ADDITIONAL COMMENTS BY LIBERAL SENATORS
1.1
Liberal senators do not agree with the majority report's conclusions
regarding the creditor's petition threshold, the increase in the stay period,
or the increase in the eligibility threshold for debt agreements.
The creditor's petition threshold
1.2
Liberal senators acknowledge that the 1996 threshold for a creditor's
petition is no longer realistic. However, the evidence received by the
committee, including from the Department, did not clearly substantiate the need
for a five‑fold increase in the threshold. In particular, Liberal
senators note that CPI changes would have increased the 1996 amount of $2,000
to $2,770 in 2009 dollars.[1]
This is consistent with the change in the real value of money since 1996. It is
also consistent with the concerns of small business whose position should not
be unfairly prejudiced by this Bill. For these and other reasons, Liberal
senators accept the evidence that a threshold of $5,000 would be more balanced,
and therefore appropriate. This sum is also broadly in line with indexation.
Recommendation 1
1.3
Liberal senators recommend that items 1 to 3 of Part 1 of Schedule 4 of
the Bill be amended to reflect a threshold amount of $5,000.
Increase in the stay period
1.4
In respect of the stay period, Liberal senators agree with the evidence
stating that a 28‑day stay period is too long. Liberal senators are of
the view that a 14‑day stay period would grant debtors sufficient
opportunity to consult with financial advisors and reorganise their affairs,
without unduly prejudicing the rights and interests of creditors.
Recommendation 2
1.5
Liberal senators recommend that item 5 of Part 2 of Schedule 4 of the
Bill be amended to include a stay period of 14 days.
Increase in the eligibility threshold for debt agreements
1.6
Submitters and witnesses, such as the Consumer Action Law Centre, the Financial
and Consumer Rights Council and the Consumer Credit Legal Centre (NSW),[2]
persuasively argued that the Bill should not seek to increase the eligibility
threshold for debt agreements until the findings of past and future reviews of
the debt agreement regime have been taken into account. In particular,
reference was made to a departmental review to be undertaken in mid to late
2010. Liberal senators agree that it would be prudent to await the outcomes of
the pending review of the debt agreement regime rather than attempting to
address issues in a piecemeal, and perhaps counterproductive, fashion. To this
end, Liberal senators do not support the Bill's current proposal to increase
the eligibility threshold for debt agreements.
Recommendation 3
1.7
Liberal senators recommend that item 11 of Part 2 of Schedule 4 of the
Bill be removed, pending the outcomes of the 2010 departmental review of the
debt agreement regime.
Recommendation 4
1.8
Subject to the above recommendations, Liberal senators recommend that
the Senate pass the Bill.
Senator
Guy Barnett |
Senator
Mary Jo Fisher |
Deputy Chair |
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