Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

As I was saying before the debate was interrupted, when Labor introduced the Banking Laws Amendment (Unclaimed Money) Bill 2015, I commented then that they needed to be aware of the unintended consequences. I said that taking over the accounts of people who have been saving money for travel and university would lead to problems. I urged Labor to withdraw the bill in order to facilitate further consultation. In the end, the chorus of opposition from the coalition and from stakeholders forced Labor to make seven amendments to their own bill. But the rest is history—the bill passed, and here we are three years later trying to clean up their mess.

Labor's undue haste and shoddy legislation belied the true purpose of this change. For all of their lofty rhetoric, it was always about a desperate cash grab to boost their flagging budget bottom line. In the financial year 2011-12, $70 million in unclaimed funds were transferred to the Australian Securities and Investments Commission. Under Labor's changes, in 2012-13 this figure ballooned to $550 million—an almost eight-fold increase in a single year. This also came at a human cost. As the minister detailed in his remarks, for many Australians funds that were wrongly claimed by government meant cancelled holidays and delays in purchasing new goods. It meant that people who thought they had money saved away were placed in needless financial difficulty. This policy was a travesty that should never have been allowed to happen. Labor should be ashamed of the contempt with which they treated parliament and the people of Australia in ramming through their legislation.

This bill seeks to restore the arrangements that existed prior to 2012. It restores a requirement that accounts must have been inactive for at least seven years before funds can be transferred to the Commonwealth. This will cost the government $285 million over four years but will save the community $36 million each year in reduced red-tape costs involved when people lose and are then forced to reclaim their accounts—indeed, their own money. That is not to mention the peace of mind in knowing that their accounts are in less danger of being seized by government. No longer will accounts set aside for family purchases and holidays be under threat. Under Labor's laws, accounts named 'Deposit for house', 'Family holiday 2018' or 'Funeral expenses'—accounts that had clearly stated purposes and were clearly not dormant—were targets for seizure by the government. Under this bill, accounts such as these will be protected unless inactive for seven years, not just three.

The bill will entirely exempt children's accounts and foreign currency accounts from unclaimed moneys provisions. This is a common-sense move. Many Australians set money aside for their children's future, and this money should never be transferred to the government. Foreign currency accounts are used by sophisticated consumers as collateral to settle transactions. For this reason, they commonly lie dormant for long periods until, or if, they are required. In the interest of avoiding red tape, the government should not interfere in this process.

Also contained in this bill are necessary changes to the way in which the personal information of account holders is protected by ASIC. Contrary to Labor's claims back in 2012, there is no law mandating that banks and/or life insurers alert their customers to their unclaimed accounts. This means that individuals are often required to personally access ASIC's unclaimed money gazette, which is published online. The gazette publishes detailed personal information, including name, last known address and the amount of money they have unclaimed. This creates two unintended consequences. The first is the potential for identity fraud. The second is the emergence, emboldened by the controversy surrounding Labor's changes, of a cottage industry of unscrupulous companies. These companies use this information to target individuals, often charging excessive fees to return so-called lost moneys despite ASIC offering it as a free service. Changes contained in this bill will remove the requirement for ASIC to publish the unclaimed money gazette and will ensure that only individuals with unclaimed accounts, or their agents, will be able to access their data through freedom of information requests.

Labor can try to sugar coat it all they want, but there is no denying that tinkering with policy on unclaimed moneys was an unmitigated policy disaster. According to the Australian Bankers' Association, complaints about the provisions increased 300 per cent following the introduction of Labor's changes. Industry was not happy; consumers were not happy. This is why the coalition government is more than pleased to reverse this policy. It is all well and good for a government to seek out savings measures, but stealing money from the bank accounts of average Australians is not the way to do it. It is this sort of cynical, desperate policymaking that got Labor into trouble. It is now the duty of the coalition government to restore fairness to the financial affairs of Australians.

I commend the bill to the House.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

Once again we stand in this place to speak on a piece of legislation that seeks to rectify the failures of the previous Labor government. Today we are speaking on the Banking Laws Amendment (Unclaimed Money) Bill 2015, which seeks to reverse the previous government's changes to Australia's unclaimed money provisions. This bill delivers on the government's promise to reform the unclaimed money provisions and contributes to the government's support of Australian business and consumers by reducing red tape and regulation.

It is worthwhile reflecting that this is just another in a long line of commitments that this government has taken to elections and through budgets and that we are now bringing to this House. In the 2015-16 budget the government announced that it would make these changes to the unclaimed money provisions in the Banking Act 1959 and the Life Insurance Act 1995. This bill will amend the Banking Act and the Life Insurance Act to specify that funds in bank accounts and life insurance policies cannot be deemed to be unclassified and therefore transferred to the Commonwealth until they have been inactive for at least seven years. These changes will be effective from 31 December 2015. This bill will also introduce secrecy provisions into the Banking Act and the Life Insurance Act to ensure that even under a freedom of information request the particulars of the mount of unclaimed money or the person to whom the money is payable cannot be released to anyone other than the account holder or an agent acting on their behalf.

It is worthwhile reflecting that between 1911 and 2012 accounts had to be inactive for at least seven years before funds could be transferred to the Commonwealth. Under these rules, only $70 million of unclaimed funds were transferred in 2011-12. But this is when the previous, Labor, government—desperate to fill the gaping black hole of their endless continuum of budget deficits, despite the fact that they said they were going to return to surplus, which they never did—decided to pick the pockets of hardworking Australians and reduce the required period of inactivity in bank accounts from seven to three years. That resulted in some $550 million of ordinary Australians' funds, from thousands of accounts, being transferred in 2012-13, an almost eightfold increase in a single year.

As the member for Ryan rightly pointed out, many of these accounts were certainly not unclaimed or forgotten but the funds were transferred to the government regardless, in order to seek to improve their budget bottom line. For many Australians this meant cancelled or delayed holidays, delays in making home purchases they had been saving for and many other issues completely unforeseen or considered by those opposite. For many Australians the consequences of not being able to access their savings when they were needed were dire, and stories abounded of these measures putting many Australians in all areas in positions of financial difficulty.

This was never acceptable, and as an opposition at the time many of us stood in this House and spoke against this legislation. Now, in government, we are seeking to make it right. That is why during the 2015 budget we committed to reforming these unclaimed money provisions. To protect Australians with unclaimed money from this exploitation, the bill will remove 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. I even saw in my time prior to entering this place the operations of the sorts of organisations that seek to charge exorbitant fees for people to reclaim either their unclaimed moneys or their unclaimed shareholdings. Very frequently we were able to assist those people very simply and, at no cost, reclaim or get access to their funds.

This bill also amends the Banking Act to exempt funds held in foreign currency accounts from the unclaimed money provisions and to exempt funds held by or on behalf of an individual under the age of 18 from the unclaimed money provisions. It also seeks to ensure that if an account holder or their agent notifies their ADI that they would like their account to remain active any time prior to its transfer to the Commonwealth then that account does not have to be transferred.

As mentioned, this bill delivers on the government's promise to reform the unclaimed money provisions. This bill will leave more Australians in control of their own finances and will better protect their personal information and leave a safety net in place to protect those with truly forgotten amounts from having their value eroded by fees and charges. From 31 December 2015 this bill will ensure that the funds from Australian bank accounts and life insurance policies can be transferred to the Australian Securities and Investments Commission only after they have been inactive for at least seven years. This bill seeks to return or restore the situation to the way it was prior to 2012 and had been since 1911. Therefore, I commend this bill to the House.

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Banking Laws Amendment (Unclaimed Money) Bill 2015. This bill provides effect to measures announced in the 2015-16 budget as amendments proposed to the Banking Act 1959 and the Life Insurance Act 1995. These amendments refer to the unclaimed money aspect of these acts. The primary feature of this bill is for the extension of the period of inactivity required before moneys held in accounts with an authorised deposit-taking institution or life insurance provider can be transferred to the Australian Securities and Investments Commission.

From 31 December 2015 this bill will provide that funds from Australian bank accounts and life insurance policies can be transferred to ASIC only after they have been inactive for at least seven years. In late 2012 the previous government reduced the required period of inactivity to three years. In opposition this government did not support this change at the time, and as promised we are now seeking to make this right. This is why in the 2015-16 budget we committed to reforming the unclaimed moneys provisions. This bill will restore the period of inactivity back to seven years.

This bill also exempts accounts being transferred to ASIC where the account holder provides advice that the account is to be treated as active. This will occur after the account is assessed as unclaimed money at the end of the year but before it is transferred to the Commonwealth. Previously there had been little time between accounts being recognised as inactive and the funds being subsequently transferred to the Commonwealth.

The provisions for unclaimed moneys to be transferred to the Commonwealth have been in place in Australia since 1911. Initially these provisions were to stop forgotten savings and life insurance policies from being eroded by fees and charges. Regardless, the unclaimed money is always claimable by the rightful owner. There is no time limit within which a rightful owner must make a claim. The money remains available to claim even though it has been transferred to the Commonwealth Consolidated Revenue Fund. After an account has been inactive for seven years the funds in the account will be transferred to the Commonwealth where they will grow tax free at the rate of the consumer price index.

As already noted, in 2012 the previous Labor government reduced the required period of inactivity to three years from its previous timeframe of seven years. This resulted in half a billion dollars from thousands of accounts being transferred to the Commonwealth. In many cases, the owners of accounts affected under the amendment to three years were aware of these accounts but believed the period of inactivity to be seven years. This placed a high number of Australians under financial distress at being required to reclaim money, especially the elderly—you can imagine the distress this caused them. For many this meant delays in purchasing new goods, such as a new washing machine, a new car or even having that hard-earned holiday. For some the consequences of not being able to access their savings when they needed their money were severe, particularly in regional areas where some found themselves financially in dire straits. There are even reports of some people having to sell their homes.

Returning the required period of inactivity before savings and life insurance policies can be transferred to ASIC to seven years is expected to reduce the number of effectively active accounts transferred to ASIC every year by up to 50 per cent. It is forecast that this change will cost the government $285 million over four years. However, the saving benefit to the community, and the reduction of red tape associated with accounts being transferred from and then returned to the account holders, is estimated to be $36 million each year. This is another example of how serious the Abbott coalition government is when it comes to reducing red tape for Australian consumers and businesses. With the changes in this bill taking effect on 31 December 2015 no account should be assessed as unclaimed until at least 2019 and no account funds should be transferred to the Commonwealth until at least 2020.

This bill also creates an exemption for those accounts that are created for children and, in addition, accounts held in a foreign currency. The exemption of children's accounts in this bill comes from the Australian tradition of being able to provide for your children when they need it most. Many Australians set aside money for their children's future. They trust that this money will continue to grow in value. They also hope that this money will be available to their children when, for example, they turn 18. This legislation acknowledges those Australians who are working hard to contribute to their family's future by ensuring money in children's accounts will not be transferred to the Commonwealth.

The exemption of foreign currency accounts is a further step in improving the legislation on unclaimed moneys. These types of accounts are utilised by sophisticated consumers in complex international business transactions. The transferring of these accounts to the Commonwealth can not only disrupt different types of international business processes but also result in the account holder being subjected to a financial loss. The funds being transferred to the Commonwealth would see them return to Australian dollars, which may result in a negative financial position for the account holder. Australian businesses competing in the global market deserve all the assistance they can get, and the exemption of foreign currency accounts from unclaimed money provisions is one way this government is helping Australian businesses.

Another key component of this bill is the protection of the privacy of individual accounts that have unclaimed moneys. The requirement for the Australian Securities and Investments Commission to publish details of the account has been removed. The cancelling of ASIC's unclaimed moneys gazette will not make it more difficult for account holders to reclaim their funds. ASIC's primary online resource for Australians who are looking to reclaim money will remain freely available to all Australians with the website moneysmart.gov.au. The cancellation of this publication will help protect Australians with unclaimed accounts from exploitation. In addition, to protect those Australians with unclaimed moneys from exploitation this bill introduces a secrecy provision to ensure that only individuals with unclaimed accounts, or those acting on their behalf, are able to access their data via the Commonwealth Freedom of Information Act 1982.

In response to continual freedom of information requests, ASIC is required to publish a database on their website containing detailed personal information of each Australian with an unclaimed account. Names, last known addresses and the actual amount of unclaimed moneys are amongst the details published. The Australian Information Commissioner has raised concerns that the level of the information currently published online could enable identity theft. The concerns around identity theft are one thing; however, the depth of the details published have led to unscrupulous individuals and businesses using this information to charge fees as high as 25 per cent to reunite people with their own money. The government and financial institutions do not charge account holders for this service.

The provisions in this bill allow the government to combat problems associated with disclosing the identity of those with unclaimed money and deter particular businesses exploiting those seeking to reclaim their money. Such steps include restricting FOI requests—generally to an individual's own details—and the cancelling of the published unclaimed moneys gazette.

The extension of the time frame for unclaimed accounts from three to seven years is designed to assist a number of Australians. In helping Australians in this manner, the reforms in this bill also include methods to make it easier to keep accounts active. This bill ensures that if consumers indicate to their bank in any way that they are aware of the account before it is transferred to ASIC, it will remain in their control. Ensuring you are aware of an account can be as simple as checking the balance online or over the phone. As a result of these reforms, thousands of Australians will no longer need to search and apply to their bank or life insurance provider for the return of their savings. Similarly, banks and life insurers will no longer need to unnecessarily transfer millions of dollars of Australians' savings to the Commonwealth.

In undertaking such transfers, the banks and life insurers have also had to respond to thousands of requests for the funds to be returned. Quite often this was done in the same year the funds were initially transferred. With wide stakeholder consultation having taken place, this bill represents community expectations in regards to unclaimed moneys. As a result of these reforms, thousands of Australians will no longer need to locate their missing savings and apply to their financial institution or life insurance provider for their return. Likewise, financial institutions and life insurers will no longer be required to transfer unnecessarily millions of dollars of Australian savings to the Commonwealth, only to find that they then have to process requests for this money to be returned and, in many instances, within a short period that the funds were transferred in the first place.

This bill ensures the government is dealing with unclaimed money in the most effective way. As mentioned previously, this bill delivers on the government's promise to reform unclaimed moneys provisions and contribute to the government's commitment to reduce red tape. This bill provides for more Australians to have control over their personal finances, better protection of personal information and provide a safety net to protect those who have genuinely forgotten amounts in their bank accounts from having the value eroded from fees and charges.

I commend the bill to the House.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The government's Banking Laws Amendment (Unclaimed Money) Bill 2015 is another important piece of legislation to reverse the chaotic policy implementation of the former Labor government. Changes to laws surrounding unclaimed funds introduced by the previous government showed a careless disregard for people's welfare, with many stripped of their valuable savings. It also shook people's confidence in the Labor government, especially in regards to the banking sector. This measure was too harsh. Moreover, Labor's reckless decision to change unclaimed many laws in 2012 after more than a century of smooth workability was just another example of unnecessary mess we have been left to clean up.

A functioning democracy is one where the people tell their elected representatives what they want. The elected representative goes back to their party or party room and speaks on the people's behalf. The late US senator, Arlen Specter, once said the essence of a democracy is a free electorate—that is, an electorate free to speak its mind, an electorate free to storm the offices of backbenchers just like me. The actions of the previous government were so reprehensible when it chose to take early possession of people's savings that it was little wonder so many from across my electorate did storm my office and those of other backbenchers across the nation. It was little wonder we were deluged with demands of people imploring us to act. They told us 'just change it back to the way it was'. They told us 'we are not happy with the Labor Party changing the law so that they can snatch our savings away'. They told us 'we want our money back'. We took their demands to the party room and the Treasurer. The party room and the Treasury listened and agreed to act.

Between 1911 and 2012, accounts must have been inactive for at least seven years before accounts could be touched by the government. In late 2012, Labor, in its infinite wisdom, reduced the required period of inactivity to just three years. This resulted in more than half a billion dollars from thousands of accounts being transferred to the Commonwealth. People were well aware of their account's existence and yet found them stripped of all savings when they tried to access them. This placed many Australians in a position of financial hardship.

The government's Banking Laws Amendment (Unclaimed Money) Bill 2015 is another important piece of legislation to reverse the chaotic policies of the former Labor government. If the truth be known, we could have continued netting billions of dollars of public money—it was certainly a nice little earner for the Labor Party. Labor used these welcome funds to help address their disastrous financial mismanagement and we could certainly have used it to help with the disaster they left in their wake. But in the end, as I said, we are servants to the people. It is their will and wishes we must honour.

Changes to laws surrounding unclaimed funds introduced by the previous government showed a careless disregard for people's welfare, with many stripped of their valuable savings. It shook people's confidence in the Labor government and in the banking sector. As I said before, this measure was far too harsh and a bridge too far. I dare say, for backbenchers in the Labor Party, whose officers were also contacted, it would have been like storming the Bastille, with throngs of angry constituents demanding their elected representatives stop fleecing them of their savings. Sadly, they did not act. Labor's reckless decision to change unclaimed money laws in 2012 after more than a century of smooth workability was just another example of a party in chaos, devoid of direction and devoid of its founding principles.

Australia has had provisions to effect the transfer of unclaimed funds to government since at least the introduction of the Commonwealth Bank Act 1911. Returning the required period of inactivity to seven years is expected to reduce the number of accounts transferred to government each year by up to 50 per cent and reduce the regulatory burden on the community by $36 million a year. More importantly, as a result of these reforms, thousands of Australians will no longer need to locate their missing funds and apply to their bank or their life insurance provider for their return. Similarly, banks and life insurers will no longer need to unnecessarily transfer millions of dollars of Australians' savings to government and then process thousands of requests for money to be returned, often in the same year that those funds were transferred in the first place.

The government's bill will ensure that if you signal to your bank in some way that you were aware of your account before it was transferred to government, even by checking your balance online or over the phone, the account will remain in your control. This will be the case even if your account had been declared unclaimed. The unclaimed moneys provisions exist to protect Australians' forgotten savings and life insurance policies from being eroded by fees and charges over time. This is all about ensuring people are not disadvantaged. In 2013, approximately $550 million was transferred from account holders to the government. This compares to $70 million transferred to the government in the previous year. As was reported in Fairfax newspapers on 10 June last year:

Pensioners and others saving for a rainy day have reported trying to access their savings only to discover their money had been seized by the government because it had been dormant for three years or more.

Canberra has collected more money from inactive bank accounts under the three-year rule than the total amount captured in the past five decades combined.

Now, only after an account has been inactive for seven years will the funds in that account be transferred to the government where they will grow at the rate of the consumer price index, tax free. No matter what, these funds continue to belong to their rightful owner and can be reclaimed at any time through contact with either ASIC or their financial institution. There is no fee charged for this service. The government's changes are due to take effect from 31 December 2015. This means that no funds should be assessed as unclaimed until at least 2019 and no unclaimed funds should be transferred to the government until at least 2020. In addition, the government will exempt children's accounts from any unclaimed moneys provisions.

We know that many Australians set money aside for their children's future and trust that this money will continue to grow in value and be available for their children when they turn 18. This could well be money for university, money for a car or money to move in search of work. I could rightly argue that such funds are more important to young people in rural electorates like McMillan, where the practical need for university funds, a car or money to move in search of work is more acute. For many young people in rural electorates, where the tyranny of distance is all too common a concept, a small nest egg is essential if they are to seize future opportunities. Robbing them of it would be almost criminal. In recognition of this fact and to reward not punish those Australians working hard to contribute to their family's future, funds from children's accounts will never be transferred to the government.

We know the people want the system essentially changed back to the way it was. The proponents of this bill have done a commendable job in overturning legislation that was designed to take from the community rather than give. The government will always do its best to empower people to fulfil their full potential. Siphoning off their savings flies in the face of that. People should always know their money is secure and that it will not be raided by governments looking for easy revenue, though I can understand why that would have been a temptation for the previous government.

This government will always do its best to put the nation on a firm financial footing. This legislation will not only help relieve the stresses of those who would otherwise have been forced to knock on the door of government to get their own money back; it will clear another expensive layer of regulatory red tape. I commend this legislation for its important and welcome changes to the way we treat unclaimed funds and, more than that, for the way we treat the account holders of unclaimed funds. The people have spoken in a loud, united voice and the members of this coalition government have listened and delivered. Yes, the essence of a democracy is a free electorate, but a free electorate is defined by many things. A free electorate is one that has the ear of its local representative. A free electorate is one that can challenge one political party to fix the mistakes of another. In this wonderful democracy, the electorate is free and soon its unclaimed funds will be too.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Another fine contribution from the member for McMillan, who spoke about the robbery performed by Labor—robbery that particularly affected regional electorates. He represents a rural electorate, as do I—the Riverina. This Labor measure particularly affected regional constituents. He talked about how the robbery was almost criminal. Indeed, it was. Of all the policies enacted by Labor during those six sorry years from 2007 to 2013, I reckon this one was just about the bottom of the barrel. We saw Labor cut defence spending. I note the shadow assistant minister for defence is here. Labor cut defence spending to almost 1938 levels. Here we go.

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

Mr Acting Deputy Speaker, I wonder if the member would take an intervention?

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

Is the member for Riverina willing to give way?

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I am happy to.

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

Could the member please set out for the benefit of the parliament in what year and to what scale there were defence cuts?

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

The cutting of defence spending was by Labor—

Mr Feeney interjecting—

You have made your intervention and I have happily accepted it. Under Labor, the cuts were to 1938 levels as a ratio of gross domestic product. I saw projects cut at Kapooka, the Army Recruit Training Centre responsible for the training of recruits, for the training of brave men and women. Projects for infrastructure at Kapooka were cut because of Labor. The only area where Labor wanted to spend money was buying back water for irrigation communities. There was always enough money for that, but there was never enough money for health or education—those important things that Labor always purports to represent but never does.

But I will tell you what, the bottom of barrel was then they tried to ensure that money was being trousered from children's accounts and from seniors' accounts. This bill will ensure that bank accounts and life insurance amounts cannot be transferred to the government until they have been inactive for seven years. The bill exempts children's accounts and accounts in a foreign currency from the unclaimed moneys provisions and better protects the privacy of account holders with unclaimed funds in order to limit the ability of some businesses to exploit them.

Up until 2012, accounts must have been inactive for at least seven years before they could be transferred to the Australian Securities and Investments Commission. In 2012, this period was reduced by Labor from seven years to three years. This resulted in a large number of, effectively, active accounts—things we heard the member for Ryan talk about such as education funds and funeral accounts, and all these sorts of things—being transferred to ASIC. That left many, many Australians financially stressed. Shame, Labor, shame.

The previous Labor government made such a mess of the budget during its time in government, it was constantly looking for more cash. This was just robbery at its worst. In October 2012, a despairing Labor government with the member for Lilley as its Treasurer, desperate for cash, announced changes to the unclaimed moneys provision, which reduced the period of inactivity required before bank accounts and unclaimed life insurance amounts were transferred to the government from seven years to three years. These changes caused significant and ongoing disruptions for effective account holders and the financial services industry. This was a direct attack on people's bank accounts and a most inappropriate grab for money by Labor.

I have had my house robbed and there is nothing worse. Could you imagine going online or into the bank or your financial institution and looking to see what your bank account was up to and realising that all your money was gone? 'Where has it gone?' 'It has gone to ASIC.' Labor just did not care. Labor did not have one single care for those people who were saving for a holiday; people who were saving for a tertiary education for their children or their grandchildren; people who were saving to put money away so they would not burden their kids when they died.

I can give you one such example. A 95-year-old Hervey Bay pensioner had $50,000 forfeited from her bank account because it had not been used for seven years. Her family were warning others to be aware of the laws being put in place by Labor. And they were put in place by Labor, member for Batman:

Craignish resident Jan Powell said she was shocked last week when she went to check on the status of an account her mother opened in 2002, established to pay her own funeral costs, and found the balance had gone from $49,000 was zero.

It went from $49,000 to zip; $49,000 to diddly-squat, nothing, zero, zilch. How disgraceful. Then there was the rigmarole that people then had to go through to get the money back. Sure, some might say it is an easy process; some might say it is a perfunctory job of the banks to fill out a form. But some people are not good at filling out forms. Some people get worried and stressed about filling out these forms to get their own money back. It is absolutely disgraceful.

David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

We call those people 'Nationals'.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Listen to it, would you! He rubbishes the National Party but that is why the Nationals are in government; to fix up the mess left by his mob.

Mr Feeney interjecting—

We are in government with the Liberal Party. Don't worry about that. And you are sitting on the opposition benches—for good reason. It is because of policies such as this very one that we are debating tonight; that is why you are on the opposition benches and why you ought to stay on the opposition benches.

Up until 2012, accounts had to remain inactive for at least seven years before funds could be transferred to ASIC. The previous Labor government reduced this to three years, resulting in a large number of active accounts being emptied and leaving many Australians financially out of pocket. This change resulted in about $550 million, more than half a billion dollars, transferred from 156,000 Australian accounts to government coffers in the 2012-13 financial year. I will just repeat that: more than half a billion dollars, transferred from 156,000 Australian accounts to government—aka Labor—coffers in the 2012-13 financial year because the member for Lilley was so desperate. He could not come up with any more ways of cutting back and paring back—all the other Defence spending, all the other priorities, like health and education.

It was not Robin Hood, but I tell you what: it was a real bushranger policy. It was stealing from—I will not say 'stealing'; that is probably unparliamentary and I will get pulled up for it. I will just say: it was taking from people's hard-earned accounts and putting it into government coffers.

Before the period of inactivity was reduced by Labor from seven to three years, only $70 million was transferred as unclaimed money in the previous 12 months. The coalition at the time—and I remember getting up here a couple of times and talking about this—said this change was completely inappropriate. They said it would seriously inconvenience people from across Australia, particularly regional Australia, and especially the Riverina and the people from McMillan, who for a very sensible reason put money aside in their bank accounts for a rainy day.

Labor went after people's bank accounts in utter desperation. This was a clear and conscious attack on people's money. And who was financial services minister in the previous Labor government?

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

Who!

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Who was it, Member for Hughes? Any guesses? The member for Maribyrnong—that is who it was—who is now the opposition leader. He was the financial services minister during the time that Labor brought this unscrupulous bill before the House.

The Australian people cannot trust Labor when it comes to managing money. Smart people know that. Labor's changes to the unclaimed moneys provisions increase the regulatory burden after the volume of accounts being transferred dramatically increased overnight. So it is ironic that Labor went after people's money in a desperate cash-grab, booked as Commonwealth revenue, to improve the bottom line, only to increase red tape and expenditure due to the substantial increase in regulatory burden. And that is precisely what we are getting rid of.

It was started by the member for Kooyong, who is now the Assistant Treasurer, for good reason. He did such a good job cutting red tape and regulatory burden that he was promoted, and he is doing a fine job as the Assistant Treasurer to the member for North Sydney. Thousands of accounts were literally transferred and subsequently reclaimed back from ASIC. Account holders then waited for up to six long months for their money to be returned, leaving some people and families financially distressed and with good reason.

Labor's changes to the unclaimed moneys provision caused substantial disruption and financial distress for affected account holders, which is why in opposition the coalition opposed Labor's changes. Upon coming to government the coalition released a discussion paper to consult—and there is something that Labor never did; they never talked to stakeholders. We went out there to see how we could improve the unclaimed moneys provision. The result is this bill before the House tonight.

Specifically the coalition sought to reform the unclaimed moneys provisions, suggesting the period of inactivity for personal bank accounts should be increased, exempting a broader range of products, reducing the regulatory burden and tightening privacy concerns. These changes were also recommended as part of the financial systems inquiry.

Increasing the time period of accounting activity from three to seven years will reduce the regulatory burden and is consistent with the government's policy commitment to slash a billion dollars' worth of red tape and green tape each and every year. We are getting on with that very important job of government. The amendments proposed to reduce the regulatory burden in this legislation will generate $36 million in savings each year and reduce the fiscal balance by $158 million over the forward estimates.

Notable industry stakeholders support the government's bill, following public consultation and discussion processes and the release of the draft exposure of the bill. A very good endorsement came from the National Seniors chief executive, Michael O'Neill. He said Labor's three-year limit is 'just ridiculous'. He went on to say:

Older Australians may not touch their secondary or back-up accounts for a few years. It does not mean it is unclaimed or indeed inactive and certainly it is not necessary for Government to become involved and seize the funds.

Of course, Mr O'Neill is absolutely, 100 per cent, correct.

This bill will reverse the unorthodox changes that Labor made in a desperate grab for cash when it was in government. It will ensure the personal bank accounts and life insurance amounts of all Australians cannot be touched unless it is distinctly obvious that they have been inactive for seven years. The bank accounts of children and accounts in a foreign currency will be entirely exempt from the provisions, as they should be. The government recognises that accounts are often opened and set aside for a number of years before the account holder will access them. That was certainly the case with the Hervey Bay pensioner who was saving money for her funeral so she would not burden her children with an unnecessary cost in the order of thousands upon thousands of dollars. She did that so they would not be left to find that money at what is a very sad and difficult time for families—when they lose the matriarch of their family, or lose a loved one. She had set that money aside, and it got pinched, stolen, thieved. People make these personal decisions based on their own circumstances, as our Hervey Bay pensioner did. It is not the business of governments to interfere in the finances of individuals. It is our job to get out of the way and let people get on with doing what they do best.

The changes in this legislative amendment will also provide increased protections for individual account holders. Specifically, it will cease the publication of the unclaimed moneys gazette so that personal information of account holders is not published online, and restrict freedom of information requests in order to protect individuals' details. The government's objective has always been to reunite people with their money as swiftly as possible; Labor's was to separate people and their money as quickly as possible, and to that extent it worked. But the Liberal-Nationals understand, appreciate and acknowledge that people's money is their own and should be used by them for whatever purpose they intended it for—not to prop up the member for Lilley's budget deficit and debt.

We are true to our word when we were in opposition. We said we did not support this initiative implemented by the Labor government and supported by the Greens and, I have to say, by the Independent members for New England and Lyne at the time. Thank goodness those seats have now gone to National Party members! We made the commitment to the Australian people that we would fix it and, proudly, we are now delivering the legislative amendment to do just that. This is good legislation. This is necessary legislation. This is appropriate legislation. It needs to pass this House to fix up the mess that Labor left and to end the wrong that was done.

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

It gives me great pleasure to speak on the Banking Laws Amendment (Unclaimed Money) Bill 2015. This piece of legislation is just another example of the mess that this coalition government have been left to clean up, the mess that we have inherited from the former Rudd-Gillard-Rudd government. Let me go back to the history of why this legislation is needed. In the dying days of that Labor government—after they had wasted hundreds of billions of dollars in reckless politically-motivated spending—they had a desperate need for cash. There was little difference between the government's desperate need for cash and that of a junkie eyeing off the cash drawer at a petrol station. Do you know where they went looking for cash? They went looking for cash in the private bank accounts of Australian citizens.

They passed a law that deemed that the money in every single bank account in this nation that had not had a withdrawal or a deposit in as little as the last 36 months would be transferred to them. That was any account with no withdrawal or deposit—and that does not include interest payments from the bank. So unless you had actively gone into the bank and made a withdrawal or deposit in your bank account in the last 36 months, that money was taken from your account and put into the coffers of the previous Labor government for them to spend.

What happened? They cleaned out—wait for this number—156,000 accounts across the nation. I see the member for Parramatta is down there at the desk. I know she is a very avid doorknocker around her electorate. That works out to be around 1,000 accounts for each electorate represented by the 156 members of the House of Representatives. Where we might have 40,000-odd households, that works out to be one household in every 40 in this nation that had their accounts raided by the previous Labor government. And the amount that was raided was $550 million—$550 million was raided from 156,000 bank accounts across this nation and transferred into the coffers of the previous Labor government.

Let me give you some examples of a few of those 156,000 accounts. One belonged to 82-year-old Maura Stanford, who had put some money away in case she needed some repairs done to her house. She had put money away for a rainy day. That day came and she needed a tradesman. She had $12,000 in that account. Do you know what happened? The tradesman came and when she went to get money to pay the tradesman the money had gone. The money had been taken from her own personal bank account and transferred to the accounts of the Treasurer under the Labor government. The account had been cleaned out. She went to the bank and said, 'What do you mean my money is no longer there?'

The staff at the branch had to comfort her. She was in tears, trying to understand how anyone had the right to take her money. She was forced to get an expensive cash advance on a credit card, and she said, 'I never thought I'd see the day when this sort of thing would happen in Australia.' Neither did I. Never did I think I would see the day that a government in this country would raid the bank accounts of Australians simply because they were inactive for 36 months, but that is what happened under the previous Labor government.

And guess who was financial services minister during this period. Guess who: the current opposition leader of this nation. He was in charge of financial services of this country. You would have thought there would be someone on the Labor side of parliament that had the intestinal fortitude to stand up and simply say: 'This is wrong. We cannot raid the bank accounts of Australians.' But there was not a whisper. It was all under the control of the former financial services minister, the man who portrays himself as the alternative Prime Minister of this country.

Another one of those 156,000 people that had their money raided was a Queensland pensioner named Adrian Duffy. Mr Duffy had put aside $22,000 in case he had a medical emergency. That medical emergency arose, and he needed a quintuple heart bypass. He came out of hospital hoping to access that money to pay his medical bills, and guess what: his account had been raided. Every single cent of the $22,000 that he had in his account was raided and taken by the previous Labor government.

It did not stop there. They even went into children's accounts. There is the case of young Seamus Hadfield, aged five, and his younger brother, Eamon, aged three. Their grandmother had put $3,000 in their account for when they grow up and get older. Do you know what happened? That $3,000 was again cleaned out and reduced to zero. Their mother said, 'Who expects governments to raid the bank accounts of children?' That is what happened under the previous Labor government: they raided the bank accounts of children to pay for their reckless and wasteful expenditure, and they want to come back and have control of the treasury bench of this nation again. This is just incredible.

There is also a list of celebrities that had their bank accounts raided. There was Buddy Franklin. He had 520 bucks taken from his account. The tennis player Sam Stosur lost $1,219, Mark Bouris lost $200, and of course good old David Koch lost $2,033. The list goes on and on and on and on. In fact, today there are probably more than 100,000 Australians yet to discover that their money was taken by the previous Labor government.

How can we put this in some context? If we look at this in a historical context, I am confident in saying this is the second largest raid of bank accounts in the history of the world. I would like to go through a few of them. I have the top six raids of bank accounts in the entire world over history. Coming in at No. 6 was the Great Train Robbery in 1963, when 16 robbers stopped a train called the Night Flyer. The train was carrying high-value packets and banknotes being sent to numerous banks in London. A hundred and twenty of 128 mailbags were removed, and the robbers made off with $74 million.

Coming in at No. 5 was the Knightsbridge Security Deposit robbery of 1987. Led by the famous Italian criminal of the time Valerio Viccei, the bank heist took place in July. The Knightsbridge Security Deposit was known to have famous clients and patrons and therefore valuable economic resources attractive to a cunning criminal. Once they had taken control of the bank, the already notorious bank robbers called for backup, and these guys ransacked and robbed the bank of $200 million in cash, jewellery and more.

Coming in at No. 4 of the biggest raids of banks in the history of the world was the robbery of the British Bank of the Middle East in 1976, when $210 million was taken. In the midst of the chaos of the civil war in Beirut, Yasser Arafat's PLO used brute force to gain access into the bank by blasting through a wall that was shared with a Catholic church. Using the help of Corsican locksmiths, they cracked the bank's vaults and got away with $20 million to $50 million in gold bars, cash, stocks and jewels, which is equivalent to $210 million today.

Coming in at No. 3 was the Dar es Salaam robbery of 2007, when $282 million was taken. The heist of the Dar es Salaam bank, located in Baghdad, is still considered one of the largest robberies in history. It happened during the war, when people took advantage of the bank's vulnerability. The money was stolen by security guards who slept at the bank overnight. When the employees came in the next morning to work, they found the front doors open, the vault doors ajar, the guards missing and the money gone.

The second biggest raid of bank accounts in the world's history was what should be described as the great Australian bank heist of 2013, when, in the dying days of the previous Labor government, $550 million was raided from 156,000 accounts of Australian citizens. This is the second biggest bank heist ever in world history.

Do you know what comes in at No. 1? The only one that could beat them was the Central Bank of Iraq robbery in 2003, of $920 million. Starting on 18 March, the day before the US began the bombing of Iraq, almost $1 billion was stolen from the Central Bank of Iraq during the course of several robberies. It was undertaken by Saddam Hussein's son Qusay, who over five hours loaded the money onto trucks. The location of the money remains unknown, but since Saddam was the ruler at the time it is possible no laws were broken, though corruption was undoubtedly involved. These incidents executed by Qusay are still considered robberies and were viewed at the time as an attempt to hide the money that Hussein obtained unethically and stole from his citizens in the first place.

This is something that is unprecedented, not only in our nation but in the history of the world—for $550 million of people's money in their bank accounts to be raided. Is it any wonder that we cannot find on the speakers list a single member of the opposition? Looking through this legislation, they are probably all cowering under their desks in their offices. The chamber is completely empty, apart from the poor and lonely member for Parramatta sitting there at the dispatch box. Not a single other Labor member is in the chamber. Is it any wonder? I am sure they are hanging their heads in shame. They have claimed that they were actually trying to protect the accounts of people. So they wanted to take their money to protect it? What an absolute farce.

One of the most important things about a successful economy is that people have confidence in the banking system. We need a system of government where people can put their money in a bank account and not be fearful that the government will raid it and take it away from them. But that is exactly what happened during those Gillard-Rudd years—absolutely outrageous. We are fixing this. Once this legislation goes through, never again will a child's bank account be raided by a government. Grandparents and parents can put money in their children's accounts knowing that the government will not come in and raid it as they did before. Secondly, we are making sure that all of those who had their money taken and absconded with by the previous Labor government will get it back. We are putting in a system where people can go online and put their name in and check if their bank account was raided by the previous Labor government. I encourage everyone listening to parliament tonight to go to that website and put their name in, because there will be over 100,000 Australians who simply are yet to be aware that their bank accounts were previously raided by the Labor government.

This was an appalling piece of legislation. It is at least good to see the Labor Party have come to their senses and are supporting this legislation, which I understand. But it does not undo the shameful piece of legislation they brought into this parliament—the disgrace of raiding those bank accounts of Australian citizens. Ultimately, this goes back to a matter of trust. If the previous Labor government could not be trusted not to raid the bank accounts of Australians, if they reduced the time to a mere 36 months before they deemed money unclaimed and claimed it for themselves, they simply cannot ever be trusted to hold the Treasury bench again. This legislation is just one of the many pieces needed to clean up Labor's mess. I commend the legislation to the House.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to 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.

Andrew Broad (Mallee, National Party) Share this | Link to this | Hansard source

I rise to talk about the Banking Laws Amendment (Unclaimed Money) Bill 2005 and I am quite proud to be able to talk about this bill in the parliament. As a farmer walking around my farm, I was shocked in 2012 that our government could stoop so low as to take money away from people who should not have had money taken away from them.

'I am an economic conservative'—they were the words of Kevin Rudd in 2007. It is easy to say that you are an economic conservative when the accounts were already balanced and there was surplus in the bank when the Labor Party came into government in 2007. But being an economic conservative is not just a statement. It is about choices. It is about making decisions. It is about governing.

Wealth is the combined sum of the efforts and endeavours of everyday Australians. Being entrusted to manage funds is a huge honour and a huge responsibility. At the heart of good government is good economic management, but to have good government you first need a heart.

This bill is not so much about history. It is not so much about what the Labor Party did at a desperate time. This is actually about character. It is about the decisions you make in the tough times. The contrast is that in 2012 the economy was not easy, and yet the Labor Party decided to take money from the sick, the elderly, the poor and sporting groups. I will give examples of exactly those kinds of people within my electorate.

The economy is not much better now. You can look at the economic indicators, and we are still walking through a very tough time but the very difference of character between the Labor Party and the Nationals and Liberal coalition is that they are changing this bill. No-one in the Labor Party wants to talk about this bill, because the Australian people know this bill epitomises character.

When things got tough, the Labor Party had a great idea: 'Let's actually take money out of people's bank accounts.' Surely, there would have been some in the party room—and I would have loved to have been a fly on the wall of the Labor Party party room when this discussion was raised. Where are the people who used to be the shearers? The people who remembered that $1.50 used to be what you got paid for dragging out a heavy crossbred ewe. That was the Labor Party, wasn't it? They were the shearers. Where were the people who bent their backs all day to make 200 bucks? They know the value of money and they know how hard it would have been to put money aside and how their mothers put money aside—$6,000. They knew it was sitting in a bank account for their funeral so that, if something happened to them, they would not be a burden on the family.

How many workers have that view—'I just don't want to be a burden on my family. I'm going to put money in a bank account, knowing that it's going to sit there.' Where are those people? Those people who used to represent the workers used to sit in the Labor Party. That is where they came from, but not anymore. Because if they did, they would have stood up at the Labor Party party room meeting in 2012 and said, 'That's an idea that's just simply unpalatable. Good one—yeah, I know: governments come up with crazy ideas, but we'll never let that one go through to the keeper. That's a nonsense. You're seriously considering taking money out of people's bank accounts that has only been sitting there for three years.'

That is just something that would never have got through the Labor Party of old. They walked through difficult times when they were in government in the Hawke-Keating years, but it would never have got through. Even 'Mr Spend' Whitlam would never have got that one through, because they had workers in the Labor Party who understood that it was hard work to save money and put it in a bank account; and governments should not touch bank accounts.

But there was no-one there. At least no-one that we know of—at least maybe they weren't leaking; I will give that to them. But where was the person who crossed the floor? Where was the person in the party of collective thought who crossed the floor and said, 'Actually, I'm representing my constituents. My constituents are poor. There's no way known that I will stand by and let people take their bank accounts.' But they did not, because in fact it was 2012. The polls were tough. They knew they needed to spend, because they had been spending. They got in in 2007 and they spent. Even though Kevin Rudd had said, 'I am an economic conservative,' he proved in his actions that he did not have the heart or the internal fortitude to be an economic conservative.

They spent like a drug addict who needed to get more money so that they could continue their spend; like a junkie: looking for money to pay for their next hit. So much so that they would essentially take from the poor, and the poor they were. The Birchip Cemetery Trust was a little country town's cemetery trust. People who had put bequests and people who had put money aside so that the gravestones could be maintained in a cemetery in a country town—they took their money. They took $63,000 from a dried fruit grower who had put that money aside for a drought—and a drought came. They took that money. It took them six months to try to reclaim that money, with no interest and lots of paperwork. The farmer had the money put aside to put his crop in. He went to get the money to pay for the fertiliser to seed the crop in May and could not get it till August. Anyone who knows anything about grain growing knows he missed the whole window. Think about that for a moment. Shame, shame. I very rarely criticise the other side, but this was the worst policy. This grain grower lost his farm. He could not put the crop in, could not get the money to pay, the bank would not loan him the money and it took him six months. He asked for an active grace payment. This was disgraceful and this is the policy that the Labor Party put in.

Of course you would think that the person who came up with this policy you would relegate to the back bench. In fact, they would not win their preselection if they brought up a policy that was going to essentially rob the bank accounts of hardworking Australians. You would not promote this person politically. Instead, what have they done? They have put up the member for Maribyrnong—the now Leader of the Opposition, the now person who they want to present to the Australian people as a fit and proper person to be the Prime Minister of Australia at the next election—the person who came up with this idea, pushed for this idea and implemented this idea when he was Minister for Financial Services and Superannuation, to be the Prime Minister.

I ask the Australian people: does this really sit with you? This shows the character that, when things are tough, your money is their money. Not only is it taking from the cemetery trust, from the farmer who had money put aside to put his crop in and from the dried fruit grower; it is also from the children of Australia.

One of the things that has concerned me for a very long time is the economic understanding of how to manage money with our children. We always tell them we need to continue to train, to learn, to save. 'Don't buy that, son; save for it and, when you can afford it, you can buy it.' That is what I was told. I remember that, as a child, we used to have free-range chooks on our little farm. We used to go clean and pack of up the eggs. Ten cents a packer. About an hour's work was roughly 60c. You would write it down and you would save up and save up until you could get something you wanted. That is what we want to encourage in our children.

I lament the credit card culture. I lament that people think they have got to have it and have it now. I think our society is poorer for it. I lament that we do not have lay-by anymore, that we put things on credit card. But how do you instil in our children that they should save, that they should open a bank account, if that money is then raided and taken by the government? Of course that money just sits there; it is there to accumulate. It will gradually accumulate, and you can teach them the wonder of accumulating interest and how that can add to their net worth. But the member for Maribyrnong, the now Leader of the Opposition, was prepared to go to the children of Australia and take their money. This is not a fantasy. This is not a story. This is a historical fact now simply because the economy was tough.

Contrast that with our government, which still has a very tough challenge ahead of us as try to pay the bills and run the economy with character and decency. Amongst all that we are choosing to put right a wrong. We are choosing to say to the children of Australia that we want them to save. We are choosing to say to the children of Australia that we want them to learn the value of good economic management. We want you to put money aside in a bank account and we are not going to steal it from you. We are not going to take it from you. We are going to let that grow so that one day you might be able to buy a car. One day you might be able to buy a video or a DVD—or now you buy it all on Netflix. One day you might be able to buy something you really enjoy, a Father's Day present or something like that. But, if it is in your bank account, it is your money. It is not the government's money.

I think this is a real lesson for the Australian people because today marks two years of government. Sure, we have not done everything right. Government by its very nature is made up of imperfect people governing imperfect people. It is clunky by its very nature. But the one thing we have done is gradually tried to restore the economy, gradually tried to renew confidence for the Australian people and do that in a way that is ethically sound. Contrast that with the person the Labor Party is putting up now as the potential Prime Minister: someone who when things got tough went after your money, when things got tough went after the cemetery trust's money, when things got tough went after the farmer's money and when things got really tough went after the children of Australia's money. Who do you trust to run the country? You will have to make that decision in probably 12 months or fewer from now. All I can say is: look back. In 2012 there was a person who stood up in a party room and then implemented a policy that took away the money of the children of Australia, as opposed to our government, faults and all, who whilst in tough economic times are restoring confidence that you can put money in the bank and it will be your money, it will be respected and it will be safe.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise to speak on the Banking Laws Amendment (Unclaimed Money) Bill 2015, because it reverses something that I and many of my colleagues have been advocating the reversal of strongly since 2012. As the member for Mallee quite rightly said, how unusual that not one member from the other side is here to speak on this bill. It is because of their sheer shame and embarrassment in confronting the implications of this measure they brought in on everyday Australians. I can recall, being an avid cartoon watcher as a young man, seeing Sylvester Junior occasionally come across the screen with a paper bag on his head, totally shamed by what his family had done. I guess the Labor family feels like that about this bill, and that explains why we do not have one speaker here in relation to this bill this evening.

The Rudd-Gillard-Rudd years are remembered for many mistakes and, as a recent ABC television special reminded us, extraordinary disloyalty and dysfunction. Many things that Labor did during their term in office impacted on and upset everyday Australians. I think it is fair to say that is why Labor received their lowest vote in 100 years. We can all remember Fuelwatch, GROCERYchoice, the set-top box scheme, cash for clunkers, the green car scheme, the solar panels program and the Indigenous housing scheme. You might recall there was going to be a computer for every child in every school. And what happened to all the trade training centres and GP superclinics? As Australians quickly learned—when you think about that history—a Labor-Greens announcement was all doorstop and no delivery. We had the disastrous, overpriced and rorted school halls program, with over a billion dollars wasted. There was meant to be a childcare centre on every corner, you might recall, to stop the double drop-off, as the doorstop said, but that never happened.

Remember them unpicking our border protection policies that worked. Remember the disastrous pink batts scheme that resulted in four deaths and is the subject of a royal commission. Recall the back-of-the-envelope Rudd-Conroy calculations for the $70 billion National Broadband Network and think about that for a moment—$70 billion committed without any cost-benefit analysis. We can recall the $900 cheque giveaway sent to dead people and to overseas backpackers. We can recall the mining tax, which raised no money but on which commitments were made on the basis that it would raise plenty of money. There was the live cattle ban that destroyed our supply chains without notice and damaged our relationship with Indonesia. There was the carbon tax that former Prime Minister Gillard promised would never be implemented by a government that she led.

To pay for all this profligate spending, Labor kept telling us they would deliver surplus budgets. Indeed, the Leader of the Opposition put out that famous newsletter claiming at the time that they were already delivering surpluses, knowing full well there had not been a surplus in this country since Peter Costello's in 2008. As the reality of Labor's tax-and-spend policies became clearer, Labor did what they always do. They reached into the pockets of everyday Australians and trousered the proceeds to try to fill their growing economic black hole. Australians are a hardy lot and they will cop a fair bit, but, when something is so patently unfair, they understandably get their backs up. And so it was when Labor cut the time that bank and superannuation accounts could be dormant from seven to three years and then seized those accounts to alleviate their growing debt-and-deficit disaster. It was something that was very poorly received across Australia, and in my community of Northern Tasmania it resulted in hundreds of complaints.

It is worth recalling that the current Leader of the Opposition was responsible for this decision, a decision that by any measure attacked the savings of Australians, particularly senior Australians. It is a story that is worth recalling. Back in 2012 the Leader of the Opposition, the member for Maribyrnong, was the minister for financial services. As I said, Labor was busy hoovering up every spare dollar they could. Then-Treasurer Wayne Swan was using the federal government departments as ATMs, and whenever he and Senator Wong, the finance minister, said, 'We need more money,' another minister would ring the cash register. The reason for that, as I explained, was that the Rudd-Gillard-Rudd government had run down our economic freedom of action that they inherited from the Howard government. To paraphrase former British Prime Minister Margaret Thatcher, Labor had run out of other people's money, and the budget's arteries were choked with an endless list of spending that was unsustainable, unfunded and unprecedented in Australia's history. Debt, as we found out soon after coming to government in late 2013, was on a trajectory to $667 billion—two-thirds of a trillion dollars. We were borrowing $100 million per day to fund legislated and recurrent Labor spending well above the revenue being received from taxpayers and businesses. So, when I say Labor were in panic mode, hoovering up money from government departments, they were doing it on a grand scale.

I was in the Department of Defence at the time, and I can recall $16 billion being taken from Defence in the years after the 2009 white paper, reducing spending to 1.56 per cent of GDP—the lowest it has been since 1938. In the 15 months before the 2013 election, the Labor-Green government stripped $5.7 billion in aid spending from the forward estimates. They also diverted $750 million in aid spending to onshore processing. They had lost control of our borders by any measure, with 50,000 unexpected arrivals in over 800 boats, and $12 billion in unexpected costs to the taxpayer. That was the result of the Labor Party's disastrous unpicking of Howard government border protection policies that worked. Moving money from the aid program to domestic onshore processing made the Gillard government the third-largest recipient of the Australian aid program.

But it was not only from government departments that the Labor-Green government were trousering every dollar they could get their hands on. Labor turned their attention to the people's hard-earned savings by changing the unclaimed-money rule. People in the gallery and those listening to this broadcast will remember that, up until then, inactive bank accounts could remain dormant for up to seven years before transferring to the Commonwealth. Labor changed that time frame from seven years down to three years. That was the people's money. It did not belong to the Commonwealth, but Labor took it. It is worth noting that these provisions relating to the transfer of unclaimed funds to the government had been around since at least 1911. They existed to provide protections for funds which Australians had forgotten they had in particular accounts, to stop them from being eroded by fees and charges. The intent was to ensure that, no matter what, those funds continued to belong to their rightful owner and could be reclaimed at any time.

Hard-earned money has been seized from everyday Australians. For over 100 years, accounts had to have been inactive for at least seven years before funds could be transferred, and under those rules only $70 million in unclaimed funds was transferred to ASIC in 2011-12. However, the Labor-Greens government's reduction of that period of inactivity to three years resulted in an almost eight-fold increase in a single year. Around $550 million from 156,000 accounts owned by everyday Australian families was seized. It is a travesty that many of these accounts were certainly not unclaimed or forgotten but were transferred to the government regardless in order to improve the budget bottom line—for no other reason than that.

For many Australians, this meant the cancellation of their holidays or a delay in purchasing goods they had been saving for—or, as the member for Mallee, who spoke before me, recalled, the end of a family's livelihood. That was the effect that these measures from those opposite had. The consequences of not being able to access their hard-earned savings when needed most were particularly severe for many Australians in regional communities like mine, in northern Tasmania. People were unexpectedly placed in positions of financial difficulty. In the worst cases, some individuals had to sell their homes. That was and is unacceptable.

Having spent everything and borrowed even more, Labor were taking from the people to feed their insatiable appetite for other people's money. And they have not learned. In the last sitting week of parliament, the member for Grayndler, I recall, was trying to make a point in question time about having funded an infrastructure project, loudly declaring to the Deputy Prime Minister, who was on his feet at the time, 'That was our money.' That is what the member for Grayndler said. Wrong, Member for Grayndler, it is not your money; it is the hardworking taxpayers' money. That attitude from the member for Grayndler and those opposite is at the heart of everything that is wrong with the modern Labor Party.

We see that wrong attitude in the opposition leader's budget reply, which added billions more in spending to Labor's growing black hole, with no detail of how he would fund them. The Leader of the Opposition, Bill Shorten, ignored Labor's appalling economic and legislative history, repeated past mistakes of deciding to tax and spend even more and showed Australia that he had learned nothing from the accident-prone governments led by Kevin Rudd and Julia Gillard. And, to compound their errors, Labor now stand, without principle, in the way of our efforts to fix the budget, by blocking billions of dollars of savings measures in the Senate, including things they themselves said before the next election that they would save.

The opposition leader, Bill Shorten, did not cost his promised five per cent tax cut for small business, which we know will cost the budget over $2 billion a year. He says a Labor government will scrap the HECS debts of 100,000 maths, technology, engineering and science students—another $3 billion. He promises a Smart Investment Fund—$500 million more. If Australians ever again have the misfortune of a return to the tax-and-spend days of the Rudd-Gillard years, they know who will come hunting for their bank accounts. We already know that the Labor Party have the hard-earned superannuation accounts of everyday Australians in their sights.

We are rolling back Labor's raid on bank deposits, and I congratulate the Assistant Treasurer, my friend the member for Kooyong, for leading so effectively on this issue. I have told him and the Treasurer repeatedly that this was one of the most raised issues in my electorate of Bass during the 2½ years that I spent as a full-time candidate before the 2013 election. That is why I am so pleased that we are reversing Labor's policy by taking it back from three years to seven years, which is also a recommendation from David Murray's Financial System Inquiry. We did not support this change in opposition, and, as promised, we are making it right in government.

This bill amends the Banking Act and the Life Insurance Act to specify that funds in bank accounts and life insurance policies cannot be deemed to be unclaimed until they have been inactive for at least seven years.

Another important change we are making is to exempt funds held by or on behalf of an individual under the age of 18 from the unclaimed money provisions. Young Australians can once again save with confidence for the long term, knowing their accounts will not be seized after three years by the government. This bill reinforces that the government's instinct is to reward, not punish, those Australians who work hard to contribute to their family's future. Children's accounts will never be transferred to the government, and I know that many people who contacted me when Labor raided their kids' accounts will be very pleased with this bill.

The third change is to introduce new protections for people's privacy, because until now, if you had a dormant account, your name and details could be published.

To further ensure that only funds that are truly forgotten are transferred to ASIC, this bill provides more options for how an account holder can keep their accounts active. If an account holder alerts their financial institution in any way prior to their funds being transferred to ASIC, including by simply checking their bank balance online, that transfer will no longer occur.

We are also ensuring that exemptions are provided to foreign currency accounts, which are primarily used by sophisticated consumers to settle complex business transactions. That is important, particularly in the Asian century, as Australian businesses leverage the benefits of the trifecta of free trade deals negotiated by our hardworking Minister for Trade and Investment, Andrew Robb.

This bill delivers on the government's promise to reverse Labor's unfair assault on the savings accounts of everyday Australians. We are restoring to Australian families their control of their own money, their own bank and superannuation accounts. We are restoring the safety net previously in place for a century to protect those who have forgotten accounts. And we are concurrently responding to privacy concerns by better protecting personal information. I know that the measures in this bill will be very warmly welcomed by people in my constituency of northern Tasmania and right around the country. I commend this bill to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I am particularly pleased to rise to support the Banking Laws Amendment (Unclaimed Money) Bill 2015. The bill makes amendments to the Banking Act 1959 and the Life Insurance Act 1995 to give effect to the unclaimed money measures announced in the 2015-16 budget. It reverses the previous government's changes to Australia's unclaimed moneys provisions. Put quite simply, the government is cleaning up yet another chaotic Labor government mess. That is what it was in very simple terms. It was just a chaotic mess. What did it cause right around Australia? Confusion and distress. Our offices were inundated with calls and emails from people who simply could not believe that the government of the day could actually take their money. Literally, that is what it was.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

It was shameful.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

As the member for Bass says, it was shameful. Of course, they stripped money off Australians of all ages, including children. The one thing that just blew us away at the time was the Labor government actually attacking the hard-earned savings of little kids who had money in their accounts. There was no incentive for a child to save. What message did this give out in the broader community? It is no wonder that Australians were absolutely horrified and disbelieving. Disbelief was what I heard most. 'I cannot believe that my government—an Australian government—is doing this to me,' and yet it was. It is a measure that we strongly opposed when in opposition.

I am not surprised there are no Labor speakers in here supporting that position. Where are they? Who could come in here in support the previous legislation that took money from children's bank accounts. I am not surprised that they are not here. I do not know how they defended this out in the community at the time. It was an appalling measure. It was a measure that we strongly opposed when in opposition and that we promised to fix when in government. Well here we are and that is exactly what we are doing.

This unmitigated mess was actually created by the current Leader of the Opposition. The current Leader of the Opposition actually created this mess. I am seriously concerned, as the member for Bass is, that if Labor comes back into government and the now Leader of the Opposition becomes the Prime Minister there could well be another attack on Australians' savings. Nothing would be sacred and nothing would be safe. Like so many, my office got complaints. It caused problems and distress for the elderly as well as young people and young families.

This bill will extend from three years to seven years the period of inactivity required before funds are actually taken from an authorised deposit-taking institution, an ADI, life insurance provider accounts and life insurance amounts and transferred to the Commonwealth. Currently ADIs are required to assess all accounts to determine if they contain unclaimed moneys by 31 December each year and transfer any that do to the Commonwealth by 31 March the following year. This was Labor's legislation. In late 2012—and I remember it was getting close to Christmas—the previous government reduced the required period of inactivity to just three years. It actually resulted in $550 million from thousands of accounts being transferred to ASIC in 2012-13. There was almost an eightfold increase in a single year.

As I said, we did not support it when in opposition and, as promised, we are fixing it. This really affected rural and regional communities. As I said, we were inundated with complaints from people who simply could not believe this. I look at my original speech on this and see that I called it an underhanded bill. It was an underhanded bill. It allowed the Labor government of the day to get its hands on Australians' money. I made the beginning of my speech on Monday, 26 November—in the run to Christmas—and said that maybe the money in those accounts were holiday savings. I actually noted that as we were heading into Christmas perhaps they were originally set up for some form of Christmas treat or for a holiday—a long-awaited overseas trip perhaps. They may not have contributed funds to or moved funds out of that account. Of course that happens. There was example after example. Accounts can sit inactive for quite some time. As I noted then, it might belong to someone on an overseas posting who may take more than three years to return. At the time it included first home owner accounts and retirement savings accounts. These accounts can say untouched for years, particularly when people are going through great hardship.

At the time the Labor government were chasing a $1.1 billion surplus. They had projected at the time that around $900 million was going to come from this proposal. Their proposed mythical surplus at that time was built around Australians' savings. It was just appalling. It was because Labor was absolutely addicted to waste and spending. To turn around and use Australians' hard-earned funds in savings accounts as a piggy bank was absolutely dreadful. At that time I said it was Robin Hood in reverse because this government had their hands in the pockets of Australians. Labor had completely lost control of their fiscal policy and they were desperate to rip every dollar that they could out of the pockets of Australians. That is exactly what they did with their bill. That was why it was so appalling and why Australians were so appalled by these actions. The fact that they had attempted to hide it in the bill itself frustrated and angered the community. It certainty led them not to trust the Labor government.

More than half the government's surplus of 2012-13—it was a promised surplus but it never eventuated—was to be achieved through the increased revenue from their bill. The sole purpose of the government removing money from Australians' accounts was to try to get a $1.1 billion surplus but that government was absolutely addicted to waste and spending.

As we know, historically there were provisions in place to transfer unclaimed moneys to the government since 1911. They existed to protect Australian's forgotten funds from being eroded by fees and charges. That was until 2012. Accounts had to have been inactive for at least seven years before those funds could be transferred to the Commonwealth. Under those rules, only $70 million in unclaimed funds were transferred to ASIC in 2011-12.

Returning the required period of inactivity before savings and life insurance policies can be transferred to ASIC to seven years will drastically reduce the number of effectively active accounts that are transferred to ASIC every year. It will cost the government $285 million over four years, but this is the funding that would have come out of Australian's pockets.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Shameful.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

Yes, shameful. To further ensure that only funds that are truly forgotten are transferred to ASIC, this bill also expands the ways in which account holders can keep their accounts active. It will actually ensure that an account holder can simply alert their financial institution to the fact that they are aware of their account in any way prior to their funds being transferred to ASIC. That can be something as simple as checking a balance online to say 'yes I am aware that my account is there', 'yes this account is active' and, 'no, I am not going to allow the process of the previous Labor government to continue'. Such an action will make sure that the transfer will no longer occur.

An account held by an ADI consists of unclaimed moneys if in the previous three years there have been no transactions in the account other than interest or charges, and they have not satisfied the notification requirements by, for example, checking their account balance online or on the phone or by specifically advising their bank that they would like the account to remain active. It will also stop ADI accounts being transferred to the Commonwealth where the account holder provides notification that the account should be treated as active after the account is assessed as unclaimed moneys at the end of the calendar year but before it is transferred to the Commonwealth—checks and balances.

The bill also exempts ADI accounts created for children—and hallelujah to that. I think that was the one thing that struck most of us with the previous Labor government's approach—the fact that they would actually take money out of children's bank accounts. It is unconscionable. It also exempts those that are held in a foreign currency from the unclaimed moneys provisions, eliminating the unclaimed moneys provisions which currently apply to foreign currency accounts and children's accounts.

Foreign currency accounts are generally used by sophisticated consumers to settle business transactions in foreign currencies. Transferring these accounts to the Commonwealth under the unclaimed moneys provisions requires the account to be converted into Australian dollars, potentially exposing the account holder to exchange rate fluctuations. Given this risk and the fact that these accounts are used by sophisticated consumers who are likely to know of these accounts, it is not appropriate to transfer them to the Commonwealth under the provisions.

Children's accounts are generally established often by grandparents—I am helping my grandkids.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Out of love.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

Out of love, exactly. 'And I am going to put a little bit of money in there whenever I can afford it'. Often it is a small amount of money because the person doing it may not have a lot of money themselves. They could be a grandparent pensioner. They could be someone who loves this little person so much and they are quietly putting small amounts into their account. Perhaps it is for the children's education. Perhaps it is for their first car. Whatever it is that the grandparent is contributing to, sometimes that account can be inactive for quite a period of time. The fact that we are going to exempt children's accounts, I think, shows the heart of the government as well and common sense and the fact that it should never have happened in the first place. This might include an inheritance or an endowment that might be kept, for example, until a child's 18th birthday. It might be that the grandparent provides an inheritance in a will but it is there for the child achieve their maturity.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

It is not for the Labor Party's deficit.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

No it is not for a Labor Party deficit, as the member for Bass so rightly says.

Transferring these accounts to the Commonwealth may result in some children losing out on higher interest rates because accounts transferred to the Commonwealth will only accrue the interest at the rate of the Consumer Price Index.

The bill also promotes and protects the privacy of individuals with accounts that have unclaimed moneys by removing the requirement for the Australian Securities and Investment Commission to publish details. I think this is really important. We have heard so much about the problems with this issue and the issue around identity theft by using currently published information. Some, as we know, unscrupulous businesses are also using this information to charge fees as high as 25 per cent to reunite people with their own money, the money that was taken from them by the previous Labor government. Financial institutions will not charge account holders for the services that they will provide.

To protect Australians without unclaimed moneys from exploitation, the bill will remove 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.

I am very pleased to speak on this bill. All of us at the time thought this was a dreadful act by the Labor government of the day. I am particularly pleased that we have done exactly as we committed to do. I strongly support this bill before the House.

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

Kelly O'Dwyer (Higgins, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I am proud that the coalition has introduced this bill to reverse the previous government's changes to Australia's unclaimed money provisions. As of 31 December 2015, as a result of this bill, 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 at least seven years.

Australia has had provisions to effect the transfer of unclaimed funds to the government since at least 1911. These provisions ensure that the forgotten funds are not eroded by fees and charges. But, no matter what, these funds continue to belong to their rightful owners and can be reclaimed at any time, through contact with either ASIC or the financial institution.

No fee is charged for this service. For over a century—from 1911 through to 2012—only those accounts that were inactive for at least seven years were transferred to the Commonwealth. In 2011-12 this resulted in $70 million in unclaimed funds being transferred to ASIC. The previous government acted to change this arrangement in late 2012 by more than halving the period of required activity from seven to three years. As a result, the amount of unclaimed money from thousands of accounts being transferred to ASIC in 2012-13 increased to an extraordinary $550 million—an almost eightfold increase in a single year.

As I have raised in this House in the past, in 2013 I was personally contacted by a very concerned parent whose son had realised that he no longer had any money in his savings account. In this instance the son had been working in London for four years and had put some money aside as part of his savings for his return to Australia in late 2013. He had checked his account only to find that all of the money had gone. After making some inquiries he realised this was a result of the previous government's changes to the unclaimed moneys bill, and he set about trying to recover the money. The process for recovering the money was complex. The parent, who had power of attorney for his young adult child, had to provide passport information and a drivers licence. He had to fill in a number of forms and had to not only prove his power of attorney but also try to get evidence of the fact that the power of attorney had not been revoked. In fact, it was so difficult for this very educated man and his son to get the money back that his son decided he was not going to bother to try to recover these funds until he had physically returned to Australia. This is just one of many examples that occurred right across the country.

The former government's changes resulted in large costs, inconvenience and, in some cases, significant stress for those Australians who had to go through the time-consuming process of reclaiming their own money. In some cases this took as long as six months. The changes made by the former government go to the fundamental differences between the ethical underpinnings of the Australian Labor Party and those of the Liberal and National parties.

Let me remind my colleagues in the ALP and the Greens that moneys held in Australian bank accounts are not government savings on which to be banked when recurrent spending is on the up nor are they government insurance for the rainy day of increasing debt and worsening economic conditions. In short, they are not government moneys; they are private moneys. They are the savings of Australians—from the smallest balance to sums that are quite substantial. They are savings earned over months and years and on which tax has already been paid. The previous government's sole intention in changing the banking provisions was to shore up its own financial position, with unclaimed moneys held by ASIC serving to reduce the Commonwealth's net debt position.

Of course, it was a fiction. If the former government had been genuinely interested in controlling debt it would have done so more carefully. It would have looked at its own activity, thoughtfully gauged the merit of its own programs and contained spending wherever possible. However, it did not do this. Instead the Rudd-Gillard-Rudd government sent $900 cheques, sometimes to people who were deceased. It embarked on the gross waste and the tragedy of the home insulation scheme and it locked continued increased spending in a range of sectors on the false assumption that more money automatically translates to better outcomes, which, of course, we know is not the case.

From a position of money in the bank and no net debt—which was the position of the former coalition government—the Labor Party, with their partners, the Greens, took us on a spending path that was leading us to net debt levels of 122 per cent of GDP. Spain currently has around 60 per cent and Greece has net debt of over 150 per cent of GDP. Rather than face the reality of their own poor budgetary performance, they instead turned to the budgets of ordinary Australians—men and women and, to their shame, even children. Those Australians were unrepresented by a peak group, diverse in nature and, as a result, were the least likely to organise and make a fuss. They were everyday Australians going about their lives and with savings in the bank. In total, 156,000 accounts were transferred to ASIC. Many of these accounts were certainly not unclaimed nor forgotten, but were transferred to the government regardless in order to improve the budget bottom line—a budget bottom line that they had created. As an opposition we opposed this change and now, as promised, in government we have made it right.

Returning the required period of inactivity before savings and life insurance policies can be transferred to ASIC to seven years will drastically reduce the number of effectively active accounts that are transferred to ASIC each year. This change will cost the government budget $285 million over four years; however, it is money the previous government should never have banked. In addition, there will be a reduction of red tape costs to the community in the order of $36 million each year as fewer accounts must be transferred from and returned to account holders.

This bill also expands the ways in which account holders can keep their accounts active, thus ensuring that only funds that are truly forgotten are transferred to ASIC. This bill will ensure that if an account holder alerts their financial institution to the fact that they are aware of their account in any way prior to their funds being transferred to ASIC, including simply checking a balance online, then that transfer will not occur. This bill will also entirely exempt children's accounts and foreign currency accounts from the unclaimed moneys provisions. In many instances children's accounts are established by families in order to set aside money for the future. In recognition of this fact and to reward, not punish, those Australians who are working hard to provide for their family's future, children's accounts will never be transferred to the government. As a new parent who is about to establish an account for my newborn child, this is something that gives me great comfort.

Meanwhile, foreign currency accounts are generally used by sophisticated consumers to settle complex business transactions. Transferring these accounts to the government not only potentially disrupts these processes but also exposes the account holder to the risk of a loss, as their funds must be converted to Australian dollars at the prevailing exchange rate before they can be transferred to ASIC. This government is committed to reducing red tape for Australian businesses, and as such these types of products will also be exempted entirely from the unclaimed moneys provisions.

To add insult to injury, the unprecedented growth in the value of money transferred to ASIC under the previous government served to highlight the deficiencies in the way that the account holder's personal information is protected. Currently ASIC is required to publish an unclaimed moneys gazette online which details the account holder's name and last known address and the amount of money they have unclaimed. The Information Commissioner has subsequently raised concerns about the potential for identity theft using currently published information. It is also important to raise awareness that, while some businesses have also been using this information to charge fees to reunite people with their own money, the government and financial institutions do not charge account holders for this service. To protect Australians who have unclaimed moneys from exploitation, this bill will remove the requirement for ASIC to publish the unclaimed moneys 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 moneys provisions. It will leave more Australians in rightful control of their own finances, better protect their personal information, and leave a safety net in place to protect those with truly forgotten amounts from having their value eroded by fees and charges. In doing so, it redresses the actions of the former ALP government and restores each person's right to stewardship of their own savings. I commend this bill to the House.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

The opportunity to speak briefly on this bill is great news for the people of Braddon. The Banking Laws Amendment (Unclaimed Money) Bill 2015 will put right a huge wrong that was done under the stewardship of Kevin Rudd, Julia Gillard and Wayne Swan. This amendment bill tonight will bring back into play a law within the statutes that was 101 years of age when the previous Labor government decided that it was no longer necessary that inactive accounts should stay for seven years and then action would be taken. They had a desperate need for funds and decided to transfer—to put it kindly—moneys that were owned by Australians into the hands of the government.

Today we will correct that wrong. For 156,000 Australians through that period, with accounts in their banks totalling over half a billion dollars—that is $500-plus million dollars—we tonight will right that wrong and return to the statutes a bill that will ensure that people's funds are back to being inactive for seven years, but with some improvements even still. Children's accounts—those accounts that were probably amongst the most vulnerable, together with those of older Australian citizens—will now be exempt from the status of being inactive and from going across to the government coffers. This is a great addition to this law. Not only that, but there will now be provisions that will mean that, even if there have been no withdrawals or deposits, if people check their accounts online or have made an inquiry at an ATM or have called their bank over the phone or have dropped into the bank to check their balance through a teller—if in fact you can find any of those these days—then that will now signal—technologically, I suppose—that this account is not inactive. In fact, it has someone very interested in the contents of that account. To think for one moment that a national government would for one moment even contemplate taking funds from people and putting them into the government coffers is extraordinary. To actually act on that is even more extraordinary. So today we will right that wrong through this bill, and it is a welcome initiative.

I know many, many of the people of Braddon were impacted by this. As the incoming member, I learned of many people who went to their bank, saw that the closet was empty and wondered what on earth had happened. I say to those people, and to others that may be wondering whether or not in fact their money is still in the bank, that they can go online at www.moneysmart.gov.au to check up to see if what may have been an inactive account is still there or has been transferred. These people are some of our aged people who put an account aside for grandchildren. They may have put money aside for their own funeral to alleviate any financial stress on their family at the time of their passing. And what did we find? We found a government so desperate to try to make the books look better that they stooped to the lows of taking funds from ordinary Australians.

I thought the contribution in this debate by the member for Hughes was exceptional. He exposed to the parliament the six biggest bank heists in history, and this one ranked at No. 2. What a disgrace it was. It is tremendous that tonight the Abbott coalition government is rectifying this wrong, as we said we would do in the lead-up to the election. I encourage people in the electorate of Braddon to check that website, www.moneysmart.gov.au, to ensure that there are not funds put aside in government coffers that in fact belong to them. I thank the House.

Josh Frydenberg (Kooyong, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

Firstly, I would like to thank those members who have contributed to this debate. The Banking Laws Amendment (Unclaimed Money) Bill 2015 delivers on the government's promise to reform the unclaimed moneys provisions and helps to deliver on the government's promise to support Australian business by reducing red tape by $1 billion each and every year.

When the previous Labor government, in a desperate money grab, reduced the required period of inactivity before funds must be transferred to the Australian Securities and Investments Commission to three years, the value of unclaimed money transferred to ASIC in a single year grew more than eightfold. Unfortunately, however, much of this money was not forgotten, and the previous government's changes left many Australian families in a position of financial distress. This was an unacceptable outcome. In order to again ensure that Australians' active bank accounts and life insurance policies remain in their control, this bill returns the required period of inactivity before they can be transferred to ASIC to seven years. It also makes changes to the notification requirements to ensure that, even after seven years of inactivity, if an account holder lets their financial institution know that they are aware of those funds in any way, prior to their transfer to ASIC, such as by checking the balance online, they will remain in control of the account holder.

In recognition of how Australians actually use different financial products, this bill will also exempt children's accounts and foreign currency accounts from the unclaimed moneys provisions entirely. For example, many Australians set money aside for their children's future and trust that this money will continue to grow in value and be available for their children when they are ready. In recognition of this fact, as a result of this bill, funds from children's accounts will not be transferred to ASIC. Foreign currency accounts, meanwhile, are primarily used by sophisticated consumers to settle complex transactions. However, transferring foreign currency accounts to ASIC not only disrupts these processes; it also exposes the account holder to a loss, as their funds must be converted to Australian dollars at the prevailing exchange rate before they can be transferred to ASIC. In line with the government's commitment to protect Australian businesses from excessive red tape, these types of products will also be exempt from transfer to ASIC.

Finally, this bill will introduce new limits on access to the personal details of those Australians with unclaimed accounts. To protect account holders from exploitation by some unscrupulous money-finding companies, or even identity theft, this bill will remove the requirement for ASIC to publish an unclaimed moneys gazette and introduces secrecy provisions to restrict freedom-of-information requests generally to an individual's own details. I commend this bill to the House.

Question agreed to.

Bill read a second time.