Katie Allen (Higgins, Liberal Party) Share this | Hansard source

I rise to oppose this motion. No-one in this parliament disagrees with ASIC, with the Hayne commission, or indeed with the member for Oxley that small amount credit contract reforms need to be implemented. After all, the coalition government is on the side of all Australians and is committed to restoring trust in our financial industry and to supporting low-income Australians. That we all know. But, unlike the member for Oxley, what this government is not is one that rushes in legislation without diligence, without consideration and without patience.

Credit contract regulation is a complicated issue. It needs consideration and diligence and the legislation brought forward by this government to deal with it needs to be treated with patience if it's to be successful. That is what this government is committed to deliver: a considered response, resulting in a successful outcome. Unintended consequences from poorly considered legislation can have profound implications on the most vulnerable members of our community.

The member for Oxley is concerned about a lack of action. He says, 'Nothing is being done,' and that, like my son would say when he was five, 'He wants it now.' Let me remind the House, and the member for Oxley, what this government has achieved on this issue and what it will continue to achieve in the years to come. This government passed legislation on 3 April this year that provides ASIC with a product intervention power on all products legislated by the ASIC Act. This took effect immediately. The product intervention power enables ASIC to intervene in the distribution of a product, where it perceives a risk of significant consumer detriment. On 9 July, ASIC released a consultation paper setting out a proposal to use this new power to address significant consumer detriment in relation to short-term lending practices. The proposal would limit the total fees that can be charged by credit providers and their associates in relation to short-term credit and collateral services.

The government has also introduced design and distribution obligations for insurers and distributors of the financial products, including credit products, commencing on 5 April 2021, in order to provide the necessary transition time to ASIC and to industry. Design and distribution obligations ensure that financial products are targeted and sold to the right consumers. These measures will improve the accountability of financial product issuers and distributors. They will improve outcomes for consumers and make ASIC a more proactive regulator.

On 20 August, the government released the royal commission's implementation road map. It sets out a time line for implementing each of the government's commitments. In doing so, it provides clarity and certainty to consumers, industry, and regulators. The government is taking action on all 76 recommendations contained within the final report of the Hayne royal commission. By the end of 2020, all recommendations requiring legislation will have been introduced. As part of its commitment, the government will remove the point-of-sale exemption that retail dealers have from the operation of the National Consumer Credit Protection Act. This amendment will require third-party vendors, as well as lenders, to recommend only those loans that are suitable for the borrower. Vulnerable consumers will no longer be subject to unfair loans that they can't pay off and that cost more than they can afford.

The government is currently considering public submissions to consultation on a suite of reforms to small amount credit contracts and to consumer leases—following the review—contained in the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill. The member for Oxley says the government is delaying. He has no idea what he's talking about. Small amount credit contracts have a place in our society but they need to be carefully regulated. We should not make rash decisions that are driven by the 'flavour of the month' mentally possessed by the other side of the chamber. The government continues to deliver strong economic reform for all Australians. That is what Australians expect from their government and that is what we are delivering.

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