Tim Hammond (Perth, Australian Labor Party, Shadow Minister for Consumer Affairs) Share this | Hansard source

I rise to bring attention to a diabolical state of affairs that, at this point in time, affects over 650,000 Australians who are vulnerable: those who are crippled financially by an ever-present debt spiral that they simply do not have the capacity to crawl out of. The reason they are stuck in that debt spiral under insidious and crippling circumstances relates to a largely unregulated area of finance and lending commonly known as payday loans and rent-to-buy schemes. They are finance arrangements that are commonly called small amount credit contracts, or SACCs. Quite frankly, what we have seen from this government in relation to its inability to do anything meaningful about reform in this area is disgraceful. The government got off to a promising start on the back of Labor's good work in putting regulation and restraint around this area—firstly in 2009, and then, secondly, in 2012, in relation to the National Consumer Credit Protection Act. It was a very good start. It put some efficacy into the area to make sure that the mercenary sharks who were preying upon vulnerable consumers in the payday loan and rent-to-buy space were reined in somewhat.

One of the things that was built into those reforms in 2012 made sure that the industry was the subject of a regular review. That was the SACC review. The SACC review was implemented back in 2015, and the industry was covered very well by those in charge of the review. They reported back to government in March 2016. Understandably, these things take some time, and there is no criticism of the steps the government took at that point. The Minister for Revenue and Financial Services—by that stage, Minister O'Dwyer—had conduct of these reforms. In November 2016, to her credit, she published a comprehensive analysis from the government of the 22 reforms that were recommended in this small-credit space in order to make sure the balance was maintained between those who desperately need credit at short notice and those who wanted to provide it.

Make no mistake, this is not a situation where Labor says that the industry should be shut down. We acknowledge, more than most, because we see it time and again, that struggling families and single-parent families—which I'll come to a little bit later on—who are working really hard to make ends meet and watching every dollar count, do have unforeseen problems that require ready access to finance quickly. Try telling a family of five or a single mum with five kids whose washing machine has blown up and who simply has no money to go and buy another one. There needs to be some form of credit available to make sure that the household can continue. The same goes for fridges. Perhaps we can park tellies and other bits and pieces, but we certainly do not shy away from the need to provide lending facilities in this area.

Again, to her credit, the Minister for Revenue and Financial Services published a very comprehensive statement on 28 November 2016, and it is important to record for posterity that Minister O'Dwyer made it very clear that the government supported the vast majority of recommendations in part or in full. The press release from 28 November goes on to make it explicit which recommendations the government was prepared to support. They were: retaining existing price caps on SACCs, extending the SACC protected earnings amount requirement to all consumers and lowering it to 10 per cent of the consumer's net income, introducing a cap on total payments of a consumer lease which is equal to the base price of the good plus four per cent of the price per month, and introducing a protected earnings amount requirement for consumer lease providers—again, of 10 per cent of the net income for all consumers—equivalent but separate to the requirements of SACCs. We have small-amount credit contracts on one side and rent-to-buy or consumer leases on the other. These reforms are designed to capture both.

So it was made very clear back in November 2016 where the government intends to go. We had stumble after stumble in 2017, and the community, quite frankly, were misled by this government in relation to the progress that was being made converting that government position into legislation. On 28 February 2017, Minister O'Dwyer on Lateline confirmed that 'there is no delay in enforcing these recommendations as legislation is being drafted as we speak'. That wasn't true. The reason we know that wasn't true is that Senator Gallagher, doing brilliant work in that other place in her capacity as shadow minister for financial services, asked in estimates whether the drafting had started for the credit card and small amount credit contract reforms. The Treasury official on 1 March 2017 said:

We are not currently drafting that legislation.

So we have absolutely nothing insofar as March 2017 goes. But, again, we get to a point, under Minister McCormack, as he then was, the minister for small business. Why this reform hasn't gone to the current minister for small business is for reasons that will be abundantly clear. Quite frankly, you can say a lot of things about the minister for small business at the moment in relation to his position on penalty rates, but the one thing we know about Minister Laundy is that he would not crack and he would probably back-sack, which is more than you can say for the assistant minister in charge of these reforms.

Minister McCormack released the draft legislation on 23 October 2017 under very prescriptive terms. He said that the consultation window for the legislation was open for two weeks. He also said in his release of 23 October 2017:

The Government will introduce legislation this year to implement the SACC and consumer lease reforms.

It could not be clearer.

The legislation was the subject of supportive submissions from the Consumer Action Law Centre as the peak body for other affected consumer groups. But then the reshuffle occurred. After that point in time, we know that Assistant Minister Sukkar appears to have carriage of this so-called legislation, presumably reporting to the Treasurer. But it gets worse, because we have seen absolutely no form of action from this government to take clear steps to implement this legislation—legislation which has bipartisan support.

Mr Deputy Speaker Vasta—and I am sure you are not Robinson Crusoe—when you go out into your electorate, your constituents will tell you, as they tell me and those on the other side, 'You know what you guys need? You just need a little bit of bipartisanship. You need to show us that you can find common ground and something to put through parliament that you all agree on.' I'm sure we all share those kinds of conversations. Guess what? That's what we had here, and yet we see the inexorable creep from those on the other side who want to backtrack on SAC, so much so that we see the 'parliamentary friends of payday lenders' being formed to lobby the Treasurer in order to pretend that these reforms do not exist—to just make them all go away. We take this opportunity today to say that that will not happen.

We will take every step available to make sure that that does not happen, and here's how. There are always parts of legislation and reform at the edges which could be refined and improved. But this is a circumstance where we have a consultation period for all sides of over two years—lines in the sand being drawn on both sides and a clear demonstration of bipartisanship. We get so far as to have draft legislation that has been through the government's cabinet process. It's been approved by government, and it's just being hidden away as if it doesn't exist. Well, here's what we have done as of today. We have said, 'Look, if you don't do it, we will. If you don't back SACC, we will. If you won't stare down your conservative backbench, we will. And what the Labor Party has done is what the government should have done the entire time, but for one of two things. It is absolute incoherent paralysis that surrounds them, because they are so engulfed in scandal, so engulfed in distraction, so engulfed in division that they cannot do their job. All they need to do is back SACC, and they have failed to do it.

There is another plausible excuse, which is that it has finally happened, and we finally have exhibit A, in black and white: the relentless pressure applied by the conservative rump of this backbench on those more moderate, sensible forces on the government side. We have it in black and white. We have clear supporting statements from the minister for revenue, the then minister for small business, saying that this should be implemented without delay. Yet there is no sign of it from them over there, so we've done it. We have introduced a private member's bill in the National Consumer Credit Protection Amendment (Small Amount Credit Contracts and Consumer Leases Reforms) Bill 2018 that matches—word for word, sentence for sentence, full stop for full stop, comma for comma—the draft legislation produced by this government.

So, the government has a choice, and it is a fork in the road of integrity for this government. Do they support their own bill in this place, or will they find a reason to kick it off to the long grass? And that can mean only one thing. It can mean only that those far right conservative forces have won. It can mean only that the Prime Minister is completely devoid of any authority whatsoever in relation to how his government runs and what agenda it purports to control. It can mean only that we will fail to see any meaningful progress whatsoever from this government in relation to truly protecting vulnerable consumers. To those 650,000 Australians who are hopelessly trapped in a debt spiral as a result of mercenary predatory sharks, all I can do is apologise for the failures of this government to take any meaningful steps when we got so close to actually making sure that there are responsible reforms in this area. It is a symptom of a sick government, it is a symptom of a lack of reform, and it has to stop now.

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