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Wednesday, 23 March 1966


Mr DUTHIE (Wilmot) .- Mr. Temporary Chairman,I wish to direct the attention of the Committee to Part X. - Arrangements with Creditors without Sequestration. I have been in close contact with the Attorney-General and his staff about this Part. Clauses 187, 188 and 189 cover the subject that I want to raise tonight. This refers to the setting up of trustees to handle estates of people who are falling into debt and for these trustees to handle in detail the affairs of a debtor. Clause 188 provides that only a registered trustee can handle this kind of case. I am thinking of all people who through various reasons find that they are going into bankruptcy. We have a scheme in Tasmania whereby this problem can be handled without a great deal of administrative cost and without forcing people into bankruptcy. In other words, this is a scheme by which a man can pay his debts to the satisfaction of his creditors and not be declared bankrupt. Such a man goes to work and pays so much to his creditors each week.

The Attorney-General was good enough to receive a deputation on this matter from Compton's Collection Service (L'ton) Pty. Ltd. in Launceston. We are doing something unique in Tasmania as far as I can understand this matter of credit arrangements. The numerous clauses of this Bill are being disposed of so quickly that we have had little chance to discuss this matter until this moment. I seek the patience of the Committee and the Minister while I develop my point. When a person in Tasmania is in trouble and his creditors are pressing him, he can make arrangements with this collection service to pay so much a week to it. The collection service then distributes the money to the various creditors. Sometimes it might take a year, sometimes two years, sometimes only six months, to pay off a debt. There is no provision in Part X of the Bill for a firm such as I have mentioned to act as a trustee. The collection service at the moment has 250 such arrangements in hand in Launceston. I was going to say that 70 per cent, of these arrangements are successfully finalised by this method. Having had a good look at the Bill, and knowing what is being done in my State on this issue, I say to the Attorney-General that he is not going to improve the position by setting up trustees. Who will the trustees be? They will be mostly chartered accountants who will be too busy to handle these sorts of cases anyway. What is going to be the result of this new procedure? More bankruptcies, and more work for our State bankruptcy courts which are busy enough as it is. If they are to get dozens and dozens of cases like this piled on to them as well, goodness knows how long some people will have to wait before their cases are settled.

I want the Attorney-General to tell me and my colleague the honorable member for Bass (Mr. Barnard) who is interested in this problem too, how the Tasmanian situation can be worked into the scheme. Are the collection services to be abandoned? Are they to be asked to give up this particular service to the people? I could cite case after case where people have been helped and finally all debts have been paid. As I have said 70 per cent, of these matters are finalised. One Launceston agency has 265 creditors on its books at the moment in what we call gentleman's agreements between creditors and debtors. When the person in trouble cannot pay, for the reasons I have mentioned - unemployment, sickness, gambling, extravagance or hire purchase agreements that send so many people into premature debt - this collection service gets all the creditors together and if they all agree to take so much per week from the debtor, that is done. The debtor pays so much to the firm each week and the firm distributes, say 5s. to this creditor, 10s. to another and 4s. to another and the debt is finally paid.

I did not have an opportunity during the second reading debate to mention this matter and that is why I have to go into more detail now than I would otherwise have done or that perhaps you, Mr. Deputy Chairman, would like me to do. The purpose of this scheme is to enable the debtors to pay their debts fully over a period of time. Under the provision that is to be brought in by this Bill, with trustees being set up, I do not see that there will be any improvement at all. In my own State of Tasmania the position will be definitely worsened. The new arrangement will be cumbersome and will prove expensive to the debtor. At present he pays only a small commission to the collection service for each transaction. This provision will bog everybody down in a whole lot of legal jargon and legal rigamarole, and I cannot see how it is going to assist us at all. I believe that the new scheme will be top heavy. The present collection service takes a personal interest in each case. That is another thing that makes it so important. The service in Launceston has a personal interest in the Launceston area; another service has a personal interest in the north coast area, and another a personal interest in the Hobart area.

I could mention the case of a person which normally would have gone through the bankruptcy courts. He was a storekeeper who had total liabilities amounting to £4,500. The collection service went into the matter carefully, arranged a meeting of the principal creditors and it was agreed that the man should pay £12 10s. a week, which he is doing regularly. He is now able to continue his business which has a turnover of £375 a week and pay back gradually all the money he owes.

The Attorney-General promised us that he would have a look at this matter to see if the present scheme could be continued in Tasmania. I should like an assurance from him that it will be continued or, in other words, that this Bill will not destroy the arrangement that is operating so effectively in Tasmania. In my State the bankruptcy rate is the lowest in the Commonwealth because of this very arrangement that I have just outlined to the House. I believe that to alter the present system would be a grave injustice to hundreds of little people who would be forced probably into bankruptcy under this proposed cumbersome scheme if the present arrangement were destroyed. The Attorney-General told me that he thought he could work out an alternative scheme by which collection services in Tasmania could continue, and I should like him to assure us that it can do so.







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