Government can't keep propping up budget on backs of pensioners

Scott Morrison is propping up his budget on the backs of pensioners and pushing pensioners into volatile insecure investments by coasting on this latest cash rate decision.

Scott Morrison is propping up his budget on the backs of pensioners and pushing pensioners into volatile insecure investments by coasting on this latest cash rate decision.

Yesterday’s interest rate decision puts even more pressure on the Government to adjust deeming rates so they are fair for pensioners.

Interest rates are at record lows and pensioners are getting hit twice: firstly, through lower returns; and secondly, because unfair deeming rates are reducing their pension.

The Government uses deeming to calculate the level of a person’s pension – assuming a rate of income from savings, whether or not pensioners actually earn those returns.

For years, Labor campaigned for the Government to adjust the deeming rates to more accurately reflect the rates of return that pensioners can reasonably expect to receive on secure investments.

But it was only in July that Scott Morrison adjusted the rate to 3.00 per cent, which Labor and seniors groups described as too little, too late.

Scott Morrison still remains unable to explain how or where pensioners can expect to find a return of 3.00 per cent on secure investments.

It is nothing less than hypocrisy that Scott Morrison would expect the banks to pass on the interest rate cut to consumers, but that he won’t do the same for pensioners.

Scott Morrison is propping up his budget on the backs of pensioners and pushing pensioners into volatile insecure investments by coasting on this latest cash rate decision.

Linda Burney

Media release - Wednesday, 2 October 2019