SUNDAY, 14 JULY 2019

SUBJECT/S: Deeming rates, Treasurer’s meeting with the Reserve Bank

LINDA BURNEY, SHADOW MINISTER FOR FAMILIES AND SOCIAL SERVICES: The Government has not adjusted the deeming rates for four and a half years. Pensioners have been short-changed by this Government for four and a half years.

The Minister came out today, and lowered the deeming rates by a very small amount. And pensioners, and particularly part-pensioners, are not satisfied with that amount. They’re not satisfied with the amounts that the deeming rates have been lowered. And they are certainly not satisfied with the process that’s been undertaken to lower these deeming rates.

Pensioners, and the ones that I’ve spoken to are very cautious, careful people. They don’t want to invest in risky products. They want to invest in secure products like term deposits with banks. You cannot get a term deposit that pays more than 2 per cent. And yet the Government has deemed today that they will lower the upper rate by 0.25 per cent and the lower rate by 0.75 per cent.

This is not acceptable. Particularly to pensioners who understand very well that these deeming rates are what determines the amount of pension that they get. The Government has absolutely short-changes pensioners and the processes that the Government has gone through is not what pensioners expect.

JOURNALIST: So you are saying that it’s too little, too late?

BURNEY: I am saying very clearly that this lowering of the deeming rates today is far too little, and far too late. I’m also saying, on behalf of pensioners; we understand what you are saying, we understand your disappointment.

The Government thinks that they have done some great thing, because of their bottom line. But really, at the end of the day, it has been four and a half years that they have been duding pensioners by charging an inflated deeming rate.

JOURNALIST: Does Labor think the deeming rate should be made by an independent authority?

BURNEY: Labor is agnostic on this. It is up to the Government, really, to determine what the deeming rate is. The Government and the Minister have the capacity, they have the staff and they have the information to set the deeming rate. It is really the responsibility of the Government. And the way in which the Government has lowered the deeming rate slightly today is not acceptable, particularly to part-time pensioners.

JOURNALIST: What evidence do you have that the Government has ignored expert advice on this?

BURNEY: Well the Government has sat for four and a half years, watching five interest rates being lowered by the Reserve Bank. They have not taken advice. We know very well that that they’re about – or supposed to be – starting a review in relation to pensioners. And we believe that this review should very much look at the way in which deeming rates are set. It is absolutely within the capacity of the Government to do this. And it is completely opaque what the Government is going to look at.

JOURNALIST: The Council on the Aging has welcomed the rate cut, so shouldn’t that be enough for Labor?

BURNEY: The Council on the Aging has cautiously welcomed this rate cut. And they would welcome any rate cut, because it’s been four and a half years since there has been one. We know that the Government has really saved million and millions and millions of dollars off the back of pensioners, because of an inflated deeming rate.

JOURNALIST: Would Labor support a Greens push for a Senate Inquiry into this issue?

BURNEY: I’ve not heard what the Greens are saying. And obviously it would really be up to me discussing a concept like that with the Leader, and with the people involved in finance in Labor. I would not go down that track without proper consultation with the people that I need to talk to.

JOURNALIST: Do you acknowledge though, that the Government needs to strike a balance between a budget black hole – preventing a budget black hole – and being fair to pensioners?

BURNEY: I acknowledge that the Government needs to be fair to pensioners. And of course we want to protect the budget surplus, if there is going to be one. But let’s be clear about this – the Government has been short-changing pensioners for four and a half years. It is really from the perspective of pensioners that I’m coming from.

JOURNALIST: Was there anything else that you wanted to share?

BURNEY: No, I think that covers it.

JOURNALIST: Just on another issue, what did you make of the Treasurer’s media op with the Reserve Bank Governor?

BURNEY: I saw Insiders today, and I was aware that the Treasurer had met with the Reserve Bank. I think it’s perfectly legitimate for the Treasurer to meet with the Reserve Bank. Whether it was a media op or not, I’ll leave for others to decide.