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

Legislative Assembly for the ACT: 2001 Week 10 Hansard (29 August) . . Page.. 3710 ..

MR RUGENDYKE (continuing):

I have taken on board two valid points relating to the breadth of the bill that were raised in the advice from Queensland. It was not intended to catch business purposes in this legislation, because the credit code only applies to personal, domestic or household accounts. However, this does appear to be an unintended consequence, and I foreshadow that I will have amendments once we get past the in-principle stage-straightforward amendments, prepared and circulated to satisfy these concerns.

The next argument on the list relates to New South Wales proposals that may or may not result in a draft bill to amend the code being prepared for November this year. We are assured that it will pick up the provisions in my bill. But when will it be passed? Next year at the earliest-January, I hear. This means that ACT consumers will again be open targets for this Christmas period. Anyone who has taken the time to consult with CARE Credit and Debt Counselling Service will know that last Christmas there was the most aggressive marketing in this area on record. By holding off until whenever everyone else wants to move we are giving the banks and credit providers a free hit at our community.

The Queensland advice says that my bill has "a great potential to increase compliance costs for credit providers". Where is the evidence to substantiate this claim? What the bill proposes to do is ensure that the mail-outs are not called "pre-approved forms". They should either remove the words "pre-approved" or not do the mail-outs at all. It may save the credit providers money in the long run.

Another requirement of the bill is to conduct an assessment of the debtor's ability to repay. Surely this is potentially a saving for the credit providers because they will not be handing out massive extensions to people who do not have the capacity to repay. As responsible corporate citizens, it would also mean that the credit providers are not lumbering people with debts that are beyond their means.

What is the problem with the ACT implementing a proposal that has been on the table for some months and that will eventually come on line anyway? What is the problem with passing a bill to compel the credit providers to do what they should be doing anyway under the existing code? How is the ACT stepping out of line by implementing a prudent measure that will send a message to the banks and other credit providers that enough is enough?

How many university students or people whose employment circumstances have changed will not be able to resist the temptation of accepting a credit card increase to get them through the demands of Christmas and New Year when the pre-approved offers come around in the coming months? How many will not be able to resist and get caught in the debt that sends them broke or entrenches them in a cycle of simply paying interest but not reducing the debt?

This bill is a positive step that places the onus on banks and financial institutions to do the right thing. Their own banking code says they are required to assess the ability of the debtor to repay, but it does not happen. It is a sad indictment that legislation is required to keep their greed in check.

I make one last plea to members to take this opportunity to stop the rot in the lead-up to the Christmas period: take a proactive stand that sends a responsible message and provides the appropriate legislative support to those in the community that have to cope

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