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Wednesday, 11 December 1974
Page: 3360

Senator POYSER (VICTORIA) -Is the Attorney-General aware that finance companies are refusing to provide consumer credit to the customers of unincorporated traders? Is he also aware that the finance companies are claiming that they are forced by the Trade Practices Act to require sole traders to incorporate their businesses? Does he propose to take any action against finance companies which are causing consumers, as a condition to the obtaining of consumer credit, to sign documents which are supposed to relieve finance companies of their obligations under the Trade Practices Act?

Senator MURPHY - This question has been raised with me in a number of ways. It has been raised several times inside the House, as I recall it, but a great number of representations certainly have been made to me outside the House. I notice that Senator Guilfoyle looks interested in what I am saying.

Senator Guilfoyle - I am interested.

Senator MURPHY - In any event it has been raised with me on a number of occasions over the last several weeks. There have been complaints, including complaints from some honourable senators opposite, about finance companies seeking to avoid- I said 'avoid', not 'evade'- obligations under the Trade Practices Act. The Act does not require sole traders and other unincorporated businesses to form companies in order to carry on business. It appears that some finance companies have been putting pressure on sole traders to incorporate their businesses. The finance companies are doing that in order to take advantage of a provision that relieves them of their responsibility for the quality of goods supplied under hire purchase where the dealer who sold the goods on credit can be made responsible under the Act. Those finance companies have found it expedient to misrepresent the position to cover what to many traders is an unpalatable and possibly costly directive from the finance companies. The Government does not propose to see sole traders who personally stand behind their business forced to incorporate because some finance company is unprepared to face up to its obligations under the legislation. If the practice continues it will be necessary for the Parliament to reconsider the position of finance companies in relation to consumer transactions.

The honourable senator also referred to the objectionable attempt by some finance companies to deny consumers the rights that the Parliament has given to them under these laws. The practical effect of what these companies are attempting to do is to require consumers to repay damages the courts have said they are entitled to where the companies are in breach of the law. The companies do not seem to recognise that new rights have been conferred on consumers by this legislation and that the Government intends to see that these rights are made effective. If the practice continues it will be necessary to consider an amendment to the legislation to make it an offence to attempt to force consumers to contract away their protection and rights under the Act. The Senate will be aware that in some areas this is already prevented by the Act.

Senator Sir Magnus Cormack - I rise to a point of order, Mr Deputy President. I wish to assert my rights as a senator in this matter. Will you take into consideration whether an opportunity should be provided for Ministers to incorporate their prepared answers in Hansard?

The DEPUTY PRESIDENT- I will consider your suggestion, Senator Sir Magnus Cormack.

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