MADELEINE MORRIS:
This morning we've been bringing you the story of Angela Fitzwater who lost $26,000 in two bank scams this year. She says the response of Bendigo Bank has compounded her distress. The federal government has promised it will force banks to do better by scam victims with a Code of Conduct.
The Assistant Treasurer Stephen Jones joins us now from Parliament House to discuss that and other matters. Good morning to you.
STEPHEN JONES:
Good morning, Madeleine, good to be with you.
MORRIS:
You've been watching the story of Angela Fitzwater this morning. What do you make of what happened to her?
JONES:
Look, every time I hear these stories it breaks my heart, and it strengthens my resolve to want to lift the standard and improve protections right across the economy for Australians who are affected by this, $3 billion in the last year.
It's a crisis and more needs to be done, a Team Australia effort having business, having telecommunications companies, banks, social media platforms and government working together. Tough codes of practice are going to have to be a part of it and this story that you're putting a spotlight on today really does demonstrate why higher standards are needed, better protections are needed, and when things go wrong a clear understanding of where compensation is required.
I will ask Bendigo Bank to have another look at what's gone in this one. I followed the story after your reporting and some of the stuff just doesn't seem to be right. I don't want to shoot from the hip, but I will ask the bank to have another look at it.
MORRIS:
And look, I mean some of it doesn't even really need a Code of Conduct, does it? She called the bank 12 times; records show they called her back once. She sent multiple emails. They didn't back to her. They frequently couldn't reach their own fraud department. You don't even need a Code of Conduct to do better there, do you?
JONES:
No. Yeah, look I think you're right, some of this stuff should be normal business practice. The message from the consumer watch dog, the message from me as the Minister and the whole government is if you think you've been scammed contact your bank immediately. If you're doing that and it's taking you, you know, an hour or so to get a response or even longer, or a call isn't recorded or insufficient follow up then, you know, that emergency, that first aid action that a consumer is taking to protect themselves is not working in the way it should and must to strengthen the system. So that's got to be one of the things that we look at in our Code of Practice, ensuring that we have that responsive.
MORRIS:
In that Code of Practice, when are you going to actually bring that in and what's it going to include? Will it include reimbursement for victims?
JONES:
Consultation on it at the moment. It will require legislation so I'm anticipating next year, early next year for the legislation. But that doesn't mean that we can't on a voluntary basis do a lot of this work with the Code of Practice before Parliament does its job of legislating. That's what I want to see happening. There's already some work going on in some of the sectors that I've mentioned, not enough, and I'm working with my colleagues to ensure that we get this moving quicker and with more detail.
You've asked me what sort of things it would contain. Well, first, what protections are required to be put in place by a bank in respect of their customers. Secondly, where compensation or reimbursements should be paid when those protections are not adhered to. That's a bare minimum I would have thought.
MORRIS:
Okay. Just on Bendigo Bank, they say they follow standard practice when it comes to dealing with scams and they do work hard to protect their customers from scams.
Can I just move you on to insurance because you've announced the terms of reference today for an inquiry into the insurer's response to the 2022 floods. Those terms of reference are really broad. What are you hoping to get out of that?
JONES:
When a natural disaster hits it's a financial, it's a social and it's an emotional crisis for everyone involved. We want to ensure that insurance is working as it should by taking some of the sting out of what is a tragic event.
I've toured the country over the last few months. I was out in western New South Wales a few weeks ago with the local member Andrew Gee. I've been up in Lismore with Janelle Saffin and in southeast Brisbane with Graham Perrett and others. What I want to see happen is the insurance claims process working more effectively. There have been, you know, some peculiar events about these flood and natural disasters all happening in a tight period of time. The inquiry will look at the claims management process. It will look at risk mitigation –
MORRIS:
And what about the cost of insurance? What about the cost of insurance? Because I mean that's gone up, home and contents by 20 per cent in the last year. People are just opting out of it now, and surely this is of great concern because someone has to end up paying for natural disasters.
JONES:
Quite right, and we're kidding ourselves if we think that there is no cost anywhere in the system for all of this. Insurance is about self‑help, insurance is about people individually looking after the risks involved in their business and their home affairs, and when that doesn't happen the cost is borne by the greater community, frankly.
The inquiry will look at affordability issues and it will look at all of the things that go into the affordability of insurance. So does that need to be taken into account.
I want some pragmatic outcomes. I'm sure, like a lot of people will look at this and say, "Great, this is an opportunity to throw some bombs at the insurance industry", and I'm sure a bit of that will happen, but frankly what I'm after is some pragmatic recommendations that government, that industry, that individuals can take up and we can say, "This will deal with affordability or help. This will help deal with risk mitigation and these recommendations will make the claims handling and resolution process work more effectively".
MORRIS:
Okay. Just finally on to aged care, there is a new issues paper being given to the aged care task force today. One of its suggestions is forcing wealthier Australians to keep a portion of their superannuation, ring fence that to pay for their own aged care, you're minister for super, is that a good idea?
JONES:
It's a conversation we've got to have. The purpose of superannuation is to provide for retirement income and of course, you know, those last stages in a person's life has got to be taken into account in this. It strikes me as odd in a system which is about retirement income that a third of the cheques that are being written by superannuation funds by value, so a third of the value of cheques that superannuation funds are writing at the moment, are bequests.
Now there will always be bequests in a superannuation system. There's no doubt about that. But it's not the purpose of superannuation to have a tax preferred estate planning mechanism. It's about providing for people at the end stages and in their retirement. We've got a crisis of funding in aged care and at the same time we've got one‑third of the value of superannuation funds being written out in bequests. That doesn't square. So it is a conversation that we need to have and the discussion paper and the discussion that my colleagues Anika Wells and Jim Chalmers are leading looks at a range of options. But I don't think we can carve superannuation out of that.
MORRIS:
Okay, thank you very much for that, Assistant Treasurer.
JONES:
Good to be with you.
MORRIS:
Stephen Jones there from Canberra.