Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012. Yet again, this government is embarking on desperate and despicable cash grab of the people of Australia's hard-earned cash and future entitlements.

One word comes to mind when we think of the process that has followed this bill into the House: chaos. This government has abused the process in which the manner and timing of this bill was introduced into the parliament. It is imperative that there is sufficient time to understand the impact and potential consequences that this legislation may have on Australians, including on the people of Wright, who I represent, who have unclaimed money in accounts that this bill specifically targets. I have no hesitation in opposing this bill together with my coalition colleagues. I cannot support this bill based on the haste with which this government is moving to act.

The first part of the bill makes amendments to the Banking Act 1959 to provide a new arrangement for unclaimed moneys held by Australian deposit-taking institutions. It was introduced last month at the same time the coalition was receiving its brief on this very bill from staff from the Treasury office. Despite seeking to have this bill referred to the Parliamentary Joint Committee on Corporations and Financial Services, the bill was listed for the debate the following day. Why, may I ask? Because of the desperate search for funds that this Treasury needs in its process of cooking the books. It seems as if it is a desperate scramble not that dissimilar to a poverty-stricken household looking to find coins down the back of the couch in order to put a meal on the table.

I want to share with you why the government is pursuing this bill. It goes to the heart of debt and to the heart of this government's capacity to manage its fiscal affairs. If you add up all of the deficits since 1901, when Edmund Barton was our first Prime Minister, through to 2007, it would come up to $123 billion. Since Labor has come to office—and this is its five-year anniversary—from 2007 to today, they have accumulated deficits of $172 billion more than the $123 billion accumulated by the entire parliament here in Australia. The current debt figure today is $252.9 billion, and borrowings over the last 22 weeks have been in the vicinity of $19 billion. This being the last sitting week for 2012 it is only more obvious that this government is going to do everything it can to rush whatever they can through the House, including this bill.

I really do not know whether to laugh or to be worried by the fact that the debate of bill was adjourned shortly after it was introduced by the government when it realised that it did not have the support of the member for Lyne nor the member for Melbourne for this bill.

The bill before the House seeks to enact various changes to unclaimed money measures which were flagged in the government's 2012-13 MYEFO and makes amendments to the Banking Act of 1959, the First Home Savers Account Act of 2008, the Life Insurance Act of 1985, the Superannuation (Unclaimed Money and Lost Members) Act of 1999, the Australian Securities and Investments Commission Act of 2001 and the Corporations Act of 2001.

Specifically, these amendments will impact arrangements relating to the transfer of unclaimed moneys to the Australian Securities and Investments Commission for bank accounts and life insurance policies, lost members' accounts at the Australian Taxation Office for superannuation, and unclaimed moneys for companies' moneys.

The bill effectively brings forward the time in which money is recognised under the relevant law as lost or unclaimed, which will in turn have an effect of moving approximately $700 million into the 2012-13 fiscal year—$700 million of Australian's money, which is going to be used on the balance sheet as if it is a government asset. Well, it will not be; it will still be the property of the Australian people as unclaimed money but it is an element of accounting trickery which this government has reduced itself to in order to try and maintain a wafer-thin surplus. These changes will reduce the period before an amount payable by an Australian deposit-taking institution is treated as unclaimed moneys from seven years to three. This change has potentially widespread unintended consequences for many Australians, and this government should not be allowed to get away with ad-hoc action that has such a perverse impact on society.

So today I am clear what this bill does. If an Australian worker who has money sitting in a bank account, and perhaps has decided to venture overseas or choose to leave money in that account accumulating interest, does not make any further deposits or withdrawals for that period of time, they will have their deposit treated, after that three-year mark, as unclaimed moneys. These funds will be moved to the government's own account, known as the Consolidated Revenue Fund. This is a terrible result for many Australians with untouched funds in their bank accounts.

The unintended consequences of this bill—and I say this with my hand to my heart, without any political rhetoric—is that we will potentially have Australians, elderly and young, rather than being encouraged to save and put money into their bank accounts, taking their money out of the banks and not use the safety net of the banks and go back to the old ways when they had no traditional security in the banking sector and put it in a Milo tin, put it under the bed or bury it in the backyard.

Before I go any further, I want to bring to the parliament's attention the important task we as members of parliament have when discussing legislation like this—because we have not had time to discuss the unintended consequences of this bill. As the member for Wright I am constantly reminded that I need to work hard towards ensuring the people of Wright will benefit from better lives and higher standards of living through higher productivity throughout the economy. But I cannot help but think of the bureaucratic nightmare those who encounter this poorly thought-out administrative change will face.

To highlight the administrative nightmare, I took the opportunity when reading this bill to go onto the Australian Taxation Office website and download the unclaimed superannuation money non-lodgement advice, because I thought it would have been an easy job of just picking the phone up and saying, 'I'm back in the country' or 'I want to try and transfer this over'—but there was nothing short of seven pages of information and data to fill out. The one that got me was the part of the download that went to the type of superannuation provider—and you could only select one. You had to nominate your superannuation account and whether or not it fell under the category of (1) retirement savings account, (2) industry or award superannuation, (3) employer sponsored or a corporate superannuation fund, (4) public offer or retail superannuation fund, (5) a small Australian prudential regulatory authority fund, (6) an exempt public sector scheme, (7) a public sector fund on eligible rollover fund—or, if you did not have anything that plugged into any one of those, you could touch 'other'. So, if someone has an amount of, say, $2,000 sitting in there, it is not unfeasible that someone could spend nearly $2,000 on accountants or their solicitors trying to work out which one of those categories they fell into simply to have those funds returned.

The next part of this bill amends the First Home Saver Account, active from 2008, to provide new arrangements for unclaimed moneys held by the First Home Saver Account providers. The new law amends section 17(a) and 15(c) of the FHSA Act to change the unclaimed money period from seven years to three, similar to the amendment before. The government announces the introduction of the First Home Saver Account in the 2008-09 budget. As many members of the House will be aware, the First Home Saver Account is a relatively new measure, with many parents having established these accounts for their kids—and it was a good idea. But they have not been able to make contributions in recent times, particularly with the rising costs of living, not to mention the impost of the carbon tax. This amendment will mean that some of these accounts will be at risk of being claimed by the government. So if mum and dad were trying to save money to put into a deposit account for their kids and have not had the opportunity over the last couple of years, because they were finding it tough or dad had lost his job, that will just get sucked into the vacuum. This amendment will mean that some of these accounts will be at risk of being claimed by the government, particularly where holders of these accounts have not been able to afford to contribute to the deposits over the past three years and have not been in contact with their bank which holds their deposit.

It is obvious from the plain and simple facts that this bill and the government are out of touch with the people of Australia, not to mention the constituents of Wright. I can only imagine the response I will get next time I walk through Beaudesert, Boonah, Grantham, Mount Tamborine or Mudgerabah in my electorate to speak to some of those constituents who are potentially going to lose their funds. Why this government has not sent this bill to the parliamentary inquiry lends itself to the question: what are the members of this Labor government trying to achieve? And do they fully understand the potential implications on Australians? I can only hope that their constituents are informed enough to make the right decisions at the next election.

Schedule 3 of this bill amends the Life Insurance Act 1995 to provide for new arrangements for unclaimed life insurance monies. Life insurance companies, within the meaning of Life Insurance Act, are currently required to report and pay any unclaimed monies to the Commonwealth. This new arrangement will reduce for the period of life insurance monies to be treated as unclaimed monies from seven years to three-year period. It is not clear how these provisions will apply to contemporary life insurance products or policies because the government has not had time to develop legislation properly. It would be nothing short of unacceptable if I did not say that it is yet another reason why parliamentary scrutiny of this bill is required. What happens to a policy of a deceased person? Is it then up to the public trustee office to go and search for unclaimed monies which fall into that three-year bracket? I suggest that there will not be a great amount of motivation, and that as a consequence life insurance policies will be not be enacted if a family member was not aware that there was one there.

The final part of this bill that I speak to today amends the Superannuation (Unclaimed Money and Lost Members) Act 1999. The amendment changes arrangements for the transfer of lost members' accounts to the Commissioner of Taxation and to provide the payment of interest of unclaimed superannuation money. Quite simply, what this means is that lost superannuation accounts with balances of less than $2,000 that have up until now been inactive for only three years, and accounts for unidentifiable members which have been inactive for 12 months, will now be required to be paid to the Tax Office. The majority of the amendments moved from seven to three years, while this particular one on cash moves from three years to 12 months.

The coalition accepts the justification for the increase of the threshold from $200 for small account balances to $2,000. They are increasing the threshold from $200 to $2,000—that is around the level where the account erosion becomes less likely. However, this tenfold increase to the threshold makes it much more critical that existing problems in the current regulations are resolved.

In relation to the increase from $200 to $2,000, you will hear members from the government side saying, 'They would have lost their money anyway. If we did not take it, it would have been eroded by bank charges and fees.' Once it gets to the $2,000 mark, the interest-bearing component on $2,000 well and truly offsets. So that will not be an argument or a debate that could be used against this particular measure. Many of these problems did not appear to have been considered while producing the bill, but will now be in real need of redress.

I concur with my colleagues in recommending that the amendments to schedule 4 of the bill be delayed until 31 December 2013 in order to address the critical issue raised since the announcement of the measures, and to align the timing of their implementation with that of the autoconsolidation process under the SuperStream reforms due on 1 January 2014.

It is with disappointment that I speak on this bill. I say this because I know the silent majority of the people of Wright, who I represent, have not been treated fairly in the due process that they so desperately deserve. But I am convinced that by speaking on this bill, the people of Wright can be assured that I am trying to do everything I can to ensure their personal savings. It is clear that the rushed time lines and implementation of this bill have been driven by nothing more than a desperate government trying to pretend that it can deliver a surplus—the surplus that is in fact generated through increased revenues from this particular bill. If this bill does not get up, the surplus is at risk.

Furthermore, I am convinced that I have never seen a bill that so blatantly impedes the life of the Australian people and my people of Wright, and that is such a direct contradiction to the integrity and trust of this parliament that we are all trusted to hold on to. I cannot emphasise enough the need to exercise caution in making changes to this act, and I concur with my coalition colleagues in not supporting, or not facilitating a government that is acting on self-interest as opposed to properly considering public policy.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

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.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I rise to speak after my good friend the member for Hughes. I congratulate him on his speech, and I also congratulate the member for Wright who spoke so eloquently before him. Once again, what we are seeing with this bill is that the government, sadly, does not know how to implement policy. It gets a political idea and then the policy flows from that political idea. The trouble is, by the time it has the political idea, it is in trouble. So you have a rushed policy and then, even worse, you have the implementation of the policy rushed.

We have seen lessons, already, over the last two years of what this can bring about. If there has ever been a lesson that everyone in this country should learn from it was the live export debacle where the government thought they had a political problem. They rushed out a policy, they implemented the policy and we have an industry still on its knees as a result. What we have to be careful of here is the unintended consequence, because the devil is always in the detail. Once again, we have had the political problem and the perception in the community that the government cannot manage money. It is a real one, and the reason for it is we have had the four biggest budget deficits in Australia's history. And what is that doing? That is keeping interest rates high because the Reserve Bank cannot move to lower interest rates because they have got to keep an eye on the government or on Wayne's wasteful spending. They cannot bring interest rates down to an international comparative level where we would not see so much money pouring into the country to take advantage of it. As we know, the rest of the world is in deep recession. So they have interest rates that are extremely low. We need to get ours down. We need to keep some pressure on the dollar to bring it down, to help our farmers, to help our manufacturers, to help everyone outside of the mining industry, mainly, so that they can benefit more from a lower dollar.

This is the political problem, and the government, in the 2012-13 MYEFO, thought: 'We have to try to get the budget back into surplus. We have a political problem and we have a real economic problem because of the four years of the largest budget deficits in Australia's history.' So the government sits down and thinks: 'What would be the economically sensible way to do this? What policies should we put in place to bring the budget back into line? Should we take sensible decisions which might cost us because it means reining in all our wasteful spending? Or do we try to use the cloak-and-dagger approach, try to disguise things and use some tricky ways to try and get it sorted?' Unfortunately, what this bill is showing is that the government is looking at the tricky ways. Because this bill has been brought in in such a rushed manner, we are starting to see that there could be implementation issues.

Let's not beat around the bush here: changing all these policies from seven years to three years is designed to give the government $700 million in extra revenue this financial year, to try to help get that budget into surplus; $700 million is a lot of money when you are aiming for only a wafer-slim budget surplus. In doing this, instead of following proper process—having a proper review, bringing stakeholders in, engaging with them and trying to understand what could be some of the implications—they have just made it up as it has gone along.

The sad thing about this is: who, potentially, will suffer as a result? Is it likely to be the government? No. It will be the Australian taxpayer. Some of the unintended consequences that we are worried about are that Australian taxpayers could inadvertently have money taken from their accounts. There are number of ways that this can happen. I would like to go into those.

What are the three schedules of the bill? First, there is the banking element of it. Schedule 1 of this bill calls for changes to section 69 of the Banking Act to provide for new arrangements for unclaimed moneys held by Australian deposit-taking institutions, ADIs. These changes will reduce the period before an amount payable by an ADI is treated as unclaimed monies from seven years to three years.

The potential consequences of that are many and varied, but let's just take a simple one. This is why we wanted the policy looked at; so we could explore this and ensure that this type of thing would not occur if, like me, for instance, you had an overseas posting. They last three years. Often they can be extended for a year to four years. You leave money sitting in a bank account in Australia while you are overseas on that posting. You could find that money that you left while you were overseas serving your country—and think for a moment about military personnel who often go overseas for extended periods—has been taken off you. If you do not make any further deposits or withdrawals for that period, under this bill, it would seem—and I am hoping we will hear the government clarify this; it would have been good for it to be done properly through a review—those funds would be taken from you and they would end up in the government's own account. This is almost Orwellian. That you would have a government that would just come in and suck money out of a private account because it has not been active for three years is Orwellian. I cannot understand why the government would want to head down this path. Surely they must realise that that is not their money and that, just because someone wants to leave money in an account for three years and not touch it, the government has no right to be able to reach in and rip it out. That is not the type of government we want in this country. I am hoping that we will see clarification of that from the government. It is the sort of thing that should have been examined under a proper committee process—but that has not occurred. So I am hoping that, before they rush this bill through to a vote, we will get some sort of explanation around that.

What does schedule 2 of the bill show us? It amends the First Home Saver Accounts Act 2008. So this is amending a bill that this government brought in to provide for new arrangements for unclaimed moneys held by the first home saver account providers. The new law amends section 17A and 51C of the act to change the unclaimed moneys period from seven years to three years.

Let us go back a little bit and have a look at this. The government announced the introduction of the first home saver account in the 2008-09 budget—so a relatively new measure introduced by this government. So you would think, for a start, that they could have got it right. You would think that they had probably looked at it all and thought: 'In introducing this legislation, let's make sure that we get everything right. Let's take time and make sure we get it right.' Yet 2½ years later they are looking at this and saying, 'No, we didn't get the detail right,' because some of these accounts are now at risk of being claimed by the government, particularly where holders of these accounts have not been able to afford to contribute to their deposits over the past three years.

We have had the GFC and we have had cost-of-living pressures which this government have not been able to bring under control—as a matter of fact, they have exacerbated them—and people are struggling to put money into these first home saver accounts. If they do not put any money in for three years, this Orwellian government once again, it would seem, can reach in and grab that money. It is very strange that they would be wanting to do this—introducing a policy in 2008-09 and then changing the regulations around it so that the government can now take money out of accounts that they were encouraging people to put money into. I just cannot fathom it. Surely there must be better ways to balance a budget, after producing four of the biggest budget deficits in Australia's history. Surely there must be better ways to do it.

Schedule 3, life insurance, amends section 216 of the Life Insurance Act to provide for the new arrangements for unclaimed life insurance moneys. Currently life insurance companies within the meaning of the act are required to report on and pay unclaimed moneys to the Commonwealth. There are two limbs to the definition of unclaimed moneys in the act. Unclaimed moneys include sums payable on the maturity of a policy which are not claimed within seven years after the maturity date of the policy. The new arrangements will reduce the period before life insurance moneys are treated as unclaimed moneys from seven to three years. Once again we see the reduction of the time frame and it will allow the government to step in and take that money.

Surely there must be a process that is put in place to make sure that everything has been done to ensure that people have not left the money there for their own perfectly valid reasons, that they want the accounts left alone, that they want the money to sit there. People have the right to do that. If I have a bank account and I want to leave money in there for more than three years—I do not want to add to it and I do not want to subtract from it—surely I have the right to do that and not be worried that a government is going to step in and take the money.

Schedule 4 of the bill amends the Superannuation (Unclaimed Money and Lost Members) Act to change arrangements for the transfer of lost member accounts to the Commissioner of Taxation and to provide for the payment of interest on unclaimed superannuation money. Lost super accounts with balances of less than $2,000 that have until now been active for only three years—currently this is seven years—and accounts of unidentifiable members that have been inactive for 12 months will now be required to be paid to the Australian Taxation Office. Once again we see, quite clearly, the government is stepping in and changing the rules so that it can benefit—in this case, so it can get access to people's superannuation. So people work hard, pay their super and, for some reason, they might decide, 'I'm going to leave that super there. I'm not going to touch for a while,' and what happens: the government can help itself.

There is also schedule 5, which deals with the Corporations Act. Once again, what we are seeing is the government manipulating the rules and the law so it is easier for the government to get hold of private citizens' money. I will not go through the details because I am running out of time, but, once again, I could set forth what the process is. This is changing longstanding pillars of our financial services industry. These changes should not be made in a rush; they should be made for a good reason and under proper scrutiny. They are enabling this government to access money from private citizens. What this government are trying to do with this bill seems Orwellian in nature. Their justification for it is poor, because if they had not wasted taxpayers' money over the last four years, like they have, there would be no need for it. Unless it is amended, we will oppose this bill and be right in doing so.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I rise to speak to the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012. This is an extraordinary bill. The reason it is an extraordinary bill is that, in essence, this is a fig leaf to cover the Treasurer's rather unfortunate situation—that is, this is a government that, as we know, inherited a budget surplus in excess of $20 billion and over $70 billion in net savings, and as a consequence, largely, not exclusively, of very poor policy decisions, has now squandered all of those assets and savings that the previous, coalition government put in place and has racked up over $140 billion of net public debt. That is a consequence of this Labor government's typical ineptitude when it comes to economic stewardship, this government's inability to balance a budget, reduce debt and decrease spending and this government spending like there is no tomorrow. In the face of continued economic circumstances being unfavourable globally, we have a government that, also as a consequence of their policy decisions, are now facing a situation where they are looking straight down the barrel of running another huge budget deficit.

The last four budget deficits have been the biggest deficits in Australia's history. The government would say, 'The reason these deficits have been so big is that we have had to stimulate the Australian economy,' notwithstanding that we are above average trend when it comes to the level of economic growth and notwithstanding that we are in the part of the globe which has enjoyed the strongest continued and sustained period of economic growth. Instead, we have a government that has been out there promising so many things to so many different people in an attempt to counter its very poor stewardship. That is why we have seen, for example, announcements with respect to the NDIS, announcements with respect to Gonski and an announcement with respect to health funding.

Because the government is staring down the barrel of another massive budget deficit, this government is desperately doing whatever it can to claw back revenue. So we get to today's bill, the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill. To those that are no doubt going to be reading and enjoying the Hansard on this debate, as they thumb their way through the pages of the Hansard, wondering what Wayne Swan, the member for Lilley, was thinking with this bill, let me make it crystal clear. I certainly know that constituents in my electorate, on the Gold Coast, are very concerned about the approach that has been adopted by someone who, in my view, is a Treasurer with a serious amount of ineptness but who, for some unknown reason, others seem to herald as the world's greatest treasurer.

This particular bill has a number of schedules to it, but in particular I would like to focus on the first schedule. The first schedule to this bill amends legislation with respect to so-called unclaimed bank accounts. It reduces unclaimed bank accounts from a period of inactivity of seven years down to a period of inactivity of three years. The consequence of this is this: money that is deposited into a bank account which has no activity on it for a period—under this bill now—of three years will be taken by the government and placed in the consolidated revenue. It is only through a high level of proactive effort from the person who has lost that money to consolidated revenue that they would be eligible to get that money back. I would also add an important qualifier—for them to get that money back in terms of the original principal plus CPI.

Now contrast that with the fact that currently the existing threshold for account inactivity is seven years. So the Labor government is moving it from seven years of inactivity to three years of inactivity, and the consequence is that there is a bottom line boost to the budget of some $660 million, basically half—in fact more than half—of the forecast budget surplus. So Wayne Swan has this fig leaf that he dangles about, because he knows that there is, in fact, an embarrassing budget deficit there. The member for Lilley, the Treasurer, is amending the legislation to raise an extra $660 million.

The point as well is that it does not allow for changes in circumstances. Say, for example—and this is one of the proposals that the coalition is putting forward—someone had two or three bank accounts. They may, in fact, have an offset account. People would be familiar with the concept of an offset account. It is an opportunity to park some cash to offset your home loan borrowings. People will often leave money in those accounts because they want to redraw that money down so they get the benefit of offsetting the interest payable on their mortgage account but by the same token they are not obligated to leaving that money sitting on the mortgage account and can withdraw it from that account at any particular time. It almost beggars belief that the government is so desperate for cash that it would look at capturing money in offset accounts as part of its attempt to raise $660 million of additional revenue, even though other accounts that are attached to the offset account are active. That is why the coalition has very reasonably said that the legislation should be amended. It should not be rushed in this way. Australians should not have their money that they have worked for taken by a Labor government that is obsessed with getting as much cash as it possibly can in as quick a time period as it possibly can because the member for Lilley, the Treasurer, is so desperate to prop up a budget that is eroding. We see this situation arise where the government is turning its back on the coalition's amendment even though it makes perfect sense. Amend the legislation so that individual accounts are not looked at but rather individuals are looked at. If an individual has three or four accounts, they should be looked at in toto, not individually. As I said, an offset account is simply the clearest example that one could come up with.

Another example of just how desperate this government is is in the MYEFO, the Mid-Year Economic and Fiscal Outlook. This government, in MYEFO, raced through this change in an attempt to prop up its budget bottom line. This was a point made clear by the Australian Bankers' Association in their submission to the Joint Standing Committee on Corporations where they said:

… the proposed timing for implementation and a commencement of 31 December 2012 is unrealistic, being in less than two 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 six months to make all the necessary changes, inform customers in a legally compliant manner and meet compliance requirements.

That is what the ABA says. The situation is extraordinary. The government is ignoring the advice of the ABA, saying to banks, 'No, you must be compliant within two months.' Why? Because it is good public policy? No, not because it has anything to do with good public policy. This is done for one reason and one reason alone: a desperate government that is trying to grab as much cash as it can as quickly as it can because it does not want to go into an election year facing yet another massive budget deficit. That is the reason why we see the Treasurer stand up and make claims: 'We've got an aim; we've got a plan; we've got a vibe; we've got an inkling; we've got a general plan to have a desire to reach a budget surplus at some point.' What the government does not have is the discipline and the wherewithal to effectively steward the Australian economy in a way that delivers a budget surplus. The problem is compounded when you see days like today, when the Minister for Health heralds the fact that the government is spending an additional $4 billion in the health sector. The government talks and crows about its vision when it comes to the NDIS—as we saw from the minister for FaHCSIA today during question time—and the government continues to spend obscene amounts of money on the NBN.

The consequence of all of these factors is that this government now has liabilities forecast to be around $120 billion to the year 2020, all of which are unfunded. A further $120 billion of unfunded announcements by this Labor government builds on the already $145 billion of net public debt—which saw the erosion of $70 billion of net savings which the former coalition government left to it—so that, in total, this glorious Labor Party that Australia has had to shoulder for the last five years has managed to spend roughly $350 billion more than this government has. That is the legacy of the Australian Labor Party. This bill is nothing but a prop to try to pretend that this is a government that in some way knows what it is doing. The greatest travesty—the most shameful aspect of this government's spending spree and this government's inability to control its promises and its spending—is that it is tomorrow's generations, the Aussie kids of today, who are going to have to pay off the $350 billion that this government has spent, money that it simply does not have.

Consistent with past form of a government that is so desperate to make announcements to try to buy its way back into office at the next election, we have a government that makes the announcements without the funding, and now we have a government that is prepared to take people's money away from them with only two months notice because it desperately needs to raise $660 million as part of its attempt to deliver a so-called surplus of a billion dollars. In addition to that, in schedule 2 of the bill the government is amending from seven years down to three years the inactivity test for the first home saver accounts—again, another four-year reduction which unreasonably increases the risks of unintended consequences. Again, the Australian Bankers Association at the brief hearing of the Senate Standing Committee on Economics stated:

… customers generally find these accounts—

that is, first home saver accounts—

and the restrictions and conditions confusing. Applying the unclaimed money provisions would add additional complexity, especially given the 4 year qualifying rule. Similarly to fixed products—

such as term facilities and deposits—

we consider that any new unclaimed monies provisions should only apply to at-call account types which satisfy the definition for inactivity.

So again there is the extraordinary circumstance where the government, so keen to get their hands on the cash, are willing to throw away good public policy.

Schedule 3 amends from seven years to three years the inactivity test for matured insurance policies. Schedule 4—and this is perhaps the most galling part of the amendment to the bill—also 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. Now a lost member, for the purposes of this bill, as defined under the superannuation industry's supervision regulations, includes, for example—and I am quoting one of the provisions—'the member is uncontactable'. That is, the provider has never had an address for the member, or two written communications to the member—or one written communication if the trustee so chooses—has been returned to the provider unclaimed. In other words, for those millions of Australians who do not take an active interest in their superannuation, who may have received a letter and had it returned, or who may not have received a single letter, their money can now be transferred to the government as being unclaimed. Again, it is a disgrace when it comes to good public policy, and it is done for one reason only: to prop up this government's budget bottom line.

On every level the government should accept the coalition's amendments and, if it fails to accept the amendments that we have put forward—sound, good policy based amendments—then this bill ought to be rejected. In essence, this bill does nothing except try to prop up a government that has shamefully wasted $350 billion and has put the next generation of Aussie kids in debt. Rather than introducing bills like this, it should focus on governing for the betterment of Australia.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I rise today to join with my colleague the member for Moncrieff in opposing this appalling piece of government legislation, the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012. I think the reason we do not see a conga line of Labor MPs lauding the great vision of the Gillard government in this regard is that we all know what is really going on in relation to this legislation. This is a shameful grab for money because the budget is broken. The usual looters who like to come in here and laud the vision of the Gillard government in doing this or doing that are not here today. They are not here to tell us about what a great and glorious policy measure this is, because this is not a great and glorious policy measure. In fact, they know it is a very ugly measure indeed, symptomatic of our often quoted saying from the Liberal side of politics that Labor cannot manage money. Indeed, even the Minister for Financial Services and Superannuation, who often in the House of Representatives lauds the government as the best friend that superannuation has ever had, is not here to tell us in relation to this unclaimed money measure that this government is the best friend that superannuation ever had. You really do not want friends like that—friends who are willing to take away your super accounts and your earnings, knowing that you may be financially impeded by not receiving a higher rate of interest, giving you a cut-price rate, a Bill Shorten rate.

There are serious concerns with this legislation that I want to turn to, in particular in relation to many of the different areas that will be covered by the government's amendments to the Banking Act, the First Home Savers Account Act, the Life Insurance Act, the Australian Securities and Investments Commission Act and the Corporations Act. So many pieces of Commonwealth legislation being amended ought to clearly flag that there is an issue with this legislation. Let us take the example of the First Home Saver Accounts, an issue that is emblematic of this government's approach to managing money. In 2008 the government said they were going to create First Home Saver Accounts. They said we need to boost national savings for young people, we need to give them a head start in getting their first home, and these First Home Saver Accounts will be particularly beneficial. It is a relatively new measure, but let us say that so far it has not been an unqualified success, although some people have benefited from it and used this new measure wisely. We certainly do not know enough about it. But for the government to say three years later that it would take those first home accounts back from people if they did not use them was, I think, a very odd policy setting indeed. It was like saying, 'We want you to save for a home'—and who can save for a home in three years or four years—'but if you do not do something with this account we are going to take it off you and pay you a lower rate than you might obtain in the marketplace and certainly a lower rate than the First Home Saver Accounts qualify for.' This was a very odd approach to the government's own measures. They were basically sending two signals to people: 'if you get these First Home Saver Accounts you'll get a good deal' and 'don't hold your money in these accounts too long without doing anything with it because we will take it back and pay you less'. That to me is emblematic of what is going wrong with this legislation.

If the government were serious about this they would consider the opposition amendments to this bill to increase the time of inactivity. There is no exact science on this, but we are at least trying to suggest that a greater period is necessary in relation to this legislation. We understand how to manage money and we understand that the psychology of the settings that you put in place from government are serious. If you are trying to get people to put money into these First Home Saver Accounts but you say, 'In three years your money might have gone back to the government at a lower rate anyway,' I think you are sending very distinct and different signals that will penalise what you trying to do.

This is very ugly indeed. There is certainly no justification for the three-year inactivity test that we find in this legislation. There is no justification from the government as to why it is three years. We know why it is three years. We can all make the assumption that the three years is related to the fact that the government needs to get its hands on that money as quickly as possible. Three years must be the optimum time for the maximum amount of revenue that is out there. It is because the government needs the cash to make the budget balance. I know that many members opposite would agree with me that there are many types of accounts that should be excluded from this. Certainly it is not understandable why First Home Saver Accounts have been included in this legislation, being such a new measure; it does not make any sense whatsoever. But there are plenty of other kinds of deposits and other interest-bearing accounts where people are being paid more than the CPI and people are going to get a higher interest rate if their money is left alone. Again, what is the signal we are seeing from the government? Savings become a little more risky out there in people's minds: 'Should I leave my money alone in savings for a period of time? Maybe the government will come for it! Is it okay to lock it up and get a higher rate, to put my savings aside and build on a firm foundation?' Well, maybe not, because maybe Wayne Swan is going to come calling. Maybe the best friend that superannuation has ever had in this government, Bill Shorten, is going to be your best friend and rock up and say, 'Id like to get my hands on that account.' Well that is what is happening here.

We are all laughing, but this is not really very funny. This is actual legislation. These are amendments to all of the serious financial acts in Commonwealth law. We are very concerned about these measures. Without going on unduly, all of my colleagues have outlined the details of our concern about all the different schedules. There are very real reasons why we should oppose this legislation. It is not just because we know the intent behind it; we know that the government are desperate to get their hands on the money; it also because they have included a series of types of accounts which ought not to be included because they have come up with arbitrary time frames which may discourage saving and further damage the progress of our economy.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

It being 6.30, in accordance with standing order 192 the debate is interrupted.

Alan Griffin (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That further proceedings on the bill be conducted in the House.

Question agreed to.