Source: theage.com.au

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Tens of thousands of Australians, many of them retirees, are now unable to get immediate access to their capital after AXA Asia Pacific, Perpetual Investment Management and Australian Unity suspended withdrawals from some funds.

Treasurer Wayne Swan responded last night by advising people adversely affected to go to Centrelink to see if they were eligible for income support.

But the Government did not appear to have an immediate answer to the cascading problem, and Mr Swan’s comments were seized on by the Coalition, which accused him of insensitivity and incompetence.

As the row erupted, Mr Swan and Prime Minister Kevin Rudd last night met the chief executives of the nation’s four biggest banks – Commonwealth, NAB, ANZ and Westpac – to discuss the financial crisis.

The meeting in Canberra came after another day of carnage on world markets, with Australia’s ASX-200 index plunging more than 4.4%.

The freezing of funds by AXA, Perpetual and Australian Unity came in response to a flood of people trying to withdraw money – mainly from mortgage funds – and transfer it into banks to take advantage of the Government’s decision to guarantee deposits.

By last night, four of the nation’s five biggest mortgage fund managers had either suspended or put restrictions on withdrawals from funds worth billions of dollars. Industry sources said up to 180,000 individuals were affected, with an average investment of about $40,000 each.

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Technorati Tags: AXA Asia Pacific, Perpetual Investment Management, Australian Unity

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