Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

I thank the member for Calwell for her motion. As for what the member for Calwell has shared, in my electorate of Forde we have many people who suffer from the same financial difficulties. There are many reasons for that. The importance of this National Consumer Credit Action Plan is that it starts to put some guidelines and protections around those who are vulnerable in our community. I think there is also great value in having a single unified system across the country so that as people become more mobile in their lives and move interstate they understand what the laws and systems are.

One thing we need to be mindful of with these facilities is that for some of these people it is their only access to finance, and therein lies a great trade-off. For people who have poor credit histories or who are unable to access finance through the normal banking channels, how do they access finance to help meet those gaps in their daily needs? I acknowledge that some of the interest rates and fees are excessive, particularly on the interest rate side. But, given that a lot of these loans are quite small and there is a requirement for the providers to charge a fee to cover some of their costs, the total cost may appear quite high but these providers at some point need to cover their costs for providing the service. So we need to be careful, with these issues, that we do not preclude people who are in difficult and vulnerable positions from accessing amounts of finance to allow them to continue to meet their living expenses and cash flow requirements.

The member for Calwell touched on the Saver Plus program, and I know from experience of talking to representatives from the Benevolent Society in my electorate that it is a great success. I commend the government and ask the government to continue to support the program. In my role, I will certainly continue to support and advocate for that program because it provides a great benefit to families in my community. I will move on to one of the reasons why these people are looking for this sort of finance—that is, access to finance through the major banks or building societies. In that regard, we as a coalition have proposed a root-and-branch reform of the financial system, starting with a nine-point banking plan. It is designed to provide a competitive and sustainable banking system. If we can bring the poor and the marginalised in our society into the mainstream banking system, it will take away the avenues of business for these short-term payday lenders.

Some of the things that we are looking at in this nine-point plan are: that we call on the ACCC to investigate anti-competitive practices such as price signalling; that we want an investigation by APRA into unnecessary bank risks; talking to banks about reporting on bank interest margins; government support for small lenders; improved liquidity for mortgage backed securities; a complete review of the financial system; and further simplification of financial services reform to reduce costs and complexity. If we can reduce these costs and complexities for the mainstream banking system and building societies, maybe that will provide them with the option and the avenue to help the lower end of the community to obtain finance without having to deal with these so-called payday lenders. This is an argument that we as a coalition have been pursuing for some period of time. We call on the government to continue to look at that in greater detail so that these new options and avenues are available for the less fortunate in our society.

One of the concerns with this National Consumer Credit Action Plan is that the regulation that is proposed around this payday lending be kept simple and straightforward so as not to make it more expensive for these providers to provide their product. We do not want to see them put their costs up and we do not want to see them increase interest rates to continue to provide the services; otherwise, we would be defeating the purpose of these facilities.

As I touched on earlier, it is through a full root-and-branch review of our financial system that we are going to be able to deal with some of these issues in a more sustainable and long-term manner. It is through positive market based solutions together with considered regulation and the government removing itself from the market and returning to a more sound economic platform that we will create an economy where everybody can grow and prosper. We would be able to help people who are currently struggling through unemployment or lack of income who do not have the hours of work necessary to make ends meet. We must help them to truly be able to earn the income to manage their own financial affairs so that they do not have to deal with these short-term payday lenders. This issue will then start to go away as their product will no longer be required.

It is not through rushed or ill-considered legislation, which this current government has a habit of making, that we are going to solve these issues. We ask the government to listen, learn from the mistakes it has made with short-term, populist pieces of legislation, take advice from the industry and take input from the coalition and other members of the community on how best to deal with these very important issues.

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