Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

I must say that I am still trying to recover from some of the speeches this morning, where those opposite actually praised my motivation! It is a highly unusual approach from those opposite. But when you get the chance, you should take it the way it was meant!

I want to deal with some of the technical issues that have been raised in relation to my private senator's bill, the Social Security (Administration) Amendment (Consumer Lease Exclusion) Bill 2015. One of the issues that this debate has clearly demonstrated is that there is no legislative base for Centrepay. Centrepay is regulated by the policy and terms determined by the Department of Human Services, and those policy and terms can be changed by the secretary—obviously in consultation with the minister. Given that a number of coalition senators who participated in the debate raised this issue, I want to place on record now that the opposition would be amenable and supportive of sitting down with the minister and the government to develop a proper legislative base for what is one of the most successful programs for many years. It is a successful program that does good things. What I am concerned about is the misuse of Centrepay by some of the most unscrupulous business people in the country.

I do not think the policy and terms of such a wide-ranging, important program, that is worth $3 billion—that is the amount of money going through this program—and which is accessed by 600,000 citizens, should simply be left to the secretary of the department to determine in consultation with the minister. There has always been a bipartisan approach to Centrepay, and I think that bipartisan approach should continue by sitting down and looking at the legislative base to see how we can protect all citizens who access Centrepay and make sure that the rip-off merchants do not get their claws into people who are doing it tough.

I might be one of the few sitting in the Senate who have used a consumer lease. Many years ago when I was involved in a pretty tough industrial scene in the Hunter Valley and at the electricity commission I had a single income. For one year I earned $8,000. That was my total income for the year. We were in all sorts of strife trying to pay our mortgage and put food on the table for our kids. We were desperate at the time for a fridge, I think it was. A leaflet came through that made it look so easy. I made a mistake: I got the fridge and I paid through the nose for it.

Again, I am one of the few here who has, from time to time, battled to put food on their family's table, because of having a single income, being a blue-collar worker and doing it really tough, so I know from personal experience what this means. At the end of a three-year or four-year lease, you think, 'Why did I do that? Why didn't someone advise me that this was the wrong thing to do? Why did I, in a moment of weakness, get caught up in this web of business process that leaves me much worse off at the end?' I do come to this from some experience. It would probably have been over 30 years ago when I was in that position. I understand that many people would be in that position.

A company, rent4keeps, sets up their pop-up business in the middle of a shopping centre in Penrith, where I still shop, targeting single mums and low-socioeconomic families. Surely the lessons that individuals like myself learnt all those years ago and the lessons that society should have learnt should be put in place and people should not be hunted down by these jackals in their smart suits who tell people on welfare that everything is okay if you pay four or five times the price for a consumer good. We have an obligation to expose that and we have an obligation to deal with it. I looked at this some time ago. Rent4keeps did not target me because I was not in the age demographic that they were looking for. I asked for the leaflet, got the leaflet and looked up their website. On the website I did the calculation for a couple of the goods that they had. One was, I think, a Hisense flat screen, fairly big television. You could pick it up for about 900 bucks. I did the calculation of what it would cost from rent4keeps over four years and it came to $5,700. This is a TV you could get for 900 bucks at Harvey Norman. You could probably get it cheaper if you went online.

There are a number of options for the young people who are getting caught up in this. Even credit cards, which are regulated, would be cheaper than rent4keeps, and we all know about the problems with getting into the credit card cycle of poverty, so that is even worse. We have regulated payday loans and payday lenders, and yet what we are finding now is that a lot of the payday lenders are moving from payday lending to consumer leasing, because consumer leasing is the next way that is unregulated to rip citizens of this country off, and I think the Senate has an obligation to deal with that.

I looked at the rent4keeps website, as I have indicated, and there were plenty of examples of why nobody should ever go near them. They are also letterboxing the Housing Commission areas in Penrith. Their stuff looks pretty flash. They have a happy, smiling family getting all the consumer goods that wealth brings, yet these people are not wealthy. It is not just in areas like Penrith; they are targeting Indigenous communities. We must say, 'Enough is enough.' We must do that. Why are some people doing this? On their website, rent4keeps say, 'Set a franchise up with us. We've got 100 operating franchises around the country'—and, remember, this is one of the minor players. They have 'numerous exciting and profitable "lifestyle friendly" franchise opportunities'. I will tell you: it is not lifestyle friendly if you are a citizen they have their claws in. There is no friendly lifestyle for them. They say:

If you enjoy being busy and having a business you can run, that does not run you, then maybe R4K is worth a look.

So they are saying, 'Hey, there's a great business opportunity here. Let's do it.' And they say:

No wonder it is very profitable when they are getting four and sometimes five times the price of the consumer good, paid through some poor citizen who is being screwed by the company. They say:

You have no big overheads like we hear in some of the arguments: 'You have to increase the cost of the consumer good because you've got overheads.' This company is saying, 'That ain't an issue. You can run this from home.' They go on to say:

Again, there is the argument: 'If you've got to invest in your business, you've got to get a return.' They are saying it is really affordable and that you could do it easily. Here are the kickers:

So it is all upside for the people who are getting their claws into the poorest people in this country and it is all downside once citizens have rent4keeps and Radio Rentals claws in them. This is a huge issue in my view that has to be dealt with.

Another argument that we have heard is that the government are moving on this issue. The government made an announcement back in May 2015 after this issue was becoming public and Labor had made some comments on it. The government said they would 'restrict the type of consumer leases that consumers can pay for using Centrepay payments.' They went on to say:

... leases that run for an indefinite period, or have a duration of four months or less, will be excluded from Centrepay ...

That did not deal with the fundamental issue that these consumer leases are still readily available under Centrepay. They said that the Department of Human Services would work with Treasury and key stakeholders to review the policy and whether you would disclose the effect of interest rate by Centrepay registered providers. If people in trouble think that Centrepay is available to do this, they will think that there is some government support for this.

I do not think that we should be giving any impression that we support Radio Rentals, rent4keeps or Rent the Roo. Some of these companies have been before ASIC and have been fined in the Federal Court and are then still part of Centrepay. Why should we be allowing that to happen? If there is one thing that this Senate should be doing it is protecting those that cannot protect themselves. That is what we should be doing.

Minister Payne said that there will be 'links to ASIC's MoneySmart website'. I can imagine the poor person down in the housing commission house will be thinking, 'I'd better go and have a look at the ASIC website to see what they say about this mob that are telling me I should pay four times the amount for the consumer goods.' Funeral insurance would be excluded, which has been a rip-off. Minister Payne also said that there would be:

…increased cooperation between the department and consumer protection regulators.

In my view—and I will not be unkind to Senator Payne—that was the smokescreen the government put up to try to avoid dealing with the fundamental issue that citizens in this country were mercilessly being ripped off, and the government at that stage was not prepared to do anything about it. That is why my bill was put forward, and I am glad to say that it was supported within the caucus of the Labor Party. It is an important way forward.

Then the kicker really comes in Senator Payne's press release. She says:

While customers may still use Centrepay for regulated consumer leases—

'regulated consumer leases'—there is no regulation on whether they charge you 400 or 500 or 600 per cent, so I do not know where this regulation comes in—

I would encourage people to carefully read the fine print and consider all of their options.

Senator Payne does recognise that there is a big problem here that should be fixed. That problem could easily have been fixed if the minister and the secretary of the department had sat down and changed the policy and terms to exclude the rip-off merchants using Centrepay—Radio Rentals, Rent the Roos, rent4keeps, and I could go on and on. All these people are making masses of profit at the expense of the poorest citizens in our country.

I say it is important that this bill passes in the Senate. It is important to send the message to the rip-off merchants in our community that this Senate does not support the rip-off of the poorest people in this country, and this bill is the first step. I would call on the government to look at the bill in the House of Representatives and pass the bill in the House of Representatives as well because that will send a clear and unequivocal message to the rip-off merchants in our community that we will not allow them to use a government department to facilitate their rip-offs, because that is what is happening. I have heard the arguments that people should have a choice. This bill does not stop anyone going into rent4keeps or Radio Rentals or Rent the Roo and getting a bank deduction and being ripped off. I say that should be looked at by Mr Frydenberg in the other place to make sure that we put a limit on those rip-offs and we stop these rip-offs, but my view is that we should pass this bill to send a clear message to the rip-off merchants that the game is up.

Radio Rentals run almost half of their consumer lease business through Centrepay. A recent analysis said that Radio Rental's business model was unsustainable because of its rip-off nature. It is a subprime approach to people in this country. When an analysis was done and when Radio Rentals made some comment to the stock exchange about what these Centrepay changes that the government had put in place would mean for them, they said that it would mean nothing to their profits, it would mean nothing for the business model. So the rip-offs continue. With all the arguments that we have heard from those opposite—that the government moved on this, that the government made these changes to stop poor people ripped off—Radio Rentals say that it did not have one effect on them at all. The rip-offs continue.

We need to be clear about what this bill is about: stopping the rip-offs and making sure that people are treated fairly. This is supported. I convened a round table of welfare groups back in March. At that round table there was overwhelming support to do something about this because the welfare groups—the St Vincent de Paul, the Smith Family and the various faith-based support groups—are the ones who are picking up the pieces on this. I did an interview this morning on FIVEaa with Leon Byner. He asked people to ring in after I had said we should stop this. Seven people rang in. Six of them gave practical examples of how their families had been left in a terrible position as a result of using consumer leases. Only one came in and said it was okay, and my view was that they were someone from the industry.

I commend this bill. I ask the Senate to support this bill. It is about protecting the most vulnerable in the community.