Cuts to deeming rates won’t go far enough

The peak body for working people warns that the Morrison Government’s plans to cut deeming rates won’t go far enough for retired workers.

The Reserve Bank needing to adopt historically low emergency level interest rates to protect a fragile economy has further exposed vulnerable workers and retirees who have been victims of the Morrison Government’s austerity policies.

The coalition Government cut the pension in 2015 and installed an asset test taper rate which nearly wholly absorbs additional income which may have been gained from saving super during workers’ lives.

While the proposed reform is long overdue it doesn’t go far enough for the workers who are affected by the assets test.

Instead of taking swift action to decrease the taper rate so that retirees are not left worse off for having saved super, the Government are tinkering around the edges of retirement income reform.

As noted by ACTU Assistant Secretary Scott Connolly

“The Morrison Government’s plan to cut deeming rates is only tinkering around the edges. They need to go further by cutting the taper rate, so that working people experience a fair retirement.

“Retirees will still lose out despite deeming rates being cut. The current asset taper rate is punitively high and causes some retirees to be worse off just for having superannuation savings.

“The asset taper rate undermines the integrity of the superannuation system by rendering pointless additional superannuation for many workers approaching retirement needing to draw a part pension.

“The Government needs to urgently reform the asset taper rate so that retired workers are better off.”

/Public Release. The material in this public release comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.