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Abbott Government's Centrepay changes don't go far enough



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SENATOR THE HON DOUG CAMERON SHADOW MINISTER FOR HUMAN SERVICES SENATOR FOR NEW SOUTH WALES

ABBOTT GOVERNMENT’S CENTREPAY CHANGES DON’T GO FAR ENOUGH

The Abbott Government's belated changes to Centrepay deductions announced today merely tinker at the edges of the the protections Centrelink clients need from consumer lease products that rip-off vulnerable Australians.

The decision to only exclude the small proportion of consumer leases that aren't regulated by the National Consumer Credit Protection Act 2009 (the National Credit Code) is welcome but doesn't go far enough.

Consumer leases are fringe financial products, whether they are regulated by the National Credit Code or not. The Abbott Government has decided to only exclude the fringe of the fringe from Centrepay. This is an inadequate political gesture that does little to protect Centrelink clients.

The small minority of consumer leases to be excluded from Centrepay are those with either an indefinite term or a term less than four months. The vast majority of consumer leases are provided by the big consumer leasing business like Radio Rentals, Rent-The-Roo and Make It Mine. These leases typically have terms of two to three years, they are regulated by the National Credit Code and they are known to cause financial harm to financially vulnerable Centrelink clients.

To protect vulnerable Centrelink clients, the Abbot Government should exclude all consumer leases from Centrepay, whether they are regulated by the National Credit Code or not.

Labor welcomes the belated exclusion of “funeral plans” from Centrepay. Aggressive selling of funeral plans has been causing financial harm in indigenous communities for several years. It is well beyond time payments for these plans were excluded from Centrepay.

While Labor welcomes the Government's announcement that it will make changes to Centrepay to expand services to include low-interest loans, savings plans and lay-bys, we will carefully consider these changes, particularly in relation to lay-bys in order to ensure that adequate protections are in place.

The Abbott Government had an opportunity today to make important changes to Centrepay that would give Centrelink clients better protection from expensive, fringe

financial products that cause financial harm. It has dropped the ball and missed the opportunity.

Some of the poorest people in our community will pay the price for these half-hearted changes. The government must exclude all consumer leases from Centrepay.

FRIDAY, 22 MAY 2015

MEDIA CONTACT: MARK ANDREWS 0417 024 890