View the Senate Committee report here, either whole or specific parts.

Media release – NILS Tasmania, 24 September 2020

Government-led Senate Committee back action on legislation to minimise harm from predatory pay day loans and rent to buy schemes

Over 1100 days since the Federal Government first tabled exposure draft legislation, a Senate Economics Committee has handed down its final report on proposed reforms to payday loans and consumer leases in the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2019 (No. 2), otherwise known as the SACC Bill.

The Committee recommended the Government ‘progress sensible reform and strengthen regulation in the area of small amount credit contracts and consumer leases’. The Committee also recommended removing consumer leases from Centrelink’s bill paying service Centrepay.

NILS Network of Tasmania made a submission to the committee and appeared before it in March to call for action.

John Hooper CEO of NILS Tasmania said, “The Committee’s report demonstrates cross party support for better consumer protection of these high cost high risk products and so surely now in the midst of the economic fallout from COVID 19, NOW is the time for the government to introduce its own legislation”

Mrs Bridget Archer MP, Federal Liberal Member for Bass, has been outspoken in her support over the last few years in calling on her Government to act and in last few days had again made representations to Minister Michael Sukkar on the issue.

Liberal Tasmanian Senators and Gavin Pearce MP have acknowledged the need for action in letters to NILS Tasmania.

Tasmanian Labor Members and Senators, Greens senators and Andrew Wilkie MP have likewise been outspoken in their call for action on legislation and likewise confused by why it’s taking so long.

The committee though, didn’t support the legislation tabled by Labor and Centre Alliance, as predictably it split along party lines. This legislation however was an exact replica of the legislation the Government’s exposure draft from three years ago.

The Hon Elise Archer MP, Tasmania’s attorney general, while not taking up our cheeky suggestion for Tasmania to draft legislation if the Federal Government won’t, has said “The Tasmanian Government agrees that protection for vulnerable consumers is imperative, joining other states and territories supporting the Bill being pursued by the Commonwealth. I understand that work on the bill is progressing. I will ensure the issue is raised at the next Legislative and Governance Forum on Consumer Affairs (CAF) meeting in November should the matter not have made further progress.”

In other states South Australian Liberal Government and the Victorian Labor Government have publicly declared they are drafting legislation of their own as they see the impending risks for vulnerable people if better regulation isn’t enacted as Australia enters its deepest recession in 100 years.

“The time for talk is past, the time for consultation is past. Three years is long enough to get some regulation sorted. Please, we’re begging you, act now before more harm is done” said Mr Hooper.

“While I have no wish to support the industry, I guarantee they will not thank the Federal Government if a patchwork of regulation across Australia is the result of any more delayed Federal Government action”

“NILS Tasmania is doing all it can and has received generous support through the State and Federal Government to provide a safe lending alternative to Tasmanians during the COVID crisis. However the need is beyond what we can assist with. Tasmania has the highest proportional growth in pay day lending over the last three years, and so we are terrified of what might happen as people spiral into debt in the year ahead.”

Mr Gerard Brody, CEO of Consumer Action Law Centre in Victoria, which has led a coalition of consumer organisations over the last few years desperately seeking reform, said “The Government now has a window of opportunity to get these protections in place before we start seeing a spike in people turning to predatory lenders just to make ends meet. The time to act is now.”

“Implementing these reforms would ensure people have enough money to pay for rent and food after making loan repayments, and help stop Australians from falling into debt spirals caused by payday loans and consumer leases.”

Media release – Consumer Action Law Centre, 24 September 2020

Government-led Senate Committee backs strengthening consumer protections for predatory payday loans and high-cost leases

A Senate Committee has handed down its final report on proposed reforms to payday loans and consumer leases in the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2019 (No. 2), otherwise known as the SACC Bill.

The Committee recommended the Government ‘progress sensible reform and strengthen regulation in the area of small amount credit contracts and consumer leases’. The Committee also recommended removing consumer leases from Centrelink’s bill paying service Centrepay.

“It’s promising to read the Government is still committed to progressing reforms to payday loans and consumer leases,” says Gerard Brody, Consumer Action CEO.

“With the ongoing economic fallout of COVID-19 and the winding back of support measures, it is absolutely critical the Government implements measures to protect people from exploitive lenders seeking to take advantage of their financial vulnerability.

“The Committee’s report demonstrates cross-party support for enhanced consumer protections in relation to these high-cost credit products. The evidence of the harm under the current law is clear, and has been allowed to go on for far too long.

“Implementing these reforms would ensure people have enough money to pay for rent and food after making loan repayments, and help stop Australians from falling into debt spirals caused by payday loans and consumer leases.

“The Government now has a window of opportunity to get these protections in place before we start seeing a spike in people turning to predatory lenders just to make ends meet. The time to act is now,” said Mr Brody.

Media release – Stephen Jones MP, Shadow Minister for Financial Services, & Senator Jenny McAllister, Shadow Assistant Minister for Communities and the Prevention of Violence, 21 September 2020

GOVERNMENT SENATORS IGNORE EVIDENCE AND FAIL TO STAND UP FOR VULNERABLE CONSUMERS

Liberal and Nationals senators today ignored substantial and compelling evidence and failed to back their own government’s legislation to provide better protection for Australians who take our small amount credit contracts and consumer leases.

The Senate Economics Legislation Committee report into the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2019 (No. 2) presents a damning picture of government inaction and a mountain of evidence of the harm done by these financial products. Despite acknowledging these harms, Government senators have not recommended that the legislation be passed.

This legislation – introduced by Senators Jenny McAllister and Stirling Griff – replicates exposure draft legislation that was released for consultation by the Government in 2017.

For more than two years, instead of implementing these measures, the Government has failed to act.

While the legislation stalled, hundreds of thousands of people have been exposed to financial products without adequate protection from harm.

The committee report chronicles a litany of failures of the current regulatory environment, including harrowing examples of exploitation of low-income earners and First Nations people.

Quotes attributed to Stephen Jones MP

“With nearly a million Australians unemployed, and in the deepest recession in almost 100 years, the need for reform is only greater and more urgent.

“It’s clear that Australians can’t bank on the Morrison Government to deliver needed reforms to small amount credit contracts and consumer leases.”

Quotes attributed to Senator Jenny McAllister

“Liberal and Nationals senators had the opportunity to meaningfully respond to the overwhelming evidence presented to this inquiry. Disappointingly, they have chosen inaction.

“Their inaction will have consequences for vulnerable Australians. The time has come to deliver small amount credit contracts and consumer lease reforms. There should be no more excuses or delays.”

Source: Tasmanian Times https://tasmaniantimes.com/2020/09/senate-report-consumer-credit-reforms/#utm_source=rss&utm_medium=rss&utm_campaign=senate-report-consumer-credit-reforms