Sharon Claydon (Newcastle, Australian Labor Party) Share this | Hansard source

It is terrific to see so much interest in the Treasury Laws Amendment (2023 Measures No. 3) Bill 2023. I have listened to some of the debate this morning and it was certainly good to see and listen to a number of contributions made in the House today. This is a bill that was quite recently introduced. To put it most succinctly, it's aimed at improving the integrity of consumer markets for credit products. It's also removing barriers for financial advisers—we've heard some of that this morning—and will support competition in the provision of clearing and settlement services for cash equities.

I'll step through each of schedules 1 to 4, obviously starting with schedule 1. This is where the bill seeks to introduce:

… new rules that prohibit schemes designed to avoid the application of a product intervention order (in relation to a credit facility) made under Part 7.9A of the Corporations Act.

That sounds very technical, but the nub of this is that it will enable safe, well-regulated consumer markets for credit products.

They're really the core element of a strong and inclusive economy. We want to make sure there are always safe, well-regulated consumer markets. People in this House will recall the very long debates we've had over the shocking, dodgy efforts that took place in payday lending operations over the years.

I'm very pleased that the member for Paterson is joining me in the House today, because her electorate, like my electorate and the electorates of Hunter and Shortland, were really a little epicentre of some particularly disturbing practices that were taking place with payday lending. There was the establishment of the small machines that for all intents and purposes looked like ATMs that would suddenly pop up at the smoke shops, where people went to buy their weekly tobacco. All you needed to secure up to $2,000 out of one of these little machines was some ID to say, for example, 'Yes, I'm Sharon Claydon,' and a bank account detail. Then, bingo, $2,000 was forwarded to your account. It operated exactly like an ATM, delivering ready cash to people who were very vulnerable. Most of those people were extremely vulnerable in low-socioeconomic households.

One would argue that the way these machines looked and the way in which they were placed in particular suburbs and areas that we know are of high need was a deliberate preying practice on those vulnerable people, who were then wrapped up in a cycle of shocking debt. They were paying outrageous interest rates for a lousy $500 or maybe $1,500, spiralling into debt. I met people who had been rendered homeless, in fact, as a result of payday lending, and that is not a story unfamiliar to many of us on this side of the House.

I joined with some terrific financial counsellors in my electorate to try to expose these practices, and I do want to acknowledge the fabulous work of Mr Graham Smith, who was the head of the financial council in New South Wales but practised alongside the Samaritans, one of the Anglican community services provided to the Hunter region, working with people who found themselves in this high-interest debt spiral.

Whilst it's unfathomable that anyone could have defended this practice, because it was a very broken business model that relied completely on the exploitation of vulnerable people and families, it's perhaps worth reminding the House at this point that there were actual friends of payday lending in this parliament. In fact, if I recall correctly, there were members of the front bench of the former government who were absolutely leading the way when it came to defending such practices.

And so it was no shock, although it came at a very high cost to all the vulnerable people and families in my electorate, that the former government had received a very damning report on these practices—back in 2015 if I'm not mistaken. The then prime minister, Malcolm Turnbull, sat on it and sat on it and sat on it. The report had been well received by many of the advocacy groups.

I recall all of the peak consumer advocacy groups at the time, like Choice, the Consumer Action Law Centre, the Financial Counselling Australia peak body, the Financial and Consumer Rights Council, the Financial Counsellors Association of New South Wales, the Financial Rights Legal Centre and the Good Shepherd microfinancing people, were absolutely united in the review process. They all made magnificent contributions to the review process. They were united in the recommendations that had come forward to government. But they were faced with a concrete wall that blocked any action from taking place.

I want to take this brief opportunity to acknowledge the current Speaker, albeit in his former role as the member for Oxley, who really led the charge for Labor in exposing these matters to the House, exposing the human cost that was involved in an unregulated system that was profoundly destructive for many, many people we represent. I want to pay tribute to the then member for Oxley and now Speaker of the House of Representatives for his distinguished service in exposing this dodgy, indecent practice.

Shamefully, the Turnbull government did not see fit to bring on those recommendations and reforms. We waited and we waited, and we kept trying to put the pressure on the government about the human cost of this inaction, only to see this ignored again under the new leadership of the current member for Cook. We saw they had no interest in bringing forward any kind of decent protections for vulnerable consumers at that time. So I am very pleased to see in schedule 1 now some further action that will see safe, well regulated frameworks. That will have great implications for those people still tempted by payday lending or required out of absolute necessity to rely on it to help them through a really tough patch. That's why this schedule is before us.

That's also why the Australian government introduced reforms to the regulation of payday lending and to consumer leases through the Financial Sector Reform Act 2022. That was important work for the new government to undertake, and I'm delighted that that has seen passage. These were changes, as I've tried to map out for the House today, that were long overdue. They gave effect to our government's response to the recommendations of that 2016 review. People had to wait six years for some action. It is almost unforgivable.

That, of course, included laws that would prohibit avoidance behaviour. The Financial Sector Reform Act 2022 introduced those anti-avoidance provisions with respect to the Australian Securities and Investments Commission's, ASIC's, product intervention orders, which were made under the National Consumer Credit Protection Act 2009. This bill extends those provisions to protect intervention orders that are made under the Corporations Act 2001.

ASIC has made several product intervention orders under the Corporations Act 2001 targeting predatory lending products that, as I've mapped out, cause very significant consumer harm.

Predatory lending products have no good side. The product intervention orders, quite simply, will allow ASIC to temporarily intervene in a range of ways up to, and when necessary, banning financial products and credit products when there is significant risk of consumer detriment. That is good public policy. That is the way governments should respond. We should always be very alert to any form of risk of consumer detriment. By bringing the anti-avoidance provision into the Corporations Act, we are bringing those into line with those in the National Consumer Credit Protection Act. This amendment will ensure that predatory lenders cannot respond to a product intervention order by engaging in avoidance activity that is not covered by the order in a similar kind of detriment to the consumer. We are closing a loophole that we know dodgy operators and lenders will totally exploit if left unattended to.

In the short time left to me, I'll briefly go to the remaining schedules in this bill. Schedule 2 is an important part of the bill before the House. It's delivering on the government's election commitment to remove the education requirements for those who are already experienced financial advisers—so people who have got 10 years experience or more and, more importantly, a clean record. If they have 10 years experience, a clean record and they have passed the financial advisers' exam, we are going to remove those educational requirements for those people. We are also making sure we're attending to some of the barriers upon entry that are facing some of those wishing to take up financial advice as a career choice in the future.

Schedule 3 is implementing the Australian Securities and Investments Commission Act, the Corporations Act and the Competition and Consumer Act to facilitate competition in the provision of clearing and settlement services for cash equities traded in Australia, and to ensure that, should competition emerge for these services, it is safe and effective. Again, this is a very sensible move.

Schedule 4 is also making some technical changes to the Taxation Administration Act and the Income Tax Assessment Act that will make sure that the First Home Super Saver Scheme works better for first home buyers, something that cannot be claimed at the moment. Now, at this time, first home buyers need our support more than ever. (Time expired)

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