Sue Boyce (Queensland, Liberal Party) Share this | Hansard source

We certainly have to give it to this government! In terms of creating dogs breakfasts with the whiff of a rort about them, this government excels. It is their forte.

When we have the situation where a Greens amendment to a bill of this sort actually improves the bill, we really have to worry a bit. And yet, as we told the government over and over, and as we have said in a dissenting report, there is no way that banks and other organisations could be ready to accept the changes proposed in this unclaimed monies bill by 31 December. Finally, pushed by the Greens, they managed to get it to 31 May.

Of course, 31 May was not what we suggested. We will be moving amendments to try to delay the introduction of this for 12 months. Banks usually do a sweep, as they told us during the very, very rushed hearing on this legislation, well before Christmas. Imagine, during the Christmas period, being obliged to do a sweep of bank accounts to see what is left unclaimed? How desperate was this government to have tried getting this legislation through in the first place? It just smacks of, well, 'ineptitude' is probably the best term to use.

Not only do we have the situation with this legislation where a Greens amendment makes better sense than the government's initial proposal by pushing the date out to 31 May—it is a compromise, but if that is what the government insists on then the Greens have done a better job on this legislation than the government has—but we also have the bizarre situation where it is the Australian Bankers' Association that is telling us that the regulations will confirm that term deposits, linked accounts and children's accounts will be excluded.

The regulations? Where are the regulations? Well, they were not developed before we got the first run of this bill, and they still are not quite exactly with us. So we end up with the banking association—not the government—answering some of the questions around the concerns that we have with this legislation. There is the opportunity that people's accounts would be picked up willy-nilly. The whole point of this, of course, was to attempt to put the budget back into surplus.

If the budget in May 2013 ends up in surplus it is on the back of young workers and people with toothache, because for 18 months there will be no dental scheme funded by this government. We have already had evidence from the superannuation funds that the people who are most likely to have their accounts declared inactive within 12 months are young workers. People who might earn around $22,000 or so in six months are the people who will be most likely to have superannuation accounts under $2,000 and have that money claimed by Mr Swan and his greedy little friends, and then have to go through the business of claiming it back from the government. Of course, that will create a cost for the government, but I guess they are hoping that it will not create a cost in the same financial year. Perhaps they will work out a way to be very, very slow in paying it out.

Over the six months from 31 December 2012 to June 2013 the government is intending to raise $760 million in additional revenue from this bill. Let us look at their moves on bank accounts. Currently, if a bank account is inactive for seven years the money becomes unclaimed and it goes into an account run and overseen by ASIC. Not only are they more than halving the seven-year time frame to three years but this government is also saying, 'Oh no—pay us straight away. Stick it all in consolidated revenue so we can try and pretend somewhere along the line that we got a budget surplus.' Again, it is unconscionable that this is the way it will be gone about. We would have supported the idea of moving the time frame from seven years to five years, but we will not support the nonsense that is currently being proposed.

If we look at the superannuation side of it: as I said earlier, the people who will be most affected by this are likely to be young workers. The lost super is expected to raise $555 million in 2012-13. Let's face it: this is just a con aimed at getting the money in the bank account at the right time so that they can get their house in order.

We have the situation where not only do we have the superannuation levy likely to go to 12 per cent but we now have one of the architects of it, former Prime Minister Paul Keating, suggesting that it should go to 15 per cent. What? So they have a better chance to rip money off people earlier and sooner. It is just a shambles that has been created here.

We also have the Treasury secretary, Martin Parkinson, telling people, 'Well, the concessions we have on super at the moment, we can't let those stand. We'll have to get rid of those. We are going to have to raise revenue somehow and getting rid of the concessions on super would be a good way to go.' The superannuation industry has already undergone three tranches of change put through by this government. They are in turmoil right now and they will continue to be in turmoil if this government continues as it has with 'change this, change that, and let's do this, let's do that'. We have another piece of legislation around superannuation coming up shortly which, once again, the industry has said, 'Well, we're not sure what you mean. 'Oh, you won't have the regulations this time until 10 past midnight. We can't get the regulations.' And this goes on and on.

It is no wonder that the investment climate in Australia is very dicey at the moment and that there is a lack of confidence in the investment sector in Australia when you have this complete incompetence, this complete lack of information and also this complete lack of understanding of how the situation will pan out.

As far as I understand, we have not even talked about first home savers grants which can in many cases be inactive for more than three years. People want to set up a history of saving for four years, which is what they are required to do with first home savers grants, yet if they strike a tough patch after, say, two years and do not put any money in for three years, the government will sweep their account. What a wonderful way to encourage people to save for the future! It is yet another bizarre example of how this government is going. The timing of this is just too rushed. It is unrealistic.

In fact, as the banking industry put out, it is not feasible that they could have met the government's initial deadline and they will have issues and significant extra costs in meeting the 31 May deadline. A far preferable deadline would have been from delaying the implementation of this for 12 months to avoid the sorts of mistakes and the sort of inconvenience that will be caused to bank customers who have their accounts taken.

We even had the bizarre situation, when this legislation was introduced, that it was going to operate at the account level. That meant that if I had five accounts with a bank—and even though four of those may have shown transactions going in and out and in and out—the fifth one, if it did not have transactions in it for three years, would be swept away by the government looking for some money to stick into consolidated revenue and hopefully produce a budget surplus. So the problem with this is that they just do not understand how business works.

So we had the situation where the regulations had not been made and the unclaimed moneys provisions, including what accounts would be excluded, were not set out. It would appear that the regulations are now going to exempt linked accounts from being swept up by Treasury in pursuit of its elusive surplus. But where are the regulations? This has not been thought through properly and we are still not sure, other than having some advice, that it will not affect linked accounts.

During the inquiry, the Australian Bankers Association said the bill:

… seems to have been developed and pushed through the parliamentary process with undue haste While the changes in the legislation appear straightforward, they do in fact have significant implications for banks and for bank customers.

Of course, they have a significant problem. Imagine if you were posted overseas. There is a reasonable likelihood that you may be on a posting of more than three years and simply leave an account here, to earn interest and do nothing else. But if you are already overseas right now, how will you ever know? That is unless the banks spend their money to yet again fix up the government's policies and the shortcomings in the government's implementation. How will you know that account is going to be swept away?

Take accounts set up for children. The government tells us that they are going to exempt those. I am pleased to hear that because accounts for children are often set up by grandparents who simply leave them to earn interest until the children reach 16 or 18. I am glad that we will not have the kiddies of Australia attempting to provide a budget surplus for the Julia Gillard government.

Returning to first home savers grants and accounts, the problems with those multiply over and over. Another thing is that the government is intending—as they tell people in a friendly way—to pay interest on the moneys if and when people claim them back out of consolidated revenue. They intend to pay interest at CPI. Never mind what the account is earning, they will pay you interest at the cost of living index. So where are we going with this? There is a possibility that in fact people will be dudded out of interest payments because the government has claimed their money and it has taken them some time to realise they have.

Another problem is that the way this legislation goes about talking about how one identifies an inactive account is out of kilter with the current way that most people engage with their banks. At the moment it has to be by letter and if you have attempted to correspond twice by mail with someone and they fail to get the correspondence, well, that is it. I know that when I bought the house that I am currently living in it took me something like 3½ years to stop receiving mail for former owners and friends of former owners around superannuation and banking accounts. Each one of these I religiously sent back with 'Address unknown—return to sender' but six to 12 months later yet another one would turn up. So that took over 3½ years to stop happening.

So, despite my attempts to let these organisations know, certainly the systems appear not to be there right now that would allow banking and superannuation organisations to easily know when accounts are genuinely inactive and, when there is lost super, when people genuinely are not here anymore.

I see some attraction in not forcing employers to pay superannuation for people who are working casual work, such as backpackers, so that they are not put in the situation of needing to reclaim it or, as with most cases, forgetting to claim it and having it sit there until it does get reclaimed. I accept the point, and all the banking organisations and all the superannuation organisations accept the point, that having inactive accounts and so-called lost super accounts is a cost to those organisations. The administration around them goes on irrespective of whether they are earning anything. To change this willy-nilly so that the cost of the unclaimed moneys becomes a government cost and attempts to offset consolidated revenue is an interesting point.

The Joint Corporations and Financial Services Committee, of which I am deputy chair, will be holding an inquiry with ASIC early next week. I will be asking them at that inquiry about the degree to which unclaimed moneys are subsequently claimed. You would think that the government perhaps would need to look at whether they should have an offset for all this money, this $760 million that they are hoping to get into consolidated revenue through this measure. Should there be an offset so that, for those who reclaim their funds, the liability for the reclaimed funds is provided for? Or, do we just hope that not too many will do it, hope that this will slip under the radar and hope that nobody will pay attention.

The unintended consequences of the government's ineffective and shambolic implementation of legislation, their shambolic introduction and drafting of legislation—I hasten to add that it cannot be blamed on the people who draft the legislation but on those who make the policy on the run to force the legislation. Their shambolic behaviour is unbelievable and unsustainable in the same way that their management of the budget is unbelievable and unsustainable.

In terms of how the government should handle identifying inactive members and lost super accounts, surely this legislation should also allow for the fact that people use email and computers and that it is quite possible to have a very active association with a bank or a superannuation company without being an uncontactable person. The current regulations define a member of a fund as a lost member if: (a) the member is uncontactable—that is, the provider has never had an address for the member; and, (b), two written communications to the member have been returned to the provider unclaimed and the member's account has not been active for five years.

That clearly needs to be developed further. Once again, without proper consultation and without properly understanding how the industry works this government has got it completely wrong. It is not just the money that is lost or the accounts that are lost; it is also this government that is completely lost. This is yet another example of how poorly it has managed to construct its fiscal environment to attempt to meet the circumstances.