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

I rise to briefly speak on the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019. The bill will establish a mandatory comprehensive credit reporting regime to apply from 1 April this year. It will provide that a credit provider cannot refuse to provide further credit, or reduce a consumer's credit limit, merely because of financial hardship and that information that will exist.

While Centre Alliance support the bill, we are concerned that the hardship arrangement indicators scheme, as outlined in schedule 2, may lead to unfair outcomes for people who are financially vulnerable. However, it has been noted by both the Financial Rights Legal Centre and the Consumer Action Law Centre that the retention of hardship information for a period of 12 months may ultimately mean people are less likely to reach out to credit providers to help for fear of having a hardship flag placed on their file. As noted by the Financial Rights Legal Centre, this may have a perverse impact on those families and businesses that are coming to terms with the financial consequences of the bushfires.

Many banks are offering assistance packages to those who may be unable to meet their financial obligations in the short-term. However, those individuals who then access any assistance will have a hardship brand on their credit report, and that hardship information will remain on their credit report for a period of 12 months, notwithstanding their financial difficulties may only have been for a few months or even, indeed, weeks. As a consequence, individuals may be forced to seek out riskier forms of credit such as high-cost payday loans, which are trapping Australians in a cycle of debt. Similarly, as individuals in hardship are unfairly rejected for credit, there may be no other option for those experiencing financial hardship than to turn to those payday lenders and consumer leases to secure the goods they need to recover from the recent bushfires. This will make getting out of the poverty trap, out of the debt trap, even more difficult.

In relation to payday lenders and consumer leases, I again note that there have been over 1,000 days since the government accepted the independent Review of Small Amount Credit Contracts and that the government is still yet to introduce legislation to address all of the recommendations of the SACCs review. I therefore move the following amendment in the terms circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes with concern that:

(1) the retention of hardship information on individuals' credit reports for 12 months is unfair and will discourage people from seeking help from credit providers;

(2) this bill may encourage people to seek out riskier forms of credit, such as high-cost payday loans that are trapping Australians in a cycle of debt; and

(3) it has been over 1,000 days since the Government accepted the recommendations of the independent Review of Small Amount Credit Contracts but the Government is yet to introduce legislation to address these recommendations.

See this speech in context