How does Australia treat inactive bank accounts? > Check the facts
Who: “This should be called our Cyprus bill, because it is basically the theft of money from individuals,” Senator Barnaby Joyce.
The claim: Senator Joyce is suggesting that the Banking Amendment (Unclaimed Money) Bill 2013 would seize money from bank accounts and is comparing the proposed legislation to Cyprus. Senator Joyce continued:
People who have money in their bank accounts and superannuation funds, who believed that that money was safe in those accounts, who believed that their life insurance money could be claimed, are now to be divested of that money and see it invested in the state because of the Green-Labor-Independent alliance.
The facts: The bill, which (at 4 July) has passed both houses but has not been assented to, actually has the effect of allowing refunds to certain individuals with deposit accounts.
Discussion of evidence: There has been a long standing arrangement whereby unclaimed money in inactive bank accounts is paid to the government by the bank concerned. The time an account was required to be inactive was recently reduced from seven to three years. The bill in question would enable the government to pay refunds in the event that a deposit was reactivated by the depositor.
Cyprus ran up huge debts in shoring up its banking system and subsequently has been obliged to reduce its government deficit to receive international assistance. One of the proposals it had been considering was the compulsory levy on the balance in Cypriot bank accounts.
The Australian Government practice of acquiring inactive accounts from those who cannot be contacted has nothing to do with anything discussed during the Cyprus crisis. The present bill returns money to depositors rather than confiscating it as in Cyprus.