One word comes to mind when we think of the process that has followed this bill into the House: chaos.
This government has abused the process in which the manner and timing of this bill was introduced into the parliament. It is imperative that there is sufficient time to understand the impact and potential consequences that this legislation may have on Australians, including on the people of Wright, who I represent, who have unclaimed money in accounts that this bill specifically targets. I have no hesitation in opposing this bill together with my coalition colleagues. I cannot support this bill based on the haste with which this government is moving to act.
The first part of the bill makes amendments to the Banking Act 1959 to provide a new arrangement for unclaimed moneys held by Australian deposit-taking institutions. It was introduced last month at the same time the coalition was receiving its brief on this very bill from staff from the Treasury office. Despite seeking to have this bill referred to the Parliamentary Joint Committee on Corporations and Financial Services, the bill was listed for the debate the following day. Why, may I ask? Because of the desperate search for funds that this Treasury needs in its process of cooking the books. It seems as if it is a desperate scramble not that dissimilar to a poverty-stricken household looking to find coins down the back of the couch in order to put a meal on the table.
I want to share with you why the government is pursuing this bill. It goes to the heart of debt and to the heart of
this government's capacity to manage its fiscal affairs. If you add up all of the deficits since 1901, when Edmund Barton was our first Prime Minister, through to 2007, it would come up to $123 billion. Since Labor has come to office—and this is its five-year anniversary—from 2007 to today, they have accumulated deficits of $172 billion more than the $123 billion accumulated by the entire parliament here in Australia. The current debt figure today is $252.9 billion, and borrowings over the last 22 weeks have been in the vicinity of $19 billion. This being the last sitting week for 2012 it is only more obvious that this government is going to do everything it can to rush whatever they can through the House, including this bill.
I really do not know whether to laugh or to be worried by the fact that the debate of bill was adjourned shortly after it was introduced by the government when it realised that it did not have the support of the member for Lynne nor the member for Melbourne for this bill.
The bill before the House seeks to enact various changes to unclaimed money measures which were flagged in the government's 2012-13 MYEFO and makes amendments to the Banking Act of 1959, the First Home Savers Account Act of 2008, the Life Insurance Act of 1985, the Superannuation (Unclaimed Money and Lost Members) Act of 1999, the Australian Securities and Investments Commission Act of 2001 and the Corporations Act of 2001.
Specifically, these amendments will impact arrangements relating to the transfer of unclaimed moneys to the
Australian Securities and Investments Commission for bank accounts and life insurance policies, lost members' accounts at the Australian Taxation Office for superannuation, and unclaimed moneys for companies' moneys.
The bill effectively brings forward the time in which money is recognised under the relevant law as lost or unclaimed, which will in turn have an effect of moving approximately $700 million into the 2012-13 fiscal year
—$700 million of Australian's money, which is going to be used on the balance sheet as if it is a government
asset. Well, it will not be; it will still be the property of the Australian people as unclaimed money but it is an element of accounting trickery which this government has reduced itself to in order to try and maintain a waferthin surplus. These changes will reduce the period before an amount payable by an Australian deposit-taking institution is treated as unclaimed moneys from seven years to three. This change has potentially widespread unintended consequences for many Australians, and this government should not be allowed to get away with adhoc action that has such a perverse impact on society.
So today I am clear what this bill does. If an Australian worker who has money sitting in a bank account, and perhaps has decided to venture overseas or choose to leave money in that account accumulating interest, does not make any further deposits or withdrawals for that period of time, they will have their deposit treated, after that three-year mark, as unclaimed moneys. These funds will be moved to the government's own account, known as the Consolidated Revenue Fund. This is a terrible result for many Australians with untouched funds in their bank accounts.
The unintended consequences of this bill—and I say this with my hand to my heart, without any political rhetoric —is that we will potentially have Australians, elderly and young, rather than being encouraged to save and put money into their bank accounts, taking their money out of the banks and not use the safety net of the banks and go back to the old ways when they had no traditional security in the banking sector and put it in a Milo tin, put it under the bed or bury it in the backyard.
Before I go any further, I want to bring to the parliament's attention the important task we as members of parliament have when discussing legislation like this—because we have not had time to discuss the unintended consequences of this bill. As the member for Wright I am constantly reminded that I need to work hard towards ensuring the people of Wright will benefit from better lives and higher standards of living through higher productivity throughout the economy. But I cannot help but think of the bureaucratic nightmare those who encounter this poorly thought-out administrative change will face.
To highlight the administrative nightmare, I took the opportunity when reading this bill to go onto the Australian
Taxation Office website and download the unclaimed superannuation money non-lodgement advice, because I thought it would have been an easy job of just picking the phone up and saying, 'I'm back in the country' or 'I want to try and transfer this over'—but there was nothing short of seven pages of information and data to fill out. The one that got me was the part of the download that went to the type of superannuation provider—and you could only select one. You had to nominate your superannuation account and whether or not it fell under the category of (1) retirement savings account, (2) industry or award superannuation, (3) employer sponsored or a corporate superannuation fund, (4) public offer or retail superannuation fund, (5) a small Australian prudential regulatory authority fund, (6) an exempt public sector scheme, (7) a public sector fund on eligible rollover fund—or, if you did not have anything that plugged into any one of those, you could touch 'other'. So, if someone has an amount of, say, $2,000 sitting in there, it is not unfeasible that someone could spend nearly $2,000 on accountants or their solicitors trying to work out which one of those categories they fell into simply to have those funds returned.
The next part of this bill amends the First Home Saver Account, active from 2008, to provide new arrangements for unclaimed moneys held by the First Home Saver Account providers. The new law amends section 17(a) and 15(c) of the FHSA Act to change the unclaimed money period from seven years to three, similar to the amendment before. The government announces the introduction of the First Home Saver Account in the 2008-09 budget. As many members of the House will be aware, the First Home Saver Account is a relatively new measure, with many parents having established these accounts for their kids—and it was a good idea. But they have not been able to make contributions in recent times, particularly with the rising costs of living, not to mention the impost of the carbon tax. This amendment will mean that some of these accounts will be at risk of being claimed by the government. So if mum and dad were trying to save money to put into a deposit account for their kids and have not had the opportunity over the last couple of years, because they were finding it tough or dad had lost his job, that will just get sucked into the vacuum. This amendment will mean that some of these accounts will be at risk of being claimed by the government, particularly where holders of these accounts have not been able to afford to contribute to the deposits over the past three years and have not been in contact with their bank which holds their deposit.
It is obvious from the plain and simple facts that this bill and the government are out of touch with the people of Australia, not to mention the constituents of Wright. I can only imagine the response I will get next time I walk through Beaudesert, Boonah, Grantham, Mount Tamborine or Mudgerabah in my electorate to speak to some of those constituents who are potentially going to lose their funds. Why this government has not sent this bill to the parliamentary inquiry lends itself to the question: what are the members of this Labor government trying to achieve? And do they fully understand the potential implications on Australians? I can only hope that their constituents are informed enough to make the right decisions at the next election.
Schedule 3 of this bill amends the Life Insurance Act 1995 to provide for new arrangements for unclaimed life
insurance monies. Life insurance companies, within the meaning of Life Insurance Act, are currently required to report and pay any unclaimed monies to the Commonwealth. This new arrangement will reduce for the period of life insurance monies to be treated as unclaimed monies from seven years to three-year period. It is not clear how these provisions will apply to contemporary life insurance products or policies because the government has not had time to develop legislation properly. It would be nothing short of unacceptable if I did not say that it is yet another reason why parliamentary scrutiny of this bill is required. What happens to a policy of a deceased person?
Is it then up to the public trustee office to go and search for unclaimed monies which fall into that three-year bracket? I suggest that there will not be a great amount of motivation, and that as a consequence life insurance policies will be not be enacted if a family member was not aware that there was one there.
The final part of this bill that I speak to today amends the Superannuation (Unclaimed Money and Lost Members) Act 1999. The amendment changes arrangements for the transfer of lost members' accounts to the Commissioner of Taxation and to provide the payment of interest of unclaimed superannuation money. Quite simply, what this means is that lost superannuation accounts with balances of less than $2,000 that have up until now been inactive for only three years, and accounts for unidentifiable members which have been inactive for 12 months, will now be required to be paid to the Tax Office. The majority of the amendments moved from seven to three years, while this particular one on cash moves from three years to 12 months.
The coalition accepts the justification for the increase of the threshold from $200 for small account balances to $2,000. They are increasing the threshold from $200 to $2,000—that is around the level where the account
erosion becomes less likely. However, this tenfold increase to the threshold makes it much more critical that existing problems in the current regulations are resolved.
In relation to the increase from $200 to $2,000, you will hear members from the government side saying, 'They would have lost their money anyway. If we did not take it, it would have been eroded by bank charges and fees.' Once it gets to the $2,000 mark, the interest-bearing component on $2,000 well and truly offsets. So that will not be an argument or a debate that could be used against this particular measure. Many of these problems did not appear to have been considered while producing the bill, but will now be in real need of redress.
I concur with my colleagues in recommending that the amendments to schedule 4 of the bill be delayed until 31 December 2013 in order to address the critical issue raised since the announcement of the measures, and to align the timing of their implementation with that of the auto consolidation process under the SuperStream reforms due on 1 January 2014.
It is with disappointment that I speak on this bill. I say this because I know the silent majority of the people of
Wright, who I represent, have not been treated fairly in the due process that they so desperately deserve. But I
am convinced that by speaking on this bill, the people of Wright can be assured that I am trying to do everything I can to ensure their personal savings. It is clear that the rushed time lines and implementation of this bill have been driven by nothing more than a desperate government trying to pretend that it can deliver a surplus—the surplus that is in fact generated through increased revenues from this particular bill. If this bill does not get up, the surplus is at risk.
Furthermore, I am convinced that I have never seen a bill that so blatantly impedes the life of the Australian people and my people of Wright, and that is such a direct contradiction to the integrity and trust of this parliament that we are all trusted to hold on to. I cannot emphasise enough the need to exercise caution in making changes to this act, and I concur with my coalition colleagues in not supporting, or not facilitating a government that is acting on self-interest as opposed to properly considering public policy.