Federation Chamber on Monday 16th September 2019

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I move:

   That this House:

   (1) recognises those impacted by the collapse of the Sterling First New Life investment scheme and associated companies;

   (2) condemns the Sterling Group for deceptive, scurrilous con-man tactics that were used to prey on vulnerable senior Australians;

   (3) further recognises that the Department of Social Services has introduced a dedicated officer to oversee the Centrelink clients impacted by the collapse and has requested that individuals seek an interview with Centrelink staff, as each personal circumstance is different;

   (4) encourages the people impacted by the collapse to make contact with the department and to make a submission to the Australian Financial Complaints Authority to investigate the financial dealings of the Sterling Group; and

   (5) acknowledges that the company is in administration and that the Australian Securities and Investments Commission has commenced investigations into their activities.

I rise today to acknowledge in this House the victims of the Sterling First New Life scheme and associated companies' collapse. I also rise to condemn the despicable, deceptive and fraudulent behaviour used by the Sterling Group to strip senior, vulnerable and trusting Australians of their life savings, leaving many of them financially wrecked, without a home and with an uncertain future. Also caught up in this con job are young Australians like Joe, a FIFO worker with a young family, who have been left carrying the financial burden of the Sterling First collapse, as they are forced to carry the cost of mortgaged homes tenanted out by Sterling Corporate Services to those who handed over their life savings expecting a roof over their heads.

The Sterling First con job was no ordinary fraudulent financial scheme. This wasn't a get-rich-quick offering appealing to human greed, nor was it like the infamous Nigerian prince scam that circulates the internet. Those sorts of scams always appear to be too good to be true, and we offer little sympathy to those who fall for them, as they come with neon flashing warning lights. But the Sterling Group con was different and far more calculated. The Sterling Group con was egregious because they were wolves dressed in sheep's clothing. It targeted senior Australians, people who had saved over a lifetime, who were trusting and who desired financial certainty and stability. The victims of the con aren't wealthy, nor are they people who would willingly gamble their life savings on the promise of a fortune. They are generally diligent, decent, honest people. The scam only worked because of their virtue.

It is heartbreaking to hear the testimony of the men and women defrauded of their life savings by Sterling First. They feel a sense of shame, as if somehow they've let themselves and their families down. I say to them today, you have not let anyone down. I feel your sense of injustice, your anger, your frustration and your disappointment. You and your families are rightly outraged by Sterling Group and their deceitful, fraudulent behaviour.

Who is Sterling Group? It's a very complex business arrangement which is difficult for people to grasp. The group is made up of 12 interwoven companies originally registered in 2012. This opacity and ambiguity was a mask for the unsound schemes and products they sold to vulnerable senior Australians. Perth broadcaster Gareth Parker referred to the arrangements as 'a spaghetti soup of related companies, trusts and entities with related-party transactions, transfers and loans.' In short, retirees were subleased properties for lengthy periods of time—up to 40 years—by Sterling First Limited in exchange for their life savings. Some paid $170,000. Some paid $215,000. Others paid $325,000. With the collapse of Sterling First Limited people have lost their life savings and many are homeless.

This is a human story, and I want to share in this House some examples. I'm quoting The West Australian here, where people have been comfortable going on the record. There are many others like them who have not yet told their story. Margaret Kennedy, from Yanchep in the electorate of Pearce, is 80 years old. She's struggling with stage 4 breast cancer, which has spread to her lung. She says:

I was told I was paying for 40 years rent when I handed over my money and signed the contract … But that money's gone, along with the people I gave it to, and now I have to pay even more rent for the house I thought I had for 40 years.

I think of Graeme and Sheryl Sofield, from Ravenswood. They've lost everything, and they now rely on their children to pay their rent. They saw a newspaper ad and started investigating. They moved into a Sterling property at Ravenswood, in the heart of Canning. They say:

We feel sick and somewhat embarrassed, to be honest—

after losing $135,000—

and we are relying on our kids to pay our rent at a stage of life when we are supposed to be helping them.

Finally, I mention David and Maria, both in their late 70s, living in Mandurah. They moved from a Mandurah retirement village into a Sterling First home in mid-2016. They spent more than $160,000 on a 20-year plus 20-year lease. They say the fact that Sterling First was put into administration a couple of weeks ago 'shocked us'. David said he was now ruined. David has put his entire life savings into the venture, and he doesn't know where to go from here.

In closing, I note on the Notice Paper that the company is in administration and ASIC has commenced an investigation into its activities. We all look forward to the result of this investigation. I also note that, given the complexity of each case, the Department of Social Services has introduced a dedicated officer at Centrelink to help those affected.