Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Housing and Urban Development) Share this | Hansard source

They listened to the Prime Minister and his government, who claimed that they would keep interest rates at record lows. They have now, of course, seen themselves become victims of these loan sharks. Unlike other financial advisers, mortgage brokers can put up a shingle with no qualifications and open for business the next day. In many cases pensioners are offered a refinance deal to cut the cost of their housing loans. The loan shark then signs them up to grossly inappropriate loans, which they know they cannot repay, and they lose their homes as a consequence. Do we hear anything from this government on these issues? No, not a word.

Ross Gittins told us today that rates will always go up and down—that people just have to live with it. We have heard Liberal politicians from various parts of the country now say that it is appropriate—that these are only small increases in interest rates. I repeat: in the circumstances where there are no longer small mortgages, there are no longer small increases in interest rates. Senator Minchin has expressed his view that he is disappointed that Australians have found themselves in financial difficulty. I can understand that he genuinely is disappointed. But we have seen other views expressed by many others in this country that it is to be expected that there will be casualties of the rate rises—that that is natural for the greedy and the gullible. Unfortunately the domestic economic situation is not quite so simple. What we are finding is that there are increasing numbers of Australians who have been taken for a ride by shonky mortgage brokers. They have been left in debt with no home and facing the distress of foreclosure. This is not just about the gullible; it is about the exploited and it is about those who have been misled. I find it appalling that we have this situation.

ASIC only recently referred to the Federal Court the case of a Canberra teenager who inherited a small sum, consulted a buyer and bought a house. He was on a low and intermittent income. I think he was an artist or something of that type. He signed various documents that claimed he had an income of $70,000 a year. The young man soon defaulted. ASIC alleges the broker who arranged the low-doc loan for the teenager, who could not repay it, misrepresented the teenager’s financial status to the lender and misrepresented to the teenager what would be in the various loan forms. In this particular case the young man was lucky because he did have some legal redress, and he had the brains and fortitude to take up his legal rights. But most, unfortunately, do not have that assistance. They are left stranded with a debt and no home. Of course, we have seen that situation repeated around the country.

There are some predictions that these types of loans could make up to 22 per cent of the total market by 2008. We have heard nothing from this government in terms of its moral responsibilities and its moral obligations to regulate and to ensure that these shonky brokers are brought to heel. This is a situation that requires national action, particularly at a time like we are seeing at the moment where we have a catastrophic failure of public policy and where the government has failed to move to protect those who are most vulnerable. These people are dismissed as being simply the casualties of the good times. The Howard government deserves to be condemned. It deserves to be condemned for its absolute failure— (Time expired)