The new poor !

In an attempt to head off a run on the banks the government guaranteed depositor's funds, but this caused a new problem.

There are a small number of investment firms which specialise in serving self funded retirees. The government guarantee covers banks, credit unions and building societies - but not this section of the finance industry - and as a result depositors have withdrawn funds for transfer to the safety of a bank deposit.

As a result, these firms have had to put an embargo on withdrawals and depositors funds are now frozen for at least six months. Those in the process of buying a home or funding a business proposition are unable to access their money - and the dreaded run on the banks has simply been transferred to other sections of the finance industry.

Interest will continue to be paid and any annuities in place will be honoured, but those simply withdrawing funds to pay living expenses now find themselves impoverished.

Turning to Centrelink will be futile. As far as this government department is concerned the fact that they have money - even though it is frozen - bars them from accessing the pension or any other form of relief.

Obviously the government must move quickly to rectify this problem of it's own making. Either the deposit guarantee must be extended to the investment firms involved - or Centrelink must be tasked with disregarding frozen money for the period of the ban on withdrawals.

Otherwise the government has reduced law abiding citizens to poverty !