26.11.12 Treasury Legislation Amendment (Unclaimed Money and Other Measures

Mr HAWKE (Mitchell) (18:22): I rise today to join with my colleague the member for Moncrieff in opposing this appalling piece of government legislation, the Treasury Legislation Amendment (Unclaimed Money and Other Measures) Bill 2012. I think the reason we do not see a conga line of Labor MPs lauding the great vision of the Gillard government in this regard is that we all know what is really going on in relation to this legislation. This is a shameful grab for money because the budget is broken. The usual looters who like to come in here and laud the vision of the Gillard government in doing this or doing that are not here today. They are not here to tell us about what a great and glorious policy measure this is, because this is not a great and glorious policy measure. In fact, they know it is a very ugly measure indeed, symptomatic of our often quoted saying from the Liberal side of politics that Labor cannot manage money. Indeed, even the Minister for Financial Services and Superannuation, who often in the House of Representatives lauds the government as the best friend that superannuation has ever had, is not here to tell us in relation to this unclaimed money measure that this government is the best friend that superannuation ever had. You really do not want friends like that—friends who are willing to take away your super accounts and your earnings, knowing that you may be financially impeded by not receiving a higher rate of interest, giving you a cut-price rate, a Bill Shorten rate.

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

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

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

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

The DEPUTY SPEAKER ( Mr Windsor ): It being 6.30, in accordance with standing order 192 the debate is interrupted.

Mr HAWKE (Mitchell) (19:14): Since starting my contribution in the Federation Chamber, I am glad to say that I have updated myself on what the government's current position is. In the time it took me to get from the Federation Chamber to the House of Representatives, there has been substantive change to this woeful legislation. I am sorry to say that that change is not necessarily for the better. An announcement from the government has come out saying:

Following consultations, the Government will amend the Bill to provide authorised deposit-taking institutions, First Home Savers Account providers, life insurers and superannuation funds more time for implementation. They will now have until 31 May 2013 to report on and transfer lost accounts and other lost moneys to Australian Securities and Investments Commission or the ATO as appropriate.

That change, which has been brought in during the time it has taken for me to get here from the Federation Chamber, is a change in the deadline—for the entire finance and banking industry—of one month. It is one more month than in the original legislation.

One of two things is going on here. Either the government is so cheap that it thinks that one month is going to be enough to make a substantive difference to the problem we have been highlighting in this legislation, or this is a typo and it should say 'one year'. The opposition's amendments called for a minimum of an extra year to give the banks and other organisations in the sector a reasonable chance to get a handle on it. One month simply does not cut it. Assuming this is not a typo or an error—and that is a big assumption with this government—what is going on? Why are they rushing through changes just to move this deadline by one month? In fact, this is even more revealing of the government's real agenda—that is, that they are still trying to grab, simply for inactivity, the money of ordinary Australians.

The press release goes on to say:

To improve certainty for industry, the Government will also clarify a number of technical issues through regulation—

I will leave aside, for a moment, the misnomer 'improve certainty for industry—

To avoid capturing accounts unintentionally, the Government will introduce regulations so that children's accounts will still need to be inactive for seven years before being treated as lost.

That is incredibly generous. They have finally realised they were taking money off the kids—so now they are going to give the money back to the kids. I am not sure that amounts to a whole lot of money, but they have finally realised they were taking money off children. No wonder the members for Lyne, New England and Melbourne are getting very nervous about the provisions of this bill. They are right to be nervous. They are right to listen to the opposition's concerns. It is not only these children's accounts which were at risk of being raided by this money hungry government but also there are other types of accounts which should not be caught by this legislation. There are other accounts which may be inactive for valid reasons.

The government's press release also says:

In addition, regulations will specify that First Home Saver Accounts will be excluded until the requirement to make a deposit in four years has been met.

Hallelujah! Without knowing it, I was being prophetic when I spoke in the Federation Chamber about the problems with first home saver accounts. But this is supposed to improve certainty in the industry. This is supposed to provide confidence to the economy and the sector that the government knows what it is doing.

They are rushing to get their hands on any available cash out there in the financial sector, even legitimate accounts. They are rushing around making last minute changes on the pretext of improving certainty. It does not stack up. The reason it does not stack up is that we have not seen an update from the government, in the explanatory memorandum or anywhere else, about how this will affect the bottom line. That is what we really need to know. How will this change the financial impact of the bill over the forward estimates? That is the question of the day, the question we ought to be discussing here right now. Again, there is no government member in this chamber to stand up and say: 'Here is the glorious vision of the Gillard government. We are going after unclaimed super for consolidated revenue. But we have protected the kids. We will not take those Commonwealth Bank piggy banks away from them. We are going to give them back.' How generous of the government.

It is revealing that there is no update to the forward estimates. What is the government's real intention with these changes? These changes are designed to trick the members for Lyne, New England and Melbourne into thinking that this government has done something. They are trying to look as if they have responded to the issues we have been highlighting. But actually there is no change. Moving the deadline one month is purely a symbolic change. Giving the children their inactive accounts back—that is not all that generous. That is not really a big change. Does anyone think that there are hundreds of millions of dollars in children's accounts?

We come back to the point that we all know what is going on with this bill. We all know what is going on with the government's changes. They are trying to look as if they are doing something for the Independents and crossbenches in order to secure their support. I say to the members for Lyne, New England and Melbourne: 'Please do not be fooled by these superficial changes. This bill is still bad legislation.' It is bad because it makes unreasonable, rash and unnecessary changes to so many Commonwealth acts in order to claim moneys of ordinary citizens that ought not to be claimed by government in this way. The rush has produced so many detail problems that it is impossible for me to outline them all in the time remaining.

The press release put out late this afternoon by the Parliamentary Secretary to the Treasurer is silent on critical issues, including the identification of, and the deeming deadline for, unclaimed accounts and money. That deadline is currently 31 December 2012. It appears this has not been changed. This is very problematic for banks and superannuation account providers. That is the point we have been making from the beginning. The government is simply trying to look as if it has done something—in order to secure the political support of the crossbenches—without actually doing anything substantive to improve the quality of this bill to avoid serious consequences for the sector and to govern this country effectively.