Government admits super cost low

Senator Nick Minchin, minister for finance, has admitted the real annual cost of extending defined benefit superannuation schemes to same-sex couples would be small and fundamentally it was an issue of equality.

However, he defended the government’s decision not to proceed with the promised reforms as part of this year’s budget because the cost to future taxpayers would be controversial.

Minchin (pictured) made the revelations in response to questions from senators Andrew Murray, Nick Sherry and Kerry Nettle during Senate Estimates hearings last week.

I agreed it was basically an equity issue. However, any change would impose a significant additional liability for future taxpayers to meet, Minchin told Sydney Star Observer.

If there was full recognition of interdependency relationships in the government’s defined benefit superannuation schemes, future taxpayers will ultimately bear the responsibility for the $2 billion increase in the unfunded liability, he said.

The $2 billion would cover both civilian and military schemes until 2010-11, but Minchin would not reveal the exact annual cost, other than to admit it was small and would not affect the four-year forward estimates to any great degree.

Responding to the case of Comsuper recipient John Challis (SSO 868), Minchin said the government had not ruled out a wider move on interdependency options.

Consideration of this complex issue is ongoing. It is quite a big decision for a government to discreetly and unilaterally add to the liability on future taxpayers, Minchin said.

During questioning from Nettle, Minchin was forced to admit that only half of the stated $2 billion would be for same-sex couples.

I apologise if I had given that impression. If we were going to move on this, we would not do it for just same-sex couples, Minchin told the hearings.

Nettle said each new detail weakened their argument.

If they’re going to use an economic argument, at least be honest. People in the community have an over-inflated impression of the cost of equality, Nettle said.

Nettle said people would make their own judgments whether the government was deliberate in creating a mistaken impression of the cost.

It shows the reluctance of the government to be honest about the issue and secondly to remove the discrimination.

I don’t think this government has any genuine commitment to removing discrimination that same-sex couples face, because I don’t think there’s any evidence of it.

Sherry said he raises the issue every year at Senate Estimates and wondered just how long these promised reforms would take.

People may not be so concerned about the issues if we can see the actual figures and the way they’re calculated. I think they’re using this as an excuse to delay action, Sherry said.

Frankly I don’t expect to see the real annual cost because I’ve asked three times before. He’s consistently refused. On track record, unfortunately I don’t expect to receive it.