Kelly O'Dwyer (Higgins, Liberal Party, Parliamentary Secretary to the Treasurer) Share 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had to not only prove his power of attorney but also try to get evidence of the fact that the power of attorney had not been revoked.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.

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