SENATOR THE HON ANNE RUSTON

MINISTER FOR FAMILIES AND SOCIAL SERVICES

MANAGER OF GOVERNMENT BUSINESS IN THE SENATOR

TRANSCRIPT

INTERVIEW WITH SALLY BOWREY, WEEKEND SUNRISE

Sunday, 14 July 2019

Topics: Cut to deeming rates to increase pension payments for nearly one million Australians.

E&OE……………………………………

Sally Bowrey: Good morning. One million pensioners are set to see a boost to their income with the government this morning announcing that it is slashing deeming rates. It means pensioners will be penalised less on the income earned from their investments. We're joined live now by Social Service Minister, Anne Ruston. Good morning to you. How much of a cut will there be?

‍Minister Ruston: There are two deeming rates - there's a lower deeming rate which will be cut to 1 per cent which is a 0.75 per cent cut on the existing rate, and, at the higher rate we'll be dropping it from 3.5 per cent to 3 per cent.

‍Sally Bowrey: Okay. And how many people will benefit from this?

‍Minister Ruston: Well, all nearly a million people that we've identified will benefit from the cut to the lower rate because everybody the lower rate applies to people who are holding assets under $51,800. But for people that are holding financial assets over that amount - that's for singles by the way and 86,200 for couples - but people who are holding more assets than that will also be impacted by the drop to 3 per cent from the upper deeming rate. So overall, nearly a million people, which is about 25 per cent of our pensioners, will be seeing more money in their fortnightly payments from Centrelink by the end of September.

‍Sally Bowrey: Minister, it has taken the government a long time to act on this though. Can you give any guarantees there'll be much swifter response in the future when it comes to pension and pensioners?

‍Minister Ruston: Well certainly when I first was appointed the Minister for Social Services two months ago one of the things I did a as priority was to ask my Department to provide me advice about what the current economic conditions were, what the market returns were for the suite of goods and financial assets that make up or determine what the deeming rate should be. And that came back and I've considered that advice and it became very apparent that we needed to drop the deeming rates to reflect current market conditions. Bearing in mind that market, the suite of assets that we're talking about range from at call accounts that have got reasonably low, if almost negligible interest rates, up to some of the market returns we're seeing on ASX yields of 4 per cent and superannuation which is in excess of 5 per cent. So it's a wide basket of goods that we consider when we determine what a reasonable market rate for returns is likely to be.

‍Sally Bowrey: Okay, thank you very much Social Service Minister Anne Ruston for joining us this morning on Weekend Sunrise.

ENDS