Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I'm pleased to rise to speak on this matter of public importance. I'd like to start by acknowledging the contribution from the member for McMillan, who brought some sense to this discussion. We all think that interest rates of 48 per cent are outrageous. I personally think credit card interest rates of 18 per cent are outrageous. We as the government hear the call: 'You're in government. Get out there and legislate it and put caps on.' That's what we hear from the other side. But the minute we do that—the minute we decide that we should put a cap on what the interest rate should be—we limit the funds and opportunity that some people will get. That's what we do.

The reason why that 48 per cent interest rate is charged is that the reality is that a lot of the customers of these payday lenders simply don't pay it back. There are very high rates of default, and that is why that interest rate is, unfortunately, so high. Certainly we'd all like to see those interest rates come down. Often you think it would be great if we just legislated that. But what would be the consequences of doing that? We would be harming the very people that we think we are helping. That's what we would be doing, because there are many people in our society, unfortunately, who have poor credit records and can't access finance from our banks or the normal financial institutions. When they face an emergency situation, regrettably, they are often forced to go to a payday lender. If we put legislation in that prevents that, what are these people going to do? What are they going to do if they face an emergency where they desperately need cash if we in government have put legislation in that actually prevents them getting it because we think we are trying to protect them and save them? This is why this area has to be thoroughly thought through. Time after time in government, we see the law of unintended consequences apply, where we think we are doing the right thing and yet what looks moral and correct—'Yes, we're helping the poor'—is not thought through properly and it harms those very people we expect and try to help.

One of the reasons, as the member for Hinkler mentioned, that people need payday loans is the shocking price of electricity in this nation, and nowhere is the price as shocking as in the state of South Australia, the state that decided it was a brilliant policy to have a 50 per cent renewable energy target. What's happened? We see the results. The Australian Energy Regulator's recent report shows the average residential electricity bill in Queensland is $580 and in New South Wales it's $653, but in South Australia, the state with these wonderful renewables, it is $900. If we look at the electricity disconnections in South Australia, 10,902 households last financial year had their electricity disconnected and cut off because they couldn't pay for it. If we look at that in percentage terms, you are seven times as likely to have your electricity disconnected if you live in South Australia as if you live here in the ACT. That's the effect of the policies of pursuing reckless and ideological renewable energy targets.

Yet members of the Labor Party want to copy the South Australian policy, which has delivered the highest number of electricity disconnections in the nation. If they really care about the poor and if they really care about people having to access payday lending at high interest rates, they should drop that 50 per cent renewable energy target, because we know exactly where that will lead—it will lead to South Australia. We've seen the results of this failed experiment. I call on the good members on that side to drop that policy. (Time expired)

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