SUBJECT: Redbank seniors community forum, productivity, unclaimed monies
STEVE AUSTIN:
Let's go Inside Canberra this morning. We're not inside Canberra, we're inside, I think Sydney Steve Ciobo. Where are you Steve Ciobo? Good morning to you.
STEVE CIOBO:
Yes. Good morning to you Steven. Yes, I'm in Sydney today.
AUSTIN:
Good to have you with us. Thanks for coming in.
CIOBO:
Pleasure.
AUSTIN:
To the ABC studios I think. Bernie Ripoll is inside Brisbane. Bernie, welcome back to you.
BERNIE RIPOLL:
Pleasure.
AUSTIN:
Bernie, I always start with questions that I have from listeners and more, but let's start with you Bernie, you've been working a forum with retirees living in a retirement village at Redbank. Why? What's the issue? What's happened there?
RIPOLL:
Well, I do these on a regular basis. I just go out and obviously talk to my constituents, but one of the best ways to do that is en masse and, sort of, town hall style. This is the Palm Lakes Resort at Redbank. Great bunch of people. It's a lifestyle/retirement-type village; over fifties. Most are a little bit older than fifty. But, just to keep them informed. They've got a lot of questions for me and we, sort of, planned on around a hour, hour and a half and it went for a bit over two hours and I had a ball. It's just great to be able to interact. Often people hear things either through the media, or radio or just on the Internet, and they want to have a discussion about it. They want to know what the facts are, they want to know what it means for them and the best place to do it is in a town hall-type meeting.
AUSTIN:
What sort of questions were they asking, what is the main question, if there was one?
RIPOLL:
Well, not one main question, but obviously a whole range of questions for people in that age group obviously retirement, their retirement savings, pensions and allowances.
AUSTIN:
Deeming rate and self-funded retirees?
RIPOLL:
Yeah, absolutely. Deeming rate, you know whether they are self-funded, Commonwealth superannuants. There's a whole range of questions around that, so it was just good to be able to update them on where things are at. I think about a week and a bit ago, the deeming rate was lowered which means for a lot of people a subsequent increase in their pension that's available and just working through a number of issues. They were actually interested…
AUSTIN:
That would be for the first time in five year or something like that wouldn't it Bernie?
RIPOLL:
That it came down?
AUSTIN:
Yes.
RIPOLL:
Yes, and I think that's reflective of the market. Deeming rates go up and down. It's not necessarily relative to whether or not your investments, for example, go up or down but it's, sort of, a low water mark denominator of what the Government deems to be what investments are earning.
AUSTIN:
Were most of them finding that they're not able to live on their income if they are self‑funded retirees. What feedback were you getting?
RIPOLL:
No, no. The feedback I got was that these are smart people, let's be fair. They're smart people. They've either saved a little for their retirement or they're completely on the pension and if they manage their income well, the feedback I got from quite a few was, look, if we're alright if we manage this well, we live comfortably, not luxury of course. But we can afford a holiday once in a while. We can spend a bit of time with the grandkids and kids. We can still have a lifestyle and I think that was a key point is that we all need to be focussed on this more and more; that in retirement we need to be able to save up in order to have a reasonable lifestyle. I'm not talking about luxury, but something reasonable.
AUSTIN:
Bernie Ripoll is the Federal Labor Member for Oxley. Steve Ciobo is the Federal Liberal Member for Moncrieff. Steve, you're the Chair of the Productivity Working Group in the Liberal Party. I wonder if the Australian Financial Review is working in concert with you at the moment. They seem to be on a productivity campaign as well. Are you and them working together?
CIOBO:
Not with Fairfax, no. But, the reality is Steve, that Australia's got a serious productivity problem and what Tony outlined at the end of last year was that he was establishing, and the Coalition, a Productivity Priorities Working Group and I've got the good fortune of Chairing that working group. In essence it comes down to this Steve, Australia has gone from being in a net asset position and having no public debt and now after five years of Labor, debt is at $145 billion. We've got another $120 billion of unfunded policy announcements, so we're talking about $260 billion of debt at a Commonwealth level only. The only way we're going to be able to realistically start to pay this debt back and to not cruel our lifestyle and our future and our amenity, is by making sure we increase Australia's productivity and that's not about making Australians work harder for less money or anything like that. It's actually just about working smarter and coming up with more efficient ways of going about the activities we do; less red tape, better infrastructure, those types of things. It's really front and centre of what the Coalition's doing and as Chair of that committee, I've been talking to people all across the country, small business people, big business, groups of workers, groups of academics, think tanks, you name it. Getting their input about what they'd like to see happen to get Australia back on track.
AUSTIN:
And, many workers want to know, is that code for I'm going to be squeezed for lower wages. That is in the back of mind of any worker I speak with when this issue comes up on the air.
CIOBO:
I know that that is a concern. That's precisely why I said this is not about making Australians work harder for less. That's the great con about productivity. If you think … I'm not sure if you heard that?
AUSTIN:
You're getting something across in your headphones are you?
CIOBO:
I am, sorry Steve.
AUSTIN:
Just keep going and if it comes back we'll try and deal with it.
CIOBO:
My concern about productivity is that really, if you think about the way in which the world has changed, we're in a much stronger position now where people can produce more in a more efficient way. You know, through the use of better ICT, that's better communications and those types of things and, ultimately, if you're sitting in traffic for example on the commute to work, that's a loss of productivity. What we actually want is for people to get to work more efficiently. If you're sitting there waiting for something to download, for example, because it takes a long time and we can do that more efficiently, then that's a productivity boost as well.
AUSTIN:
Ok, let me go and go to Bernie Ripoll at this time because I think he agrees with you strangely, Bernie Ripoll.
RIPOLL:
Not strangely at all. I completely agree with Steve, on infrastructure hallelujah. After twelve years of the Liberal Government, the first thing we did when we go into office, the first day, was we upgraded the Ipswich motorway to the fantastic infrastructure we've now got. We did a massive, largest ever in Australian history, infrastructure program because we agree, productivity is related to infrastructure and on ICT and waiting for things to download; where's the next big thing for Australia, well it is the Internet, it is connectivity and it's called NBN because this is the big pipe, the seriously big pipe, that delivers not just to the nodes, but in to everyone's homes and businesses directly.
AUSTIN:
Steve Ciobo, do you agree the NBN is one of the things in the kit for improving efficiency for Australians?
CIOBO:
Look, I think it's a shame that Bernie thinks that's an opportunity to try to plug what Labor's up to (inaudible)
AUSTIN:
It's a pretty big piece of infrastructure.
CIOBO:
Look, I'm not doubting that, not for one second am I doubting it's a big piece of infrastructure, it's costing taxpayers $37 billion and the other thing too, Steve, is that $37 billion sits entirely separate to the $260 billion of debt that Labor's already got us in to. I mean, the point is Steve, it's got to be able to…
AUSTIN:
Yes, but it's productive debt. Isn't that the point, that it's productive debt?
CIOBO:
It's about what is the best bang for the buck for the Australian people. I could sit here, Steve, and I could design some ‘you beaut' infrastructure project involving delivery of super-fast broadband that would probably cost a trillion dollars, but the point is that it's not about just spending obscene amounts of money. I mean, taxpayers expect Governments to make good decisions about the way in which they utilise their money and this Government is not doing that. We have so much debt and deficit Steve and I know I go on about this week after week, but I cannot begin to explain how concerned I am about the level of debt that this Government has got us in to. Steve, the fundamental point is this; on all of these infrastructure projects, talk about the Gonski education reforms, about announcements being made left, right and centre by this Labor Government, desperate to try to buy their way back in to office. The fact is, Steve that it is the future generations, it's Aussie kids today that must pay back all this debt. This money…
RIPOLL:
That's rubbish Steve, and you know it.
CIOBO:
It's not rubbish Bernie (inaudible). The fact is…
AUSTIN:
Just wait Bernie, and I'll let you have a response.
CIOBO:
The notion that a Government that racks up $260 billion of debt and doesn't have to pay it back, it's currently costing around $10 billion a year to service the debt that Labor's put in place. That $10 billion, Steve, that's money that's being paid to service bonds and the interest on that debt that Labor's racked up that now, no longer can that $10 billion per annum be spent on schools or be spent on hospitals or be spent on roads so I personally take great offence when Labor Party members start lecturing the community about how this massive spending binge can go on unfettered with no concern about ever in reality having to pay all of this money back.
AUSTIN:
Steve Ciobo, I have given you a very good run, so let me give Bernie Ripoll a chance to respond. Bernie Ripoll.
RIPOLL:
Look, quite simply, Australia's debt is very low, it's very manageable, it's very affordable. It's akin to somebody borrowing money to buy a house. It's like a mortgage, you pay it down. This country can well afford it and it is and the money is being spent on really good things. The productivity drive is the infrastructure, things like the NBN, things that will actually create jobs and keep pace with what's happening around us in the world. The rest of the world has some serious debt, we don't. We have debt which is very, very low, single digit figures to GDP and something that's more than manageable and it's being spent in the right areas. The money is there to ensure that families still have a job, that interest rates are low, that people can afford to pay their mortgage. That's what this is about. We still have a resilient economy; an economy that's doing better than just about any other economy in the world for a good reason; because the Government took on itself the very difficult task of making sure that unlike every other country in the world that got smashed by the GFC, we managed to walk through it and here we are people still employed, one of the lowest unemployment rates in the world, an economy that's resilient and strong…
AUSTIN:
But a big underemployment rate, for those people who don't have enough work Bernie Ripoll.
RIPOLL:
There is an issue with underemployment, yes I agree and we've talked about that before and I think that's part of the reason, I know that's part of the reason, why we've got a whole heap of programs about trying to lift that. We don't want that to stay where it is. That's an ongoing problem and we need to fix that as well.
AUSTIN:
Twenty past nine. This is 612 ABC Brisbane. My guests are two Federal Canberra MPs, both from Queensland, Steve Ciobo is the Federal Liberal Member for Moncrieff, Bernie Ripoll is the Federal Labor Member for Oxley. Steve Austin's my name. Bernie Ripoll, if things are that good, why is the Federal Government moving to take money from inactive bank accounts, sort of purloin it for consolidated revenue? Why are you doing that?
RIPOLL:
Sure. Let me just put some context around this ‘cause otherwise it just doesn't make sense, ‘cause people will think this is somehow new or different or that we invented this. The reality is that this particular legislation and policy has been around for many decades. What we've done is, what happens is if there's an unclaimed amount of money, inactive in an account for a period of time, which was seven years, then the institution, the bank, was obliged to then pass that money through back to either the Australian Tax Office or ASIC to be held in trust for whoever claims that money in the future. The big difference we've made is we've made that time shorter, so it's now three years and what we've done is we've stopped the fees and charges being taken out of your bank account, your money and we give you interest so that when you do claim it back you still have some money. The problem currently is that people actually lose their money so it's in the interests of certain institutions to hang on to it for as long as they can. There legitimately are a number of accounts that go inactive and what we've found is that after three years, generally they all, if they're inactive for three years or more, they're generally inactive for extended periods, well beyond seven years.
AUSTIN:
So how can people check to see if they or a family member has lost or forgotten a bank account? It's theirs, it's in their name but they don't have the account details, they don't even remember it. How can they check it?
RIPOLL:
Well, under the old rules really you couldn't. If you'd forgotten you had a bank account, you'd probably forgotten which bank it was in as well and the bank wasn't ever really going to tell you. What happens now is that once the money is transferred, it goes on to a national database and you can just log on to moneysmart.gov.au and check to see whether you name's there, a family members' name is there or a friends name and if you think that that's you or a friend or a family member, contact them and they can make application for their money which has been preserved and it's preserved forever. The money is never gone, it's always there. The beauty about what's happening right at the moment is because there has been a change, the time period has been shortened and now we pay interest for the first time, it's really great for consumers, the banks are now informing people that if their account's been inactive for three years that they really need to activate their account for, let's say, a dollar just so that they're not then compelled to pass that money on. What it does is alert people to the fact that they may have an issue, otherwise accounts just go dormant and who gets the benefit? The net benefit of that money sitting in those accounts? Not the account holder, but the bank. We want to make sure consumers are the winners here.
AUSTIN:
The Federal Government apparently expects to garner about over $100 million, is that correct?
RIPOLL:
Well, we're not garnering it.
AUSTIN:
Well, sort of, you know, capture. What's the appropriate adjective? Capture?
RIPOLL:
Well, it's exactly what's been happening in the past. The money has always been going in to, it's just the time difference, it's gone from seven years to three years so it makes no difference in the overall scheme because this has been going on for more than 20 years.
AUSTIN:
This happens on July 1 I think, doesn't it?
RIPOLL:
Well, just the change does, it actually happens on 31 May and the big change on July 1. But the reality is, all we've done is shorten the time, for instance, it's been happening for more than two decades so in terms of the bottom line of the Government, it makes no difference. What we're doing now is actually paying interest for the first time, alerting people to the fact and I think the real evidence in this that's it's working for consumers is since we've gone on this campaign of telling people go and search for your lost money, your unclaimed accounts, there's been a sharp increase of claims and people being reconnected with their funds. A net win for consumers.
AUSTIN:
Steve Ciobo, is the Opposition supportive of shortening the time period from seven to three years.
CIOBO:
Steve, Bernie is slicker than any used car salesman I've ever come across.
RIPOLL:
Come on Steve. Call me anything, but not that.
CIOBO:
For goodness sake, Bernie. You turn around and say this makes no difference to Government. This is benefiting the Government's bottom line by $100 million Steve. Now, they're not doing this because they think it's in the goodness of their hearts and it's going to be in consumers' best interests and all the waffle that, frankly, we've just heard from Bernie. They're doing it for one reason; because it is currently forecast that this year's budget deficit will be $15 billion in the red again. That's after $44 billion last year and it's after a record 50-something billion the year before. The reason why their doing this Steve, is because they're desperate to get their hands on money and here's an easy way that they can get an extra $100 million flowing in to the coffers of the Federal Government. The Bankers Association (inaudible)
AUSTIN:
Bernie's point is that it would happen after seven years anyway.
CIOBO:
No, but it's nowhere near that amount of money, obviously. The longer the time period involved, the smaller that there is unclaimed bank accounts and it's not just a case of it being accounts that have been parked and forgotten about, this has all sorts of implications in terms of business bank accounts where you've got different structures that are in place between different commercial entities and so you don't have funds that flow across, someone who just has a savings account where they put some money to one side and they're just letting it sit there accruing interest in a savings accounts. This is the kind of thing that's now going to be swallowed up by the Federal Labor Government because they're so desperate to get cash.
AUSTIN:
Bernie, you're disagreeing completely all the way along the line.
RIPOLL:
Completely, look, that is not accurate.
CIOBO:
Bernie, are you raising $100 million from this. Does this give the Federal Government an extra $100 million?
RIPOLL:
No, Steve, before you just scaremonger people…
CIOBO:
Is it raising $100 million?
RIPOLL:
All of those things you mentioned about accounts that will be claimed on et cetera, is not accurate. That is not the case.
(inaudible)
CIOBO:
Is it raising $100 million?
RIPOLL:
It's not raising $100 million, the money being (inaudible)
AUSTIN:
…capturing? What's the adjective, capturing, grabbing, holding? (inaudible)
RIPOLL:
It is capturing the money exactly as it did under the Howard Government (inaudible)
CIOBO:
It's $100 million more money Bernie.
RIPOLL:
And more money has gone back out. This is the thing you won't acknowledge. You only acknowledge it on one side of the ledger. Since we've been marketing and telling people about their lost accounts, more people, record numbers, have been reconnected with their accounts. I'd like to see 100 per cent of people reconnected with their accounts and there'll be no money left over. Let's get… the actual size of unclaimed monies in this country is phenomenal.
AUSTIN:
How big is it?
RIPOLL:
Almost $1 billion.
AUSTIN:
$1 billion of unclaimed money (inaudible) …in superannuation, in unclaimed shares, banks.
RIPOLL:
In a whole range of areas, unclaimed. Some are genuinely lost where there is no name attached, which is fairly rare. Others are because the person has moved or perhaps passed on. There might be a whole range of issues, in reality, what this does is activate. People go on a national database, it's searchable for the first time for these people over a quicker period. They get interest, which they weren't getting in the past.
AUSTIN:
But the Government will be counting it in your bottom line.
RIPOLL:
Just like every other Government has in the past, yes. Just like every other Government has. It makes no difference.
CIOBO:
Steve, can I make a point?
AUSTIN:
Steve Ciobo.
CIOBO:
I want to make a point here and I do want to express goodwill towards Bernie, but I'm sorry Bernie, you're lying through your teeth. This is a net benefit to Government.
RIPOLL:
Steve, I wouldn't go that far. We might have different views about each other, but calling me that, I think on this because I could have strong views that you are misrepresenting a range of facts.
CIOBO:
Bernie, is it a net benefit? This is a very important point. You're claiming it as a gross benefit of $100 million.
RIPOLL:
It is a net benefit, exactly the same as it was (inaudible)
AUSTIN:
One at a time please chaps, sorry. I'll let Steve Ciobo go and I'll come back to you Bernie.
(inaudible)
RIPOLL:
I'm not going to let him call me something like that on radio which I think is grossly unfair, this is not what we're doing here and I take great umbrage at the fact that he's actually misrepresenting the facts. He hasn't even (inaudible)
CIOBO:
Bernie, I'll tell you why.
AUSTIN:
We'll just let Bernie say his point Steve Ciobo and I'll come back to you.
RIPOLL:
I've got the facts in front of me here and the accounts that he's mentioned and all of this is just scaremongering it's not the case. We've made sure. It has not changed. What's changed is the time period and the interest and the fact that Government counted this on its ledger is exactly the same as it was when his people were in Government.
CIOBO:
That's the wrong point. Now, I've given you your chance…
RIPOLL:
Sorry, it's not untrue, it's just not the wrong point. Thank you. It's not untrue, it's just not the wrong point.
CIOBO:
(inaudible) No Bernie. I've given you your chance, now I'll tell you why I've said that. Because this is not gross, you're making out that it's a gross increase of $100 million and then that money is flowing back out. They were your words. This is not. This is a net benefit. Net benefit to Government of $100 million. In other words, Government will collect more than $100 million and, yes, I agree with you, they will pay some of that money back out to consumers.
RIPOLL:
More than in the past.
CIOBO:
But the net benefit to Government is $100 million. That's the only reason you're doing it and don't make out that this is about what is good for consumers because you're doing it because your Government needs the money. The net benefit is $100 million and that's why I said what I said.
AUSTIN:
Gentlemen, we'll have to go to news headlines in just a moment and wrap it up. Bernie Ripoll, so if people want to check the money that they have
RIPOLL:
Moneysmart.gov.au
AUSTIN:
This happens on the 31st of May.
RIPOLL:
Yeah, there's a period there where institutions have to notify people, well, they don't have to sorry, it's up to them, but otherwise they have to transfer the funds, yes.
AUSTIN:
Steve Ciobo thank you for your time this morning from Sydney.
CIOBO:
Thanks.
AUSTIN:
Bernie Ripoll, thank you for your time this morning in the studio, thank you very much Bernie Ripoll.
RIPOLL:
Thanks