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48    Deeming rates

Senator Dodson, pursuant to notice of motion not objected to as a formal motion, moved general business notice of motion no. 28—That the Senate—

               (a)       notes that:

                                     (i)       deeming rates determine how much the Federal Government assumes pensioners earn on their savings, and are used to calculate how much pension a person receives,

                                    (ii)       deeming rates are set by the Government,

                                  (iii)       the Reserve Bank has cut interest rates five times since 2015, but in this time the Government has not adjusted the deeming rates at all,

                                  (iv)       the cash rate is now just 1%, but the Government has kept the deeming rates at up to 3.25%,

                                   (v)       secure investments, like term deposits, are not providing returns in line with the deeming rate,

                                  (vi)       low interest rates and high deeming rates mean pensioners’ budgets are being hit twice, with lower earnings on savings and reduced pension payments,

                                (vii)       up to 627,000 age pensioners, who are on a part-pension because of the income test, are impacted by the Government’s refusal to reduce deeming rates, and

                               (viii)       the Treasurer has said banks should pass on interest rate cuts to mortgage holders in full, but the Government is refusing to do the same by reducing the deeming rates for pensioners; and

               (b)       calls on the Federal Government to urgently reduce the deeming rates and stop counting income that many pensioners simply are not earning.

Statement by leave : The Assistant Minister for Forestry and Fisheries (Senator Duniam), by leave, made a statement relating to the motion.

Question put and passed.