The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

12 September 2008

Interview with Madonna King

ABC Radio 612, Brisbane

12 September 2008

SUBJECTS: Pensions, Economy, Tax Cuts, Henry Review, PM / Memoirs, Deeming Rate, Surplus, Overseas Aid, Luxury Car Tax, Harmer Review, Superannuation, Pharmaceutical Allowance

KING:

Treasurer, good morning and welcome to 612 ABC Brisbane.

TREASURER:

Good morning, Madonna.  It’s great to be home, great to be in Brisbane, and it’s good to be on 4QR.

KING:

Well we say 612 ABC Brisbane now. Say it – you’re on 612 ABC Brisbane.

TREASURER:

612 ABC Brisbane.

KING:

We’ll be using that now.  Has it been a bad week?

TREASURER:

Not at all.  I welcome the debate about the adequacy of the age pension.  What I said on television the other day was something that I’ve said on many occasions.  I’ve been involved with these issues to do with the adequacy of the pension, income support, for many years.  Indeed, I talk all the time to aged pensioners, disability support pensioners, Vietnam vets.  There’s a real issue here.  So when I said the other day that I couldn’t live on it, it’s something that I’ve said many times before, but it did excite much media commentary. And I certainly welcome the subsequent debate, because there is a very big decision before the Government here, and it’s one that we said we would take on in the May Budget and we are.

KING:

Can pensioners afford to wait until next year though for some relief?

TREASURER:

Well Madonna, that’s why we put the $500 bonus in the Budget.  It had not been budgeted for by the previous government…

KING:

But it was given by the previous Budget.

TREASURER:

Well not always, no, not at all.  It had been given on the previous occasion.  This is one of the problems, you see.  The previous government, for 12 years, did nothing about the base rate of the pension, and occasionally, and only occasionally, gave a bonus.  So, the legitimate criticism is that if the pension is inadequate, we shouldn’t necessarily be depending upon bonuses from time to time.  What we should do is increase the overall adequacy of the pension, and that’s what we said we would do in the Budget.

KING:

But can they wait until next year?

TREASURER:

Madonna, that’s why we increased the Utilities Allowance, because we recognised pressures were substantial.  We’ve also got the indexation coming through, granted it’s only small, something like $4.50 in March, something like $7.50 a week in September.  All of those things are happening.  Look this is a really difficult question, Madonna.  My life is a constant tug of war between what my heart wants me to do and between what my head tells me we can do responsibly.

KING:

But if you’re sitting out there listening, you think, well where do I fall in Wayne Swan’s priorities.  He found $30 billion for working family tax cuts.  Why, before the election, didn’t you come out and say, look, I’m going to look after you as pensioners…?

TREASURER:

Well can I just deal with that one, Madonna.  That’s a really important one to deal with.  A low income earner, let’s say around $20,000, got a tax cut in the Budget of only $450.  Someone on an age pension got a bonus payment of $500 and they got an increase in the Utilities Allowance of $400.  I just want to make that comparison, because the notion is that somehow working families got an enormous amount in the Budget and pensioners did not.  That’s just not the case.  Now, does that make me think that what was given was adequate?  No.  Does the Government think we should be doing more?  Yes, we do, but very big cost implications for the Budget, not just this year, but through the years.  We have an ageing population.  So, getting these issues right for the long term is a very high and important priority for the Government.

KING:

Just before we go to our line-up of callers, when you talk about a review of the pension, because I’ve had this question asked several times this week, are you talking about the single age pension and the double pension and the carers pension?

TREASURER:

We’re talking about the lot, Madonna, because you see, you can’t just say you’re going to increase the single pension by $30 and not have knock-on effects in a whole host of areas in the income support system.  And of course, what Dr Nelson has said is that he’s left out 2.2 million pensioners.  Disability support pensioners aren’t included, Vets aren’t included, and so on.  You’ve got to get this right for the long term.

KING:

Let’s go to Clare first at Deagon.  Good morning, Clare.

CALLER: 

Good morning.

KING:

Your question?

CALLER: 

Mr Swan, I disagree with you completely about the knock-on effects.  I’m on widows allowance – and I’m not talking about my situation – but when I was nursing my husband at home, he was on disability pension and I was on carers pension and we had $1,000 a fortnight.  I’m now on widows allowance, which is not a pension, and is the equivalent of New Start – $430 a fortnight.

KING:

So what’s your question, Clare?

CALLER: 

I can’t see why, because age pensioners and disability pensioners have extra medical costs, I can’t see why they can’t single – I’m talking about the single age pensioner and the single disability pensioner – can’t immediately get an increase and the other welfare recipients can be looked at later.

TREASURER:

Well first of all, when you’re talking about disability support pensioners, they didn’t receive the bonus in the Budget.  That was a very hard decision.  But they are pensioners and that’s one of the reasons why they should be included in any comprehensive review of the pension.  And of course, recognising that you are on a widows allowance, I do recognise you’re in very tough circumstances.

CALLER: 

Well, I’m actually not.

TREASURER:

You see, it varies a lot between groups.  If people have got supportive friends and families, it’s fine, but many are out there on their own. And that’s why the Government has first of all highlighted the inadequacy of the base rate of pension as the first priority to do something about this in the long term.  But there are, of course, other issues involved and we do need to consider them altogether.

KING:

Clare, thank you for your call this morning.  Peter from Burpengary, what is your question?

CALLER:

My question to the Treasurer is about the knock-on effect as well, but more importantly, on the overall economy in terms of inflation and things like that.

KING:

So what is the specific question?

CALLER:

I want to know from the Treasurer how hamstrung is the Federal Government by the economic circumstances?  At the moment they really want to do something for pensioners, but what impact will that have on inflation, and for the general public to understand how building to a $50 billion surplus is going to be achieved when these basic social welfare issues are going unaddressed?

TREASURER:

Well we have to take decisions that are sustainable for the long term.  This year we’ve budgeted for a $22 billion surplus which is very important given the challenge on the one hand of tackling inflation, and on the other hand of having a buffer in place given the international uncertainty we face.  Now of course I think that decision to have a strong surplus was very important in terms of giving the Reserve Bank room to move so it could take its decision on bringing down rates.  So this is a really difficult balance here. 

We will take our decision on the pension issues with all of those things in mind.  We do need to be very careful in our macroeconomic management.  That’s why I will not take, and the Government won’t take, some sort of quick fix which has big implications for the Budget without any explanation of what it means in terms of macroeconomic management.  And that’s why Dr Nelson is being so economically irresponsible.

KING:

John’s visiting Brisbane.  John, what is your question?

CALLER:

My concern was the TPI pension, or the totally and permanently incapacitated veterans pension, which has bloody been eroded and no longer meets the example that was set down in 1918 and 1920, where it would be a one-for-one of the average weekly male income.

KING:

So what is your question though, John?

CALLER:

What will the Minister be doing to rectify the TPI pension and let alone the veterans on lesser payments?

TREASURER:

Well certainly we’re including in our review all those on pensions, unlike Dr Nelson who’s just singled out age pensioners.  We’ve got to look at all of them.  And of course the Vietnam Veterans have issued a very tough statement about this a couple of days ago.  My father actually was a TPI pensioner when he died.  I understand how veterans feel, and that’s why they’re part of the comprehensive review.  You can’t just snap your fingers and think you can fix one problem when there are so many other problems in the system.  And that’s what we’re doing.

KING:

Given your time again, would it have been better to reduce the $32 billion in tax cuts, or the $30 billion in tax cuts, and put some of that money into increasing the pension?

TREASURER:

No, not at all.  You see Madonna, what has occurred here in recent years is that the previous government did have some priorities.  And their priorities were to give tax cuts to people in the top half of the income distribution, and that’s what they did year after year after year.  And no decisions were taken to increase the adequacy of the base rate of the pension.  So a choice was made by the previous government to give tax cuts at the top end of the income distribution and to do nothing about the base rate of the pension and to occasionally, just occasionally, give a bonus. 

What we said we would do in our last Budget was to give those tax cuts to people in the bottom half of the income distribution who had missed out for a long period of time, and also to provide some interim relief to pensioners via the way of bonus and via an increased Utilities Allowance.  That’s what we’ve done, but we also said we recognise that wasn’t enough. But because of the expenditure implications of changing the base rate of pensions are so big and so complex, we said we’d have a comprehensive review, and we’d have that review in time for next year’s Budget.

KING:

Cathy is from Brisbane City.  Good morning, Cathy.

CALLER:

Good morning.

KING:

What’s your question?

CALLER:

I think that $273 a week is enough to buy food and utilities.  Would it make sense to increase the rent subsidy and provide some relief for people who have mortgages to pay so that the money from the pension, and this goes for all social security payments, (inaudible) actually living on, but accommodation costs are more heavily subsidised?

TREASURER:

Well there’s certainly no doubt, Cathy, that increases in rent in recent times have been a dominant factor that have put many people, particularly on the single pension, under tremendous pressure.  It’s very hard, whether you’re renting or even if you’re in your own home and you’re on your own and with no help from your family, to survive.  Certainly that is one possible solution to the problem.  I also think what we’ve got to do is we’ve got to make a much bigger effort in terms of affordable rental housing across the board, and certainly the Government’s got its eye on that.  But we’re looking at all of these things in terms of the review, and you do make a very good point about the cost of housing.

KING:

Picking up Cathy’s point, is there a real difference between pensioners who own their own house and pensioners, particularly with single age pensioners, who are renting?  Is that the problem?

TREASURER:

Well certainly the rental market out there is really tough.  Rents have gone through the roof.  One possible solution is to increase rental assistance, but that may have the opposite effect of simply pushing rents up further and people being worse off.

KING:

Are you thinking about that?

TREASURER:

Well it’s all in the system.  We are having a comprehensive root and branch review which is why you just can’t click your fingers and take a decision in one area, not being aware of the implications in other areas.

KING:

No, but it’s easy to say we’re having a root and branch look.  Is the Henry Review also looking at whether rental assistance would be increased?

TREASURER:

It’s all part and parcel of the equation.  But there’s only a certain amount of money to go around.  What we’ve got to try and do is to get in place a sustainable solution to get that base rate of pension to a decent level.  But I also recognise, on top of that, there are issues to do with utility costs.  There are issues to do with housing costs.  That’s all part of it.

KING:

What’s the worst story, the most heart breaking story from a pensioner you’ve heard?

TREASURER:

There was one the other day, because I’m out and about with pensioners all the time, I have been all of my political life, and I was talking to one guy, and you know they’re really proud.  If you’d worked all of your life to make the country what it is and to look after yourself and suddenly you find you haven’t got enough money, people like that don’t frequently even tell their children that they’re doing it tough.  There was one guy the other day who basically wasn’t using his heater, wouldn’t turn his heater on when it got cold, so he’s getting the flu all the time.

KING:

Do you understand why some of them might feel a bit let down?

TREASURER:

Of course I do.  I think the country has let these people down, but over a long period of time.  This is the whole point.  We couldn’t undo in one Budget what had taken 12 Budgets to develop.  And that’s why we are so serious about this review.  But there are no easy solutions here, Madonna.  There’s no bottomless pit of money to solve this problem.  But we are very serious about putting in place a system which is sustainable for the long term.

KING:

Wayne, you’re next.  But one by email – and there’s dozens of those coming in too – but  there was an interesting one on if the pension was increased by $50 a week, do you know roughly how much money you would have to find to fund that?

TREASURER:

Well, $50 a week, I think, if it just went to singles, would be of the order of $7 billion or $8 billion.  But if you were to give, say, a $30 increase to everyone – not just the seniors but also the couples, the Vietnam vets, the TPIs, all of those, disability support pensioners – at $30 a week that’s $10 billion.  So you are dealing with very, very big figures here, and that’s why I have to approach this in a responsible way.  I can’t just respond emotionally.  The country’s economic future, health and prosperity and dignity depends upon getting the economics of this right but also getting the social policy right.

KING:

Many of you have asked that question. So a $30 increase would mean a $10 billion…

TREASURER:

Across all pensions, not just Dr Nelson’s half-baked proposal, yes.

KING:

Wayne from Ipswich, what’s your question?

CALLER:

Yes, look, congratulations, Treasurer.  You’re doing a fantastic job of great leadership.

TREASURER:

Thanks, Wayne.  We’re a good crew, us Waynes out there.

KING:

Do you have a question?

CALLER:

Yes. You’re showing so much leadership. When will you be running for Prime Minister?  Has the deal been done yet, and when can we expect to see your memoirs?

TREASURER:

Well fortunately we’re focused on running the country, unlike Peter Costello and Dr Nelson.

KING:

But do you want to be Prime Minister one day?

TREASURER:

No.  No.

KING:

You’re ruling it out categorically?

TREASURER:

Absolutely.

KING:

Never, ever, hand on heart?

TREASURER:

All of that.  I love this job.  I consider it a privilege to be the Treasurer of Australia.  It’s a challenging job.  And as we’re talking here today, it’s just not about the hard economic outcomes, terribly important as they are. We’ve got to have some heart, but we’ve got to deliver it with policies that come from our head and comprehensive policy analysis.

KING:

Wayne Swan answering your questions this morning on 612 ABC Brisbane.  Des from Alexandra Hills, you’re next. What’s your question?

CALLER:

Yes, Mr Swan, I’d like to ask why did you reinstitute, reinstate the deeming policy on pensions where the Federal Nationals chose to ignore it, when someone living in a house at Raby Bay on a million dollar value can get the pension, and someone living on land over five acres cannot, and get deemed if they can earn an income off that pension?

TREASURER:

Well the deeming policy hasn’t changed.  It’s there now as it was under the previous government.  You are referring, I guess, to someone living at Raby Bay in their principle place of residence, which isn’t counted in the assets test.  There may be some anomalies when we compare the assets test for some people in different conditions, but I’d have to see the detail of what you’re talking about.

KING:

Several questions about whether you think a pensioner should be able to earn a little bit more before they lose part of the pension.  Do you have a view on that?

TREASURER:

Well that’s certainly part of the review. If you’re a single pensioner, you can earn $3,590 a year before it starts coming off your pension, and a single pensioner can get a $1 pension income up to a private income of something like $39,000 a year.

KING:

So you’re looking at that?

TREASURER:

Yes, it’s all part and parcel of it. Because I mean one of the issues here is the ageing of our population. I think it’s something like 13 per cent of the population is now over the age of 65. In 20 or 30 years it’s going to be a lot higher than that. So we’ve got to be acutely aware of the problems of the ageing of the population, not just in terms of costs, but also in terms of labour force participation and so on.

KING:

Is the widows allowance part of this review?

TREASURER:

Certainly.  It’s all in there.

KING:

Doug from Brisbane is next.  Doug, good morning.

CALLER:

Good morning, good morning, Mr Swan. How are you?

TREASURER:

Good morning, Doug.

CALLER: 

Just a quick question. With the country having such a wonderful surplus – probably one of the best we’ve ever had – is the Government looking at ways to alleviate our hospital problems, waiting lists etc?

TREASURER:

Certainly, Doug.  The reason we’ve accumulated this surplus is not only to tackle the inflationary challenge, but also to have the funds for the future to invest in the critical infrastructure in our health and our hospitals, our roads, our rail and our ports.  And of course the funds from the surplus are being transferred to those funds that we established in the last Budget, so we can put in place our nation-building program. And that extends across health and hospitals, right through to that critical economic infrastructure in terms of road, rail and ports.

KING:

Trish says why is the question not asked how 30 or 40 years of work results in nil savings. The pension is meant to be an extra support only.  Have some people not helped themselves?

TREASURER:

Well it may be the case that some people haven’t saved, but the great bulk of people who’ve worked hard for this country and who now receive the pension, will be people who didn’t have the opportunity to save via superannuation.  You see the previous government, when it reformed the superannuation system, left behind particularly people aged 50, 55 through to 65, and they received nothing from the superannuation reforms of the previous government.  They have inadequate superannuation or nil superannuation, and through no fault of their own are now dependent upon the age pension.

KING:

Matthew from the Gold Coast, what’s your question?

CALLER:

Good morning, Mr Swan.  How are you?

KING:

Good to talk to you.

CALLER:

Good to talk to you.  Just a quick question. I’ve got a family. I look after my mum as well too where I can. She’s on the pension.  I may have to take – because of petrol prices and the cost of living going up, electricity, especially in Queensland, going up – a second job.  But if I take a second job that requires me to pay PAYE tax, I’ll be taxed at 48 cents in the dollar. And I don’t quite understand why if you want to work harder and try and get ahead, but you get taxed at such a rate?  I’m not a millionaire, you know.

TREASURER:

Sure.

CALLER:

I just want to try and get, you know, break even and look after my family, you know.

TREASURER:

Sure. Well there is a provision in there which means if you take a second job, you do attract the top marginal rate of tax.  That’s pretty harsh. Under the current rulings, which is the law of today, I mean you would certainly be getting that money back in terms of your tax return eventually.

CALLER:

Yeah, no, I understand that.

TREASURER:

Sure.

CALLER:

When I’m working like week to week, you know my mum can’t wait another, you know, she’s got an eye operation coming up and she’s got to get to and from hospital. I can’t be there all the time to drive her. So there’s taxis. They’re a pain in the arse trying to get a bloody rebate scheme fixed so she can get – she doesn’t come under the thing to get a taxi…

TREASURER:

Is your mum a pensioner?

CALLER:

Yes.

TREASURER:

Have you been to talk to the Financial Information Service at Centrelink at all?

CALLER:

No, I haven’t.

TREASURER:

It might just be worthwhile having a talk to them about what your mum’s entitlements are and whether they’re all being accessed or not, or to talk to your local federal member about helping with that.

KING:

Do you think that taxis or something like that may be accessible?

TREASURER:

Well it’s a complex area and some of these things are provided by the State Government not the Federal Government. But it’s certainly worthwhile just running a ruler over what you may be entitled to.  It may be you’re not accessing it all.

KING:

What about Matthew’s broader point about this being penalised for taking a second job?

TREASURER:

Yeah, well the provisions in the tax system – and this has been the law for a long period of time – is that when people take on second jobs, they do get taxed at the higher marginal rate, then receive the balance, if you like, back in their tax refund.  This happens a lot to young kids in the workforce as well.  It’s something I’ve had a concern about over time, and have been talking to the Tax Department about. But that’s the law at the moment.

KING:

Do you plan to change that law?

TREASURER:

Well not at the moment, but it’s something I’ve taken a personal interest in.

KING:

Something you would like changed at some point?

TREASURER:

Well, it’s one of those things…

KING:

It’s so easy as a politician to say, look it’s something I don’t quite like, but are you going to do something about it?

TREASURER:

Well once again, when you start fiddling with the tax system, it’s as complex as the social security system.  What we’re trying to do at the moment is simplify the tax system and simplify the social security system, which is the whole point of the Henry Review. But it’s a real issue.  I’m acutely aware of it.  I’ve been the Treasurer for nine months now, and it’s something that I’m looking at.

KING:

You’re looking at it. Okay. Peter from Sheldon, good morning.

CALLER:

Good morning.

KING:

Your question?

CALLER:

My question is that Mr Rudd yesterday came on and was gravely concerned about the build-up of arms in the Asia Pacific region.  This morning he gives another $1 million for some catastrophe in India, which is one of the countries that is building up arms, and most of the arms in the Asia-Pacific have been allowed because we’ve been keeping their citizens by giving them money.

KING:

So Peter, what’s your question though?

CALLER:

My question is, these countries that are building up arms, why do we keep giving them money every time there’s a catastrophe?  Let them pay for it themselves.

TREASURER:

Well I think the answer to that is that we are good international citizens, and having a civilised relationship with countries when their citizens end up in trouble is a very good thing for the future of this country. And, equally, when it occurs here we are entitled to the same support from other countries in the world as well, and that’s what generally happens.

KING:

Some people would say though charity begins at home, and our pensioners up against international, another country.

TREASURER:

Well there’s no doubt that we ought to provide dignity and support in old age for people who have worked hard all of their lives to make this country great.  That’s the moral principle that I operate upon when I’m considering this issue.  But at the end of the day, I’ve got to make the sums add up when we deliver a national Budget, and it’s got to be sustainable so we do not put a burden upon our children and our grandchildren.  I believe we can do that, and that’s what we’re trying to do.

KING:

Richard from Carseldine, your question?

CALLER:

Good morning.  I was just wondering when the present government is going to stop blaming the previous government for all the woes and whatever, and the budgetary this and the budgetary that, and whatever?  I don’t know.  I mean we’re almost twelve months into the present government. I mean how longer can you blame Howard?

TREASURER:

Look, can I just say this.  You just can’t click your fingers and solve the problems in the pension system in nine months.  It simply doesn’t work like that, and it’s not desirable that it is done like that. And we’re not blaming the previous government for the position that we have inherited.  What we’ve said is, this is the position we’ve inherited, that’s what they left us, we accept responsibility for fixing it, and fixing it we are. But it does take some time, because these problems took a long time to develop.  The problem with the adequacy of the pension didn’t just suddenly happen on the 24th of November last year.

KING:

Wayne Swan, the Federal Treasurer, answering your questions this morning.  Minister, can I just get you to sit there. Quick cross to the newsroom to catch up on the news and we’ll be back. [News report.] Michael, what is you question? Michael? No, we’ve lost Michael there. Let’s go to Matthew from Upper Mount Gravatt. Matthew, what is your question?

CALLER:

Good morning, Treasurer.  I would like to know why you are increasing the luxury car tax from 25 per cent to 33 per cent?  I work hard in my business.  I provide employment to people.  I take risks.  I take loans out.  I invest.  Why are you sticking your hand into my pocket to grab an extra 33 per cent if I want to buy a decent car for myself?

TREASURER:

Well I’m delighted that question’s been asked so I can answer it and provide the facts to all of the listeners, because we increased the luxury car tax that the previous government put in place at 25 per cent, to 33 per cent. And we’ve done that as part and parcel of a responsible Budget and responsible economic management to build a surplus that can act as a buffer against inflation, and also provide the pool of funds to invest for the future.  So we make no apologies for that, and we are not going to back down on the luxury car tax.  It’s just a shame that the Liberals in the Senate want to blow a hole in the surplus by opposing this small increase in the luxury car tax that can do so much for so many people in our community. And here we are, we actually have a very good contrast here.  The Liberals in the House opposing the increase in the luxury car tax, basically saying they want lower taxes for people driving Porsches, but at the same time arguing for billions of more expenditure for pensioners.  We want to get our priorities right.  We believe we have and they haven’t.

KING:

Steve from the Sunshine Coast, your question?

CALLER:

Good morning, Mr Swan.  This review that you keep referring to, what are its aims and what results do we expect from it?

TREASURER:

Well the review is into the adequacy of the pension.  It’s that simple.  It will report at latest by February next year so we can take action in next year’s Budget. But we want to have a comprehensive look at all of the issues that arise when you increase a base rate of pension, and to make sure we do it in a comprehensive and thorough way which produces a result which is enduring and is also affordable for the country.

KING:

Thanks Steve.  Scott from the Sunshine Coast, your question?

CALLER:

Yeah, good morning Mr Swan.  Just a question regarding accessing superannuation. Why can’t we access our superannuation funds to clear, or certainly relieve, our residential mortgage debt?  I’m in a position where I run my own business and certainly one of the pressures for me is paying that residential mortgage debt.

TREASURER:

Sure.

CALLER:

And superannuation from there would certainly relieve a lot of pressure for me, if I could use that money to relieve my debt. And I would be happy to continue paying I guess the amount of my mortgage into my superannuation, which over the long run would be better off for me.

TREASURER:

Well the answer is very simple.  Superannuation was put in place by Labor Governments many years ago so we could reduce the dependency upon the age pension, and it receives very substantial tax preferment or public subsidy if you like. And if it is drawn down before people retire, then that basically defeats the purpose of encouraging people to save for their retirement. So the rock of reducing dependency on the age pension is superannuation, and you crack that rock if you allow people to access it before they’re retiring.

KING:

Just before we go to Peter from Oaky as the last caller, Wayne from Roachdale via sms. Why can’t we use the Future Fund to pay for the rise in the pension?

TREASURER:

Because the funds in the Future Fund and the other funds that we’re putting in place are there to invest in our long term productive capacity.  That’s really important.  The Future Fund at the moment, given the decisions of the previous government, was used to pay off public servants’ superannuation.  When it’s done that, surplus funds will be going into the Funds we’ve created in our Budget to invest in the long term productive capacity of the country – something that’s been sadly lacking for a long period of time.

KING:

Michael from Wynnum West. Does Wayne Swan realise that the pharmaceutical allowance has remained at $2.90 for the past ten years, but on the 1st of January each year the cost of prescriptions increases by ten cents?  That happened again this year.  The deeming rate was increased early this year.  All pensioners were affected by the Pharmaceutical Allowance. All partially self-funded pensioners were affected by the increase in deeming rate.  This meant of course that the Government had a windfall of a decrease in pensions.

TREASURER:

I don’t necessarily think that that follows, but this just demonstrates the complexity, Madonna, of all the issues that we are dealing with when we talk about pensions.

KING:

He says the Reserve Bank reduced the cash rate, but the deeming rate has not changed accordingly.  Come on Mr Swan and Mr Rudd, just stop prolifering and do something for the age pensioners.

TREASURER:

Well I’ll go off and check what he’s had to say about the deeming rate. That doesn’t accord with my memory of what occurred earlier this year, but I’ll go away and check it.

KING:

Just before we go to Peter, Tony from Caloundra. Mr Swan, what is your pension when you retire and how often is it reviewed?

TREASURER:

Well, very good question. I’d have to go away and check it. But it’s a defined benefits scheme and it delivers a certain percentage of my final salary.

KING:

So it’s pretty good though?

TREASURER:

Yes it is. Unquestionably it’s very good. There’s no doubt about that.

KING:

David a truckie wants to know why the Reserve Bank is privately owned?

TREASURER:

Well it’s publicly owned.  It’s not privately owned.  It’s publicly owned by the people of Australia.

KING:

And Peter from Oaky has dropped off, so we’ll leave it there.  Chris from Bracken Ridge says I’d gladly give up my tax cut for the pensioners. They need it more than me.  When do we expect this review to come down?

TREASURER:

Well the review will be down at latest by February next year.

KING:

And so when would you expect pensioners to have something more in their pockets?

TREASURER:

Well I think it will be coming through in terms of the Budget next year, but the review at latest will be available by February next year.

KING:

Are you behind the scenes considering some kind of interim measure to help?

TREASURER:

No, what I’m doing is going about this in a comprehensive and measured way.  We are absolutely determined to do something that is lasting and something that is sustainable, but it’s got to be done in a comprehensive and measured way.  Too many short term fixes have produced the situation we’re in at the moment, Madonna, and the Government wants to do this in the most comprehensive way that we possibly can.

KING:

Wayne Swan, thank you.  Will you do this again?

TREASURER:

Of course.

KING:

We look forward to it.