I rise today to speak on the Turnbull government's continuing assault on pensioners and, specifically, its refusal to review deeming rates. In my electorate of Paterson pensioners are still reeling from the New Year's Day pension cuts. There are 3,410 pensioners in Paterson who are worse off as a result of the cuts—made by the Turnbull government in cahoots with the Greens—that were opposed by Labor every step of the way. A third of them—1,040 people—have had their pensions cancelled entirely, leaving them worse off by $191 a fortnight. There are 2,370 pensioners in my electorate who have had their pensions reduced, leaving them $135 a fortnight worse off. But the Turnbull government's assault on pensioners does not end there. The government's failure to address deeming rates is, in effect, a de facto pension cut and one that pensioners can ill-afford.
I received an excellent letter just yesterday from Philip Healey of East Maitland. It reflects quite succinctly what many pensioners have told me about the deeming rates. Mr Healey said the New Year's Day pension cuts left him and his wife worse off by $408 a fortnight—that is, $10,600 a year. However, the 'gross disconnect between the pension assets/income test and the financial marketplace' artificially reduces their pension even more. The government deems that Mr Healey's investments earn him 1.75 per cent for the first $81,600 and 3.25 per cent for anything above that. Mr Healey's financial institution had, up until this week, offered a 'deeming account' with an interest rate the same as the government's deemed rate: 3.25 per cent. But the institution has discontinued its deeming account, reducing the rate to 2.6 per cent. Mr Healey is not critical of this decision by his institution, because he says that most had already done that quite a while ago. 'The reality is,' Mr Healey wrote, 'the government's deeming rate is too high.'
Mr Healey has done some research as to how he might obtain the interest rate of 3.25 per cent that the government deems him to be earning. He found he would need to change institutions and would need to place all his funds in a 36-month term deposit with interest paid annually. And therein lies the problem: how can the government deem that Mr Healey is receiving 3.25 per cent per annum and reduce his pension each fortnight when it is not possible for him to access any income for 12 months? He and his wife cannot lock away all their savings for three years and go without income for 12 months, because they would have no money to live on. It is a scandal. These deeming rates must be reviewed.