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Rudd Government's flawed deposit guarantee scheme leaves many pensioners and retirees high and dry.

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Media Contact: Greg Pierce 02 66 52 62 33 0408 532 785 Canberra: 62 77 4447

Luke Hartsuyker MP Federal Member for Cowper


October 24, 2008

Rudd Government’s flawed deposit guarantee scheme leaves many pensioners and retirees high and dry

The Rudd Government’s flawed deposit guarantee scheme could leave many pensioners and retirees with no money to feed themselves, Federal MP Luke Hartsuyker said today.

Mr Hartsuyker was commenting on remarks made by Treasurer Wayne Swan who encouraged people to visit Centrelink if they are unable to access their funds because they have been frozen by the financial institution.

“The Treasurer knows that the majority of these people are not going to qualify for any assistance because the funds invested are considered an asset and therefore exceed Centrelink’s Assets Test.

“These comments by the Treasurer are callous and show a complete disregard for the situation which has been created by the government.

“The government must act immediately to remove any barriers which restrict those investors, whose funds are frozen, from accessing Centrelink benefits.

“There are many self funded retirees who solely rely on the income from these funds to survive. The Treasurer must provide some assurance that these people are not going to be turned away when they go to their local Centrelink office.”

Mr Hartsuyker said the Rudd Government had created a lot of uncertainty and instability through their poor management of the global financial crisis.

“The Rudd Government bank deposit scheme was rushed out to meet the Prime Minister’s media and political strategy. Instead of getting the detail right Kevin Rudd announced an unlimited guarantee on bank deposits, which has severely distorted the capital markets.

“All of a sudden there has been a rush by investors to move their cash from funds which are not covered by the guarantee to those funds which Mr Rudd says will be covered. This run on funds has prompted fund managers to freeze redemptions (withdrawals).

“We have also seen the Government announce a new tax on deposits which will further reduce the value of investor funds. The Government is currently confused at to how this tax will apply, with the Treasurer contradicting himself about whether it will be compulsory and who will pay. We are seeing the Rudd Government releasing policy on the run and it is creating a lot of uncertainty for hundreds of thousand of Australians.”