Politicians are debating the potential changes to the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill in Parliament, with a string of Labor Party members taking the government to task over the new reforms.
A succession of Opposition politicians spoke against the Bill, which received the approval of the Senate Economics Legislation Committee last Friday afternoon, and is due to be voted upon by the Senate this week.
Headline reforms that are included in the new Act will include a tilting of the balance between lenders and borrowers, with lenders gaining more ability to make loans as barriers to borrowers accessing credit are lowered.
Understandably, the banking industry has reacted positively to the reforms, but a range of consumer groups have expressed opposition. The central focus of the Labor attack was that the proposed reforms directly contravened the first recommendation of the Hayne royal commission into the banking sector.
“If there's one thing that the current health and economic crisis has taught us, it has been that it's vital that we focus on long-term reform and not chase short-term gains, as is being done through this particular bill,” said Steve Georganas, Member for Adelaide. “Chasing short-term gains is precisely what this bill does.”
“The government wants to remove key responsible lending protections as an attempt to simplify Australia's credit framework, but this will have a disastrous effect in the long term both for the economy and, more importantly, for individuals' livelihoods. The changes proposed by this bill will shift responsibility from where it is, with lenders, to the borrower.”
“It will reduce protections for borrowers if credit decisions are made on the basis of incorrect information, for example. It's important to note that recommendation 1.1 of the Hayne royal commission explicitly warned against amending this framework. So what does the government do? It ignores one of the key findings of its own royal commission.”