Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
The Morrison government has taken the opportunity to target the grey vote heading into its mid-year budget review, as it readies the nation for next year’s federal election.
This included the announcement of cutting the interest rate it charges pensioners who tap into the equity of their home, which advocates described as an early Christmas present for older Australians.
Treasurer Josh Frydenberg will release the mid-year economic and fiscal outlook on Thursday, which economists expect will see an improved budget position against the backdrop of a rapidly recovering economy.
Deloitte Access Economics expects deficits will have improved by $103 billion over the four-year budget estimates.
This would see the 2021/22 budget deficit reduced to $91.1 billion from $106.6 billion forecast at the time May budget and $61.8 billion in 2022/23 rather than $99.3 billion.
But shadow treasurer Jim Chalmers said the economic recovery will mean nothing if Australian working families are left with stagnant wages at a time of skyrocketing cost of living pressures.
“The prime minister says he doesn’t look in the rear vision mirror and that’s because he doesn’t want to see all of those Australians that he’s left behind,” Dr Chalmers told reporters in Brisbane on Wednesday.
This could be Mr Frydenberg’s last major economic showpiece should Prime Minister Scott Morrison head to the polls in March rather than May, and before the 2022/23 budget planned for March 29.
Social Services Minister Anne Ruston said the government is reducing the interest rate from 4.5 per cent to 3.95 per cent on its Pension Loans Scheme from January 1, which will now be known as the Home Equity Access Scheme.
The scheme allows older Australians to get a voluntary non-taxable fortnightly loan from the government up to a maximum value of 150 per cent of the rate of the age pension.
“It just gives them another tool to have a better quality of life in their retirement and using that equity in their own home to be able to achieve that,” Mr Morrison told 4BC Brisbane radio.
COTA Australia chief executive Ian Yates said the interest rate cut would be an early Christmas present for those using the scheme.
Mr Yates said the revamped scheme built on the findings of the Retirement Income Review.
“Some of the changes, including the intention to permit lump sum payments, are subject to legislation passing in February, so we ask all parties will assist smooth passage through parliament so that older Australians can start reaping the benefits,” he said in a statement.
Aged Care Services Minister Richard Colbeck also announced a $34 million research centre within Adelaide’s Flinders University that will initially focus on dementia care, restorative care and rehabilitation, mental health and wellbeing, and social isolation.
“This is a big step forward when it comes to ensuring the needs of older Australians in care are not just met, but exceeded,” Senator Colbeck said.
Mr Yates said it was crucial to have the voice of older people and their families at the heart of research and development into these areas.
Meanwhile, Urban Infrastructure Minister Paul Fletcher announced a further $316.1 million in funding for the Coomera Connector on the Gold Coast.