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Monday, 26 November 2012
Page: 13215

Mr FLETCHER (Bradfield) (19:22): I am pleased to speak on the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012. This government's desperate grab for cash is a dismaying and unedifying spectacle. Having lost control of its finances, it is casting around furiously looking for any possible opportunity to scrabble together what in the context of the Commonwealth government budget is a relatively small amount of money but in the context of individual Australians whose money is now to be gathered up and captured by government without them realising is a large amount of money. It is truly a dismaying and unedifying spectacle. It brings to mind the example of parents who have so lost control of the family finances that they are reduced to smashing open their child's piggy bank to pull out the coins saved so carefully.

In substance, what we have in the bill before the House is the elected government of this nation going into the bank accounts, the superannuation accounts, the life insurance policies and other places where citizens of this nation have sought to accumulate savings and using a technical and an artificial and a strained definition of unclaimed moneys to gather up moneys as quickly as possibly and apply them to consolidated revenue. We are told that this is in the interests of citizens; we are told that the only motivation for this high-minded government introducing these measures is to protect citizens against the ravages of high fees and other impacts on their accumulated savings. We on this side of the House are deeply sceptical. We are unpersuaded, despite the government's assertions, that its motives have anything to do with protecting citizens against high fees. In our view, the government's motivations are transparently clear—this is a desperate grab for revenue by a government which has produced deficit after deficit and is now looking for any way possible to achieve its promised surplus.

As a number of speakers have advised the House this evening, there are provisions in this bill which vary the unclaimed moneys regime applying to different kinds of accounts and assets. There are five essential sets of measures. One deals with bank accounts and reduces from seven years to three the minimum period after which moneys can be treated as unclaimed. Another deals with first home saver accounts, although we are told in the press release from the Parliamentary Secretary to the Treasurer this afternoon that there will be some relaxation of those provisions. Another deals with life insurance, another deals with superannuation accounts and the last deals with unclaimed moneys in the case of corporations.

In the brief time I have available I want to make three points. The first is that what we are seeing here is a truly terrible public policy process driven by this government's desperate scrabbling around for cash; its desperate scrabbling around to find additional sources of revenue. The second point is that serious technical and policy problems run through many of the changes to the five different regimes I have spoken about. In view of the seriousness of those technical and policy problems time ought to be taken to carefully address those issues with a view to resolving them. If the government were proceeding in good faith, it would take extra time to ensure those matters were resolved. The coalition has amendments to give effect to what we see as the sensible way forward, and that is the third point: what needs to be done to fix up this mess?

Let me turn to the truly terrible public policy process we are seeing here. We are told these measures will raise $760 million between the end of December 2012 and 30 June 2013. That is a very important period if you happen to be a government desperate to achieve a surplus in the 2012-13 financial year. As it happens, that is precisely what we have—we have a government which is desperate to achieve such a surplus and is therefore rushing this bill through in a disorderly and chaotic process. If reforms are to be made in this area—and the coalition is not close-minded to the merits of change—the paramount interest which should be considered is the interest of Australians whose money is held in savings accounts, whose money is held in superannuation accounts, whose money is held in life insurance policies, whose money is held in accounts and assets of the various kinds this bill deals with by way of material changes to the unclaimed money laws.

It is patently clear that the interests of account holders come a very long way down the list of the considerations which this government regards as important in rushing this bill through, and they fall a long way behind the government's desperate desire to raise revenue so as to achieve the surplus which it has promised for 2012-13—a surplus which is completely at odds with the proven character and behaviour of this government, which has delivered the four largest deficits in the history of Australian public finance, racking up accumulated deficits of $172 billion. But, because of this government's haste and its politically motivated desire to grab revenue wherever it can, fundamentally important policy considerations going to the basic rights of Australians who set aside money for the future are being disregarded. That is a dismaying thing to see in a government.

I turn to some of the technical problems which the various measures in this bill present. I will speak, firstly, about the changes to the inactivity test in section 69 of the Banking Act. The deadline proposed for the implementation of these changes is 31 December this year. As a consequence of the press release from the Parliamentary Secretary to the Treasurer this afternoon, we know that the date on which the banks need to hand over the cash has moved from the end of April 2013 to the end of May 2013, but it does not in any material way change the fundamental unreasonableness of the timing being imposed on the banks. Here is what the Australian Bankers' Association had to say in its submission to the Senate Economics Committee:

… the proposed timing for implementation and a commencement of 31 December 2012 is unrealistic, being in less than 2 months and falling during a period when banks implement freezes on any technology or IT systems changes.

More fundamental than the technical problems of implementation is the policy question of whether it is reasonable to treat as 'unclaimed' money sitting in an account which has not been touched for a period of three years. There are a whole host of very good reasons why a citizen might choose to put money into an account and not touch it for three years—not make a deposit into the account or a withdrawal from the account. It may well be that this citizen is spending some time overseas, and a job posting of three years is by no means unusual. It may well be that a grandparent has set aside some money for a grandchild. As I said, there are a whole host of reasons why citizens might choose to put money aside and leave it in a bank account, untouched, for three years. It is just the most extraordinary proposition that three years of inactivity is enough for the government to be able to say, 'Oh, well, that money must be unclaimed. We'll get our hands on that, thanks very much.'

One of the other material concerns is what might happen to citizens who put money into an account which was paying interest. By the operation of this legislation, they would find the money removed from that account and handed over to consolidated revenue. The government assures us that citizens need not be concerned, because if they can prove they have a claim to that money they will get it back—but at what interest rate? That is the critical point, and here I quote from the submission made by the Commonwealth Bank of Australia to the Senate committee:

A high level analysis by CBA indicates that the majority of account balances at CBA which would be impacted by the proposed changes to unclaimed monies currently receive an interest rate higher than the CPI linked rate which the Bill proposes to be paid on those balances once transferred to unclaimed monies.

So citizens who, for perfectly good reasons, chose to put money into a bank account and conducted no transactions on that bank account for a mere three years, and who may have done so on the assumption that they were being paid a certain rate of interest by the bank, will find themselves in the situation—should this bill pass into law—where the money can be removed from that account and handed over to the Commonwealth; and if, as they quite reasonably should, they put up their hand and say, 'Hang on; that's actually my money and I want it back,' they will get it back but at a lower interest rate than the one the bank was paying them. That seems to be an extraordinary intervention on the part of the state in the affairs of citizens.

Turning to superannuation, the technical and policy consequences of the changes that are proposed in this ill-considered and badly-thought-through piece of legislation are troubling in the extreme. One consequence is that the threshold for a superannuation account to trigger the unclaimed moneys provision will rise from today's level of $200 to a level of $2,000. This means that the funds in a much wider range of accounts could be treated as unclaimed. There is also the very real likelihood that accounts which are in substance active will be artificially treated by this legislation as inactive, and the moneys will be removed from the superannuation account in which they sit and paid into consolidated revenue.

This is particularly going to hit, I might add, those with lower balances—those with balances under $2,000. It will disproportionately hit the young, who are relatively early in their careers and relatively early in the accumulation of superannuation balances, and it will disproportionately hit the low paid. It is an indication of this government's desperation to gather revenue to achieve its politically motivated budgetary position that it would do so at the expense of young workers and low-paid workers. It is noteworthy that the Australian Institute of Superannuation Trustees and the Financial Services Council—two organisations that are not always aligned when it comes to superannuation policy matters—have jointly recommended that the regulations set a minimum two-year membership period before an account is treated as lost.

One of the other concerns when it comes to superannuation is the inconsistency between the measures contained in the bill before the House this evening and the measures imposed under the SuperStream set of reforms, which funds are required to comply with, and have arrangements in place to do so, from 1 January 2014. Now there is this new set of changes which is required to be complied with earlier. The Association of Superannuation Funds told a parliamentary committee that this overlap was likely to lead to moneys being transferred from superannuation account providers to the Australian Taxation Office and then, very likely, transferred back again. It is an absolutely crazy outcome and an indicator of the chaotic process through which this legislation has been developed.

The third point I briefly want to make is that there needs to be a fundamental review of these provisions. The coalition has moved amendments to give that result, and if our amendments are not accepted we will be opposing this legislation.