Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Monday, 19 October 2015
Page: 11516


Mr LAURIE FERGUSON (Werriwa) (11:51): I certainly do not wish to go into partisan polemics about the exploitation of some of the most desperate people in this country; however, I thought that was a pretty confused performance. The speaker decried Labor's failure to fully rectify the problem when in 2013 it moved to rein in the worst excesses by capping interest and establishment fees. Then it went on to say how horrendous the exploitation of these people was and how shocked the member for Corangamite was et cetera. On a number of other occasions she said that Labor had failed to do anything and that the government was having a review.

Quite frankly, I think this issue is one in which both sides—we could equally go back to 2013 and see whether the then opposition was more intent upon criticising Labor's legislative initiatives from the view of defending these people or was it actually calling for further reforms. I doubt it was. As I say, I think people on both sides of this House really should look at the way in which these companies are exploiting people.

Senator Cameron first came across this development in the Penrith shopping centre. People were out there in the street actually trying to recruit single parents on low incomes, disabled people et cetera and persuade them to take out loans that they should not. This argument by the industry and others that, quite frankly, they are helping people with no other options in life has to be answered. If they were so interested in these people, they would not have a situation where people are paying 1,900 per cent in compound interest on some occasions. They should be counselling people as to whether they can afford within their long-term financial interest to undertake these loans.

It is not as though there are not other options out there. I agree that these people should be given far more finance by the banks and governments in this country, such as they are by NILS, established by the Presentation Sisters. It has operated in my own region of Sydney for 10 years. I have been at every national conference of NILS. For people living in the electorate for six months or more, it helps them with whitegoods, furniture, medical equipment et cetera. This is the kind of priority we should have, as well as clamping down very severely on what we have been talking about.

It is wrong that Centrepay access is given to exploitationist characters. No-one is saying for a moment that Centrepay should not operate for legitimate purposes so that the right kind of companies out there doing things for people can have access. But to argue that because of the need to have Centrepay we have to have these characters as part of it is really worrying.

In 2015 the Federal Court handed down a fine of $18.975 million against Cash Store, a failed payday vendor. Their role just typifies the problem out there. They operated until September 2013. They had 80 stores and wrote up 10,000 short-term loans of up to $2,200 a month. The court examined 281 randomly selected consumer credit insurance contracts arranged by that company up to 2012 but found only four of the 281 contracts did not involve some contravention of Australian legal requirements. Based on this, ASIC argued that 300,000 of the total 325,726 contracts arranged by the Cash Store were likely to have breached responsible lending laws.

A 2012 consumer action survey on the subject found that the demographics of those who took out these loans have remained stable since 2002. They are low-income borrowers in their 20s and 30s, slightly under half of which have a young dependent child or children and 45 per cent of whom are in full-time employment. Between 20 per cent and 30 per cent of borrowers are likely to receive some form of Centrelink benefit. Back in 2008, 28 per cent of borrowers were in part-time or casual employment, 22 per cent were unemployed and five per cent were full-time students. Seventy-three per cent of those in employment had below-average income earnings, with 23 per cent reporting incomes of less than $20,000.

This is so important to this country. It is so important to people who are struggling to make ends meet and being manipulated into these kinds of contracts where they often are not advised on the interest they will pay and are not told how in the long term it will absolutely destroy their already meagre lifestyle just for the benefit of these unscrupulous operators, many of whom then fly from the Australian legal system, close themselves down and move into another sector. I congratulate Senator Cameron for initiating this in this way. I would hope the way through is found by both sides of politics to rectify the problem rather than engaging in meaningless partisan politics.