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Monday, 7 November 2016
Page: 2867

Ms TEMPLEMAN (Macquarie) (11:03): In my electorate of Macquarie, the coalition made a great many promises during the last election, ranging from $310,000 for a local environment plan to $30,000 for an irrigation system for Knapsack Oval in Glenbrook. So far, the Turnbull government is yet to make good on any of these promises, and I, of course, will be pushing for them to do so. But today I ask: where were the Prime Minister's promises for Macquarie's pensioners, part pensioners and self-funded retirees? These are people who had a deal with the government that if, over their lifetime, they worked hard and saved what they could, there would be a pension to help make ends meet, if they needed it, at the end of their working life. They trusted they would be cared for in return for their economic and social contribution to our country. Sadly, this is a promise that the Prime Minister and the dysfunctional coalition government are failing to deliver.

What has this government and the previous Liberal government delivered for pensioners? In every single budget the Abbott and Turnbull governments have handed down they have tried to cut the pension; they are trying to abolish the pensioner education supplement; and they are increasing the pension age to 70. In 2014 they tried to change pension indexation, a change that would have left pensioners around $80 a week worse off within ten years. Most recently, they attempted to cut the clean energy supplement. They want to penalise migrant pensioners who go overseas to visit family and friends by cutting their pensions just six weeks after their departure.

As a result of the government's changes to the assets test, legislated with the help of the Greens, from 1 January 300,000 pensioners will have their entitlements cut, and just under 100,000 of those will lose the pension entirely. It is an appalling record, and that is why deeming rates are today so important. Unless you are retired and looking at your eligibility for a pension, part pension or seniors heath card, deeming rates do not actually matter that much. But deeming rates are supposed to be a practical way for government to efficiently estimate the interest and dividend income earned by retirees on their assets, inclusive of term deposits, share portfolios, bank accounts and more.

Despite the fact that interest rates are currently at record lows of 1.5 per cent, the government has insisted on leaving deeming rates artificially high at 3.25 per cent; meaning that individuals applying for pensions are estimated to have an interest based income much higher than they actually do. The result will be that thousands and thousands of people will be excluded from accessing pensions and part pensions because this government—overseen by the Treasurer, the social services minister and the Prime Minister—will calculate that they earn more income than they actually do. It is very convenient for the government. They get to reduce the budget bottom line and shift costs from government to individuals, and these individuals have the least capacity to find alternate sources of income to meet their costs of living.

Let's get really practical here. The absolute highest rate an individual investing their money in the Commonwealth Bank's pensioner security account would receive is 2.25 per cent per annum. Even if you had a balance significantly over the threshold for pension eligibility at the highest interest rate, that rate is still lower than Minister Porter's deeming rate of 3.25 per cent. And that is the case with all of the big four. A single pensioner with a bank balance of $60,000 in such an account would have their earnings deemed at a rate 68 per cent higher than the interest they would actually be receiving. This will lead to people being excluded at the means-testing stage for having an income that is, thanks to deeming, too high.

This issue has been raised by the Blue Mountains branch of the Association of Independent Retirees and by many individuals, like Ron from Blaxland east, John from Richmond and Brenda and Arthur from Bligh Park in my electorate. These people do not want to be forced into higher, riskier investments in order to get a return that more closely matches the deeming rate. They want security; they want not to be getting more than they should; they want to be treated fairly and the current deeming rates do not do that.

Therefore, we call on the Prime Minister to immediately reduce deeming rates in line with falling interest rates so that pensioner assets will be deemed fairly and Australian pensioners will finally get some relief. All it takes is the stroke of a pen. We do not need to pass legislation; we just need this government to make the right decision.