Luke Gosling (Solomon, Australian Labor Party) Share this | Hansard source

I'd like to start by commending the member for Perth and his staff for championing the small-amount credit contract and consumer lease reforms. The National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill will improve the lives of some of our most vulnerable Australians and may very well prevent others becoming trapped in dodgy and shady small-amount credit contracts, or SACCs.

In the Territory, we have had many instances of individuals being ripped off by payday lenders and rent-to-buy operators. In one instance, a payday loan client who borrowed $150 was told within six weeks by a payday lender to repay over $1,000. We also had a Centrelink recipient who had four rent-to-buy payments deducted from her Centrelink payment each fortnight, leaving her with only $50 to feed her family. On top of that, she had a payday lender attempting to withdraw a further $66 repayment each fortnight by direct debit. We've had a case of an age pensioner paying $1,500 for a set of drawers worth $600, and we even had a ridiculous case where a lender charged a $50 dishonour letter fee on top of a $49 payment dishonour fee. We also had the case of Amazing Rentals Pty Ltd in the Northern Territory. In one disturbing instance, a man on Newstart allowance, with English as a third language, could not afford to pay for electricity or food because his lease payments to Amazing Rentals were so high. But for the great work of ASIC and the North Australian Aboriginal Justice Agency—NAAJA—this organisation would still be operating and ripping off Territorians.

In the Territory, there are 72 remote Indigenous communities where services are coordinated by the NT government, and we also have about 500 homelands in the Territory. The final report of the Review of the small amount credit contracts laws in 2016 noted:

The issue of unsolicited sales (of any products or services) in Indigenous communities has been long recognised as causing significant harm, with these communities targeted as suppliers can make multiple sales in a short period of time with little effort or outlay of capital.

Officers from ASIC's Indigenous Outreach Program have been told of instances where businesses, including rental companies, have given inducements to senior or respected community members to obtain introductions to individuals in the community so that they can make as many sales as possible. That is shameful. They have heard, both firsthand when visiting a community and second-hand through financial counsellors and consumer advocates, of regular instances of this practice being used in numerous communities around Australia. In some instances, unscrupulous lenders are able to operate in these remote communities due to loopholes in current regulations. So, I am very pleased that this bill will prevent door-to-door selling of consumer leases at residential homes and introduces broad anti-avoidance protections to prevent SACC loans and consumer lease providers from circumventing the rules and protections contained in the credit act.

The reforms in this bill aren't groundbreaking or revolutionary. We know that members opposite support the measures—or at least they should, because this bill implements the government's own policy in relation to SACC reforms. I'm sure that we can all agree that strengthening penalties will increase the incentive for SACC providers and lessors to comply with the law and that imposing a cap on the amount that can be paid will protect consumers.

ASIC agrees with the changes. The bill adequately balances the need to protect consumers from harm whilst ensuring that the useful parts of the industry remain viable. We know that there are times when those on low incomes need quick access to cash, and we are not—not!—advocating the total elimination of payday lending. Instead, we are protecting those people from exploitation by predatory lenders. Needless to say, it would be a disgrace if members opposite voted against its implementation when we all know they agree with the changes being proposed. We have a chance to help vulnerable Australians, some of whom are suffering because of payday lenders and small-amount credit contracts, so I urge the government to accept the member for Perth's proposals and pass their own legislation.

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