Rachel Siewert (WA, Australian Greens) Share this | Hansard source

I rise to make a contribution to the Social Security (Administration) Amendment (Protecting Consumers from Predatory Leasing Practices) Bill 2020. This bill is necessary because the government have failed to act. They have failed to take the necessary measures to protect low-income and financially vulnerable Australians from these predatory practices. This bill provides that the secretary may not make any deductions requested by a person from their social security payments if the deductions relate to goods hired under a consumer lease entered into by that person.

Centrepay was set up to help people receiving income support payments to pay their rent and essential bills through automatic deductions from their payments. This has clearly been abused by consumer lease providers in predatory lending practices. It has been reported on in this place, in committee inquiries and through a range of community service organisations who see their clients impacted, or adversely affected, by these predatory practices. The government won't act. In this case, it's up to Labor, which has brought this bill, to act. We have also raised this issue many, many times. It's absolutely outrageous that Services Australia—and, before that, the Department of Human Services—have not used their powers to ensure that these practices are not continued. It's very, very clear that these predatory companies are deliberately targeting vulnerable Australians on income support knowing very well that Centrepay will prioritise their payment. So it's a guaranteed source of income at absolutely outrageous interest rates. Centrepay should not be used to facilitate these appalling practices.

We know that there are many Australians on income support payments who suffer financial harm after entering into consumer leases that deduct payments through Centrepay. When consumer lease providers are able to access individuals' income support payments via Centrepay, this often results in significant financial harm. People are locked into high-cost, low-value products, which expose consumers to an unacceptable risk of financial stress or exploitation. Consumer lease providers often employ predatory tactics to target vulnerable Australians who are doing it tough, particularly financially. Consumer leases come with huge fees and interest rates that often exacerbate financial hardship. For example, a consumer lease for a baby cot and mattress from Direct Appliance Rentals costs $4,368 over 24 months, compared to only $1,487 if purchased direct from the retailer. That's nearly three times the cash price of goods—all payable via Centrepay, apparently with no questions asked by Services Australia. That's fine—no questions asked. This means that payments are made before income reaches the person's bank account. Nobody should be forced to prioritise repayments for expensive consumer leases ahead of paying for essentials like food and housing.

The Consumer Action Law Centre have witnessed consumer lease providers restart Centrepay deductions after consumers have cancelled payments without obtaining the customer's consent. They have also assisted consumers who have suffered harassment as a result of cancelling deductions, or who have had consumer lease providers continue to deduct payments through Centrepay after the relevant contracts have finished. How is that possible? Where is Services Australia? They are negligent in regard to this issue. It's been raised time and time again in this chamber and, as I said, in committee inquiries and in estimates. We were told this wasn't happening anymore; they were going to take care of it. Clearly, they have not taken care of it. The Commonwealth Ombudsman recently agreed with complaints brought forward by the Consumer Action Law Centre that Services Australia weren't adequately enforcing their own policies against consumer lease providers.

You have to ask why. Is it just because they haven't got enough staff that are able to do this—to provide this sort of oversight and to ensure that the rip-offs of people aren't happening? Or is it because they're turning a blind eye to these sorts of outrageous lending practices? This bill is necessary because Services Australia has failed—again and again and again—to respond to breaches of its own policies by consumer lease providers, therefore leaving vulnerable Australians open to exploitation. In other words, a government department is basically facilitating these rip-offs. By failing to implement their own policies, they are facilitating the rip-off, on a massive scale, of vulnerable Australians trying to survive on income support, and we all know how poor—outside of the COVID supplement—these payments are.

Centrepay access is not needed by people to obtain household goods through consumer leases, as there are other payment options available that enable people to make regular payments. If consumer leases were removed from Centrepay, people would still have the option of paying for their goods by direct debit, credit card, bank transfer, POLi or signing for fee-free basic bank accounts that do not charge default or overdraft fees. They can also apply for an interest-free loan. These are options that are obviously not explained by these consumer lease providers when they are trying to flog people these products. Because they know that if they go through Centrepay, they're not going to get pinged by Services Australia, and they can simply rip these customers off by three times—or, as we heard earlier from Senator McAllister—up to eight times the fees. These are appalling practices, and, if the government were doing the right thing, we wouldn't need to be standing in this chamber talking about it time and time again—if Services Australia were doing the job it's supposed to be doing. I think they forget that, actually, their job is to help vulnerable Australians, not to facilitate rip-offs.

The Greens support this bill. We think it's way past time that people on income support were protected from these predatory practices. It is appalling that action has not been taken earlier on this issue.