Emma Husar (Lindsay, Australian Labor Party) Share this | Hansard source

I am proud to rise this morning to move the first motion in my name in this place. For the benefit of the House and those in my electorate who are affected by deeming rates I would like to read the motion into Hansard as part of my speech. I move:

That this House:

(1) notes that:

(a) the Government is short changing Australian pensioners;

(b) despite interest rates falling from 2.25 per cent in February 2015 to 1.50 per cent today, the Government has failed to adjust deeming rates for Australian pensioners;

(c) currently a single pensioner's savings are deemed at 1.75 per cent on the first $49,200 and any amount over that is deemed at 3.25 per cent;

(d) deeming rates are supposed to reflect returns across a range of investment choices available in the market, but the Government is failing to act by lowering deeming rates; and

(e) Australian part-pensioners are doing it tough in a low interest rate environment and pensioners are crying out for some relief; and

(2) calls on the Prime Minister to immediately reduce deeming rates in line with falling interest rates, so that pensioners' assets are deemed fairly and Australian pensioners finally get some relief.

This is an issue that is seriously affecting pensioners in my electorate of Lindsay and right across the country. We currently have a situation where the assumed rate of return on investments made by pensioners is significantly out of step with the economic conditions that we see in Australia at the moment. As a result pensioners, effectively, are being ripped off because the government is assuming they are earning income—which, in many cases, they are not.

The government is using this non-existent income to determine the pensioner's benefits. It is a fact that interest rates in Australia are at a record low. This lowers the rate of return on safe investments across the board. Traditionally, pensioners have opted for low-risk financial products from well-established institutions so their hard earned money is protected in their later years. Generally, term deposits are preferred.

If you were to go onto the financial products ratings agency Canstar and search the thousands of term deposit products available to Australian investors, I would invite you to guess how many products were on offer at a return of 3.25 per cent or above. It is just one. Out of thousands upon thousands of products just one offers 3.25 per cent. It is with Big Sky. It has a four-year minimum term and interest is paid annually at 3.25 per cent. But too bad if you do not want to lock up your funds, for whatever reason, for 48 months or if you need to be paid more often than yearly. Anything less than a four-year term gets you a guaranteed rate of return less than the government's deeming rate, and for any product that pays monthly, quarterly or six monthly, again, you are guaranteed a rate of less than the government's deeming rate.

As I am sure those on the opposite side are very well aware, this is an issue that causes significant distress to pensioners as they try to manage their financial affairs. It is simply not fair to assume that pensioners are earning income that they are not and then use this fake income to decide their benefits. It is a despicable situation this government is presiding over and it is causing undue stress and anxiety among our pensioners who have worked hard to get where they are.

To make it worse, I have heard from some of the more detached and apathetic commentators, in this space, that there are plenty of financial products out there that offer higher rates of return than term deposits. We might even hear that from those opposite today, seeing as they have managed to conjure up just two speakers on this motion. That is true: if you are in a position to take on more risk and invest over a longer period there are plenty of financial products for you. But following the global financial crisis there is good reason for pensioners to invest their hard earned money safely and securely. They simply cannot ride out a downturn without it having an immediate impact on their quality of life.

Why this government is forcing pensioners to invest their money in ways that take on more risk is beyond me, but it is not surprising. After all, this is a government that is hell-bent on cutting the energy supplement, meaning pensioner couples will be $500 a year worse off. And this is a government that wants to increase the pension age to 70. In all, these things show that when it comes to Australian pensioners Malcolm Turnbull and his Liberal government are completely out of touch.

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