Coalition Senators’ Additional Comments
Coalition senators support the national consumer credit package of
legislation, but there are issues surrounding its implementation about which we
make further comment.
In relation to the large number of recommendations by this committee,
coalition senators feel the level of reservations about the bills as they stand
to be implemented once again exposes the Rudd government's rushed legislation
agenda.
Timetable indecision
The Rudd government has announced two significant changes to the timing
of the start of the responsible lending provisions. On 25 June 2009, the
government deferred the start date of the responsible lending provisions as
planned during the consultation period by one year to 1 January 2011 and then
on 14 August 2009, the Minister announced the date will come forward again to 1
January 2010 for mortgage brokers and lenders.
In this context, coalition senators are dismayed at the committee
having to conclude from the evidence that there are grounds for all but the
responsible lending provisions of the bill due to commence on 1 January to be
delayed to 1 July 2010. Coalition senators suggest that government senators
are loathe to put off the responsible lending provisions as they apply to
credit providers other than ADIs and finance companies, in the knowledge that
the government has already brought them forward from 1 January 2011.[1]
Although coalition senators lend our support to the recommendation for
delay if necessary, we are wholly critical of the Rudd government for driving
this agenda at a pace beyond the deadlines which businesses could feasibly meet
and, moreover, seesawing between start dates. As has been commented in other
reports this unseemly rush without giving time for stakeholders to prepare and
adjust is becoming a typical modus operandi of the Rudd government
We appreciate that there is the added complication of a constitutional
referral to add to the mix of factors weighing in on the legislation timetable,
but it is not surprising that some smaller lenders may leave the business of
lending altogether.
The government cannot fairly expect credit businesses to meet the
requirements when it is changing the rules and the timetable on the run.
Point of sale finance
The second significant point coalition senators make relates to the
government's ambivalence over the treatment of point of sale credit assistance,
whether this credit-related activity by retailers is in or out, or merely has a
reprieve until phase two of the reforms.
Although we recognise that new schemes of regulation almost by
definition bring compliance burdens and transition insecurities, we consider
that the uncertainty for retailers whether this applies to their business
models, on top of the timetable uncertainty, is nothing short of reprehensible
on the part of the Rudd government.
Coalition senators are aware, based on the evidence of Treasury and
ANRA to the committee, that there is a schism between the government's intended
scope of the draft regulations as they apply to point of sale retailers, and
the view the retailers are taking, on advice, of their obligations under the
main bill.
The government is driving an almost impossible agenda and is coming
undone in the process.
Coalition senators call on the government to immediately clarify this
issue for retailers.
Credit licensing
The financial services industry presented cogent arguments to the
inquiry that the AFS licensing regime under members are regulated is more than
adequate protection for the interests of the consumer and accordingly licensees
should not be subjected to an additional licensing obligation.
Consultation
A number of submitters raised issues about the practical implications
of some of the changes in the bills, which Treasury's evidence satisfied.
Coalition senators consider it would have been preferable for the government to
have advised stakeholders prior to the committee hearings that the matters
raised were not real issues.
Senator
Alan Eggleston
Deputy Chair
Senator Barnaby Joyce
Senator David Bushby
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