Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

I rise to speak on the Banking Laws Amendment (Unclaimed Money) Bill 2015. The rolling back of the legislation passed in 2012 by the previous government is a very clear demonstration of the years of profligacy under the Labor government—the huge increases in spending, the huge promises of new money for everyone and the projections, more than a decade into the future, of great rises of income, without any idea of how to fund the promises. In this case, it was a very aggressive attack on every hollow log they could find. There are two ways that governments can wriggle out of a tight economic spot and try to cover it up. One is to delay committed expenditure and the other one is to bring forward tax receipts. In a way, that is what the government tried to do in this area. They altered a system that had been in place for 101 years. In my opinion, if something has been in place for 101 years—and it obviously was not broken—there is no really good cause to go playing around with it. But, no, the Labor regime thought they could move things to their advantage. They changed the period after which bank accounts would be deemed inactive from seven years to three. The act that was put in place in 1911 was aimed at protecting people's forgotten accounts and, in the latter-day world, superannuation accounts from fees and charges. But this became just another way to rip off Australians. From memory, at the time, the government said it would raise in excess of $70 million. But it was to be one-off—so $70 million to the budget bottom line.

I liken this to the emptying of a pipeline. Perhaps with water pipelines it does not make much sense, but, if you know anything about gas, the pipeline system is the storage system and you can shut down the gas pipeline and harvest what is within it but, before you are back to full pressure again, you have got to fill your pipeline back up. So it was with this modest line of income that was coming to government when accounts had been inactive for seven years. This legislation was put in place, initially, to protect people's investments in the longer term, so they could go back and find their money later on and find it had not been whittled away. Labor brought forward the discharge out of that pipeline, if you like, by four years. It was to give this $70 billion-plus one-off dividend. But in fact it did much more than that. It provided $550 million in the first year. If it had worked as the Labor government had proposed, and had just brought forward the four-year receipts, it should have delivered about half of that. But in fact this distortion meant that they swooped on lots of active accounts—accounts that people considered to be active; they just had not looked at them for a couple of days. In a way, this money should be like a loan to government until you discover where it is. But it is not like that—some of it sticks with government, and that is what they were so keen on.

So it caught up a whole lot of new accounts—not active for three years but certainly not forgotten. The owners knew exactly where the money was. They wanted that money so that they could buy a new fridge or a new car or do some house repairs. They knew where it was and, when they went to use it, it was not there. The government at the time had taken it away from them. That is when the stress started. The phones started running hot when the owners of the bank accounts went through the process of trying to redeem their money. They did not ask for this. They were metaphorically sitting on a rock watching the river gently drift past them when all of a sudden the financial services minister at the time, the member for Maribyrnong, the now Leader of the Opposition, had his hand in their skyrocket—firmly planted in that old back pocket—and he was taking the money out while they were sitting there watching life go past them. It was wrong then and it is still wrong—and we are going to fix it.

The owners of the money, the mums and dads and perhaps even the grandmas and the grandpas and even the children—as the previous speaker mentioned—were totally bemused. They had put their money in the bank—it is as safe as the bank, after all, isn't it?—and found that, no, it was not a shyster or some internet scam that had taken the money out of the bank; it was the government. The then government had moved legislation to remove their money. I do not blame them for being upset. That was when they started contacting their federal members. I was one of them. Fancy having to go to the government to get your money back that the government took without your permission. It really is a pretty difficult pill to swallow. And it has destroyed a lot of people's faith, at least to some extent, in government.

What a great little earner for the government of the day, though, it has to be said. It worked well for the Labor Party at the time. But, as I said, it was wrong when it was introduced, and we in opposition opposed it—I opposed it in opposition—and it is wrong now. We made a pre-election promise to undo it, and today we are delivering on that commitment. But, unfortunately, it costs. Just as the Labor Party emptied that pipeline and more, to undo the legislation it takes money to fill it back up again. In this case it is going to cost the government, the taxpayers, $285 million over the next four years to put back what was taken away. But it must be done, because it is immoral, it is unjust and it is unfair. There are a couple of upsides, though. On the positive side, it will save Australians $36 million a year, because they will not be fighting to get their money back. Just dwell on that: they will not be fighting to get their money back.

This bill goes further. It allows for the account holder to advise that their account is still active and it can be maintained by lowering the threshold qualification for active. The account will in fact be deemed active if a customer checks the balance in their account. The bill exempts children's accounts—and so it should. For many years, parents and grandparents have given gifts to their children—when they are born, when they are baptised and for other reasons. Often those accounts are never added to; they are just left there in the bank. The parents might pick it up and say, 'We are going to convert this into your school savings account,' and, in that case, it will be managed and will remain active. Other accounts just sit there, and they know that when they turn 18 they will be able to access those funds. But, before they get there, all of a sudden they have found that someone else has been accessing those funds. That will no longer be the case.

The bill will also exempt accounts held in foreign currencies, just because of the risk it imparts on people when foreign exchange movements take place at a time when that currency may not be favourable to them—at inopportune times, if you like. The bill also stops the publishing of a list of unclaimed money along with the names, and provides some level of secrecy to protect accounts and the account holder from thieves. When I say 'thieves' I mean the common garden variety thieves, not the thieves of government that were thieving their money—but you know what I mean. So this bill ticks a lot of boxes. In opposition we opposed the previous government's changes. During the election campaign we promised to undo their changes—and we are now delivering on that promise in government. This bill fixes a sin and should at least restore some faith in government.

Mr Deputy Speaker, in the short time available to me, I beg your indulgence to use this opportunity to talk about a couple of other issues in the banking industry that are loosely associated. The Treasurer and the Prime Minister recently announced that we were not pushing ahead with the bank deposits tax. We are served pretty well by our banking system and the strength of the big four, and generally they operate well. But there are times when I am left wondering about some issues. One issue is the current interest rate on credit cards. I think there is a moral obligation in this game. The banks are protected by good legislation, and we saw during the GFC that government was willing to underwrite the banks so that there was not an uncontrolled rush on them. The quid pro quo is that they treat Australians with respect. I think interest rates charged on credit cards is an issue that should be addressed by the banks. It would be good banking practice for them to bring them back to more realistic market levels.

The other issue that I have come to deal with personally is the renewal of fixed deposits. I have had some firsthand experience with this. I have had fixed deposits in the past, but I do not at the moment. When I was managing my parents' affairs—they have both passed on now—I dealt with fixed deposits, and now I am somewhat involved with helping my parent-in-laws manage their financial affairs. You become used it. When your fixed deposit matures, the bank sends you a new offer to roll it over and it is generally about one per cent lower than the one you had before. If you are aware of this, that is fine; you ring up the bank and they immediately give you your one per cent back, and you think, 'Why did I have to do that?' The problem arises when people are not closely in touch with their financial affairs—for example, old people, in particular, who just get the paperwork and say, 'Oh, well, the interest on this money isn't doing very well now, but I guess that is what I have to expect.' I see this pretty much as a grade 1 scam. As I said before, banking is a two-way street. They operate in a well-regulated safe environment. They have seen the backing of government in the past. On these two particular issues I want to see them lift their game. I want to see them give a better run to Australians, because in both cases—high interest on credit cards and the rollover of fixed deposits—particularly affect the poorest, the least educated and the elderly in our community. I just think that is unfair.

If any banking organisation is listening to this and wants to take this issue up with me, I will be more than happy to talk to them. If they can explain to me that what they are doing is fair, I will have my ears open, but they will have a lot of explaining to do. Thank you.

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