Wednesday, 18 March 2009
I want to raise with the House my concern for the people of Gippsland, Bass Coast and Phillip Island who have suffered significantly when funds from South Eastern Secured Investments Ltd, a non-bank lender known locally as SESI, were frozen. The Age of 14 March 2009 cites the factors contributing to the freezing of those funds held by depositors. Mums and dads, retirees, farmers, small-business owners, young families, major investors and sometimes children with their first savings account are owed $178 million. The Age said:
And when the Federal Government issued a guarantee on bank deposits in the face of the maelstrom enveloping world economies, SESI (and other non-bank lenders) suffered a surge in withdrawals.
In other words, the people of Bass Coast, Gippsland and Phillip Island have suffered directly as a consequence of the ill-conceived way in which the federal government imposed its bank guarantee. It led to a run on the non-bank lenders. SESI was tied up directly. This is not the only cause. It preyed on existing weaknesses, and that will be up to corporate doctors and regulators to examine.
Let me make it absolutely clear that these people—mums and dads, farmers, retirees and sometimes children with their first investment account—have had their funds frozen because an investment company which had its weaknesses, which should be examined independently, was made much weaker, was made worse, by the actions of this federal government.
I want to raise these issues in this House because it was in this House that the government of Australia took the actions which went straight to Bass Coast, Gippsland and Phillip Island. Existing weaknesses were made far worse by the bank guarantee, which did not cover non-bank lenders, was excessive in the levels to which it went and led to a run on, a lack of confidence in and the freezing of investments. These are real impacts with human consequences. Right throughout the Bass Coast, Phillip Island and Gippsland area we have seen families and others struggle with the freezing of $178 million. I only hope that the money can be recovered. I know there has been some small payback. I express these concerns on behalf of the investors and on behalf of the people of Bass Coast, Gippsland and Phillip Island.