Susan Lamb (Longman, Australian Labor Party) Share this | Hansard source

It's not often that I eagerly await legislation from this government. Actually, I usually dread it, but that's because usually legislation from this government hurts people who don't deserve it, as with cuts to TAFE and cuts to university—I've just come from the chamber downstairs, where I spoke against the cuts to universities—or maybe the attacks on hospitals or the public health system. But I've been waiting for their promised small-amount credit contract, or SACC, legislation for some time now—too long, in fact. I've been waiting because this legislation should provide protections to vulnerable consumers who've been ripped off by unscrupulous payday lenders and rent-to-buy schemes.

Just to go through a quick time line of what has led us up to today, when Labor was in government we enacted the National Consumer Credit Protection Act, a national regime for regulation of consumer credit, with some additional protections. This legislation included a mandated review of the legislation, which was commissioned by the then Assistant Treasurer Josh Frydenberg back in 2015. When the government received the review in March of 2016, they waited eight months before noting, in November 2016, that they supported the vast majority of recommendations in part or in full. So, a year later, in October of 2017, the then minister, Michael McCormack, gave us a promise that the government would introduce the legislation later that year.

Well, here we are, still waiting, months after yet another government promise has been broken. We are still waiting despite Labor repeatedly calling upon the government to introduce this legislation. We are still waiting despite the member for Perth doing the government's job for them and bringing forward this private member's bill, the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2018, which replicates, word for word, the exposure draft legislation that the government released in October last year.

This bill that we're speaking about today is consistent with the small-amount credit contract review recommendations. It seeks an imposition of a cap on the total payments that can be made under a consumer lease, it removes the ability for an SACC provider to charge a monthly fee in respect of the residual term of a loan when a consumer is able to repay the loan early, and it strengthens the penalties to increase incentives for providers and lessors to comply with the law, amongst other measures.

These are all critical reforms that are vital to protect vulnerable consumers. You see, some small-amount credit contract providers prey on people with low incomes. They know that 40 per cent of people who enter into an SACC loan are unemployed, and they know that 25 per cent of those people receive more than 50 per cent of their income from Centrelink. They know that these people are struggling and are looking to SACC loans as a way to smooth out some unforeseen swings and roundabouts that affect low-income families. Yet some providers are locking these vulnerable people into contracts that end up costing three or four times the retail price of the good that they're purchasing. They use rent alone to calculate an applicant's expenses, not taking into account the cost-of-living bills, even for things as simple as groceries.

I'm not saying that all providers are bad. I'm not saying that there's no place for small-amount credit loan contracts; I'm not saying that at all. What I'm saying is that we need protections in place to ensure that vulnerable Australians don't fall victim to unscrupulous lenders who are taking advantage of their situation. There are people in places like Caboolture in my electorate of Longman who are being trapped in cycles of debt by exploitative lenders. Without proper regulation, this is going to keep happening time and time again. It's time the government took charge and introduced the legislation that they promised all those months ago. It's time to do it.

So I say to the government that this is something that Labor will work with you on. We will work with you to pass this through parliament as quickly as we can, because we know just how important this is. We say to the government: quit stalling and introduce this legislation. There are people in my community who are counting on this legislation moving through. I say to this government: once and for all, do your job.

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