with
STEPHEN JONES
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR FINANCIAL SERVICES
MEMBER FOR WHITLAM

Labor is deeply concerned that today’s announcement on changes to responsible lending obligations signals an intention to dump the recommendations of the Banking Royal Commission.
 
Labor will look closely at the Government’s proposed changes to lending laws, including how it lines up against the Royal Commission findings and recommendations.  
 
We want to see households and businesses get sufficient access to finance but we don’t want consumers caught in debt traps or the balance tipped back in favour of shonky lenders.  
 
The Government has form when it comes to going easy on the banks and loan sharks.
 
The Government voted 26 times against a Banking Royal Commission and nearly two years after the report was handed down, the Government has still only implemented a fraction of its recommendations.
 
Commissioner Hayne’s first recommendation in the final report was that the Government should not amend the National Consumer Credit Protection Act’s obligation to assess unsuitability.
 
The Government needs to make the case for why these reforms are needed, when their own Treasury said that compliance with existing lending laws would “enhance, rather than detract from macroeconomic performance.”
 
We know the Government has had exposure draft legislation for at least fourteen Banking Royal Commission measures since January. This includes measures to enforce banking codes and to protect consumers from the hawking of financial products. But they have yet to bring forward legislation on any of them.
 
And earlier this week, they failed to back their own Bill to prevent predatory lending when it comes to small contracts and consumer leases.
 
There is no evidence that the Government has consulted widely on these major reforms to lending practice.
 
We must ensure consumers are protected and there must be rigorous processes in place for lending which don’t unnecessarily get in the way of funds flowing to families and small business. 
 
The Government must get this balance right, because getting it wrong will only hurt more vulnerable Australians and prolong the deepest recession in almost a century.

FRIDAY, 25 SEPTEMBER 2020