This is only the case if you're doing PAYG witholding, which isn't the case with interest income (unless you don't have a TFN).
That was never being contested.
This is just your preference for deciding to allocate tax to a certain income stream. It's just as valid to for me to decide that, if their interest income is less than $18200, they can claim the tax free threshold on that income. When it comes time to do the tax return, their tax obligation will be the same regardless of which way you stack the pieces.
I used to think exactly like you, until this guy challenged me to actually run the numbers because the concept is counter-intuitive (he's a partner at a big 4 firm, specialising in tax). Lo and behold, in the end it makes no difference to your tax return.
The whole point of my post is not to poo-hoo your idea, as it has merit, but to help calculate the benefits accurately.