Swan’s rhetoric on interest rates should also apply to deeming rates
9th December, 2011
Federal Member for Wide Bay Warren Truss has called on the Gillard Labor Government to act on its rhetoric and pass on to pensioners the full amount of the Reserve Bank’s cuts to official interest rates, by cutting Centrelink’s deeming rates for the age pension.“Treasurer Wayne Swan has been big on rhetoric with his attacks on the banks over passing on the cut to official interest rates to borrowers. He should now walk his talk and cut Centrelink’s age pension deeming rates,” Mr Truss said.
“Given the cuts to official interest rates, combined with the falls in the rates of return for investments and declines in financial markets, the deeming rate should be cut immediately.
“Wayne Swan demanded that banks pass interest rate reductions on to home borrowers, but the Government has the same opportunity to lead by example and decrease deeming rates for age pensioners.
“For every day the Gillard Labor Government fails to do so it cheats pensioners out of part of their age pension.
“If the Government was serious about helping pensioners meet rising cost of living pressures, it would pass on the full benefit of interest rate reductions and implement the reduction immediately.”
The deeming rate for some pensioners is currently 3 per cent for the first $44,600 of financial investments for single pensioners and the first $74,400 for couples. The deeming rate is 4.5 per cent for amounts over those thresholds.
“Reductions in the deeming rate will mean that some pensioners will receive an increased pension, and it will help other people of Age Pension age to qualify for the pension for the first time,” Mr Truss said.
ENDS
