In a clear pitch for the ex-service vote, the government has promised more generous indexation of military superannuation payments.
But it's less generous than the opposition's proposal, kicking in at age 65 against 55 for the coalition plan and applying to around 26,700 people, half the number who would benefit under the coalition.
It's also cheaper - $34 million over four years. The opposition costs its policy around $100 million but the government reckons it's $175 million.
Defence Materiel Minister Mike Kelly says the government's plan struck the right balance between assisting older military retirees and being fiscally responsible in the current climate.
"It's not a cheap measure and certainly I know it will be welcomed as a means by which these pensioners can keep pace with the actual cost of living," he told reporters in Canberra.
Ex-service groups have long lobbied for a change in indexation of superannuation payments to retired defence members.
That relates to the Defence Force Retirement and Benefits Scheme (DFRB), which opened in 1948 and closed in 1972, and the Defence Force Retirement and Death Benefits Scheme (DFRDB) which opened in 1972 and closed in 1991.
Anyone joining the defence force since 1991 belongs to the newer Military Superannuation and Benefits Scheme (MSBS).
DFRB and DFRDB pay a percentage of the person's final wage as a pension, indexed twice yearly according to the Consumer Price Index (CPI), the same as other Commonwealth and state public sector superannuation.
Neither scheme has its own funds, with all benefits paid from consolidated revenue. The two schemes have an unfunded liability of $25.8 billion.
The government says the coalition's indexation would add $6.2 billion to that liability but hasn't said what liability its scheme would add.
Ex-service groups want superannuation to be indexed the same as the aged pension - to the higher of the CPI, Male Total Average Weekly Earnings (MTAWE) or Pensioner and Beneficiary Living Cost Index (PBCLI).
Both Labor and the coalition have promised this in opposition but failed to deliver in government.
But from July 1, 2014, Labor will index these pensions to the higher of the PBLCI (currently 2.7 per cent) or CPI (2.4 per cent) but not MTAWE (4.8 per cent).
Opposition veterans affairs spokesman Michael Ronaldson dismissed this as a pale imitation of the coalition policy.
"It doesn't include MTAWE. It is only for those over 65. It should be judged very harshly by an ex-service community that is looking for fair indexation and passionately supports the coalition's position," he told reporters in Melbourne.
Defence Force Welfare Association vice-president Les Bienkiewicz said it was up to the electorate to decide which was the better of the schemes.
"It is pretty obvious which way most people would see that," he said.
RSL National President Rear Admiral Ken Doolan said the opposition scheme was certainly more generous.
"Nonetheless ... now both the major political forces in this country agree that indexation for DFRDB and DFRB recipients needs to be indexed at a better rate than CPI," he said.
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