Credit (Commonwealth Powers) Bill 2010 and Credit (Commonwealth Powers) (Transitional and Consequential Provisions) Bill 2010
Second Reading — Cognate Debate
HON ALISON XAMON (East Metropolitan) [7.51 pm]: I rise on behalf of the Greens (WA) to support the Credit (Commonwealth Powers) Bill 2010 and the Credit (Commonwealth Powers) (Transitional and Consequential Provisions) Bill 2010. We do not have amendments to this legislation. I understand that the purpose of the legislation is to ensure that credit providers and finance brokers are subject to the same national regulatory schemes. This is a positive step forward, particularly for consumers and consumer protection. I understand that Western Australia has had a strong regime compared with the other states in relation to regulations around this area. It appears that moving towards a national scheme will have the effect of improving the standards in other states by effectively bringing them up to our standard, which is a good thing. This is particularly important these days when it is relatively easy to gain credit from interstate. My first mortgage came from a South Australian bank even though I was living in Western Australia. I am aware that this process has been quite long and drawn out and that there is more to come. The consultation was conducted at the national level. I am aware also that there have been multiple submissions from the sector throughout the various stages of the legislation and I understand that there is some confidence that most of the gaps that were identified throughout the process have been ironed out. It would appear that the Council of Australian Governments has done its job by consulting fairly widely, even if it has taken some time to do that. It is obviously better to try to get it right, particularly in an area like this.
I understand that the stakeholders envisage there will be some issues with the implementation of the legislation, including the possibility that more people will be seeking assistance from those who assist consumers. The Financial Counsellors’ Association of Western Australia and the Western Australian Consumer Credit Legal Service have indicated that they are already seeing increasing numbers of people coming to them as a result of what has been occurring in recent years. They are expecting that this legislation will add to the pressure even more. That is a positive thing in the sense that it means that people can feel that they have recourse if they have concerns about the way they have been treated. There is a bit of a wait-and-see-attitude to see how effective the Australian Securities and Investments Commission will be in dealing with individual complaints. Until now, ASIC has been more about dealing with systemic issues. Having said that, the responsible-lending provisions certainly are welcomed and the increase in the hardship threshold is good. Again, that means that more people will be eligible to seek help, which is very positive, but we must ensure that people are aware that they are able to access this additional assistance.
We know that the effect of shonky or dodgy finance brokers or lenders can be absolutely devastating for individuals and families. As we have seen in recent years, it can actually be devastating for entire economies as well. We have already started to see the impact financial pressures are having on families. The Financial Counsellors’ Association of Western Australia represents 91 financial councillors across the state. It is running a free counselling hotline for people who need assistance and is fielding about 30 or 40 calls a day. Apparently the demand for financial councillors is already very high and there are lengthy waiting lists for help. It is expected that there will be increasing demands on those services. The services required are increasingly complex because people are relying on receiving easy credit. That means that more and more people cannot readily manage their bills. That means that they become vulnerable to operators who are perhaps less scrupulous than others, which makes it all the more important to go down the path that we are going down with this legislation. This legislation reinforces the importance of ensuring that consumers are receiving adequate protections while at the same time we must ensure that we are not making it prohibitive for people to access credit. I would not have a house if it was not for credit, and I am pretty sure that most members would be in the same situation. Not many people can afford to buy a house outright.
Those who are involved with consumer protection and who support those who are seeking assistance have said that the legislation is positive. They also recognise that removing inconsistencies between the states is a good thing and that the responsible-lending provisions are welcomed. This legislation is expected to increase demand for services, particularly services such as the Consumer Credit Legal Service. Members who do not know much about that organisation should find out because the CCLS is wonderful and is doing very important work. It is very important for the government to ensure that the CCLS funding is sufficient. The government needs to recognise that this legislation is likely to increase the needs of CCLS and that it should be funded accordingly.
Finally, I want to make some reference to the reports from the Standing Committee on Uniform Legislation and Statutes Review. I am usually quite reliant on reading the reports of that committee because the reports tend to be well considered. I applaud the committee and its staff for the excellent work that they do. It is important to make sure that these committees are funded appropriately and are able to do their work. These very important bills deserve to be subject to closer scrutiny. Even though in this instance it appears everyone is supportive of them, it is very concerning if they are not able to be subject to the sort of scrutiny that we should expect all uniform legislation to be subject to. The government needs to look at the allocation of resources, particularly for this place and to our committees. It must make sure that our committees have the capacity to be able to do their jobs effectively, because that is extraordinarily important. I received a letter—as I imagine other members did— from the Australian Finance Conference urging me as a member of Parliament to do whatever I can in my capacity to ensure that this legislation goes through by 1 July. Certainly, it is my understanding that it will be quite problematic if it does not. It is for that reason precisely that we must ensure that our committees are able to do their job and that they are not being hampered by something as simple as a lack of resourcing. It not only diminishes the work we do here; it has the effect of potentially holding up legislation, which is also a problem.
On that note, I ask the government to start funding our committees better and to ensure that our community legal centres are better funded. The Greens (WA) support this legislation. It is a step in the right direction. As I mentioned, we do not have any amendments to propose.