Tuesday, 16 February 2021
Statements by Members
Banking and Financial Services: Responsible Lending Laws
This government voted against the establishment of the Hayne royal commission 26 times. The Treasurer and the Prime Minister have now sat on Commissioner Hayne's report for two years and only implemented one-third of its recommendations. Instead, this Treasurer and PM are planning to ignore the first recommendation and destroy responsible lending laws.
There is no evidence that these laws are adversely impacting loan growth or the cost of household borrowing. Credit has never been more available. In fact, the RBA just announced that the value of new loan commitments for Australian housing has reached a record high, rising 8.6 per cent to $26 billion in December 2020. A raft of experts has lined up against watering down these protections. Choice, CALC and many other consumer advocates have said that Australians need more income, not more debt and fewer consumer and regulatory protections. APRA and ASIC weren't properly consulted on these proposals. Shayne Elliott has said: 'I don't think there's a fundamental issue with the law as it stands.' The Australian Treasury has said: 'Responsible lending laws are providing stability for the financial system overall.' And I could go on and on, with so many other experts and academics.
The government's proposed changes to responsible lending will hurt the people of Fraser. Brimbank Melton Community Legal Centre has told me about harrowing examples of Fraser residents who have been financially exploited. Financial exploitation and disadvantage are strongly correlated with instances of family violence and relationship breakdown, and they hurt vulnerable people more generally. This is an atrocious and destructive answer to a problem that doesn't exist.