Labor welcomes the release of the Final Report of the Review of Small Amount Credit Contracts, relating to payday lending and consumer leasing.

The Report highlights that there are some substantial problems in the small amount credit industry including repeat borrowing, loans to customers who may not be able to afford the debt and very high fees, particularly for consumer leasing.

Especially in light of recent high-profile cases of inappropriate lending by some small amount credit providers, the Government should act quickly and decisively on this Report to institute adequate protections for consumers.

Labor is considering the Report’s recommendations, with a view to achieving a regulatory regime for Small Amount Credit Contracts which puts people first. We are particularly interested in exploring the Report’s recommendations around:

• introducing a cap on the cost of consumer leases on household goods and the amount of net income that can be used to service lease repayments,

• strengthening the responsibility for lenders to ensure small amount credit contracts are affordable for consumers, and

• preventing unsolicited offers for payday loans and consumer leases being made to current or previous customers.

However, Labor is not satisfied that the proposed changes to the regulation of consumer leases will adequately protect Centrelink clients, who are the most financially vulnerable members of our community.

Labor doesn’t believe the recommendation that the Department of Human Services implement cost caps and protected income amounts as soon as possible goes far enough.

Labor will put the most vulnerable people in the community first by closing off Centrepay to consumer leasing businesses who have in the past systematically targeted Centrelink clients with exorbitantly priced, sub-prime financial products.

We must seek to end the irresponsible practices that exist in the payday lending and consumer leasing industries and work towards a financial system which works for people, not against them.