Figures from the Australian Security and Investments Commission (ASIC) show almost $360 million was collected from 80,000 inactive accounts in the year to May under new rules introduced by Labor. The new rules lowered the threshold at which the government is allowed to snatch funds from accounts that remain idle from seven years to three years.
The rule change has delivered the government a massive bonanza with the money collected in the year to May more than the total collected in the past five decades combined. Between 1959 and 2012, the total collected was $330 million.
While the purpose of the laws is actually to reunite people with lost accounts before funds are eroded by fees and other charges, the lower threshold has been criticised as a budget cash-grab which affected accounts that were neither lost or forgotten.
Australian Bankers’ Association chief executive Steven Munchenberg said the legislation was a “rushed” budget-boosting exercise which had transferred money set aside by people for their grandchildren’s future to the government’s coffers.
“We have grandparents who put money aside for their grandkids’ future and farmers who have set aside money for a rainy day, but it was transferred to the government,” Mr Munchenberg told Fairfax Media.
Connie Franze, 68, and her son Vince, 45, told Fairfax Media they were trying to reclaim life savings of more than $12,000 that was taken by the government last June.
Ninety per cent of the accounts seized by the government had balances of less than $5000, although some were worth millions.