Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I'm proud to support the motion moved by the member for Perth, and I thank the member for Oxley for his fine words on this topic. I'm proud to join the member for Perth in calling on the Turnbull government to immediately prepare legislation to implement the small amount credit contract review recommendations.

Next week, the coalition government starts its fifth year in office, so it's not as if they haven't had enough time. The government commissioned a review of SACC in 2015 which reported to the government in March 2016. The government's own response was released in November last year. So the reform plan already exists and has done for a year. Most of the work has already been done. Now it's time to actually act. In fact, Minister O'Dwyer indicated in February that the drafting of the legislation was already underway to implement the SACC review's recommendations. However, we've now heard that the drafting actually has not commenced. So not only have they been sitting on their hands when it comes to the review's recommendations; they've also misled the Australian people about the progress of these vital reforms.

It's high time the government stopped dithering, stopped focusing on themselves and their interminable division, and started standing up for Australians trapped in these inappropriate small amount credit contracts or payday loans and rent-to-buy schemes.

These small amount credit contracts or payday loans and rent-to-buy schemes are a particular type of loan that is almost exclusively used by people on low or very low incomes who are simply trying to keep their heads above water. They are loans that are not issued by authorised deposit-taking institutions like banks, building societies or credit unions. They are loans for much smaller amounts and shorter durations, and, as the member for Oxley stated, they can have annual interest rates amounting to 100 to 400 per cent or so.

We see the TV ads: get cash in 30 minutes or instant loans on an iPhone app; get your holiday paid for now; go into hock for your wedding. Sadly, with inequality at its highest in 70 years, the number of Australians feeling the squeeze with the rising cost of living and other pressures is rising. This leaves an ever-increasing number of Australians with low disposable incomes and without the capacity to absorb financial shocks like keeping a fridge that's broken down running, repairing a burst pipe or repairing a car so that they can go to work.

In these scenarios, it's easy to see why people turn to the apparent promise of a small loan to relieve this financial stress. In the short term it's attractive, but in the long term you're obviously paying these exorbitant rates. Then there are the rent-to-buy leases where a consumer will rent a product, such as a washing machine or a fridge, from a particular company for a particular period. They appear nice and shiny. They're basically the modern-day version of the old hire-purchase scheme.

Labor remains deeply concerned about the systemic failures and the lack of an adaptive regulatory framework that can respond to these small amount credit contracts, leaving many Australians in a cycle of spiralling debt where they're borrowing to pay the interest on these payday loans. I was proud to be part of a Labor government that enacted the National Consumer Credit Protection Act 2009 in 2010. For the first time in Australia, that act implemented a national regime for the regulation of consumer credit. Labor's record in government on consumer law and securities reform is strong. We work with small and large business to reduce red tape and inhibitors to business confidence. Over our two terms in government, our reforms in this sector received an abundance of support from the commercial and consumer sectors, something you could hardly suggest this Liberal government enjoys. In fact, we've only had one speaker from the Liberal Party on this motion. We strengthened our own consumer credit protection regime in 2012 as a response to growing concern amongst Australians about improper behaviour by payday lenders, including by strengthening protections for consumers of these products. That's our record, Labor's record. I'm proud to stand by our achievement in the consumer law sector and look forward to doing even more under a Shorten Labor government.

Part of Labor's plan also mandated a built-in review mechanism of the new national consumer credit protection regime. That review commenced in 2015, and we've been waiting, with cobwebs blowing around and tumbleweeds rolling down the finance street. As I said earlier, we've heard one thing from the minister over six months ago—that the legislation was being drafted—and then another thing from the relevant department, saying that no such drafting had occurred. I certainly hope those sitting opposite might be able to provide Australia with an update on the drafting at the very least, because we need this legislation. Australians who are trapped in these contracts stand to have their lives improved by this parliament acting to fix the problems, only to have our government too preoccupied with internal divisions—yet another example of the legislative inaction that has become too synonymous with this Turnbull government.

So I thank the member for Perth for his motion, and I wish that those opposite had supported the motion and spoken on this important area of work. I look forward to the member for Perth's contribution in the future.

See this speech in context