Josh Frydenberg (Kooyong, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill will implement the government's comprehensive credit reporting regime.

It will deliver benefits to lenders and borrowers and drive competition in the lending market while preserving and enhancing important security and consumer protections.

This bill will place Australia in line with many other developed nations who already have comprehensive credit reporting regimes in place.

Schedule 1 of this bill requires our largest banks—those with total resident assets of over $100 billion—to provide comprehensive credit information to credit reporting bodies from 1 April 2020. By mid-2021 our largest banks will have supplied comprehensive credit information on all consumer accounts to every eligible credit reporting body.

The bill will also ensure the security of consumer credit information—an issue of high importance to the government—by strengthening the already strict provisions in the Privacy Act relating to how consumer credit information is handled.

The bill requires that credit reporting bodies store credit information within Australia or according to alternative requirements in regulations if established.

Schedule 2 of the bill incorporates the results of a review by the Attorney-General into the treatment of financial hardship information, providing the legal certainty required for this information to be shared. Based on this review, the bill establishes a new type of credit information in the Privacy Actthat will indicate consumer credit contracts that are affected by a financial hardship arrangement.

The bill also requires government to complete independent reviews of the mandatory regime and the credit reporting provisions in the Privacy Act prior to 1 October 2023.

Under the comprehensive credit reporting regime, consumers will have better access to credit and will be able to use their reliable credit history to seek more competitive rates. Those consumers who possess a poor credit rating will be able to demonstrate their creditworthiness through future reliability.

Credit providers will have a more complete picture of a consumer's financial situation. This will help them to better price credit and meet their responsible lending obligations.

The government has consulted widely with credit providers and consumer groups. The Legislative and Governance Forum on Corporations was also consulted in relation to the bill, as required under the National Credit Agreement 2009.

This bill is another example of the reforms implemented by this government that are designed to increase competition in the financial sector. Other initiatives include:

- open banking;

- strengthening the mutuals sector through implementation of the Hammond review recommendations; and

- establishing the $2 billion Australian Business Securitisation Fund to improve funding sources for non-major banks and non-bank lenders who lend to small and medium sized businesses.

Our government will continue to support stronger competition in the financial sector by ensuring that the market works effectively for the benefit of all Australians.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.