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COMPERE: Meanwhile Defence morale's taking a battering from an unexpected source: the Tax Office. The association that represents the country's Defence personnel has warned of the potential for a mass exodus from the armed services. The Armed Forces Federation wants Defence personnel to be exempt from the move to list FBT on Group Certificates from July next year. It says their rental subsidies will mean they'll have to pay more child support and could be forced to contribute more towards the Medicare levy, superannuation surcharge and HECS. Kirsten Aiken reports. 

KIRSTEN AIKEN: Thirty-six-year-old Warrant Officer Stranton Dixon joined the Army 19 years ago, believing he'd have a career there for life. But he didn't anticipate the Federal Government's changes to the tax system; specifically the move that will see fringe benefits tax listed on his group certificate from next year. 

While his FBT, which consists mainly of a rent subsidy, won't be assessed as taxable income, it will be used to assess child support payments for his three children from a previous marriage. Warrant Officer Dixon says that means the cost of the payments will more than double, and his take-home pay will be substantially cut, leaving him unable to provide for his new family. 

STRANTON DIXON: After consultation with the Child Support Agency and also the taxation agency, child support will be increased from $328 to $662 a fortnight. 

KIRSTEN AIKEN: And what will that leave you with? 

STRANTON DIXON: Currently I'm receiving $1,879 a fortnight. Once tax, 
superannuation and married-quarter rent, and child support, are taken out, all compulsory deductions, I'm left with a take-home pay per fortnight of $344.86. 

KIRSTEN AIKEN: Is that enough to live on? 

STRANTON DIXON: Oh, not in Sydney; no way. That amount depends, of course, on what location you're posted to and where you're at. But for myself to support a wife and a child in Sydney, $344 a fortnight, no it's not enough. Not when I'm being employed to do a job and I'm paid, supposedly, 24 hours a day. 

KIRSTEN AIKEN: Warrant Officer Dixon no longer believes his future lies in the armed services. He's begun applying for other jobs and hopes an interview this Wednesday will be his ticket out of the Army. But if he's not successful, he's considering quitting anyway. 

STRANTON DIXON: An option to me would be to wait until I complete my 20 years of services, which comes up in January next year, and then to leave the Army and possibly not take up any employment at all. In which case I believe everybody's a loser; the Child Support Agency can't take a cut of my pay to pay to my ex-wife and three children, I'm not left with a very satisfactory lifestyle, because I'm not employed anymore, and once again it's not providing a lifestyle for my wife and my daughter. 

KIRSTEN AIKEN: The association that represents Defence force personnel says Warrant Officer Dixon's situation isn't unique. In fact the Armed Forces Federation says at least 10 per cent of personnel, or 4,500 workers, are nun-custodian parents with bills for child support. And Industrial Officer, Graham Howatt, says all up 50 per cent of personnel will be effected with the changes, that are also expected to have ramifications for payment of the Medicare levy, the Higher Education Contribution Scheme, and the superannuation surcharge. He says unless personnel are exempt from the FBT reporting conditions, more will follow Warrant Officer Dixon's lead. 

GRAHAM HOWATT: There could be a mass exodus of Defence personnel come the year 2000, and that's going to put a strain on operational capability of the ADF. 

KIRSTEN AIKEN: What type of safeguards would you like to see implemented? 

GRAHAM HOWATT: We would like to see a range of exemptions granted for ADF personnel, on some of these so-called benefits that the Government provide them, in return for them putting their life on the line to protect the nation. They go where they're told, they go where they don't want to be, they serve in remote localities, they're posted here, there and everywhere at Defence's discretion, but that's at Government direction in most cases. 
They should be given some sort of special entitlement. They are not 
employees in the legal sense, therefore they should have special 
considerations and special employment conditions. 

COMPERE: Graham Howatt from the Armed Forces Federation, speaking to Kirsten Aiken