Having just watched the Treasurer criticise the major banks for not passing on the full cash rate drop to everyone who has a mortgage, followed by comments on how far the banks are behind on the amount the cash rate has dropped over the last seven downward adjustments that have occurred in the last two years, I feel I have to make a comment on behalf of all the pensioners, like my wife and me who, because we saved some money for our retirement are, as a result, on a part-pension.
The fact is that the Government determines how much your pension is reduced, by working out how much you earn by using Deeming Rates, which the Government have not seen fit to reduce at all over the period, while the seven cash rate falls mentioned above have taken place. The result is that part-pensioners are now being deemed to be getting more money than they can receive from safe investments, such as term deposits, if they have a reasonable amount invested and are not only being affected by the lower investment returns, but are being further adversely affected by the Government not reducing the deeming rates, which would result in a small increase in the part-pension received.
In view of the above, I suggest the Government is much more deserving of criticism than the banks in its lack of action in regard to Deeming Rates.
W Stewart
Port Macquarie
