Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)General outline and financial impact
Overview
The Bill makes amendments to the Banking Act 1959 (Banking Act) and Life Insurance Act 1995 (Life Insurance Act) to give effect to the unclaimed moneys measures announced in the 2015-16 Budget.
The Bill extends the period of inactivity required before funds from authorised-deposited taking institution (ADI) and life insurance provider accounts and life insurance amounts can be transferred to the Commonwealth from three years to seven years. As such, accounts held by ADIs and life insurance providers will have to be inactive for a period of seven years before they are deemed to be unclaimed moneys and transferred to the Commonwealth.
The Bill exempts ADI accounts created for children and those that are held in a foreign currency from the unclaimed moneys provisions. It will also stop ADI accounts being transferred to the Commonwealth where the account holder provides notification that the account should be treated as active after the account is assessed as unclaimed moneys at the end of the calendar year but before it is transferred to the Commonwealth.
The Bill also promotes and protects the privacy of individuals with accounts that have unclaimed moneys by: removing the requirement for the Australian Securities and Investment Commission (ASIC) to publish details of unclaimed moneys in the annual Unclaimed Moneys Gazette; introducing a secrecy provision to prevent access to information on unclaimed moneys via the Freedom of Information Act 1982 (FOI Act); and making consequential amendments to the FOI Act to restrict the access to information on unclaimed moneys under freedom of information requests.
Date of effect: The amendments will take effect from 31 December 2015.
Proposal announced: The measures were announced by the Prime Minister and the Assistant Treasurer on 18 March 2015 and is included as part of the 2015-16 Budget.
Financial impact: The amendments will have negative cash impact of $285.1 million over four years from 2015-16.
Human rights implications: This Bill raises human rights issues. See Statement of Compatibility with Human Rights.
Compliance cost impact: Savings of $36 million per annum.