Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on behalf of the more than 600 Tasmanian families who will be affected by an imminent $160,000 cut to the no-interest loan scheme in my state. This funding is being axed from NILS Tasmania because Good Shepherd Microfinance, which oversees the scheme nationwide, has restructured the way it allocates its national funding pool. Rather than allocating funding by need, Good Shepherd will, from next year, allocate funding on a purely per capita basis, which drastically impacts smaller states like Tasmania, despite demonstrably higher levels of socioeconomic advantage and need for these services. NILS provides loans of up to $1,500 to low-income earners who receive a pension or hold a concession card. No fees or interest are applied to repayments. NILS can be used to access finance for things like a new fridge or washing machine, unanticipated dental costs, education services or a car repair. It can also offer microfinance to launch a new small business. Without NILS, many low-income families would be forced to consider signing up with high-cost payday lenders and rental schemes, and the difference in cost is astronomical. For example, an LG eight-kilogram washer from a rental firm will cost around $2,500 over the lease period, with no ownership at the end. The repayments on a NILS loan would cost $874—simply the cost of the machine—and the machine would be owned. That's $1,600 not going into the pockets of payday lenders and rental schemes.

We know that NILS Tasmania is needed, because it's reaching double the percentage of clients that NILS on the mainland is. Little wonder, given Tasmania's historically higher numbers of low-income earners and people requiring income assistance. I do not want to be critical of Good Shepherd Microfinance; it is a non-profit agency doing very good work. But I urge it, in the strongest terms, to reconsider its decision to strip $160,000 from Tasmania.

Meanwhile, I take the opportunity to remind the House that this is Anti-Poverty Week. The Tasmanian edition of the Salvation Army's The Hard Road makes for sober reading. Some 72 per cent of survey respondents said they had foregone food at some stage to pay their rent. The Tasmanian Council of Social Service estimates 5,000 Tasmanian households have gone without meals in the past year due to financial stress—stress that is increasing, not coming down.

In November last year, the federal government released its response to the final report of the independent review of small amount credit laws. These are designed to protect vulnerable people. I urge the government to look at these recommendations and, with stakeholders, implement these recommendations at the earliest opportunity.