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Monday, 19 October 2015
Page: 11515


Ms HENDERSON (Corangamite) (11:46): I rise to address the issues raised by the member for Fremantle. I want to begin by saying that the government is committed to ensuring that vulnerable Australians have access to tools to effectively manage their money. However, I think, in this private member's bill put forward by Senator Cameron, he has really missed the mark.

This goes back to Labor's so-called reform in 2011 and 2012. I think it is important that it is well understood that when the federal Minister for Financial Services and Superannuation, the Hon. Bill Shorten, in 2011 passed amendments to the consumer credit and corporations amendment bill—and there were some further amendments—these amendments regulating payday lending were simply not good enough. I am looking at an esteemed academic, Ian Ramsay, in the Monash University Law Review. He says the amendments made by Labor:

… reduced protections for payday loan borrowers, indicates that the campaign undertaken by the payday loan industry was influential in shaping the final version of the Enhancements Bill.

We have seen some real failures from Labor in relation to regulating payday lending, and there is no doubt that some of these rip-offs are an absolute disgrace. I take great pride and reflect on the time when I was a consumer advocate working for the ABC's TheInvestigators program and it makes my blood boil when you see these lenders charging people who are desperate to buy household goods up to 240 per cent in interest rates.

So while we must tackle the problem—a problem that was not fixed by Labor, and that has been well recognised—Labor's proposal is not tackling the problem. That is the issue. The Centrepay system does give some credit access to those who are most vulnerable on welfare benefits. If they do not have access to Centrepay, they do not have access to any credit at all, because most welfare recipients may have trouble accessing a credit card. So Senator Cameron has faltered in the solution.

The Assistant Treasurer announced on 7 August that there will be a review of the small amount credit contract laws which will consider whether those laws should be extended to apply to regulated consumer leases. So the government is very alive to the issues and to Labor's failures in this area. It is sensible to consider options for further changes, including possible caps on and disclosure of effective interest rates. I ask the question: if these rip-offs are occurring, which they are and it is an absolute disgrace, why isn't Labor tackling the core of the problem? Why isn't Labor looking at the rip-offs and forcing these lenders to disclose how much they are ripping off Australians? That is what we are interested in.

We say that the government does not support Labor's bill. It is not the right solution. We are very open to helping to fix this issue, but the way in which Senator Cameron has proposed this is, as I say, not going to stop the rip-offs and that is fundamental.

On 1 July this year, there were a number of changes to Centrepay which will help protect the most vulnerable Centrelink customers. These changes will mean that Centrepay no longer supports consumer leases that are not regulated by the National Consumer Credit Protection Act, and that is very important. I understand some of those providers now excluded from Centrepay are now arranging to obtain an Australian credit licence and, by enhancing regulation, of course they will be subject to review by ASIC as the regulator.

ASIC has raised a number of issues in relation to the standards of conduct in the payday industry, and the department is currently seeking assurances from lessors involved in Centrepay that their consumer leasing practices comply with the responsible lending obligations set by ASIC. So there is now no doubt that we need greater standards. There is no doubt that we need greater regulation and that we are actively reviewing these issues: however, the proposal put forward by Labor, unfortunately, does not resolve the problem.

As I mentioned, the Assistant Treasurer announced a review of the small amount credit contract laws and the government, as I say, is very open to those solutions. Thank you very much.