Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 2001 Week 5 Hansard (2 May) . . Page.. 1327 ..

MR RUGENDYKE (continuing):

Last month the Chief Minister issued a media release entitled "Canberra's Retail Boom-14.8 per cent Growth in Just one Year". My question is: how much of this increased spending was on credit cards?

Mr Speaker, in researching this topic I consulted extensively with CARE, the financial counselling service. Their advice to me was that the marketing of credit cards and limit increases in the lead-up to last Christmas was aggressive. I would call it saturation of these pre-approved credit limits that are ticked and flicked without appropriate assessment. There have been reports in the Sydney media that checks were not being performed by credit providers because the employees got paid for how many customers they signed up.

Would you believe that one of the pre-approved credit forms was recently sent to the CARE financial counselling service itself? Westpac Business Banking issued a pre-approved certificate with a $15,000 limit. The letter said:

This is just another example of the type of marketing that is in vogue.

Reserve Bank figures show that expenditure Australia-wide on credit cards provided by banks alone jumped from $4.5 billion in April 2000 to $6.2 billion in May 2000, a rise of $1.7 billion, or 38 per cent. It is a huge temptation for people in need of quick money to accept such offers. They are attractive to people who are already juggling debt, but if they are a student or unemployed it can quickly get them into trouble.

Mr Speaker, I am concerned about this practice not just locally but also on a national level, and I am urging the Assembly to lead the way in ensuring that credit providers act responsibly and within the spirit of existing laws and codes.

The Australian uniform credit laws agreement of 1993 says that the states and territories should, as far as possible, be uniform in their laws; but the agreement also says that, where any state or territory is not uniform, it should be consistent with the uniform laws. What I am proposing is certainly consistent with the spirit and the intention of the existing laws. If credit providers are required to provide checks in the first instance, then they should be equally as prudent when it comes to offering credit limit extensions.

This bill will not negate the operation of the present legislation. In fact, I firmly believe that it will enhance the situation. I also encourage the ACT's fair trading minister to take my proposed reforms to the ministerial council for consideration.

I should also point out to members that the New South Wales Fair Trading Minister, Mr John Watkins, has also tried to lead the way with credit legislation. Earlier this year he introduced the Consumer Credit (New South Wales) Amendment (Pay Day Lenders) Bill 2001 which proposes to clamp down on questionable conduct in the short-term credit business. The ACT can similarly lead the way with unsolicited and pre-approved credit extensions.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .