As Treasurer Jim Chalmers seeks to rebuild fiscal buffers, deeming rates are back under the microscope.
used to determine some 600,000 pensions will remain frozen, the Treasurer’s office says, despite the highest interest rates in a decade and slowing economy hampering government revenues.in Washington on Thursday that the government had yet to decide on whether to lift deeming rates in the upcoming federal budget.
The current deeming rate was frozen by the Coalition until next year at just 2.25 per cent, but the cash rate, which deeming is historically pegged to, is already at 3.6 per cent. “We have said in the past, when interest rates were being cut, that it made sense for the deeming rates to be more responsive to that.”
He said he knew the budget was under pressure and that some tough decisions had to be made to ensure the budget was stronger, and the economy was more resilient to future shocks.
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