Retirees need ‘a fair go’ from banks: PM
Maeve Bannister and Andrew Brown |
Retirees must be given “a fair go” by the banks for staying loyal during the pandemic, the prime minister says.
The Reserve Bank of Australia has raised the official cash rate from a historic low of 0.1 per cent to 0.35 per cent – the first rise since 2010.
The big four banks have passed on the rise to borrowers, with the cost of living already a key issue in the May 21 election campaign.
Announcing a freeze to the deeming rate for almost 900,000 social security recipients, Scott Morrison said self-funded retirees had been “doing it tough” in the past two years.
“My message to the banks is to give (deposit holders) a fair go,” the prime minister told reporters in the Adelaide seat of Boothby on Wednesday.
“I’d be encouraging the banks – it’s obviously their call and there is no way to force them to do that – in fairness to those deposit-holders who have stood by their savings.
“They deserve the recognition of that, ensuring that those (interest) benefits are passed on directly to them.”
The Morrison government is on the defensive after the central bank raised interest rates for the first time in more than a decade.
The deeming rate freeze will apply to 885,000 people, with the lower deeming rate set to remain at 0.25 per cent, while the upper deeming rate will stay at 2.25 per cent.
Social Services Minister Anne Ruston said the freeze would provide greater financial certainty for older Australians.
“We know that older Australians particularly have felt the uncertainty of the last two years very, very keenly and the decision today to freeze deeming rates for the next few years provides them with two years of certainty,” she said.
Anthony Albanese, who campaigned in the Victorian seat of Chisholm on Wednesday, noted the prime minister had previously been “dragged kicking and screaming to make any changes to deeming rates”.
Mr Albanese said the government was oblivious to cost of living pressures on working families.
“The combination of low wage growth, rising inflation, and rising interest rates is putting real pressure on working families in the suburbs and the regional towns of Australia,” he said.
“Scott Morrison has an excuse for everything and a plan for nothing. He wants to always take credit when things are going well, but never accept any responsibility when things aren’t.”
Treasurer Josh Frydenberg, who debated his Labor counterpart Jim Chalmers at the National Press Club on Wednesday, said the COVID-19 pandemic and war in Ukraine were “the main drivers” of inflation.
But the government was doing what it could to ease cost of living pressures, including halving the fuel tax, cutting the cost of medicines and providing cash payments.
“Australians are doing it tough right now and just as we had their back at the height of the pandemic, we have their back now,” Mr Frydenberg said.
Dr Chalmers said the cost of living crisis began well before the pandemic and Ukraine war, with wages not keeping pace with inflation and the government presiding over a “wasted decade of missed opportunities”.
“My heroes are the essential workers and the shiftworkers who did so much to keep the wheels of the Australian national economy turning throughout the course of this pandemic,” he said.
“And the reward for their efforts can’t be another three years of working hard, but still going backwards in this economy.”
AAP
