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Monday, 26 November 2012
Page: 13335


Mr CRAIG KELLY (Hughes) (17:37): I rise to speak on the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012. Here we go again: another flawed, rushed and ill-considered bill introduced into this parliament by this failed government. I support the comments from the member for Wright. In doing so, I wonder where all the government speakers are on this bill. On the speakers list there is a long list of speakers from the coalition side but there does not appear to be a single speaker from the government prepared to come into this chamber and defend this bill. Perhaps they are simply dying of embarrassment at the contents of this bill.

Firstly, I will go through the five separate schedules. Schedule 1 amends the period from seven years to just three years for the inactivity test for bank accounts under section 69 of the Banking Act 1959. So, after just three years of so-called inactivity, the amount that is in people's bank accounts is deemed as unclaimed money and then gets taken from their bank accounts and transferred into consolidated revenue—three years. And the taxpayer or the owner of that money has to go through a long and arduous process of having to claim the money back from the government's hands. Schedule 2 of the bill amends the seven-year period back to just three years for the inactivity test for the first home savers accounts known as FHSAs. Schedule 3 amends from seven years back to three years the inactivity test for mature life insurance policies under section 216 of the Life Insurance Act 1995, after which the amounts are deemed unclaimed money and, again, taken from those accounts and transferred to the consolidated revenue of government. Schedule 4 of the bill amends the Superannuation (Unclaimed Money and Lost Members) Act 1999 to change the circumstances in which lost and unidentifiable superannuation accounts must be transferred to the government. The amendments will increase the account balance threshold below which accounts are deemed as lost and are required to be transferred, from $200 up to $2,000. Further, the amendments will decrease the period of inactivity before accounts of unidentifiable members must be transferred to the ATO from five years to just 12 months. Schedule 5 amends the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001 to close the Companies and Unclaimed Moneys Special Account and establish new processes for the receipt and payment of unclaimed moneys.

To start with, what problem does this bill seek to address? Where are the members of the public or the industry lobby groups out there calling for the changes in these bills? What is the mischief, what is the evil that these bills are seeking to remedy? We have heard the mendacious, the deceptive and untruthful arguments contained in the explanatory memorandum of this bill that these bills are actually designed to prevent the erosion of small or lost or inactive account balances, or to reunite unclaimed balances with their owners. But we all know the truth about this bill, and the truth is that it is simply being rushed into the House in nothing more than a desperate attempt by this government to try to deliver a pretend surplus. Half of this government's promised surplus for 2012-2013, this financial year, is to be achieved through the revenue from this bill, basically, which is simply taking money from the accounts of Australians and putting it into government coffers. In just the six months from 31 December this year to 30 June, this government will raise $760 million in additional revenue simply by taking that money from the accounts of hardworking Australians and transferring it to government coffers. What a desperate need for cash to preserve this complete illusion of a surplus! We are going to see the raid on children's and pensioners' bank accounts. We are going to see the raid on superannuation accounts of workers, with $760 million transferred from their accounts into government coffers.

And where is this money being put? Is it being put in a safe place so workers and pensioners and children can claim this money at a later stage? No. This money is already being spent. It is being spent to try to shore up this dodgy $1.1 billion surplus—the complete illusion which we all know will never eventuate. It will just be the facade ticking on for months to come.

Why is the government in such a desperate situation for cash? Why do they need to raid $760 million from the accounts of children and pensioners and workers? We all know: because this government has put together the four largest deficits in our nation's history. The four largest deficits in our nation's history combined are $172 billion of accumulated surpluses and we all know they are on track to deliver the fifth budget deficit in a row. This is a government that has not cracked it for a surplus in the last 21 years, and here we have the complete facade of a $1.1 billion surplus. We know the importance of this $172 billion surplus. We often hear the term, 'We are returning the budget to surplus,' and that is why this bill is being rushed through parliament. But what is actually happening out there is that we still have that $172 billion net deficit over the last four years and then, if we even deliver it, we have $1.1 billion surplus. Of the last five years we will have net deficits of this government over five years of $171 billion. As for this surplus, if it is achieved—this great surplus with all these accounting fudges, taking money from children and pensioners and workers' superannuation accounts to get this phoney figure—to undo the damage of that $172 billion deficit it would take the current $1.1 billion surplus to be done year after year for 170 years. That is how deep this government has got us in the red.

Some of the real concerns about this bill are to do with timing; it is rushed and unrealistic. We have heard from the Australian Bankers Association, which has described the deadline to apply the new rules to inactive accounts—taking it to just three years—as not feasible and without unreasonable risk of mistakes, extra compliance costs and even a complete shutdown of our banking system for a day or two near Christmas to comply with the government's requirements. They said in their submission:

The ABA notes that 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. It is estimated that banks and other ADIs will require at least 6 months to make all the necessary changes, inform customers in a legally compliant manner, and meet compliance requirements.

In short, the Australian Bankers Association has argued that, even if we bring this bill in, a 12-month transitional period is required to ensure the legal, technical and practical issues can be addressed. But we know why the 12-month period cannot be applied. This bill is not about good government. It is not about good legislation. It is about trying to patch up a dodgy surplus for this financial year.

Amending the seven-year period—one which has been in the Banking Act for many years—down to three years of so-called inactivity of unclaimed money is a terrible, bad mistake. Three years is far too short a time. Think back in time: this government has run almost three years, although I am sure many Australians will think that is far too long a time. Just think of that three-year period.

But what happens to an Australian who has a posting overseas and leaves some money in their bank account here in Australia? When they come back after three years they will find that the government has taken their money. What happens to a young person that goes travelling for three years after they leave school or university? After three years they will come back and find the money they set aside for when they came back has been taken by the government. What about children? A grandparent might set up a bank account for their grandson or granddaughter. They may put aside a modest amount in the bank account and set that aside, thinking that money was safe, but in three years it will be gone—the government will grab it. What about pensioners? Many people when they retire might put a small nest egg away in the bank account, thinking that money is safe, relying on their pension and keeping that for an emergency, an operation or medical treatment. They will wake up three years later and find out that their money is gone—the government has grabbed it. That is what this bill does.

And what does this do to our trust in our banking system? As the member for Wright said, we do not want people hiding their money under their mattress. We need a banking system in which people have trust, where they can put their money in the bank knowing when they go back to that bank their money will be there. But, if this bill passes, within three years they will go back to their bank and find out the government has taken it if they have not put any more funds in.

Why the three-year period? Where are the studies? Where is the research that shows that three years is the right time? Why not four years, or five or six? We think that three-year period has been selected because that will bring in the greater slice of revenue for the government to fix up its dodgy budget surplus. The coalition will propose some amendments to remedy the many flaws in this bill. Firstly, regarding bank accounts for customers, we need to make sure that further consultation takes place. We want to ensure that the banks and other financial institutions should not see these changes rushed in and expose their customers to mistakes, inconvenience and additional cost. There should be, if this government is about good legislation, no need for this rush.

Secondly, we need to review this three-year inactivity test for bank accounts. Would four, five or six years be better? Should there be any change from the current seven years? There is simply no research, there have been no studies, and that is why extra time is needed. We also need to look at the changes so that, where an account is found to be inactive, that inactivity test should be applied to all the account holder's accounts, at the customer level, to test if that customer has other accounts. If at least one of those other accounts is active, then it is clear that that is not an inactive account, and the government should not take that money.

We also need to look at the threshold for protection of small amounts which has been increased to a $2,000 limit. This limit is too great an increase from the current $200 amount. The shortcomings in this legislation could be addressed if there were further consultation and consideration of the coalition's amendments to ensure sound objectives in reducing account balance erosion and to ensure that lost balances can be reunited with their owners without all these unintended consequences. That is why the coalition will introduce amendments to delay the implementations of schedules 1, 2 and 4 for at least a full 12 months. Let's do the work; let's do the consultation; let's make sure there are no unintended consequences. We know the reason the government will not support that. That will have the effect of delaying the government taking $600 million from the accounts of children and pensioners and from the superannuation of council workers and transferring it into their pockets. This is bad legislation. It has been done through a bad process. It has been rushed and is an embarrassment to this government. It should either be opposed or the coalition's amendments accepted.