Joanne Ryan (Lalor, Australian Labor Party) Share this | Hansard source

I rise with great pleasure today to speak to the Treasury Laws Amendment (2023 Measures No. 3) Bill 2023 in the second reading debate. This bill contains measures that are very important to me and very important to my community. Testament to that is the number of times I have risen in this House to talk about the predatory behaviours of payday lenders in my community and communities like mine across the country.

This bill will improve the integrity of consumer markets for credit products. It removes barriers for financial advisers and supports competition in the provision of clearing and settlement services for cash equities. Schedule 1 of this bill is the one that my community care about the most, because schedule 1 legislates avoidance of certain product intervention orders by predatory payday lenders and by businesses that have been, across at least a decade, targeting vulnerable people in my community. I want to thank Minister Jones, the member for Whitlam, for his work in this space and I want to particularly thank our current Speaker, the member for Oxley, for his work in this space while we were in opposition across the last two terms.

I also want to personally thank Gerard Brody, formerly of the Consumer Action Law Centre, for his advice across many years about how we, in opposition and now in government, could crack down on predatory behaviours that hurt vulnerable people. We're hearing a lot of talk about inflationary pressures and about the cost of living. Let me tell you that that is the absolute pinnacle time for what those predators do, because it is when people are doing it tough that the predators are leaning out the shop door offering someone a cup of coffee to sell them a product that will cripple them financially. At its peak, those opposite refused to take action in this space, despite their own review and their own recommendations that said that this should be cracked down on. They failed to do so. There are those in this place now who were here during those years when the former member for Higgins, the then Assistant Treasurer, Kelly O'Dwyer, conducted that review and made a commitment to enact the recommendations. She failed to enact those recommendations, leaving vulnerable people open to being preyed upon.

I thanked the member for Oxley, who worked closely with me in raising this issue many times in this place as well as out in the community. I want to thank some local bodies, including Anglicare Financial Services, who I met with on more than one occasion to hear the stories of the impact of these predatory behaviours on people I represent. Anglicare shared the stories of people who had not one payday loan but four or five, with absolutely crippling interest rates, and who were sent to the wall and went to Anglicare for financial advice and support to unravel the situation they had gotten into.

We all knew at the time that the answer lay here in the federal parliament, that the answer lay here in the House of Representatives and that it was within the powers of the former government, as they'd said in their own review, to block this predatory behaviour. But they chose not to do that.

I thank Westjustice, and particularly Denis Nelthorpe, who also worked closely with me. I also want to thank Vernon Fettke OAM, from Homestead Financial Group. He is a financial adviser who also spent considerable time helping me to understand the issues and the solutions.

We on this side know that, despite the 2016 Review of the Small Amount Credit Contract Laws, little happened in this place to protect vulnerable people from predatory behaviour. This legislation takes another step towards that protection. It introduces anti-avoidance provisions that are aimed at reducing the risk of consumer harm from predatory lenders who modify their business models to avoid the application of the consumer protections in the credit act and other financial services legislation.

To put that into plain language, legislation can be created and business models can shift and change. We have to get to the nub of this and stay two steps ahead of those who want to change their business models in response to legislation so as to allow their predatory behaviour to continue. That's what this legislation will do. It will ensure that there are anti-avoidance provisions that hold to account those businesses that are behaving in these ways. The provisions in the Financial Sector Reform Act 2022 extend the Australian Securities and Investment Commission's ASIC product intervention orders made under the National Consumer Credit Protection Act 2009.

Schedule 1 of the bill ensures that anti-avoidance provisions also apply to the ASIC product intervention orders relating to credit products that are made under the Corporations Act 2001. In essence, the bill is creating anti-avoidance provisions so as to ensure that existing legislation covers the behaviour from providers who shifted and changed their business practices so they could continue their behaviour. I want to say a few things about the harm that I saw it do in my community. It was obvious to me that there was money to be made in this space. It was obvious because within 800 metres of my Werribee train station there were five payday lenders with a shopfront. It was obvious to me when I sat with some of the victims of this, with their financial advisers from Anglicare, and heard them say to me: 'I really need support, and I really need help. But go easy on those guys. They're really nice. They give me a cup of coffee.' There's a physical presence in the community. There's someone welcoming people through the door, to offer them another product to further harm them, and to do so with a smile and a cup of coffee. This is predatory behaviour.

This went on for years while those who now sit on the opposition benches failed to act on their own recommendations. They failed to stop this behaviour in communities like mine. They failed to take the steps they designed themselves—not just one minister but ministers over a decade. This behaviour was allowed to flourish in communities like mine and harm the most vulnerable, the least financially astute, people who were open to being seduced into these products.

There has been a lot said in this space across the years that I've been here, and it's always prefaced with: 'Sometimes people really need that line of credit, and they need it quickly. They might have a job interview, or they might need new tires on their car.' That has been used as justification to allow this behaviour to flourish. It should never have been allowed to flourish. Business practices that rely on people taking on credit where they can't afford to pay it back, and at exorbitant rates, don't deserve to flourish. What they deserve is legislation to stop the practice, and that's what this piece of legislation delivers today.

I mentioned Vernon Fettke OAM. This goes to schedule 2 of this piece of legislation. Obviously the financial sector, as we've heard speakers say today, was heavily criticised in the royal commission. This had a huge impact on the financial advice sector. Vernon Fettke was with the Homestead Financial Group locally in my electorate. I distinctly remember sitting with Vernon while we were talking about (a) the payday lending scope, and (b) the financial advice that was being given. He led the development of a code of conduct for financial advisers in his business. I attended when everybody who worked at Homestead Financial Group took a pledge on that code of conduct. Vernon was acting proactively in response to something that he was not guilty of, but, seeing the damage that was being done via the royal commission by bad actors, he took a positive step to ensure that everybody that was working with him in my community was going to do no harm and was going to act with integrity.

Schedule 2 in this piece of legislation is doing some tidy-up work in that space which reflects the government's commitment to an advice industry with strong professional standards that gives Australians access to high-quality financial advice. As implemented, the education requirements have failed to appropriately recognise the lived experience of financial advisers. The current requirements do not properly balance the desire to professionalise the industry with the benefits of retaining an experienced, skilled workforce, hence my references to someone like Vernon, who has since retired. But his leadership of young financial advisers was extraordinary and exemplary, as seen in the development of that code of conduct for that group.

Since 2019 over 10,000 financial advisers have left the industry, including experienced advisers with no history of misconduct. This only serves to reduce access to quality financial advice. This schedule means that experienced advisers who make a valuable contribution to the financial advice industry and play an integral role supervising new entrants during their professional year will be able to share their knowledge and experience more broadly. It ensures that consumers continue to have access to quality advice by removing a significant disincentive for experienced advisers to stay in the industry and ensure there is a pool of advisers to mentor, supervise and upskill new entrants.

The space around credit, and businesses who provide credit, is something that government needs to be attuned to and aware of. I would encourage all members to ensure that they have a relationship with the community organisations in their electorates, so that they've got an ear on the ground on what is happening in this space, because these businesses will shift and change again. There will be new ways of doing things. In my electorate, when this first came up for me as an issue, it was a cup of coffee and a shopfront. But it soon morphed into unsolicited text messages to people, leaving places where they'd registered online, offering them a line of credit. We know those things were happening. I would encourage all members to ensure that they are in contact with those community organisations like the Consumer Action Law Centre, West Justice and Anglicare Financial Counselling Services so that we can, as a parliament, stay one step ahead in ensuring that changes to business practices—new and unforeseen things that we can't see now or perhaps a bit more buy-now pay-later that might be preying on our vulnerable citizens—stay ahead of the game, close loopholes as quickly as we can and ensure that the most vulnerable in our communities are not set into debt traps where one person makes a profit and another potentially falls into a debt cycle that will take decades to recover from.

See this speech in context