Banking Laws Amendment (Unclaimed Money) Bill 2015


 

Senator SESELJA(Australian Capital Territory) (13:19): It is great to follow my friend and colleague Senator Williams in speaking to this very important piece of legislation. Let us be crystal clear: this legislation is about a fundamental difference between the coalition and those opposite—the Labor Party and the Greens—based on what was expressed earlier today in the debate. The fundamental difference is that we believe that people's hard-earned money is their money. We believe that you should not be raiding people's bank accounts. You should not be raiding their super accounts. You should be leaving people with as much control of their own money as is possible, keeping the tax burden as low as possible and certainly not looking for new and inventive ways to raid people's savings.

That is what the Labor Party did when they were in office. That is what they plan to do should they come back into office. It is great that they are supporting this repeal. It is unfortunate that we need it, isn't it? We would not need it if the Labor Party had not raided people's cash. They have already signalled that should they come back into office they will be raiding people's superannuation accounts. We take a very different approach. We want to leave people with as much of their own money as possible. That is how we approach all legislation and all policy—we start with the principle that it is taxpayers' money and that, when we take it in taxes, we need to use it wisely. We should keep that tax burden as low as possible and we certainly should not be raiding people's accounts. In that vein, it is great to be supporting the Banking Laws Amendment (Unclaimed Money) Bill 2015.

 

This is another bill from this government that is about the fact that we believe people should be able to enjoy the fruits of their labour and keep their savings. We have already done much in this space. We scrapped the carbon tax. That allows people to have more of their own money in their pockets. We scrapped the mining tax, which allows more jobs in the mining industry so that workers can have more of their own money in their pockets and can choose how to look after their own families. We have delivered the biggest tax cut ever to small business, which means that the hardworking men and women who run small businesses in this country can have more of their own money, can choose how they will spend it and can look to employ more people so that those employees can have money in their pockets, contribute to their families and contribute to our economy.

 

In total, we have reduced the overall tax burden on Australians by nearly $7 billion since coming to office. That is $7 billion staying in the pockets of hardworking Australians. That is something we are very proud of. We are continuing to look at how we can lower the tax burden on ordinary Australians. We note there are all sorts of issues with the tax system and, of course, through various processes we are looking at how we can further reform our taxation system to make it fairer and more reasonable, and particularly for low- and middle-income families who are doing it tough we want to make sure that they can keep as much of their money as possible.

 

Also, I was glad to see in this vein, just last week, the Prime Minister and the Treasurer announcing that we are getting rid of Labor's bank deposit tax. That is just another raid on people's savings. This decision is not only fulfilment of our election promise to protect the savings of Australians but, also, it comes after the recommendation of the financial systems inquiry and extensive consultations with stakeholders and the community. Labor's bank deposit tax would have imposed costs of $1 billion on Australians with bank savings. It would have damaged competition in the banking sector by putting regional and community banks at a disadvantage relative to the big four banks, further disadvantaging hardworking Australians.

 

Dumping Labor's tax also addresses another legacy of Labor's shoddy economic management. Labor announced this tax just before the last election and then put it in the books so their bottom line looked better, but they never legislated the change. This is typical of the hypocrisy of Labor in government. All through the last chaotic days of the Rudd-Gillard-Rudd government they made announcements about spending, put them in the books so that things would look better and never legislated the changes, because they knew they would never have to deliver. We saw it in their promises on health and education, which they knew they never had the money for. Mark my words on this: if they ever do come back into government, they will not be putting back the money that they claimed was there. I can assure you, they will not be putting that money back, because it was never there. As I said, we are about protecting people. We are about putting money back in people's pockets, not raiding their savings.

 

This bill amends the unclaimed moneys provisions which exist to protect Australia's forgotten savings and life insurance policies from being eroded by fees and charges over time. This bill will ensure that, after an account has been inactive for seven years, the funds in that account will be transferred to the government where they will grow at 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. As you mentioned in your contribution, Acting Deputy President Williams, we have had provisions like this since 1911. That is, of course, until the former Labor government came to office and decided that the provision which had been there for a century was no longer good enough. They did not want to transfer inactive accounts after seven years; they wanted to raid bank accounts after three years. They did that in late 2012, but they did not legislate it. This resulted in some half a billion dollars from thousands of accounts—many of which belonged to people who knew they existed and were simply long-term savings—being transferred to the Commonwealth. Many Australians were left in financial distress. By returning to the original benchmark of seven years of inactivity, we expect to see a reduction in the number of accounts transferred by about 50 per cent and it will reduce the red tape burden on the community by around $36 million per year. That is another example of how we are respecting Australians' money and, of course, cutting red tape. We want to do that in all sorts of ways. We are doing it for small business. This is another way that we cut red tape and cut some of the cost burdens in the economy. The change to the time of inactivity will take effect from 31 December this year, which means that no funds should be assessed as unclaimed until at least 2019 and no unclaimed funds should transfer to the government until 2020.

 

As I said, we on this side are about protecting the savings of Australians. We know that one important type of saving comes from parents to set aside accounts for their children. Many parents do it this way with a view to making those savings grow and being made available for their children when, for example, they turn 18 or perhaps at some other important milestone. When parents do this for their children and contribute to their family's future we should be protecting them, not raiding their savings. Funds from children's accounts are exempt from this bill. They will never be transferred to the government. Similarly, accounts in a foreign currency are also exempt from this provision. This is because these accounts are often used in relation to complex business transactions. Not only does transferring these accounts to the government potentially disrupt these legitimate business processes; it also exposes the account holder to costs, as the moneys must be converted back to Australian dollars at the prevailing exchange rate. The government is committed to reducing this sort of unnecessary red tape, so these accounts are also exempt.

 

At present, the Australian Securities and Investment Commission publishes an online Unclaimed monies gazette which details personal information relating to unclaimed accounts. This information includes a person's name, last known address and the amount of money unclaimed. There were serious concerns raised by the Information Commissioner about the potential for identity theft from the publishing of this information. Some unscrupulous businesses, as has been touched on, have also been using this information to prey on these people with unclaimed money by charging high fees—as much as 25 per cent—to reunite people with their own money. With this in mind, the bill will also remove the requirement for this gazette to be published. We will also restrict FOI requests generally to an individual's own details. The ASIC MoneySmart website will continue to operate and people who may have unclaimed money can go there to find out their own situation. So there will still be plenty of opportunity for people to find their unclaimed money, even without this gazette. Cancelling the Unclaimed monies gazette in conjunction with stricter controls on accessing account holders' personal information through FOI requests, will help to protect Australians with unclaimed accounts from exploitation.

 

As I have already mentioned, this bill is about protecting the savings of Australians, so we are also making it easier for people to make sure that their accounts stay active and away from the government. If you signal to your bank in some way that you are aware of your account before it is transferred to the government, the pending transfer will be cancelled and your savings will remain in your account. That notification can be as simple as checking your balance online or making a phone call to your bank. We are setting that bar very low because we understand that this is other people's money and we need to respect it as such. This will be the case even if your account had been declared unclaimed, because we believe your savings are, first and foremost, yours, and the burden should be on the government to transfer money, not on the individual. This is part of our commitment to reducing red tape and keeping your money in your pocket. As I have said, this reform will save $36 million a year.

 

Thousands of Australians will no longer need to locate their missing funds and apply to their bank or life insurance provider for their return—all thanks to this bill. Similarly, banks and life insurers will no longer need to unnecessarily transfer millions of dollars of Australians' savings to the government and then process thousands of requests for this money to be returned—often in the same year that those funds were transferred in the first place.

 

As is normal practice on this side of the chamber, we have looked through this issue carefully and methodically and have consulted widely. This is what good government does. Unlike those opposite, we do not just decide it is more important for our bottom line to look good than it is for Australians to keep their savings. We know the most important thing is to do the right thing by Australians and their own money—that is good government and good economic management—so we have consulted with the community on this issue.

 

On 26 May 2014 the government released a discussion paper, 'Options for improving the unclaimed bank account and life insurance money provisions'. Consultation on this paper closed on 11 July 2014 and the government received 17 submissions. These informed the government's changes to the unclaimed money arrangements. A year later, on 28 May 2015, the government released an exposure draft of the Banking Laws Amendment (Unclaimed Money) Bill 2015 and the Banking Amendment (Unclaimed Money) Regulation 2015 and explanatory materials. Consultation closed on 26 June 2015 and the government received five submissions. These submissions have informed the final bill that has been presented to the parliament. So this has been a long, thorough process, and it is now important the Senate does the right thing and passes this bill so that thousands of Australians can have the security of knowing their savings are protected.

 

This of course builds on our record of lowering taxes and growing the economy. We are lowering taxes, boosting productivity, encouraging investment and creating jobs. All of these small steps, as they may be, contribute to saying to Australians: 'We respect your money. We believe your money should not be raided, be it your money in your bank account or your money in your superannuation account.' We respect those who have done the right thing, who have worked hard, who have saved their pennies and who believe that that money should belong to them. We agree with those Australians who believe that they should have access to their own money. Of course, it is part of our broader plan about people keeping their own money not just in their bank accounts and in their superannuation accounts but through lower taxes.

 

I have already outlined some of the taxes that we have gotten rid of or reduced. We have gotten rid of the bank deposits tax, the carbon tax and the mining tax, and we are lowering taxes for small business and putting in place tax write-offs for small business. This all means more money in the pockets of Australians. There is a fundamental difference between us and those opposite. Even though the Labor Party has indicated their support for this bill today, which is welcome, we would not be here if Labor did not have the view that, when they get into trouble, when they overspend, when they blow out the deficit and create a debt and deficit legacy for Australians, they always look to raid Australians' money in various ways. They jack up taxes and they look to raid superannuation accounts and bank accounts. Here is a clear difference in approach. I commend what I think is an important bill to the Senate.