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Tuesday, 21 June 2011
Page: 6753


Ms HALL (ShortlandGovernment Whip) (21:16): The National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011 will amend the National Consumer Credit Protection Act 2009, including the National Credit Code, to give effect to the government's Fairer, Simpler Banking policy. It will also introduce a requirement for lenders to give borrowers a simple one-page key facts sheet for home loans to help them shop around for a better deal.

One thing I am really pleased about as I stand here in the House tonight is that for once the opposition is supporting the government on a piece of legislation. This opposition that opposes everything that comes through this parliament is supporting us on this excellent piece of legislation. I think it is also worth noting that when this legislation went to the Selection Committee the opposition did what it always does: it sent good legislation off to a House committee that ended up recommending that the legislation be passed. I might add that that was unanimously supported by members of the relevant committee. This is an opposition that disrupts for the sake of disrupting. This is an opposition that opposes for the sake of opposing, even when we have very good legislation before the parliament.

But tonight I welcome and embrace the opposition's commitment to seeing this legislation pass through the parliament, legislation that will prevent lenders sending unsolicited offers to individuals to increase their credit card limit unless they elect to receive them. It is legislation that prevents lenders charging fees where a consumer goes over their credit unless the consumer elects to be able to go over that credit limit. It will require lenders to pay off consumers' debt with the highest interest rate until the consumer elects otherwise. In other words, if a consumer takes a cash advance that attracts a higher interest rate, that component of their credit card debt will be paid first. In the committee's foreword the chair of the committee, the member for Dobell, makes the point that the debt treadmill may be good for banks' profit but it has significant social costs. That is why the committee supported the bill.

I know from the many constituents who come to see me, and I am sure members on both sides of this House are aware—(Quorum formed)

I thank the member for Paterson for calling my colleagues to the chamber. I am sure they appreciate coming down just to hear my contribution to this debate. I might thank him for pointing out to the House what an outstanding contribution I am making on this very important piece of legislation. I am sure that my constituency in the Hunter is aware of your support for my contribution to this debate. As I was saying before a quorum was called for, the excellent member for Dobell and chair of the Economics Committee made the point that the debt treadmill may be good for banks' profits but it has a significant social cost, and that is why the committee supported the bill. I went on to say that members on both sides of this House would be visited by constituents who have found themselves in some degree of trouble because they accepted some of those unsolicited offers of increased credit limits and have found that they are having a significant problem with their credit cards. This legislation recognises how these problems can arise, and I am pleased that both sides of this parliament are supporting the legislation.

These reforms will regulate the circumstances in which borrowers can go over their credit limits and will abolish fees when they do so. Many of the banks do not support that, but already NAB has made some moves to recognise it and introduce some changes, without being forced to do so. The UK and the US have adopted a similar approach to this.

Currently the vast majority of credit card lenders will allocate repayments to the debt that attracts the lower interest rates. They will now be required to allocate the repayments to the part of the debt that attracts the highest interest. As a result, credit card users could save $360 or more a year. That is a very important change, along with the banning of unsolicited credit limit extensions.

The legislation makes it mandatory for credit card application forms to include a clear summary of key account features. It introduces a requirement for home loan lenders to give potential borrowers a key facts sheet so that they can compare between home loans. Once again that is a very important change. It is one that will be welcomed by consumers throughout Australia. The opposition have had the good common sense to recognise that this change will benefit all Australians.

I would also like to point out that you always know that legislation is hitting its target when you have banks complaining about the changes. For instance, Steve Munchenberg came out on behalf of the Australian Bankers’ Association and launched an attack on these changes. That attack was not driven by concern for good legislation but rather for concern about maintaining the level of profit that the banks have at the moment. He said that the move to increase regulation, especially for mortgages and credit cards, was misplaced and would lead to higher costs for consumers.(Quorum formed)

I again thank the member for Paterson for being so kind as to praise my speech and encourage my colleagues to come to the chamber. Once again I would like to put on the record just how appreciative the government is that for once the opposition is not opposing legislation that is passing through the parliament. It is a rare occasion for us on this side of the parliament to find that this opposition, which says no, no, no to everything, is actually saying yes to something and supporting a piece of legislation that is going through the parliament. This is excellent legislation which will benefit many Australians. Hopefully the opposition will honour its word and will not at the last minute renege on the undertaking to support it that many members have given.

I commend this legislation to the House and I am pleased that both sides of the House have indicated that they will support it.