Media Release
1st
Feb 2010
Retirement Savings Being Turned Into Bank Profits
Swan Should Look Closer to Home
The Federal Treasurer Wayne Swan should look closer to home over the loss of retirees savings
capacity and launch a Parliamentary Enquiry into the excessive interest rate and fee charges in the
unlisted property trust sector.
Owen Lennie Spokesman for the Light of Day said Bank lending policies in the $60 billion
unlisted property trust area, which have left tens of thousands of self funded retirees with
frozen funds or no returns because of excessive interest rate charges and excessive fees,
should be part of the Rudd Government’s review of increasing retirees saving capacity.
The bottom line is that excessive fees and charges are turning retiree’s savings into bank
profits and ultimately will add to the cost of ageing Australia.
“At the heart of the current crisis is the action of some banks to take advantage of the
downturn where the valuation of a property has reduced to force the unlisted property trust into
a higher rate of interest or to roll over their loan for short periods, incurring excessive fees.
There are 240,000 investors in the unlisted property trust area
Mr Lennie said in one case we are aware of, investors in a fund faced an interest rate cost
increase of 50% overnight which caused the fund to cancel distributions and suspend major
building maintenance or improvements which increase rents and make the investment perform.
“With one face the banks have been solemnly assuring customers and the Government that they are
forced to raise interest rates because of the cost of money and with the other face they immediately
announce and celebrate record cash profits.”
“Apart from wanting people to work harder and longer in the future, the Rudd Government should be
looking at ensuring self funded retirees, who have already worked hard to stay off the CentreLink
pension and support themselves, are protected against excessive bank interest rates and fee charges.”
“The release of the inter generational report today by the Federal Treasurer Wayne Swan on the cost of
an ageing population should also include some comments on a government review of excessive Bank
Fees and Charges in the unlisted property trust area”. Mr Lennie said
Media Enquiries: Owen Lennie, Spokesperson, Light of Day Mobile: 0411 507 505
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