now based in remote areas of Australia. Personnel posted to these
locations receive specific benefits and allowances to compensate them for
serving in a remote locality. In order to develop an understanding of the
recruitment and retention issues associated with service in remote localities,
the Committee visited ADF personnel in Darwin, Katherine, Puckapunyal,
Townsville and Wagga Wagga.
5.11
The Committee discovered that there are many
inconsistencies in the allocation and application of remote locality benefits
and allowances. Many of these inconsistencies can be attributed to the
Department of Defence definition of a ‘remote locality’. For example,
Townsville is designated a remote locality, yet it has better access to many
services than Puckapunyal and Wagga Wagga which are not deemed as remote
localities. ADF personnel in Wagga Wagga cited the fact that electricity costs
were higher and that there was a shortage of medical services in comparison to
Townsville.[11]
The Committee also heard that the Electricity Allowance (used to run
airconditioners in the wet season) is granted to ADF personnel posted to RAAF
Base Tindal but not in Darwin, yet the climatic conditions would appear to be
similar.[12]
Such inconsistencies in the definition of a remote locality have contributed to
dissatisfaction and low morale amongst many ADF personnel.
5.12
Another issue associated with isolated posts is
the application of Remote Locality Leave Travel (RLLT). This benefit involves
free travel for an ADF member and their dependants to the nearest capital city
in order to ‘provide relief from the climatic and isolated conditions
associated with living in a remote locality’[13].
This benefit is in the form of an airline ticket and Defence has a contract
with Qantas (effective April 2000) for an airfare valued at 68 per cent of the
normal fare.[14]
Of course, a member may offset the airfare entitlement to fund travel by an
alternative means, to an alternative destination, or to pay for a relative to
visit them in the remote locality. However, it appears that the establishment
of the discount airfare with Qantas means that members who elect to offset
their entitlement do not receive the same benefit as other government employees
in the same locality. The Committee heard that ADF personnel in Katherine
received $1,236 per adult if they elected to offset their RLLT airfare while
other government employees in the same area received a larger lump sum ‘into
their bank account every 12 months’.[15]
It is natural to expect that ADF personnel do not feel they are receiving a return
for unrestricted service when their remote posting benefits do not match or
exceed other government employees providing restricted service.
Conclusion
5.13
The Committee concluded that no single pay or
allowance issue was causing ADF personnel to separate from the Service. Rather,
a number of pay and allowance related problems have combined to give ADF
personnel the impression that their unique service is not valued. The key
strategic factors affecting ADF pay and allowances are the discriminators for
base salary, taxation and the definition of a remote locality. The Committee
felt it was important to include the level of responsibility as a discriminator
for calculating base salary, remove the negative impact of reportable fringe
benefits on salary, and more accurately define remote localities for allowance
purposes. These measures would provide unique pay and allowances for ADF
personnel in fuller recognition of the unique nature of their military service.
Recommendation 17
The Committee recommends that the Government instigate a
salary system for uniformed personnel that recognises their appointed
responsibility in addition to rank, competency and experience.
Recommendation 18
The Committee recommends that the Government review ADF
benefits currently reported as fringe benefits on members’ payment certificates
where those fringe benefits have an unintended and unfair effect on
family-related benefits and payments.
Recommendation 19
The Committee recommends that the Department of Defence
investigate and review its classification of remote locality postings in order
to ensure a more equitable distribution of benefits.
Recommendation 20
The Committee recommends that the Department of Defence
align the RLLT entitlement to match other government employee entitlements.
Equity
Background
5.14
The Committee noted the release of the Burchett
Report on 16 August 2001, regarding Harassment in the ADF. While many
submissions indicated that media reports of harassment in the Navy and Army had
affected recruiting levels, the Committee received no evidence of widespread
harassment in the ADF or any associated retention issues. However, the
Committee received several submissions regarding discrimination in the ADF and
the impact of this on recruitment and retention. These submissions focussed on
discrimination against gay and lesbian service personnel.
Policy issue
5.15
The key issue regarding discrimination against
gay and lesbian service personnel is spousal recognition. Existing ADF
conditions of service recognise the opposite sex partners of service personnel
for benefits such as relocation, housing, leave and travel entitlements, and
service related death or injury benefits. Several submissions to the Committee
have correctly pointed out that ‘these benefits are not extended to the same
sex spouses of service personnel’.[16]
Further, these submissions argued that, as a result of this discriminatory
policy:
...many good, qualified, experienced and enthusiastic members of
the general community decline to join the ADF. Equally, many good, qualified,
experienced and enthusiastic members of the ADF leave.[17]
5.16
The Committee asked the Department of Defence to
respond to this issue during a public hearing on 25 June 2001. The Department
reported that its current policy on same-sex spouse recognition is aligned with
the Marriage Act (1961), which defines marriage as the union of a man and a
women, and the Sex Discrimination Act (1984), which defines a defacto spouse as
a person of the opposite sex.[18]
In addition, the Department indicated that, according to exit surveys, ‘equity
is not one of the primary reasons’ for personnel to leave the ADF.[19]
Conclusion
5.17
Whilst accepting Defence equity policies, the
Committee notes that same sex relationships are recognised to varying degrees
in other Government departments, such as the Department of Foreign Affairs and
Trade.[20]
This fact, combined with the number of submissions received on the issue, led
the Committee to conclude that recruitment and retention of ADF personnel might
be improved if Defence policies on spousal recognition were to be reviewed.
Recommendation 21
The Committee recommends that the Department of Defence
investigate its spouse recognition policies to ensure they are equitable and
aligned with other Government departments.
Housing and accommodation
assistance
Background
5.18
According to the Department of Defence, housing
assistance is provided to ADF personnel in the form of either home purchase
assistance or accommodation assistance.[21]
Home purchase assistance is delivered in the form of a subsidised home loan
under one of the Defence Service Home Loans Schemes and also in the form of
Home Purchase Assistance Scheme (HPAS) cash grant. Accommodation assistance is
provided via either Defence-owned housing or a payment to rent a house.[22] The Committee was able to view
the different standards of accommodation available to ADF personnel and gather
individual comments during its tour of Defence establishments.
Housing and accommodation
assistance issues
5.19
The main comments received by the Committee
regarding housing and accommodation were those in relation to the standard of
housing assistance and the flexibility of arrangements for accommodation
assistance. Firstly, in terms of housing assistance, some respondents argued
that the new HPAS allowance was a flat rate and did not provide the same
financial assistance as the previous Home Purchase or Sale Expense Allowance
(HPSEA),which reimbursed members for all costs. This appeared especially the
case for those members purchasing a house in an expensive real estate region
such as Sydney. As one witness explained:
..I got paid $6400 towards my house but I had close to $17000
worth of fees and charges in buying a house in Sydney. The fact that I bought a
house in Sydney shows what I was saying about not being on bad money, but that
allowance would have been fully re-imbursable under the old HPSEA scheme 12
months ago. So I am net $10000 negative under the current scheme.[23]
5.20
Other personnel explained that changes to policy
on occupying own home or DHA housing in their posted locality reduced the
incentive for them to purchase their own home. The new policy directs personnel
to make release-clause arrangements when leasing out their own home so that
they can occupy that home if it meets their family requirements (and not a DHA
home) when they return to that posting locality. The difficulties with this
policy were explained by one witness in Puckapunyal:
In the past, if you had a posting order and you had your own
home and you had a tenant signed up in your own home, you could still get a
married quarter. This new release now says that you should not be signing up
people for 12 months because you might get a posting order. We all know that,
but if we have received a posting order for two years, we would like to think
that we can sign up our tenants for at least 12 months. It says here that you
should try and get a three-month release clause in. We have a house in
Canberra, and Canberra was one place where you could always get a release
clause in. You cannot anymore; it is not industry practice.[24]
5.21
Secondly, in terms of accommodation assistance,
the Committee heard of inconsistencies in the standard of accommodation
provided around Australia for single and married service personnel. Married ADF
personnel in Darwin and Inner Sydney criticised DHA for not developing plans to
provide married quarters closer to their place of work:
I think that DHA serves the purpose of DHA, rather than the
service community. I would expect to be provided with a reasonable standard of
accommodation within a reasonable distance of where I work. DHA seems to be
running along the lines of some giant real estate corporation selling up
expensive stuff in the inner city close to work and then buying up further and
further out, so that eventually we will get to East Perth and that will be it.[25]
5.22
Single personnel at HMAS Cerberus and RAAF Base
Tindal indicated that the standard of on–base accommodation had deteriorated to
unacceptable standards. One witness spoke of defects and maintenance with fire
doors that ‘were outstanding for some 12 months’ and situation where ‘we also
had trainees sleeping on broken bed bases on the floor.[26] The Committee is aware of
departmental efforts to progressively improve accommodation for single
personnel at Defence bases.[27]
5.23
The Committee also received complaints about the
standard of customer service provided by DHA for housing allocation and
removals. Some personnel felt that the allocation of these services to a
commercial provider had created efficiency but reduced effectiveness. One
witness in Sydney explained:
I dealt with DHA—in fact, I never dealt face–to–face with
anyone; I dealt with them over the phone—and I was told pretty much the same
sort of thing; ‘We’ve got a house for you. If you don’t like it—bad luck
buddy!’ I also had to deal with the removals organisation that had been
privatised to a large extent. There are three to four people in the
administration chain, all of whom appear to be making money, and I had to
threaten legal action in the end to get them to listen to my case when they had
destroyed a lot of my furniture in storage.[28]
Department of Defence housing and
accommodation assistance activities
5.24
The Committee received evidence from the Defence
Housing Authority (DHA) on 27 August 2001 and the Acting Director–General
Personnel Policy and Conditions Branch on 21 September 2001. The DHA became
operational on 1 January 1988 and manages approximately 19,500 houses.[29] The organisation has recently
assumed additional responsibilities for tenancy management (1 July 2000) and
removals management (1 July 2001).[30]
Meanwhile, Personnel Policy and Conditions Branch has continued to monitor and
assist the development of allowances and benefits associated with housing and
accommodation assistance.
5.25
In response to criticisms regarding the standard
of housing assistance and in particular the arrangements for HPAS, the
Personnel Policy and Conditions Branch advised the Committee that ADF members
were also eligible for the Federal Government grant of $7000–$14000 under the
First Home Owner Grant Scheme (FHOGS). According to Policy and Conditions
Branch, the HPAS and FHOGS together ‘provide very valuable assistance to ADF
members to buy and live in their own homes’.[31]
The Committee disagrees with this assessment because the FHOGS will cease at a
time of Government choosing and neither benefit compensates the member for
higher costs in expensive real estate areas of Australia. Accordingly, the
Committee feels that HPAS should be reviewed to ensure it provides equitable
benefit in all real estate regions of Australia.
5.26
The Policy and Conditions Branch provided no
evidence to respond to criticisms regarding the policy for ADF members to
arrange short leases and occupy their own home if posted to the locality of
that home. This policy requires further investigation by the Department of
Defence to ensure ADF members are not disadvantaged.
5.27
The Committee heard that the DHA has a corporate
plan to invest $570 million over the next three years to improve the standard
of housing in Darwin, Sydney, Newcastle, Puckapunyal and Katherine, and to
address issues such as security, air conditioning and outdoor living areas.[32] This action is commended by
the Committee because it follows the general improvement in the standard of DHA
housing that has occurred in the past five years and should go some way to
addressing the concerns of some ADF personnel regarding Housing in remote
localities. However, more needs to be done to address the current policy of
selling old housing stock in established communities near military bases and
forcing defence personnel to occupy housing considerable distances from their
base.
5.28
The Committee also heard that the DHA has
launched several initiatives to improve customer service satisfaction. These
include participation in Defence exit surveys, the establishment of a web–based
house database and selection system, establishment of focus groups with spouses
to design DHA housing, and the employment of spouses in customer service areas.[33] While these initiatives are
likely to improve the service provided by DHA, the Committee believes that a
group independent of the Department of Defence should conduct any survey of
customer satisfaction levels.
Conclusion
5.29
The Committee noted several concerns among ADF
personnel regarding housing and accommodation assistance. These concerns are,
in the view of the Committee, contributing to retention problems within the
ADF. Whilst DHA and the Department have attempted to monitor and improve
standards, the primary issue is achieving a consistency in the level of assistance
and customer service provided. To that end, the Department of Defence should
review key areas of assistance and allow an independent assessment to be made
of customer satisfaction.
Recommendation 22
The Committee recommends that the Department of Defence
review HPAS to ensure it provides equitable housing assistance to ADF members
in all real estate regions of Australia.
Recommendation 23
The Committee recommends that the Department of Defence
review the policy regarding own-home lease arrangements for ADF personnel to
ensure they are not disadvantaged.
Recommendation 24
The Committee recommends that Defence Housing Authority
review its policy of selling old housing stock in established communities near
bases and forcing Defence personnel to occupy housing considerable distance
from their base.
Recommendation 25
The Committee recommends that the Government conduct an
independent survey to assess the level of customer satisfaction with the
accommodation assistance provided by DHA and recommend improvements.
Family support
Background
5.30
The Department of Defence has established a
network of family support for ADF personnel. At the strategic level, the
National Consultative Group of Service Families (NCGSF) provides advice to the
Chief of the Defence Force and Head of DPE on family support issues. This is
reinforced by the Defence Community Organisation (DCO), which provides welfare
support, advice and assistance to ADF members and families in each region. The
family support programs established within individual units underlay both of
these networks.
5.31
The expectation that a member’s dependants will
receive a high standard of support is an important clause in the ‘psychological
contract’ adopted by ADF personnel upon enlistment. In order to assess the
current level of support provided to ADF personnel, the Committee:
- visited regional Defence Community Organisations (DCO) in
Katherine, Darwin, and Perth;
- collected evidence from representatives from the National
Consultative Group of Service Families (NCGSF); and
- conducted discussions with Service spouses in Katherine,
Puckapunyal, Wagga Wagga and Townsville.
5.32
Family support issues received critical
attention in the Hamilton and Cross Reports of the 1980s. Both these reports
made important recommendations to enable the improvement of family support
services. The Committee was very disappointed to discover that many of the
issues raised in the Hamilton and Cross Reports were still alive or had only
been partly addressed. Indeed, the Committee received considerable evidence to
suggest that the co-ordination and level of family support provided in areas of
spouse employment and child education was unacceptable and contributing to
recruitment and retention problems.
Co-ordination and communication
5.33
A plethora of strategic communication methods
have been established to convey family support information to Defence families.
These range from local newsletters and information booklets to Family
Information Network for Defence (FIND) phone lines and Internet web sites. There
are two issues associated with the co-ordination and communication of
information. The first issue is ensuring that the spouse of a new recruit
understands clearly the lifestyle they are about to inherit. It was noted that
some recruiting units conduct ‘married enlistment interviews’ with spouses and
social workers.[34]
Similarly, the Committee was informed of a ‘spouse induction program’ being
established in Victoria Barracks, Brisbane.[35]
In the view of the Committee, these initiatives must become standardised to
assist recruitment and retention of ADF personnel and avoid the situation
explained by one witness:
One point that stands out large for me is that I had a wife in
to see me last week. She said to me, ‘If I knew at the beginning what I know
now, I would not have encouraged my husband to join.’[36]
5.34
The second issue is delivering consistent
standards of support and information. The Committee noted that Defence families
receive a varied level of support depending upon their sponsor unit, location
and access to information. Spouses in Townsville indicated that the level of
support provided to families varied markedly between sponsor units.[37] Also, newsletters were being
delivered to families in married quarters, but not to families residing in
their own home. Clearly, the Department of Defence must investigate and adjust
the co-ordination and communication of support to Defence families to ensure a
common standard.
Spouse employment
5.35
Evidence received by the Committee suggests that
spouse employment and child education are the main areas of dissatisfaction
associated with the requirement for ADF personnel to regularly move. Frequent
postings mean that a spouse is continually changing employment and family
finances are adversely affected. One witness explained:
But for some people who have another wage coming in or whose
wife is working, when they get posted they could be losing 50% of their income
for X amount of time. If they go into a position in an area where there is a
lot of unemployment, they could halve their wage for the time of that posting.
When is comes to someone saying ‘You are being posted,’ and your wife is on
$60,000, then the button gets pushed. That has to be looked at, because you are
losing a person who really does not want to get out of the Defence Force but,
financially, they can go out and get the same money.[38]
5.36
The Committee wants to make it quite clear that,
from the evidence given the Committee throughout the inquiry, spouse employment
is fundamental to retention. In Australian society today, as in many or
most other Western societies, dual income is essential for most couples or
families, to enable them to have a reasonable life. The same applies to ADF
members and their spouses. If spouses cannot work, their standard of living
declines appreciably.
5.37
Many discharges are the result of spouses
unhappy with a range of disadvantages stemming from Service life. With the
move to northern Australia and large bases outside urban areas, spouse
employment becomes more difficult, especially spouses with professional or
other specialised occupations.
5.38
To its credit, the Department of Defence has
provided several initiatives to address the problem of spouse employment. These
include computer support for resume preparation, Internet access to employment
agencies and access to job network providers (paid for by Defence) for training
and case management into employment.[39]
The Committee notes that DCO, DHQ, Toll Transitions and NCGSF are currently
discussing other spouse employment assistance measures[40]. However, this issue could
also be addressed in terms of career management and allowing longer-term
postings where spouse employment has been established.
5.39
There is no easy solution to the problem of
spouse employment. Ultimately, the strength of feeling amongst ADF personnel
regarding spouse employment support suggests that it needs priority attention
from the Department of Defence, especially in the career management area.
Child education
5.40
Many previous reports on the provision of
support to ADF families have highlighted the difficulties created by the absence
of a national education standard. The problems have been accentuated by the
posting turbulence that currently prevails in certain parts of Defence because
of staff shortages. Unfortunately, these problems continue to affect ADF
personnel and their families. The Committee heard evidence that Defence
families moving on posting encountered difficulties with school entry ages,
grading systems and handwriting standards. One frustrated witness
elaborated:
We were due to get posted this year up to Oakey in Queensland.
We were happy to go until I rang up Toowoomba and spoke to guidance officers
and everybody in the area. We were informed that, because my children started
school here at age four, they would automatically have to repeat. It was purely
an age based thing. I spoke to all sorts of people about it. When we went back
to DOCM and told them we were not happy to go to Oakey on that basis, I was
told that I was whingeing, it was a flimsy excuse, it is a condition of service
that we move around and it was bad luck; my children just had to put up with
that.[41]
5.41
The Committee notes that the Department of
Defence has a network of child education support initiatives to deal with the
problems created by regional education systems. The Education Assistance Scheme
(EAS) and DCOs Families with Special Needs Program each provide a form of
financial support for families for child tutoring, boarding and special
support.[42]
Similarly, the system of Regional Education Liaison Officers does provide
suitable advice and support for families.
5.42
Career managers and posters should also take
some account of the problems of children’s education. They should be aware of
what difficult sequences of postings on educational grounds and try to avoid
such sequences for members with children who might be affected by the
differences among the State and Territory education systems. That is not to
say that education should be an overriding factor. It would, however, make
some postings more palatable and avoid some discharges. Whenever a member
discharges for family reasons as a result of a posting that the member had
sought hard to avert, someone else has to be found anyway.
5.43
However, these measures avoid the strategic
problem of a national education system, which must be addressed by Federal,
State and Territory Governments. This is an issue that has been on the
national education agenda for a long time. It covers mainly starting ages,
handwriting styles and curricula. Differences among the States and Territories
cause immense difficulty and frustration for Defence personnel and all other
people who move from State to State with their employment or for other
reasons. It is time that Commonwealth and State and Territory Education
Ministers get national consensus for at least starting ages and handwriting
styles.
Conclusion
5.44
The ADF is experiencing difficulty recruiting
and retaining personnel because of family support issues. These issues centre
on coordinating and communicating a consistent level of support to Defence
families before, during and after postings. The provision of assistance in
spouse employment and child education are specific areas of concern during
posting. While the Department of Defence has introduced several initiatives to
address these issues, a wider solution is required.
Recommendation 26
The Committee recommends that the Department of Defence
review its strategic communication plan for conveying family support
information to Defence families to ensure a consistent message and availability
of information.
Recommendation 27
The Committee recommends that the Department of Defence
adopt a mandatory pre-enlistment spouse induction program as part of the ADF
recruiting process.
Recommendation 28
The Committee recommends that the Department of Defence
ensure that all current and available resources are being used in the matter of
spouse employment assistance and, as a matter of priority, investigate and
implement additional lateral measures to provide spouse employment assistance.
Recommendation 29
The Committee urges Commonwealth, State and Territory
Education Ministers to reach consensus on the introduction of national standard
school starting ages, standard grades and standard handwriting requirements.
Superannuation
Background
5.45
Current serving ADF personnel are supported by
one of two Superannuation Schemes. These are the Defence Force Retirement and
Death Benefits (DFRDB) scheme and the Military Superannuation and Benefits
Scheme (MSBS). The DFRDB scheme was closed to new members in 1991. The MSBS is
subject to the new Superannuation Industry Supervision (SIS) Regulations. The
most common comment from ADF members in public hearings and submissions was
that the DFRDB scheme contributed more to recruitment and retention of
personnel than the newer MSBS.
Superannuation issues
5.46
Under the DFRDB, many personnel elected
discharge after 20 years continuous service because they could access their
retirement benefits at that point. This created vacancies for promotion and a
natural balance between experienced and fresh ADF personnel. Under MSBS, fewer
personnel are electing discharge after 20 years service because they cannot
access their retirement benefits. Instead, personnel are either leaving the ADF
shortly after their initial engagement or serving on to the mandatory
retirement age of 55. The Committee heard that the MSBS is creating a log-jam
for promotion in some ranks and trades.[43]
However, the development of new ADF terms of employment and a graduated system
of retention benefits would solve this problem, as discussed in Chapter 4.
5.47
The main complaint regarding Superannuation was
related to the question of access to MSBS benefits between the mandatory
retiring age of 55 and preservation age of 60. This was summarised by one
witness as follows:
There is no incentive for people to stay in beyond the minimum
term. Look at the superannuation: they can only stay in until they are 55 but
under new legislation people born after 1960, I think it is, cannot get their
superannuation until they are 60.[44]
5.48
The Committee found that this complaint was
partly founded on a lack of understanding of the MSBS amongst ADF personnel.
The increase in preservation age does apply to a person born after 1960 but the
Government has given a concession to ADF personnel to the effect that they may
access employer benefits as a non–commutable lifetime pension at their
mandatory retirement age. Therefore, MSBS benefits at aged 55 are:
- A lump sum member benefit of member contributions and
interest earned up to 30 June 1999 (member benefit contributions and interest
earned after 1 July 1999 are payable when a member reaches their
preservation age).
- A preserved employer benefit that may be taken as a lump
sum or converted in part or full to an indexed pension (unless the member has a
preservation age greater than 55 whereupon this benefit may only be taken as a
non–commutable pension).[45]
5.49
The Committee believes that, despite some
Government concessions on access to MSBS benefits at the mandatory retirement
age, more could be done to recognise the unique nature of military service.
This might include the removal of all preservation age restrictions and
allowance for lump sums to be paid at the compulsory ADF retirement age of 55.
In the Commonwealth Public Service and in private enterprise, there is no
mandatory retirement age of 55. If people have a preservation age of between
55 and 60, they can continue in their jobs until the preservation age is
reached. As ADF personnel have a mandatory 55 retirement age, they are being
discriminated against because they are not allowed to access all their
superannuation benefits at their mandatory retirement age.
5.50
A final Superannuation issue raised by ADF
personnel relates to the rules regarding continuous service. The Committee was
informed of a case where a female Air Force member lost recognition of her
previous service for the MSBS retention benefit after taking maternity leave.[46] Under the rules of MSBS, if a
member takes leave without pay for a period of greater than 21 days (like
maternity leave) the cessation of MBSB contribution will effectively negate any
previous service.[47]
The Committee agreed that this rule should be amended because it was
discriminatory against female members and not in the spirit of recognising the
unique nature of military service.
Conclusion
5.51
The Committee received overwhelming evidence of
dissatisfaction with the existing Superannuation arrangements for ADF
personnel. While some of this dissatisfaction is due to poor communication,
there is enough evidence to support further amendments to the rules associated
with the payment of benefits under the MSBS.
Recommendation 30
The Committee recommends that the Government apply a
concession to the Superannuation rules of MSBS to allow ADF personnel to access
member and employer benefits as either lump sums or indexed pensions at the
mandatory retiring age.
Recommendation 31
The Committee recommends that the Department of Defence
amend the rules governing continuous service and eligibility for the MSBS
Retention Benefit in the case of Maternity Leave.
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