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Tuesday, 21 June 2011
Page: 6740

Ms MARINO (ForrestOpposition Whip) (20:19): The National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011 addresses some key issues in the use of credit in the form of home loans and credit cards. To be specific, it aims to ensure that credit card usage is not approved above the credit limit, except in certain circumstances, and to specify an allocation hierarchy for payments made under credit card contracts. It also requires credit providers to make the details of products available in a simple and convenient manner in a so-called key facts sheet.

These and other changes are proposed because the government is concerned, and rightly so, that credit can become a burden on citizens. But I find it really quite incongruous that it is this government that is expressing concern about the ability of Australians to manage their debts when it is this Labor government that has itself wallowed in debt—in fact, the highest debt in Australia's history. This Labor government is apparently concerned about people going too far into debt but will force a total public debt of $107 billion on the Australian people. It is this Labor government that suggests limiting additional borrowings on the credit cards of Australian citizens that is itself borrowing $135 million a day. It is this Labor government that wants to ensure that repayments Australian citizens make go to paying off first the debt with the highest interest rate, while at the same time leaving the Australian public footing an interest bill of $18 million a day to pay for Labor's debt splurge. I understand the intent of this bill, but the government should be applying these principles to its own management of the Australian economy. It is a case of taking the log from your own eye before pointing out the splinter in another's.

This bill seeks to prevent credit card debt being extended beyond initial limits except in 'certain circumstances'. That might be a good idea for the Australian government as well. What would 'certain circumstances' include for a Commonwealth government? This government, as a part of the budget process, is increasing the credit limit it gives itself.

The DEPUTY SPEAKER ( Ms AE Burke ): The member for Forrest is labouring the analogy a bit much, and she can come back to the bill before us.

Ms MARINO: Certainly, Madam Deputy Speaker. We do know that, in extending the credit limit, the government wants to raise that to $250 billion and in the process to define and get rid of special circumstances. That has happened at the same time that it has dumped the need for the special circumstances for itself but not for the voters. The government is refusing to apply to itself the same principles of accountability that it is willing to enforce on people through this bill.

Looking at the bill in more detail, the proposal to have credit institutions develop a key facts sheet on credit products has some merit. Many of them currently provide this information in an open and honest manner and standardising this across institutions would make comparisons easier. But I wonder what such a sheet would look like for the government.

The DEPUTY SPEAKER: The member for Forrest has been warned. She will go to the bill before her.

Ms MARINO: And I have, Madam Deputy Speaker. The bill prohibits credit providers from making unsolicited invitations that encourage consumers to increase their credit limits, except where the consumer has consented to receive such offers. Many of us have received in the mail those 'you have been approved to go further into debt' letters, especially during the credit gluts of the 1980s and the early 2000s. Your mail on that day might have offered to double your credit card limit and also have been full of unaddressed brochures on the things to spend that extra credit on.

While reducing the number of these offers going out, we should be looking at alternative ways to prevent people going too far into debt. This probably needs to start when we are younger. Many young Australians leave school with the legal capacity to go into debt but not the training to understand and manage that debt. Indeed, many college and university graduates are highly skilled in the technical fields they studied but are horribly ignorant of the financial facts that might keep their businesses open and themselves out of bankruptcy. It is this lack of economic education which is, to my mind, one of the prime reasons for the economic hardship faced by so many young Australians today.

I am sure that the government would agree that having some debt is not a problem if you can manage it and repay it comfortably. The secret is to control the debt before it controls you. I am afraid that this has not applied to the government itself. The government at last has responded, through this bill, to industry concerns and provided amendments at this late stage. These eleventh hour amendments have certainly responded to industry concerns. However, the need for a full review of Australia's financial system, as is part our nine-point banking plan announced last year, certainly would not go astray.