Amanda Stoker (Queensland, Liberal Party) Share this | Hansard source

I rise to speak in the debate on the Social Security (Administration) Amendment (Protecting Consumers from Predatory Leasing Practices) Bill 2020 that has been put forward by Senator McAllister and her team. The purpose of their bill, as is stated, is to amend the Social Security Act to prevent Centrepay deductions from being made in relation to consumer leases. For those people in the gallery who may not be familiar with consumer leases, they don't relate to property in the real sense. It's not about your house or your apartment. It's about taking out a lease to get yourself a refrigerator or a washing machine—the kinds of appliances that can be really important for people's lives going to plan. They relate to generally smaller sums than the kinds of leases that we associate with real property.

The government doesn't support this bill and, I would suggest, with good reason. It brings into sharp focus the approaches of different parties to some really fundamental issues. We have on the one hand some people in our community who can be vulnerable and who, by reason of their being a recipient of Centrelink payments rather than somebody who is in work, can face some real challenges in meeting all of the expenses they might incur or wish to make in their lives. On the other hand, however, we face the important value that is the right of individuals to choose what they do with their money and to do so without governments telling them what they are and aren't entitled to spend their money on. They are entitled to the opportunity to learn from participation and from experience how to, and whether they wish to, interact with all the different types of items for sale and all the different types of products in the financial space that are available to them.

When we think of financial literacy as being one of the real problems, where people find themselves in something of a cycle of hardship, financial literacy is a really big part of both the problem and the way out. One is more likely to end up in circumstances where they need assistance if they have lower financial literacy, but, at the same time, if we take away the right of all individuals to make choices about what they want to do with their money they are denied the opportunity to build their financial literacy by gradual experience. So we need to make sure that the way we handle this area of law takes into account the need to balance the risk that a person might be exploited by an unscrupulous provider against the really important value that a person should be able to choose and should be able to learn by participation. They are both really important things.

This government has done what I would suggest is a good job of balancing those considerations. Rather than taking away the ability of people to engage in leases or enter into different financial products that might suit their individual needs, despite the fact that they are in receipt of social security assistance, we instead took the step of conducting a detailed review from 2013 to 2015 of the way that these types of products are offered and assisted in their delivery by payment using the Centrepay service. In doing so it was this government, importantly, for the record—not those opposite, who did nothing about it when they were in government, but this government—that knocked off hundreds and hundreds of loan shark like businesses that were indeed unscrupulous in the way they operated in this field. One example that was quite confronting to see was that some of the unscrupulous vendors who have since been pushed out of this system—they have not been able to participate since 2015—would go into Aboriginal communities and sell insurance products, like funeral insurance, to 10-year-old kids. It isn't fair, it isn't sensible and it's not the kind of thing that meets what I would suggest is our sense of right and wrong. The consequence of that review and that process, which I understand was led by both now Minister Payne and now Minister Robert, was that over 1,000 providers that were at that time registered to deliver services that were paid for through Centrepay were kicked out of the system. I think that says something about the rigour that has been applied to this sector.

It is worth turning our minds to this: what exactly is Centrepay? Those people who haven't had the experience of being in receipt of social security benefits may not have come into contact with it. For those listening from home, Centrepay is a free service. It is offered as part of the suite of tools offered by Services Australia, formerly known as the Department of Human Services, to help people who are in receipt of a welfare benefit to manage their money as they grow their financial literacy. The way it works is it allows a person to set up a whole series of direct debits, if they wish—they can use it as many or as few times as they want to. It means that they can set it up so that bills, utilities, rent and the like come out of their Centrelink payment, and then what remains, once all of those important and core expenses of life are taken care of, is deposited into their bank account for use.

Centrepay was created in 1999 and in the last five years it was used, at some point, by 46 per cent of all people who are Centrelink customers. That speaks to something of the need for it and it speaks to its usefulness as people are going through a phase in their lives when they are getting hold of their financial situation and doing what they can to build financial literacy. It means, for those people who use it, that all of the essentials of life are covered before the remainder of the payment is deposited into their account. It's really important for making sure that a person in receipt of social security benefits is able to manage their household budget well.

The categories of goods and services that are covered by Centrepay are quite broad. It can cover accommodation, education and employment, health services, utilities, household goods, travel and transport, even some social and recreational type activities, legal and professional services in some circumstances, and a range of financial products. In the financial year just gone, there was an average of 648,000 customers a month who used the service, and they used it to make 26 million Centrepay deductions worth over $2.76 billion to approximately 14,000 approved businesses. So you can see that it is really quite a widely used service that is important in the lives of many Australians.

Now we're coming up to Christmas, and I think it's worth acknowledging that, for people who are on social security benefits, it can be a time when it's tough to manage your money. Controlling and staying on top of managing your income, particularly when you've got dependants, too, can be really difficult. But Centrepay gives control back to people so that they never miss the fundamentals. They never miss paying rent. They never lose the roof over their heads.

It is the kind of responsible approach to managing money that this government tries to bring to everything. We want to empower people who are in receipt of government assistance—and of course we hope that that will be short-lived; we hope that people will be able to make the transition back into work as soon as possible, as soon as their life circumstances and the job market permits. But we take the approach that it is important to empower people as individuals to make the best possible choices for their own future, because what the best choice is for you to do with your money, Madam Acting Deputy President, might well be different from what is right for me or, indeed, right for every other Australian. We'll all have different priorities and different values, and different things we want to achieve, and it would really be quite arrogant for any government to think that it knows and it should decide what a person is allowed to do with their money. Instead, this voluntary, free service helps people manage the pressure of their competing priorities so that not only do the fundamentals get paid—the rent gets paid, the lights stay on; all that can happen—but also they're able to make some choices for themselves about what they want to do with the rest of their money. The success of Centrepay is really about the fact that it's voluntary.

When we strengthen the help that's available to individuals who are receiving government assistance, who are developing their financial literacy, we are also strengthening that help on the other side by making sure that the system is only able to be accessed by those who participate according to clear and defined rules of the game, which means that the suppliers who receive payments through Centrepay have to comply with quite rigorous standards of auditing. They have to sign up to a code about how they interact with and treat the people from whom they are receiving payments through Centrepay. Importantly, they have to work with them to hear on a regular basis how they can continually deliver better outcomes for customers.

So this is really a program of consumer consent with a focus on the basics. It's entirely consistent with that that a person who finds themselves in a situation where one of the basics they need to operate is on the blink—whether that's a washing machine that they must have as a matter of urgency to get the kids' school uniforms clean and for them to get on with their education, for instance—is able to make decisions for themselves about what works best. Some people will be able to just go down to Harvey Norman and pick up a new machine, but that's not the case for everyone. For someone who can't access microfinance, for instance—that's part of one of the really low- or no-interest programs that already exist—the existence of consumer leases can be a really important resource. And, provided it's done within the bounds of ethics, as this government has sought to make sure is the case by all of the different types of regulated leases that are available, it gets the balance right between giving people choice and making sure they're not exploited. Who are we as a parliament to tell the mother who needs to get uniforms washed for their kids for school so that they can participate in their education for the coming week that, no, they can't go down and get themselves a washing machine on a plan? This isn't a buy-now pay-later arrangement; this is the rental of an item, but it can be just what's needed to fill a hole in a person's laundry, shall we say, but also to help them get through a hole in their budget for the short term. And that is only right.

When a company who is a participant in the Centrepay scheme is found to do the wrong thing, of course this government steps in and boots them off it until they fix whatever it is that's causing problems. The regulatory framework means these types of businesses have to be licensed; they have to comply with responsible lending obligations; they are overseen by a regulator; and this isn't a service that's offered to cash lenders, pawnbrokers or buy-now pay-later schemes. This is really an important part of the services that are available to people who are in receipt of government assistance, and using Centrepay to help them get on top of their expenses is not only a sensible thing but it is the right thing to do, as we—to bring it back to where I began—balance their need to be protected from vulnerability with their need to develop the skills they need for financial literacy through participation and experience in the market as the capable individuals they are.