Joe Hockey has claimed the further cut to Australia’s official interest rates as justification for the government’s decision not to rein in superannuation tax concessions in next week’s budget.

The treasurer specifically referred to the pressure on retirees’ incomes after the Reserve Bank of Australia (RBA) decided on Tuesday to reduce the cash rate by 25 basis points to 2%, the lowest on record.

While Hockey portrayed the rate cut as “welcome news on a number of fronts”, he invoked the decision as a reason not to bow to growing calls to look at the superannuation tax concessions that accrue to wealthier retirees – prompting Labor to denounce the treasurer’s “pathetic” excuses.

“I want to emphasise,” Hockey said, “that it’s going to be very hard for people who retire and rely on their savings being in the bank. That’s one of the reasons why the government has decided that it is unacceptable to have any increases in taxation on superannuation in the upcoming budget.

“Now is not the time to hit superannuants who are facing potentially many years of lower returns on their savings in bank accounts ... It’s only the Labor party that wants to increase taxes on superannuation at exactly the wrong time, when returns are lower than they have been for some period of time for people who invest in bank accounts.”



However, Labor’s superannuation policy would not affect the majority of superannuants because it is targeted only at people who are earning more than $75,000 a year during the retirement phase. Income above this amount would attract a 15% rate. If people’s super earnings decline, they could be pushed back into the lower tax-free threshold.

“This is a pathetic excuse for inaction,” the shadow treasurer, Chris Bowen, said.

“Very clearly he knows that our plan would mean that every dollar of earnings up to $75,000 remains tax free and he simply doesn’t want to, or hasn’t been allowed to, act in this area which is simply unsustainable.”

Despite the Coalition’s reluctance to make changes to these tax concessions, it has signalled that it is preparing to pursue other measures that would affect retirees who rely on a combination of superannuation and the part-pension.

The social services minister, Scott Morrison, all but confirmed on Tuesday that the government would adjust part-pension eligibility to target wealthier recipients. He pointed out that the existing arrangements allowed a couple with assets of $1.15m plus a family home to still receive a part-pension.

The government is not planning to add the family home to these considerations, but has flagged changes to taper rates that guide the rate at which the size of the part-pension is reduced based on income and assets.

Morrison said the budget situation was “extremely different” from 2007 when the Howard government increased the generosity of taper rates, which “added to the cost of the pension by about $1bn a year”.

The mooted changes to part-pension eligibility are intended to replace the government’s politically toxic proposal from last year’s budget to cut the size of increases to the age pension. The indexation changes from 2017 would have affected millions of people whereas the number of people worse off under the government’s revised plan is expected to be lower.

Labor indicated it would not drop its political campaign against the prime minister, Tony Abbott, over pensions. The opposition leader, Bill Shorten, said the revised measures were a “thought bubble” but suggested they would also breach Abbott’s pre-election promise to make no change to pensions.

The renewed political dispute over pension and superannuation policy comes as Hockey puts the finishing touches on his second budget, to be signed off by cabinet on Thursday and delivered next Tuesday.

The treasurer said the government had faced challenges but was “absolutely confident that our plan is on track” and insisted the government and RBA were working “in the same direction” to encourage investment.

In his statement on monetary policy, the RBA governor, Glenn Stevens, said the board had taken the opportunity to cut the cash rate “so as to reinforce recent encouraging trends in household demand”.

Stevens pointed to “improved trends in household demand over the past six months and stronger growth in employment” but also cited “weakness in business capital expenditure in both the mining and non-mining sectors over the coming year” and said public spending was expected “to be subdued”.

“The economy is therefore likely to be operating with a degree of spare capacity for some time yet,” Stevens said.

Hockey said there were “many green shoots in the Australian economy” and the RBA’s decision was “as much about putting fertiliser on the green shoots as anything else”.

“I say to the Australian people directly: now is the time to borrow and invest,” the treasurer said. “Whether you be a household or a small business, now is the time to have a go.”

Labor highlighted Hockey’s previous statements, when the RBA dropped rates to 3% in 2012, that they were at “emergency levels” because the economy was “facing huge challenges”.

Bowen said Hockey’s “complete lack of consistency and competence goes to the heart of this government’s challenges when it comes to the economy”.

The RBA was “taking extraordinary action” to reduce rates to a lower level than they were during the global financial crisis because of concerns about the economy, Bowen said.

“What we see is a treasurer who is failing at his job and the Reserve Bank stepping in to try and boost the economy, to create jobs, to create investment, and to create confidence because this treasurer is simply not up to the job,” he said.

