Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Hansard source

I stand here proudly tonight like my colleagues to get rid of this draconian, money-grabbing legislation, legislation that was designed to do nothing more than hit the hip pockets of innocent Australians to prop up a Labor budget which had blown out of control.

I remember that a particular constituent called my office in tears—that is the sort of distress that this bill caused amongst my constituents. She expressed to me that she was fearful that her money was going to be taken by the then Labor government. She felt powerless to act and was not sure what to do. In an absolute frantic state, she felt that her only option was to drive to the nearest bank and request to withdraw all her money and keep it at home, basically under the bed. She did not feel safe. She did not feel that her money was safe. This call really drove it home to me how outrageous the previous government's intentions were with this unclaimed money legislation.

Today, I am as proud a member of the coalition as I can be to speak on the Banking Law Amendment (Unclaimed Money) Bill 2015, which will reverse the previous Labor government's changes to Australia's unclaimed money provisions. I spoke against the Labor bill back in 2012 and 2013. We are wasting no time in implementing our legislation. From 31 December 2015, our bill will give assurance to all Australians, like my constituents in Paterson who were frightened by the previous government's proposal. I did not receive just one call about this. My electorate has a high over-65 demographic, and when the previous Labor government proposed its bill and then legislated for it, my office was inundated with concerned constituents, mainly grandparents, who wanted to pass on their hard-earned savings to their children and grandchildren.

Mr Acting Deputy Speaker Goodenough, how many grandparents do you know whose dream to put a few dollars aside for when their grandchildren turn 18 or 21 to give them a bit of a kick-start in life was threatened when they saw Labor's proposal? It was a threat to the money that they had worked hard to put away in the bank for their grandchildren's future.

The provisions in this bill will ensure that funds from Australia's bank accounts and life insurance policies can only be transferred to the Australian Securities and Investments Commission after they have been inactive for seven years, as it was before. They will protect the interests of Australians with forgotten funds. It is critically important because funds in bank accounts are a sense of security for many Australians. As a government, we recognise that these funds must continue to belong to their rightful owners and under no circumstances should they be encroached upon through fees and charges for being unused.

These rights have been in law since 1911. These rights were designed to protect the interests of Australians such as those of my constituents in Paterson. My electorate office received a high volume of calls on this subject when it was announced by the previous Labor government. People know that the previous Labor government were doing nothing more than raiding their bank accounts. By way of context, between 1911 and 2012, accounts must have been rendered inactive for at least a seven-year period before the funds could be transferred to the Commonwealth. Comparatively, under the long-held rules, in the 2011-12 financial year only $70 million in unclaimed funds were transferred to ASIC. However, in late 2012, the previous Labor government reduced the required period of activity from seven years to three years. That resulted in $550 million from the thousands upon thousands of accounts being transferred to ASIC in 2012-13. It is abundantly clear that the previous Labor government did nothing more than raid thousands of people's private bank accounts. This was designed to do nothing more than prop up a budget in an attempt to produce a surplus to make the Labor Party look good at the expense of people like my constituents in Paterson.

Let me make this clear to any Labor members who might be listening—though they do not usually listen. This money was not the earnings of the Labor government; this money was the hard-earned dollars of my constituents and people across Australia, whether individuals or corporations, that owned the money in those bank accounts—in their life insurance policies and in their superannuation policies. The money actually belonged to someone. Many of these accounts were certainly not unclaimed or forgotten. Many people, like my constituents, were content to simply know that the money was in an account and they did not feel the need to add or subtract from the account. It was their nest egg. Yet, the previous government's excuse was that this money did not belong to someone; therefore, it belonged to the government and therefore the government could use it to prop up its ineptitude at managing the budget—as we saw so often. It was an incredulous proposition.

The previous Labor government transferred this money to ASIC after three years of inactivity simply to improve their budget bottom line. These were the actions of a desperate and dysfunctional Labor government. The consequences of the previous Labor government's changes to the rules were detrimental to many Australians. It caused untold stress on many seniors in the community. For some people, the money was a safety net, a nest egg or a backup, and suddenly it was gone. For some, the consequence of not being able to access their hard-earned savings sitting in a bank account was severe, with some individuals actually having to sell their homes. This is totally unacceptable. It showed a blatant disregard of the many Australians who had funds in long-term savings accounts which they did not touch.

In opposition, we did not support this bill and we promised that we would make it right in government. That is what we are doing. We are making this right. Earlier this year in the 2015-16 budget, we committed to reforming the unclaimed money provisions. In returning the required period of inactivity to seven years, as it was between 1911 and 2012, we will drastically reduce the number of inactive accounts that will be transferred to ASIC each year.

It is sobering to think about how this affects the people who think ahead—those that plan, those that have put their hard-earned money aside before they retire—for a long-term purpose. My electorate has one of the oldest populations in our nation, and my elderly constituents are always at the forefront of my mind.

Some elderly constituents might be living on their own because, sadly, their partner is now deceased. These people might be putting aside their money for their own funeral. Some people make the choice not to pre-purchase their funerals but to have their financial affairs in order—money in the bank to cover themselves when the time comes—so as not to burden their family. These people might live beyond the three-year period that the previous Labor government opted for. How tragic and how distressing it would be for family members to discover this money has been taken because it was in an 'inactive' account. They might not even know where the money has been put aside.

Even interest payments to an account would not deem it 'active'. It would still be rendered 'inactive'. I reflect on a family like this who has been left behind after someone has passed away. How difficult would it be for the family to find and access this money that was wrongly taken by a Labor government? What processes, what paper work did they have to go through to find and identify this account and then recover the money to pay for the funeral? It is instances such as this that have not been thought through by the previous Labor government.

The government is acting out of national interest in these changes; it is not acting on behalf of the Treasury. This change will cost the government. It will cost us $285 million over four years. However, it will save my community, Australia's community, over $36 million a year through reduced red-tape costs, because there will be fewer accounts that will need to be transferred from and returned back to account holders.

One aspect of this bill that I am particularly reconciled towards is the exemption of children's accounts and foreign currency accounts from the unclaimed money provisions. As a government we recognise that many Australians set aside money for their children's future or for their grandchildren's future. They trust that this money will continue to grow in value and be readily available when their children need it. As I said, it is quite common for grandparents to put a few dollars away here and there. When they retire they might put money aside for when their grandchildren hit 18 or 21, to give them a bit of a kick-start in life.

We as a government want to reward people; we do not want to punish hardworking people—people who worked extremely hard to put their hard-earned dollars away for their family's future. They did that by saving, by going without and by making sure that money was there. We want to make sure that we are not transferring children's accounts to the government's accounts. We aim to see this through for the benefit of the person that the money was bestowed upon and for the person that was putting the money aside.

I also support the fact that this bill will ensure that only funds that are truly forgotten are transferred to ASIC. This bill expands the way in which account holders can keep their accounts active. The bill will ensure that an account holder with savings alerts their financial institution to the fact that they are aware of their account prior to their funds being transferred to ASIC. Simply checking a balance online will mean that the transfer will no longer occur. People can go online, check the balance of that account and see what interest they have earned, and that will make the account active. It keeps the government's fingers off of constituents' hard-earned dollars.

The changes made by the previous government left many Australians financially distressed. But the changes we are making also highlight deficiencies in the way personal information is protected on behalf of account holders. ASIC is currently required to publish an 'unclaimed money gazette' online. This encompasses detailed personal information, including a person's name, their last known address and the amount of money they have unclaimed. This is incredibly dangerous. I can think of many ways—including identity theft—that this information, when made public in this way, could adversely impact people.

The public dissemination of this personal information has left vulnerable people in an even worse position. Unscrupulous businesses have used this information to charge fees as high as 25 per cent—to reunite people with their own money that the government took off them. This is a service the government and financial institutions do not charge account holders for. In order to protect those Australians with unclaimed money from being exploited by unethical businesses preying on this vulnerability—and to protect them from the dangers of identity theft—this bill removes the requirement for ASIC to publish the unclaimed money gazette, and will introduce secrecy provisions to ensure that only individuals with unclaimed accounts or those acting on their behalf will be able to access their data through freedom of information requests.

This bill delivers on the government's promise to reform the unclaimed money provisions, and it contributes to the government's promise to support Australian business by reducing red tape $1 billion each and every year. This bill will leave more Australians in control of their own finances. This bill will better protect the personal information of thousands of Australians. It will also leave a safety net in place to protect those who have truly forgotten money in bank accounts. It will protect their money from being eroded by fees and charges and it will protect it from being stolen by the former Labor government.

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