Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

I thank all members who have spoken on this bill, particularly the last member to speak, the member for Swan, and reassure the House and everyone listening that the opposition are supporting these reforms and this very good legislation—the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011 and the National Consumer Credit Protection Act 2009. These are good reforms. They follow a range of serious reforms which this government has taken on, after an absence of almost 12 years when the opposition were in government of dealing with some of the serious reforms needed in financial services. The reforms look at banking competition, the advice sphere and superannuation—what we have done in the Cooper review—for the next 20 years. In the past 20 years we have seen super grow to become the basis of our national savings. Over a trillion dollars worth of savings in this country helped support us through the global financial crisis. Whether it is credit reform, consumer protection or competition in these areas, Labor has taken on these serious and challenging reforms. So it is good to hear that members opposite will be supporting these very important reforms.

This legislation follows through on our election commitment to crack down on unfair treatment of Australians who use credit cards, to make sure they get a better deal out of our banking system. In the end, we are all tied in together—the banking system, consumers, credit providers. Everyone needs everyone for the system to work but it ought to be a fair system that delivers a quality product to people.

In Australia, there are 15 million credit cards out in the market, almost a credit card for every man, woman and child in the country—certainly one for everyone over 18 years of age. So there is a fair bit of credit out there. I heard earlier criticism about our comparatively high credit levels compared to other countries. From time to time that may be the case. I have spoken in the past about unsustainable levels of credit, but a curious thing has happened in the last few years—that is, average credit card debt has fallen. People are beginning to get the message. They are saving and paying down their credit cards, being responsible in their use of credit. Our responsibility in this government and this parliament is to make sure that we give them the support they need in return—to make sure that the regulatory frameworks are right, that the banks and credit providers are doing the right thing, that credit is provided to those who can afford to repay it, that it works in the right way and that we support competition in these areas.

As most people would know, the average family has more than one card; it has multiple cards. The majority of families use that credit responsibly. Credit can be a very important means for ordinary people to give themselves a good lifestyle and to manage the creation of wealth. No-one buys a house with cash. People buy houses on credit. There are ways that people can manage good credit for good reasons, build their wealth over a period of time and create for themselves a good lifestyle and a retirement income for when their working lives come to that point. It is okay to have credit and it is okay to have a credit card, as long as people understand their responsibilities, as long as it is something that they can manage properly and as long as they are not being taken advantage of. That is the key thing when we look at the principle behind these reforms. We want to make sure that people do the responsible thing, but we also want to make sure that banks and credit providers provide an assurance of responsibility when they provide credit to people. (Quorum formed)

I thank all of my colleagues for taking the time out of their busy schedules tonight to come and listen to me speak. I put on the record again that these are great reforms. While we hear the criticisms of the opposition, the opposition will actually be supporting this legislation, because deep down they believe this is good legislation and the government is doing a good job. When it comes to financial services reform and consumer protection—whether it is in relation to banking competition, banking exit fees, credit card limits or other necessary protections for ordinary working people—this government takes the hard decisions and makes the reforms. I thank the opposition for supporting this very important legislation.

I have very little time left, given that the opposition finds it necessary to continue to cut short our contributions, but in this legislation we are banning unsolicited offers to increase credit card limits. I think this is an acceptable reform. People do not need to be offered unsolicited increases to their credit card limits. They should be adult and responsible enough, if they need further credit, to apply for it themselves. It has been too easy for banks and lenders to, in an unsolicited way, encourage people into higher credit limits and even into debt.

This legislation also prevents lenders charging fees to customers who go over their credit limit, unless they have expressly asked for this particular service. There are a range of ways to ensure that consumers, while getting good access to credit, are protected from some of the worst aspects of credit, particularly the high interest that some providers charge on credit card debt, the high credit card limits and the fees that are charged. We also want to make sure that there are warning statements about making minimum repayments so that people understand that, by only making the minimum repayment, they potentially put themselves in a revolving door of credit and may never actually pay that credit off. If you calculate what you are actually paying over a number of years, the numbers are phenomenal. People ought to be aware of the pitfalls of having revolving credit card debt which you never pay. It can be worse than having a mortgage in the length of debt and the amount you pay back in fees and interest charges.

This legislation does many things to protect consumers in the area of home loan exit fees, providing more competition and giving people more ability to choose. It also provides for a one-page home loan facts sheet which will give people access for the first time to real information, restoring the power equilibrium and making sure that they know what their home loan is about, exactly what their responsibilities are, what the terms and conditions are and how much they will be paying. It will give them power for the first time to be in control of their own credit and debt.

I thank all the members who have spoken on this legislation. In conclusion, I can say that it is very good legislation. It provides for competition. It provides for choice. It provides for consumer protection. It is part of a suite of financial services reforms and changes that this government is making. I recommend the legislation to the House.

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