Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I too would like to make a contribution to the debate on the Social Security (Administration) Amendment (Protecting Consumers from Predatory Leasing Practices) Bill 2020. To take a leaf out of Senator Henderson's book, I'll take exception to some of the comments that have been made from the other side in the same way that she made them about Senator Ayres.

She did manage to reference ASIC. ASIC has found that household goods leased from rent-to-buy businesses can cost nearly nine times the retail price of the same goods. So, in that environment, where you pointed to the regulator and said, 'They're over it; they're across it; people can't go astray here,' the contribution from ASIC is that it's probably going to cost you 800 per cent more if you go down this path of rent to buy.

I think it's really instructive that the other comment was about superannuation and how the government has done everybody an enormous favour by allowing them to access their superannuation early. To be fair, it has given them cash in their pockets today, this week or this month, but it has taken a substantial chunk out of their pockets at retirement. It has reduced the potential lump sum exponentially. It has reduced their retirement expectation exponentially. And, if you're a welfare recipient, it may well have compromised your ability to actually get welfare. If you have a remaining amount in your bank account, that would be listed as an asset and may well complicate your access to Centrelink and the like.

This is a government that had an algorithm and that went out there and punished enormous numbers of people. Indeed, there may even have been some suicides and the like from the pressure that was put on people with the government's algorithm. They backed off and paid $1.2 billion in compensation. Why haven't they got an algorithm to have a bit of a tickle around here and see who is providing the best value for money in this space? I accept that, if it's 40 degrees and you haven't got a fridge, you're going to get one somehow. You're going to rent, borrow or buy one, or perhaps use an untoward means of getting it. If your children haven't got a cold drink of water or milk, you're going to get a fridge. You're not going to sit back and say: 'What is the best way of doing that? Will I get three quotes?' No, you'll get a fridge within a day.

Let's be fair. I have had little experience in this space. I've been encouraged by the contributions of Senator Siewert, Senator McAllister and Senator Pratt to go out and do a bit of digging. If you go and get a briefing from a Centrelink social worker, they'll tell you some really interesting things. I have had briefings in areas of Adelaide which are chronically underprivileged, where there are three generations of unemployed people. One contribution has never, ever gone out of my head. A social worker told me, 'Senator, we're really worried about the grandmothers.' I said 'The grandmothers?' They said, 'Yes, because 16 and 16 makes 32, and we have people here on welfare who are 33 years old and are already grandmothers.' Some of them made a bad decision once, or not a bad decision but a decision that affected their whole life: they had a child at 16. That precluded them from continuing their education or entering into useful work, and sometimes that goes on and on generationally. The social worker said: 'We really worry about the people that are facing another 30 years of Centrelink. They don't make good decisions; they need education.'

I came across a constituent who had had a successful career in business and ended up doing some good work at a bank and at an air services company. When he retired he went and volunteered for the Good Shepherd organisation. He went into homes, examined budgets, gave counselling and pointed the way forward. The no-interest loan scheme is incredibly good. He explained it by saying, 'We look at people's finances and tell them that there are other ways of doing it.' He tells them: 'We need to clear that debt and then you can go and buy the washing machine of your choice, the fridge of your choice and the TV of your choice. But we need to do some really hard work first and we need to get you in a position where you can get a thousand dollars to go out and do a bit of shopping.' He would then say to them: 'Go out into the marketplace but don't commit. Come back to me and we'll have a look at your circumstances, your budget and your situation and we'll try and get you on a path to success.' Some people are very successful at this. They appreciate the experience of learning from their budget, going into the marketplace and getting quotes. There is a great organisation, The Good Guys, that looks at this space and says, 'What everybody else does we'll do better.' They have a relationship with no-interest loan providers. People actually learnt from the experience. They learnt that it was expensive to rent to buy. They learnt that it was expensive in these other areas and they became much more successful and very proud of their own achievements, because they are actually budgeting and making decisions about their life instead of reacting to what was happening in their life.

Full credit to the not-for-profits in this no-interest loan area. This government should be giving them more money. If you are really serious about getting people off welfare, you need to let them control their life, and the key to controlling your life is being able to budget. Even on a meagre subsistence allowance like a Centrelink payment, being able to budget is the key to re-entry to the workforce, re-entry to education and a better life. Let's be fair: these people don't have a lot of support. If they had the family support that I'm fortunate enough to be able to provide or that my son and daughter are fortunate enough to be able to provide, people wouldn't get too far away from education, contribution to the economy and success. But these people are not in that situation. There are areas in Australia, well known, well documented, where people are subsisting.

If this government could take a robodebt attitude and try and bang out big bills all around the country, if it could take a slightly less adventurous but perhaps a more private equity approach and put a small amount of money, even $100 million, into no-interest loans and run an algorithm and see that it is successful, then perhaps it could even rejuvenate some of these areas. What we do know is that, worldwide, women, in particular, are incredibly good and successful at managing small loans. It's been proven in Pakistan, India and many developing countries that, if you give women who have responsibility for children and the family a small amount of money, they will become productive. They can articulate it, work it out and go forward with a reasonable degree of success. Unfortunately, there are many areas in Australia where underprivilege is embedded.

I thought Senator Henderson's contribution, when she referred to ASIC, was hilarious. Isn't it Telstra that's just been found to have used predatory pricing in Indigenous communities? Isn't it Telstra that has been found to have sold mobile phone plans that were incredibly overpriced and disadvantageous to Indigenous Australia? Where's ASIC in that space? Are they having a look? I think it's a free-for-all. I don't accept Senator Henderson's contribution that these people are on the job, looking at protecting Indigenous communities and looking at protecting welfare recipients from predatory behaviour. If it's the case that ASIC has found that these rent-to-buy businesses can charge nearly nine times the retail price for the cost of goods, then the only people who would enter that space are those who are completely vulnerable or completely desperate. No-one would knowingly go and pay nine times the price of an article in the marketplace.

What we've got here is a party that is opposing what I think is quite a sensible proposal to look carefully at who has access to Services Australia clients to make sure that they're not being preyed upon. It's pretty straightforward. It's not rocket science. I'm struggling to understand how anybody could actually support rent-to-buy schemes. It's incredible. If we were really serious about Centrelink and social security recipients, we would be giving them some free financial advice. We would be encouraging more not-for-profits. We should be stacking this area with more finance. We should measure it very carefully to work out exactly what does work: what contribution in what area is capable of moving people onto a better pathway? One of my constituents told me: 'This is really good work. You can get a great deal of satisfaction out of moving people incrementally towards an education pathway or into the workforce through a proper budget in the home. These people want no less than anybody else. I don't blame them for making poor decisions, because, if I didn't have a TV and I was on Centrelink payments and someone said, 'You can have one for seven bucks a week,' I'd be there, just like anybody else would be, and I'd count the cost later.

I think the contribution from the other side is thin. When you look at the superannuation area, people are being told, 'You can have 20,000 grand now,' and those most in need of it will take it. I accept that. But they kick themselves an own goal on a lower lump sum or a lower retirement future. If they do it in as a Centrelink recipient and it reduces their ability to claim a payment—which is a bit of a contest at the moment—they've doubly kicked an own goal. The government doesn't tell them any of that.

In summation, I really do think that everybody should support this area. When you meet social workers at Centrelink and get briefings, you see that people are struggling and they need more help. The help they need is not just another handout; they need to be lifted up the ladder. The help they need is to have a proper household budget, to be able to identify previous mistakes and not make them again, and to be offered no-interest loans to get them into a space that will allow them to take pride in their home, their children and their education. I cannot get the contribution from that social worker in the northern suburbs of Adelaide out of my head. They said: 'We're really worried about the grandmothers, because they face a lifetime on Centrelink payments, never having had a decent education and never having had the opportunity to contribute in a decent job, and all because they arguably made a poor decision when they were very young and vulnerable, or someone made that decision and then abandoned them.'

We've really got to do better in this space, and I don't know why we would argue about a product that can cost nine times an item's value being unsuitable for people who can barely afford to pay for their food, clothing and rent. Why would we argue about that? But we are. We hear the contributions from those on the other side, including Senator Henderson, from whom, frankly, I expected a more considered and more meaningful contribution, because her public persona and reputation is that she's a fair-minded person. The defence of this stuff really intrigues me. To defend it when their own policeman on the job, ASIC, found it can cost nine times an item's value is completely mystifying. I suppose that's politics and that's what keeps this place going round and round, but, if we're going to make a difference in this space, I think we have to be completely innovative.

I'm probably a heretic on my side too, because I don't accept that people should be allowed to live their lives on Centrelink payments. I think there should be some strong responsibilities to the community. I know that if we took a more private equity approach to this space, where we became more adventurous and less risk averse, we would probably move a lot of people off Centrelink payments, and we should move a lot of people off them. We do know, from worldwide experience, that small loans, particularly to women with families, are a very successful way of creating empowerment and creating better educational opportunities and better outcomes financially, because people are intrinsically smart enough and determined enough to feed their families and be successful. My advice to any government would be that you do no-interest loans to get people back to square. You fund that area and get people back on the books, and then you look at moving them, through proper financial advice, proper advice about education and proper advice about how to get into the job market. You'd do that exponentially, because it is no life on Centrelink payments. It isn't a life where you can take a trip away. You're stuck in a repeating cycle of debt and bills to pay from the next contribution. Welfare recipients have fewer decisions in respect of their autonomy and the life that they should be able to lead, because there are no funds to do it.

So my contribution would be: pass this bill and then get to work on making the whole thing better by taking more of a private equity approach. Do some innovative projects in this space, measure how many people you get back into education and back into work, and work at reducing the taxpayer bill in this area, because we can do it if we work collegiately and responsibly together.