Bernie Ripoll (Oxley, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

I thank all members who have spoken and contributed to this debate. I can understand that there is some confusion, although I find it difficult to understand why that is the case. We have clearly articulated exactly what this bill does—and the amendments to this bill—in protecting people's savings and superannuation, protecting their money and, for the first time, ensuring that people's lost accounts are not eroded away by fees and charges, and that for the first time they also have an opportunity to continue to earn interest. These are good for consumers and good for the country. The bill is certainly not what has been described by a number of members opposite. In fact, it is the case that the rules on how unclaimed moneys are dealt with, with ASIC and the ATO, are in currently place. They currently exist. In that effect there are no changes. The changes are to when it takes place. It will happen more quickly, but that is a really good thing for consumers because the earlier it happens the earlier their lost accounts can be reconnected and the quicker they can re-access their funds.

The interesting part about the different elements that have been raised is that the reason the accounts are lost in the first place is people have for whatever reason become disconnected and they have no mechanism to reconnect with their lost account in whatever form. No method exists. If it is with the bank it is not in the bank's interests to put forward that you reconnect with your funds and take them out, but it is in the government's interest that ordinary people are reconnected with their funds, that the fees and charges stop being taken out and eroding a person's savings, and that savings are added to by giving people CPI interest—yes, at the lowest rate, but interest so that the value of their money maintains value over time. These are really good, sensible changes.

I am prepared to have debates and arguments over time frames—whether it is seven years or three or whatever other time frame—but that does not change the principle. The principle we have before us is that we are trying to save people's money by giving them interest for the first time, to stop the erosion of the value of their money by having fees and charges taken out for the first time, and to make sure that the government, through the Australian Taxation Office and the Australian Securities and Investments Commission, actively reconnects people with their money. Right now, what happens in the absence of these very good changes we are putting forward is that those unclaimed moneys go on for not three years or seven years but 10 or 15 years because people do not know. The reason they are unclaimed is a lot of people do not know they exist, or they are overseas, or whatever the case may be. The faster we can reconnect people the better it is.

There is a whole range of other issues that have been raised by opposition members trying to confuse this area—that the government is somehow reaching into people's accounts. That is not the case at all. This is an amendment to existing laws about things that currently happen, and this is an improvement to what we have seen in the past. This bill is directly intended to do exactly what it does, which is re-unite Australians with their lost moneys faster and to protect that lost money from inflation and fees. I am astonished that anyone in this place would oppose it.

We have made a number of technical amendments and we have clarified a range of areas—because there are a lot of technical issues in some of these matters—and this now means it is clear for banks and for consumers. We have given the appropriate time frames for organisations to be able to implement these new measures. Contrary to the suggestions from the opposition, this bill does not introduce a new regime for lost moneys. Rather, the bill will deliver better outcomes for consumers by making a small number of refinements to the existing regime. This is the disingenuous element of some of what has been said in this debate.

These are laws that existed under the Howard government. What we have done and what we continue to do in government is take those laws and make them better. Following consultation with the industry the government will move amendments to the bill that will provide industry with more time to implement the changes. There is no argument from industry about whether this is right or wrong, because it is currently being done. We are giving industry a little bit more time to be able to properly—

Mr Hockey interjecting—

We get laughter from the opposition. More time—isn't that what they were saying? Isn't that what they wanted? That is exactly what we have done—we have given them a little bit more time. It will happen in good time because the faster these changes happen the better it is for consumers. If we used the principle that the opposition brings to the table there would be no time, because they could never find the time in 12 years in government—there was never any time. There was never any time to make any good changes. We will take the time and we will do it.

Specifically, we have also authorised for deposit-taking institutions, First Home Saver Account providers and life insurers to be required to make supplementary assessment and transfer by 31 May 2013. That is sufficient time for the changes to be adopted, adapted and implemented so that people can be earlier reconnected with their money. This provides an extra five months for these institutions to identify lost accounts and an extra two months to transfer them, as requested by industry groups such as Abacus. We agree with them. Let us give them a little bit more time. Let us make these changes. But the faster we get there the quicker people will be reconnected. All the evidence is on the table. All you have to do is go through the evidence from history. Have a look at what happened with unclaimed moneys in each previous year. There were more and more of them over time and no effort was made—nothing was done—to reconnect people. As soon as this Labor government started to make an effort, we saw a change. We saw people who had lost accounts being reconnected with their accounts. We are seeing people with lost super being reconnected with their super. We are seeing the things that this bill intends to do working.

We have had more evidence recently. There has been a bit of media activity around this issue, including on the radio. The government and ASIC have promoted the fact that people ought to go and use the free search tool at ASIC or the ATO to look for their lost accounts. A whole drift of people have gone there to reconnect for the first time. This bill will assist people to do that.

This is the key that the opposition needs to understand. Most people have no way of knowing that they have lost money. Even if you thought you had, where would you look? It is lost. Where would you start? But as soon as it transfers from the institution—the bank or wherever it might be—to ASIC or the ATO you can search for it. It does not matter how long you wait. You can search it now or you can search it in 10 years and your money will still be there. It will not have been eroded by fees and charges. The real value of your money will have been maintained because you will get interest. For the first time, you will get interest. How could you oppose that? In 10 years time, somebody who lost their money will be able to reconnect with their funds. Under this mob's rule, what happened was that it just stayed lost. That is what they want: they want the money to stay lost. They want the lost accounts to stay lost. They want to make an amendment all right: one to take the time period from the old seven years to forever, because they are not interested in reconnecting people with their funds. We are and that is exactly what we are doing.

Consultation with industry has identified some areas in which the intent of the amendments can be clarified. These issues can and will be dealt with through regulations, as per my press release yesterday.

These reforms will ensure that more Australians are reunited with their lost moneys. They will also ensure that this happens faster. That is the whole point. Why wait any longer? If somebody has a lost account—lost moneys in either their life insurance policy, superannuation, bank accounts or even property—why should they have to wait any further? Let us reconnect people with their money and let us do it now.

There were a range of issues raised by speakers on the other side. I will make a few points to clarify things. The principles in the existing legislation will not be changed. The principles remain exactly the same. At some point in time, be it seven years or three years, that money will be transferred—and this was done during the Howard era—from an account that is lost, unidentifiable or inactive to the ATO or to ASIC. What we are doing is making that happen faster so that you can reconnect with your funds faster. The principles have not changed. When those opposite say that the government is taking your money, that is not the case, because that is the existing law—it is exactly what happens now; it is exactly what happened during the Howard era. We did not hear them at that point in time saying that they were taking that money. The key principle differences are that it stops your money being eroded through fees and charges for the first time and that you get interest for the first time.

The other concern from the opposition revolves around speed: it is all too fast, according to them. We may be moving too quickly for the opposition, but we can walk, chew gum and breathe at the same time and introduce good amendments. This is not too fast. This is appropriate. It is about time that people are reconnected with their funds in a more timely manner. Whether that lost money is in superannuation, life insurance policies or bank accounts, the settings that we are putting in place are appropriate—and particularly for super. There is a complexity to super, particularly for young people with multiple accounts. In fact, superannuation is one of the areas in which there is an enormous amount of lost money. The shorter the time period, the quicker it moves across, the faster that you will be able to identify and reconnect with your superannuation. That is great for consumers. It means that they can get their money faster.

The issues that have been raised have been more than amply dealt with. The amendments that we have put forward, after good consultation with the industry about implementation periods, are sensible and appropriate. The government commends this bill to the House, because it is good for consumers and good for reconnecting people with their lost moneys.

Question agreed to.

Bill read a second time.

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