I rise to speak against this bill, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, and again call on the government to abandon this effort to wind back responsible lending obligations.

I acknowledge this bill contains some amendments designed to improve consumer protection in smaller credit products, but the main part of this bill will remove the obligations for lenders and the protections for consumers put in place after Australia’s last recession.

Responsible lending obligations have become a core part of our credit regime. According to Treasury, approximately $34 billion in consumer credit that is subject to these obligations is issued each month. They require a lender to do basic due diligence about a person’s capacity to pay back a loan. They work to protect against cowboy lenders and predatory loan sharks and to prevent Australians falling into the debt trap—saddled with debt they can’t afford to repay. And, while they don’t stop all unsuitable lending, they give lenders a standard to uphold and consumers an avenue for redress. What this act would do is remove responsible lending obligations from all forms of credit except small amount credit contracts and consumer leases. This effectively removes these obligations from loans of over $2000, such as mortgages and personal loans—the everyday debt that is a staple of our economy and involves the biggest financial decisions we make in our lives.

As an Independent MP I represent only the interests of my constituents, and them alone. With them in mind, I look carefully at each bill before me to decide how to vote. I ask my constituents: is this good for you? I ask the organisations that support them: does this reform take us forwards or backwards? What I hear from my constituents is concern. What I hear from social and legal services, from churches and from consumer groups in my electorate is alarm and disbelief. And what I see as a person trained in evidence-based decision-making is a case not yet made for winding this back.

I’ve consulted widely with my community on this bill, and my constituents are united, of one voice, in telling me to oppose this bill. This is what they’re saying. Judith Beach of West Wodonga says:

It feels like it will make some of our most vulnerable people even more vulnerable to credit problems and to allow banks to return to the situation highlighted in the royal commission into banking.

Isabel Mary Dean from Euroa says:

Responsible lending was addressed in the Banking Royal Commission but seems to have been ignored by banks and government, let alone the even less regulated lending bodies. Rolling back the already poor or flexible level of lending responsibility seems a very bad move.

Alex McMillan from Tarrawingee says:

I would like to urge you to vote against the lessening of credit lending responsibilities as the economy is surging and the housing market is booming. Lessening the onus on credit providers seems to be pandering to profits not to the care of people.

Neil Barclay says:

As a TAFE legal studies teacher, I spent many years supporting/explaining these improvements to protect the vulnerable young and adults putting their toe in the water wanting to access finance … No vote from me.

Jacinta Ludeman from Oxley simply said:


These constituent concerns are echoed by social justice, and legal and welfare organisations in my electorate. They’ve called on me to vote to strengthen, instead of repeal, safe lending laws. Hume Riverina Community Legal Service and Upper Murray Family Care tell me:

We already help people in our rural and regional communities who rely on emergency food relief because they can’t make ends meet and others who are homeless because they are unable to afford rent as well as their loan repayments. We also see people being chased by debt collectors, and the extreme stress and anxiety this causes. We believe a change will lead to more debt, more bankruptcies, and more home repossessions. Clients we have been assisting have voiced their disappointment with the move to roll-back the laws.

Sandra Blake, a respected and experienced financial counsellor currently working on the Small Business Bushfire Financial Counselling Support Line, tells me this about responsible lending obligations:

Banks and other lenders have and do breach these laws, but there has been some deterrent and form of redress for people when that happens. The government is planning to remove these protections in the middle of a recession when it is more likely than ever that people will be more vulnerable to being taken advantage of by lenders.

I thank my constituents for engaging with me in good faith on this significant piece of legislation and sharing their personal stories, which have informed their well-founded views.

The problems with this bill start with its title, specifically the part in brackets, ‘supporting economic recovery’. The government says this reform is a key part of the economic recovery from the COVID-19 pandemic, seeming to claim that ‘reducing the time and cost associated with the provision of credit’ will make a material difference to getting back on track, yet there is no evidence that responsible lending obligations are holding us back.

Across our country, our economy is rebounding at a rate that would have shocked the Treasurer when he first announced these reforms, in September last year. In December the total number of new loan commitments reached record highs, rising 8.6 per cent in a year to $26 billion, according to the ABS. The national accounts showed our economy expanded by 3.1 per cent in the December quarter, and last week the OECD upgraded our economic growth forecast to 4.5 per cent.

The Treasurer himself said our economy was ‘outperforming all major advanced economies’ in 2020 and that the OECD points out that ‘our level of economic growth is closing in on our pre-pandemic level’. This is fantastic news. With the government’s other COVID-19 fiscal interventions, there is no shortage of credit being issued. But—and here’s the point—I would say to the Treasurer: if you were intending to rely on COVID-19 to justify these reforms, your rationale has completely evaporated.

My electorate was economically battered by the 2020 trifecta of bushfires, COVID and border closures. I’m in constant contact with employers and businesses that have weathered these storms. They are grateful for the dramatic economic interventions of this government. They care, as I do, about business growth and creating steady, well-paid jobs. More than that, we care about the welfare of employees, the future of their children, and the young families so important to regional growth. Safeguarding these people from unsuitable debt strengthens the fabric of our society and therefore our economy.

It is with them in mind that I am particularly worried about how removing these protections might affect my constituents wanting to buy their first home. The pandemic has seen a surge of tree changers lured to our regional towns by affordability, lifestyle and newly found working-from-home arrangements. We’re thrilled to welcome these new families, but there’s a consequence. The consequence has been that locals are competing with Melbourne buyers with significantly more purchasing power. The property market is running hot, and prices are skyrocketing.

According to Domain’s latest house price report, over the past year median prices have risen 13.7 per cent. In Wangaratta it’s 13.1 per cent, in Myrtleford it’s 13.4 per cent, in Euroa it’s 17.11 per cent and in Bright it’s a stunning 22.8 per cent. This is already locking local first home buyers out of their town. Young adults who grew up in Beechworth or Bright can no longer afford to buy there, even if they have two steady incomes. Our median household income is 22 per cent lower than the Australian average, which sets us even further back. We have in our hands a perfect storm of our young people overextending themselves, taking on more debt than they can afford, to get a foot into a real estate market that shows no sign of slowing.

When I think about the removal of these responsible lending obligations, I think of our young families, who have already made so many sacrifices to scrape together a deposit only to find out it’s just not enough. How easy it would be for them to take a risk, a risk they can’t afford, optimistically hoping that something will work out.

We know that Australians will walk over hot coals to pay off a mortgage, sacrificing other essentials like doctors’ appointments, getting the car serviced, late fees on credit cards and school books, just to keep a roof over their heads. This can have long-term impacts, like draining their emergency funds or affecting their future credit score. Where will this leave them? This is exactly the situation that responsible lending obligations try to avoid. It’s not just bureaucratic red tape; it’s a handbrake on incurring the type of debt that could lead to bankruptcy, ruin mental health and jeopardise relationships.

Of course, housing affordability won’t be fixed by this law. But I’m sounding the alarm that higher levels of debt may become a fact of life for my constituents. Coupled with the uncertainty of the labour market and with JobKeeper stopping and JobSeeker being cut, at this moment we need more protection, not less.

This bill looks set to pass the House today, yet I cannot, in good conscience, support any legislation that would leave vulnerable people in my community saddled with bad debt, nor legislation that directly contradicts the very first recommendation of perhaps one of the most far-reaching royal commissions of our time.

I urge the government to abandon these reforms. It’s not too late. And I urge my Senate crossbench colleagues to take heed of the 33,000-signature strong open letter endorsed by Choice, ACOSS, the Consumer Action Law Centre and 125 community organisations. They’re calling on us to strengthen, rather than repeal, these safe-lending laws and oppose this bill, put forward with the flimsiest of rationales—a bill that will do far more harm than good.


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