Rebekha Sharkie (Mayo, Centre Alliance) Share this | Hansard source

I second the motion, and I strongly support the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2018, from the member for Indi. It's been 1,172 days since the review of the small-amount credit contract laws started and 692 days since the government accepted the recommendations of the review. What are we waiting for? The longer the government ignores this issue, the more Australians will sink deeper into debt. We can no longer 'Nimble it and move on'.

The Consumer Action Law Centre reports that, since the government released the small-amount credit contract review back in April 2016, at least three million—three million—additional payday loans, estimated to be $1.8 billion worth, have been taken out by more than 1.6 million households. This has generated around $250 million in net profits for lenders. They are profits from the misfortune of some of our most vulnerable Australians.

Too often, the people who are taking out these loans are doing so because they are desperate. They are facing unexpected financial costs such as medical expenses for themselves or their family, and they have no other income source available to them. Or, too often, it is everyday pressures like the quarterly power bill that prompt them to this desperate need for credit. No, it is not a sensible financial decision, but, when the alternative is to live in darkness, the payday loan seems like the only option. It is simply deferring the payment and adding crippling interest for the benefit of a little breathing space. When I say 'crippling interest', I'm talking about up to 200 per cent interest in real terms.

But, if these families cannot afford to pay the power bill, how will their financial situation improve with the added burden of yet another financial repayment? The short answer is that for many families the situation gets worse, and you get sucked into a vortex of payday loans paying off payday loans. Research commissioned by the Consumer Action Law Centre shows that, over a five-year period, about 15 per cent of payday borrowers will fall into a spiral of debt that has significant ongoing economic and social consequences for the nation.

The member for Indi mentioned the former member for Perth, who was instrumental in pushing for this in the parliament, but I'd also like to acknowledge the work of the member for Oxley. The member for Oxley and I have had many conversations where he has talked about the volume of payday lenders in his electorate preying on the most vulnerable people in his community.

In conclusion, I'd like to commend the member for Indi on her work and her determination to see this issue given the attention that it deserves. May I just repeat: it has been 1,172 days since the review of these small credit contracts. What on earth are we waiting for? That is over three years. I commend the bill to the House, and I strongly urge the government to act now. You do not need to wait for the findings of the royal commission. Let's not kick this can any further down the road.

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