Ms LEY (Farrer—Minister for the Environment) (09:32): I move:

That this bill be now read a second time.

The Environment Protection and Biodiversity Conservation Act 1999 is 20 years old and needs modernising to ensure Australia can meet current and future environment and heritage protection challenges.

The final report of the Independent Review of the EPBC Act was released on 28 January. The final report is far-reaching, with key reform elements including increasing efficiency by streamlining environmental approvals, to be underpinned by strong, legally enforceable national environmental standards and supported by strong assurance.

This will provide confidence that environmental assessment and approval systems are delivering outcomes for the environment, for business and for the community.

I again thank Professor Samuel for his dedicated work in undertaking a comprehensive and thorough process over a period of 12 months.

The Morrison government is committed to maintaining strong environment protection and ensuring the EPBC Act is serving its intent to both protect the environment and grow our economy. This is essential to support our COVID-19 recovery.

We have an opportunity to deliver key reforms that support clear and consistent protection for our environment while also unlocking job-creating projects.

All states and territories have joined the Australian government in recognising the need for change recommended by the independent review and elsewhere.

Together leaders have agreed that the immediate priority for reform is to implement single-touch environmental approvals, underpinned by national environmental standards that reflect the current requirements of the EPBC Act.

In August last year, I introduced the Environment Protection and Biodiversity Conservation Amendment (Streamlining Environmental Approvals) Bill into the parliament.

The purpose of that bill is to ensure that bilateral agreements and the accreditation of state authorisation processes, which give effect to single touch approvals, are legally robust and durable.

This is an essential step in implementing the commitment made by national cabinet.

The bill I introduce today, the Environment Protection and Biodiversity Conservation Amendment (Standards and Assurance) Bill 2021, further demonstrates that the Morrison government is stepping up to, not away from, its environmental responsibilities.

It has always been the intention of the government that bilateral agreements with the states and territories will be underpinned by strong, Commonwealth-led, national environmental standards. The bill delivers on this commitment by establishing a framework to make legally enforceable, national environmental standards.

Standards will provide greater clarity for proponents and the community, as thousands of pages of rules will be distilled into clear and concise requirements.

This will increase efficiency for proponents and support improved community understanding of the EPBC Act.

The government's amendments to the EPBC Act will require the interim standards to be reviewed within two years.

This review point is an opportunity to ensure that we are getting the balance right between developments that are necessary for our economic recovery and protecting the environment.

I have made a commitment to stakeholders that this is a starting point, and I am determined to use the interim standards and the goodwill of all stakeholders around the table to drive change. This process will continue immediately following the passage of the legislation.

National environmental standards are a fundamental change to Australia's national environmental law. In the first instance, the government is prioritising the development of interim national environmental standards for matters of national environmental significance, reflecting the existing requirements of the EPBC Act. This will make the Commonwealth's existing rules clear.

These interim standards will ensure that Commonwealth requirements and obligations are upheld—regardless of who makes project approval decisions.

This is the first step. Bilateral agreements underpinned by the interim standards will harmonise environmental approval requirements across all jurisdictions.

What is expected of me as the Commonwealth environment minister when making approval decisions under the EPBC Act will also be expected of state and territory decision-makers under bilateral agreements.

This framework will pave the way for future change. Over time, as more information becomes available, the standards will be reviewed and refined to have greater specificity and will more clearly and consistently set out the limits that define acceptable impacts on environment and heritage matters and the outcomes that need to be supported by decision-makers.

Bilateral agreements with the states and territories will be underpinned by national environmental standards. States and territories that want to be accredited under the EPBC Act to make approval decisions will need to demonstrate that their systems can support the national environmental standards.

States and territories will have flexibility to find the best possible way to deliver these outcomes.

The bill will also allow the minister to determine which decisions under the EPBC Act the national environmental standards will apply to. This mechanism will allow the standards to apply to a range of different decisions under the act over time.

Once a decision has been determined to be subject to the national environmental standards, the person making the decision must be satisfied that it is not inconsistent with the standards.

The amendments allow the national environmental standards to be applied at a systems level, by setting out a range of factors that can be taken into account in determining whether a decision is not inconsistent with the standards.

These factors include, for example, policies, plans or programs of the Commonwealth, a state or a territory, or the funding of activities related to the environment or the promotion, protection or conservation of heritage, by the Commonwealth, a state or a territory.

There may be circumstances where it is in the public interest to make a decision that is inconsistent with the national environmental standards.

The amendments provide the minister, and only the minister, with the ability to do this. States and territories will not be able to make decisions that are inconsistent with the standards.

To ensure these decisions are transparent, the amendments will require the minister to publish a statement setting out the reasons why the minister was satisfied that the decision was in the public interest. The statement must be published on the department's website as soon as practicable after the decision is made.

Environment Assurance Commissioner

To provide oversight and confidence that single touch approvals systems are working as intended, are upholding the requirements of the EPBC Act and are achieving the national environmental standards, the bill also establishes a new, independent, statutory position—the Environment Assurance Commissioner.

The Environment Assurance Commissioner will be appointed by the Governor-General, will be independent and will not be subject to directions by the minister.

The Environment Assurance Commissioner will monitor and audit the operation of bilateral agreements, as well as the Commonwealth environmental assessment and approval processes under the EPBC Act.

As the audits are directed to the effectiveness of environmental assessment and approval systems, an audit could, for example, examine the effectiveness of accredited state or territory systems for making and enforcing approval decisions in achieving the national environmental standards.

The Environment Assurance Commissioner will not have a role in monitoring or auditing individual decisions. It is not a second decision-making body, and it is not a replacement for, or a precursor to, legal review processes for decisions.

The Environment Assurance Commissioner will be housed in the department and will be supported by dedicated resources. In addition to the preparation of annual work plans, the commissioner will have the capacity to proactively conduct unplanned audits where necessary.

The operation of the Environment Assurance Commissioner will be transparent. The commissioner's annual work plans and audit reports will be published on the internet, and the commissioner's annual reports will be tabled in the parliament.

By putting in place clear rules to support strong environmental outcomes and establishing assurance mechanisms to provide confidence in the overall environmental regulatory system, we are ensuring that the highest national environmental standards are met, regardless of who approves a project.

While the review concluded that the EPBC Act needed fundamental reform, it also recommended that this be pursued in staged tranches, taking time to deliver well-considered adjustments.

I have committed to working through the full details of the recommendations of the review. We will do this in consultation with business, industry, environment groups, farmers, Indigenous Australians, and states and territories to deliver lasting reforms to national environmental law.

With the streamlining bill and this bill, the government has commenced the first phase of reform, introducing amendments to establish the central pillars recommended by the review. These include the delivery of robust single-touch approval agreements that are underpinned by national environmental standards and subject to strong and independent assurance.

The Australian government is committed to delivering the reforms needed to improve the act, in a methodical, well-planned way.

Further phases of reform will build on these efforts and our ongoing discussion with stakeholders.

This process is too important to stall because not everyone can agree on where to start.

The fact is, we need to start.

We need a staged process, and we need reform.

I have presented the government's reform agenda in good faith and as environment minister I am confident that by starting this process we can deliver strong protection for Australia's unique natural environment. I commend the bill to the House.

Debate adjourned.

Ms LEY (Farrer—Minister for the Environment) (09:43): I move:

That this bill be now read a second time.

The government is continuing its program of reform to private health insurance, which is making private health insurance simpler and more affordable. The most recent premium round process, which delivered the lowest average premium increase in 20 years, demonstrates our success.

Announced in the 2020-21 budget as part of the reform program, from 1 April 2021 the maximum age of dependants for private health insurance policies will able to increase from 24 to 31 years. For the first time, there will also be an opportunity for insurers to offer policies with no age limit for dependants with a disability.

The Private Health Insurance (Complying Product) Rules will include the definition of disability. Our intention is to align this definition with the National Disability Insurance Scheme but allow insurers flexibility to extend coverage to people who do not meet the NDIS eligibility. The commencement date will be stated in the rules.

We welcome the readiness of insurers to offer this expanded coverage to their customers and recognise that they will need some time to communicate with their customers about these changes.

Younger adults will be able to stay on their parents' private health insurance policy for longer at a time, when many young adults may otherwise consider opting out of private health. It will be easier for them to transition from being on their parents' cover to buying their own when Lifetime Health Cover applies at the age of 31. While this reform most obviously benefits the younger adults who will be covered as dependants, their transition to their own adult cover after they turn 31 years of age will over the medium term contribute to making private health insurance more sustainable for everyone.

People with disability will be provided with the flexibility to access more affordable private health insurance without age limits as they can be covered under a family policy at no or low cost—rather than purchase a standalone policy.

Debate adjourned.

Mr ROBERT (Fadden—Minister for the National Disability Insurance Scheme and Minister for Government Services) (09:46): I move:

That this bill be now read a second time.

Throughout the coronavirus pandemic the government has acted decisively to cushion the blow for households and businesses. We have provided $251 million in direct support to households and businesses.

The pandemic caused a once-in-a-lifetime disruption to the labour market, and we have used our comprehensive welfare system to provide emergency support to Australians impacted by other crises, including through the coronavirus supplement and expanded access to JobSeeker payments and related payments. Throughout this period, our values have not changed.

The government strongly believes the key to improving people's living standards and reducing welfare dependency is job creation and having the right incentives to ensure there is a workforce ready to take those jobs.

In addition to our JobMaker plan to support businesses and provide the employment opportunities Australians need, we are strengthening our income support system. This bill will provide a permanent increase to working age payments provided to over 1.95 million Australians.

This $50 increase is the largest increase to employment payments in more than 35 years. It will be provided to jobseekers, student payment recipients, parenting payment recipients and youth payment recipients.

This $9 billion increase to payments balances the need to ensure income support payments encourage and enable workforce participation with the need for the welfare system to be fiscally sustainable for future generations.

This rate increase will occur from 1 April 2021 and is in addition to the usual indexation of payments, which will take effect on 20 March 2021.

The $50 per fortnight increase will apply to the JobSeeker payment, youth allowance, the parenting payment, Austudy, special benefit, partner allowance and widow allowance.

The increase will flow on to Abstudy (living allowance), farm household allowance and payments made under the Department of Veterans' Affairs education system.

The bill also permanently increases the income free area to $150 per fortnight for the JobSeeker payment and youth allowance (other) from 1 April 2021, allowing people to keep more of what they earn as they reconnect with the labour market, and encourage recipients to take the first step into employment without impacting their payments.

The bill extends the waiver of the ordinary waiting period for the parenting payment, the JobSeeker payment and youth allowance for a further three months until 30 June 2021.

The bill also extends to 30 June 2021 expanded access to the JobSeeker payment and youth allowance (other) for persons who find themselves having to self‑isolate or care for someone who is self-isolating due to the pandemic.

It also extends the portability period for certain age pensioners and recipients of the disability support pension (for people with significant disability) until 30 June 2021. This means pensioners unable to return to, or depart from, Australia within 26 weeks due to travel restrictions resulting from COVID-19 will have their entitlement maintained until 30 June 2021, as if they had been able to return home as planned.

The policy delivered by this bill carries a cost of approximately $9 billion to 2024-25, including approximately $700 million in 2020-21.

The bill will further strengthen our income support system in a fair and sustainable way. I commend the bill to the House.

Debate adjourned.

Ms LEY (Farrer—Minister for the Environment) (09:50): On behalf of the Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development, I move:

That:

(1) a Joint Select Committee on Road Safety be appointed to inquire into and report on:

(a) measures to support the Australian Parliament's ongoing resolve to eliminate road crash fatal and serious injuries with a focus on ways to achieving Vision Zero by 2050;

(b) the effectiveness of existing road safety programs across Australia; opportunities to improve them and encourage broader take-up of effective approaches;

(c) opportunities for government policy in health, education, industry, transport and other areas to contribute to road trauma elimination, integrating Safe System principles;

(d) opportunities to embed road trauma prevention across Australian Government portfolios and agencies; and

(e) opportunities to reduce road trauma in the workplace, working with Work Health and Safety agencies and employers across Australia; including a focus on heavy vehicles and the gig economy;

(2) the committee present a report on or before 1 July 2022;

(3) the committee consist of nine members, four Members of the House of Representatives to be nominated by the Government Whip or Whips, two Members of the House of Representatives to be nominated by the Opposition Whip or Whips or by any minority group or independent Member, and one Senator to be nominated by the Leader of the Government in the Senate, one Senator to be nominated by the Leader of the Opposition in the Senate, and one Senator to be nominated by any minority group or independent Senator;

(4) participating members may:

(a) be appointed to the committee on the nomination of the Government Whip in the House of Representatives, the Opposition Whip in the House of Representatives, the Leader of the Government in the Senate, the Leader of the Opposition in the Senate or any minority party or independent senator or member of the House of Representatives; and

(b) participate in hearings of evidence and deliberations of the committee, and have all the rights of members of the committee, but may not vote on any question before the committee;

(5) every nomination of a member of the committee be notified in writing to the President of the Senate and the Speaker of the House of Representatives;

(6) the members of the committee hold office as a joint select committee until presentation of the committee's final report or until the House of Representatives is dissolved or expires by effluxion of time, whichever is the earlier;

(7) the committee may proceed to the dispatch of business notwithstanding that not all members have been duly nominated and appointed and notwithstanding any vacancy;

(8) the committee elect:

(a) a Government member as its chair; and

(b) a non-Government member as its deputy chair who shall act as chair of the committee at any time when the chair is not present at a meeting of the committee;

(9) at any time when the chair and deputy chair are not present at a meeting of the committee, the members present shall elect another member to act as chair at that meeting;

(10) in the event of an equally divided vote, the chair, or the deputy chair when acting as chair, have a casting vote;

(11) three members of the committee constitute a quorum of the committee provided that in a deliberative meeting the quorum shall include one Government member of either House and one non-Government member of either House;

(12) the committee:

(a)have power to appoint subcommittees consisting of three or more of its members, and to refer to any subcommittee any matter which the committee is empowered to examine; and

(b)appoint the chair of each subcommittee who shall have a casting vote only;

(13) each subcommittee shall have at least one Government member of either House and one non-Government member of either House;

(14) at any time when the chair of a subcommittee is not present at a meeting of the subcommittee, the members of the subcommittee present shall elect another member of that subcommittee to act as chair at that meeting;

(15) two members of a subcommittee constitute the quorum of that subcommittee, provided that in a deliberative meeting the quorum shall include one Government member of either House and one non-Government member of either House;

(16) members of the committee who are not members of a subcommittee may participate in the proceedings of that subcommittee but shall not vote, move any motion or be counted for the purpose of a quorum;

(17) the committee or any subcommittee have power to:

(a) call for witnesses to attend and for documents to be produced;

(b) conduct proceedings at any place it sees fit;

(c) sit in public or in private;

(d) report from time to time; and

(e) adjourn from time to time and to sit during any adjournment of the House of Representatives and the Senate;

(18) the committee or any subcommittee have power to consider and make use of the evidence and records of any former committee on related matters including but not limited to the former Joint Select Committee on Road Safety;

(19) the provisions of this resolution, so far as they are inconsistent with the standing orders, have effect notwithstanding anything contained in the standing orders; and

(20) a message be sent to the Senate acquainting it of this resolution and requesting that it concur and take action accordingly.

Question agreed to.

Ms LEY (Farrer—Minister for the Environment) (09:50): On behalf of the Assistant Minister to the Minister for the Public Service, I move:

That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: The Australian War Memorial Development Project.

The Australian War Memorial is proposing new building works: refurbishment of the main memorial building and the CEW Bean building; new and upgraded galleries; and improvements to the public realm. The works will provide additional exhibition capacity to enable the Australian War Memorial to effectively tell the stories of Australian experiences of conflict and operations in a manner that preserves the national significance of the Australian War Memorial, while enhancing the visitor experience. The estimated cost of the works is $498.7 million, excluding GST, over nine years.

The project was referred to the Public Works Committee on 30 April 2020. The committee has recommended that the House of Representatives resolve, pursuant to section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the project. Subject to parliamentary approval, the works are expected to commence immediately, with a staged completion by June 2028.

On behalf of the government, I would like to thank the committee for undertaking this inquiry. While I note that there is a dissenting report, the government agrees with the majority of the committee. I commend the motion to the House.

The SPEAKER: The question is that the motion moved by the minister be agreed to. I think the ayes have it. There being only one no, I declare it for the ayes.

Mr WILKIE (Clark) (09:52): Mr Speaker, I request that my name be recorded in Hansard.

The SPEAKER: Why don't you just finish the sentence? Then Hansard will have it. Your name's already recorded in Hansard every day, but perhaps I'll give you one sentence.

Mr WILKIE: Mr Speaker, I request that my name be recorded in Hansard as opposing this outrageous expenditure at this point in time.

Question agreed to, Mr Wilkie dissenting.

The SPEAKER (09:54): I understand it's the wish of the House to consider the amendments together.

Ms LEY (Farrer—Minister for the Environment) (09:54): I move:

That the amendments be agreed to.

Question agreed to.

Mr DREYFUS (Isaacs) (09:54): I'm pleased to table the report of the Parliamentary Joint Committee on Intelligence and Security in respect of the declared area provisions.

Report made a parliamentary paper in accordance with standing order 39(e).

Mr DREYFUS: by leave—Section 119.2 of the Criminal Code Act 1995 makes it an offence to enter or remain in an area in a foreign country that has been declared by the Minister for Foreign Affairs under section 119.3 of the same act. These are extraordinary provisions which were introduced in late 2014 in response to an extraordinary set of circumstances. At the time, our security agencies advised us that approximately 160 Australians had travelled to Syria and Iraq to join extremist groups and participate in the then ongoing conflicts in those countries. These measures, along with a number of other measures that were introduced at the same time, were designed to deal with the threat posed by returning foreign fighters and the problem of Australian nationals heading over to Syria and Iraq in the first place.

To date, there have only been two areas declared by the Minister for Foreign Affairs under section 119.3 of the Criminal Code: al-Raqqa province in Syria and the Mosul district in Iraq. Both of those declarations have since been revoked. Only one person has been charged under section 119.2, and the individual charged was ultimately not prosecuted for the declared areas offence but for other, more serious offences.

Given the limited use of these powers, the significant developments in Syria and Iraq since 2014 and the introduction of a range of new powers over the last six years, a number of submitters told the committee that the declared areas provisions were no longer necessary and so should be repealed. Ultimately, the committee has unanimously agreed with the position put to the committee by government agencies that the provisions should not be repealed at this time. However, we've made it very clear that these provisions should be reassessed by the committee over the course of the next three years and that, unless the parliament determines that the provisions remain necessary, the declared areas provisions should be repealed on 7 September 2024.

We've also recommended that the Criminal Code should be amended to allow Australian citizens to request an exemption from the Minister for Foreign Affairs to travel to a declared area. This would introduce an important degree of flexibility to a regime that is anything but flexible and allow, in appropriate circumstances, Australians to travel to declared areas for legitimate reasons that are currently not covered by the exemptions listed in section 119.2.

As I said at the outset of these brief remarks, the declared areas provisions are extraordinary provisions that were introduced in response to an extraordinary set of circumstances. We must never lose sight of that and, as the committee recognises in this bipartisan report, the moment these provisions cease to be necessary, they should be repealed.

I would like to thank the non-government and government submitters to this inquiry. However, I would like to make a brief comment in closing about the contribution of the Australian Federal Police to the inquiry, which was generally very helpful. I do not think that the parliament or the Australian people are well served by the Australian Federal Police's description of the declared areas regime as just another 'tool in the toolbox'. That was the expression used by the Australian Federal Police during the committee's public hearing. Regrettably, the committee has become accustomed to the Department of Home Affairs using that banal expression to describe a whole range of extraordinary powers that have been introduced over the last seven years to deal with very specific threats. The language that we use to describe powers like the declared areas provisions matters. The department and all government agencies should not lose sight of the fact that many of the powers this parliament has provided to agencies, especially since 2001, are among the most extraordinary powers that any parliament in any democracy has given to its security and intelligence agencies. We need to keep that steadily in mind. The powers need to be regarded as extraordinary not just by this parliament, and not just by the Australian people, but also by the agencies that have been given these powers in the first place.

Ms TEMPLEMAN (Macquarie) (10:00): The National Collecting Institutions Legislation Amendment Bill 2020 has been presented by the government as innocuous, a simple tidying-up job that will make the legislation which governs six of the national collecting institutions more consistent and allow them to attract more private philanthropy. But you can forgive me for treating anything this government does in the arts portfolio with a healthy dose of scepticism.

The national institutions have not escaped damage wreaked by this government's years-long campaign to undermine and underfund the arts in Australia. The worst impact on the national institutions came in the 2015-16 financial year, when the government imposed a three per cent efficiency target on some institutions, in addition to the existing efficiency dividend, which resulted in an estimated $20 million loss of funding across the board. It threw many of these institutions into turmoil, including the National Library, which, for a time, had to stop adding new content to its popular online archive service, Trove. Although the situation has slightly improved now, we are still seeing job cuts and a reduction in services at the national collecting institutions.

We've seen this over and again with this government and the arts: they put a wrecking ball through important institutions, as they did with the Australia Council and the Catalyst fund under George Brandis, and then they paper over the damage and pretend that nothing's happened: 'Nothing to see here.' Well, lasting damage has been done. The arts in this country, including the national institutions, were hit hard by COVID, but the truth is that the sector was already very fragile before that, with repeated funding cuts and endless rounds of applications proving too much for many in the sector. Many people who had been in the industry for decades left it. So, when this government tries to say that the arts is in a worse state because of COVID, it's true, but it's not the full story. The damage had already been done by a series of Liberal ministers, and they didn't do enough to help when COVID hit.

This bill, although portrayed by the government as simple, is actually quite complex in terms of the many different changes it makes to the legislation which governs the national collecting institutions. Schedule 1 of this bill contains a major change which affects all of the institutions. It's a change to the investment mandate of the institutions, so that they may invest donated funds in higher-risk, higher-return instruments and assets. Currently, under the Public Governance, Performance and Accountability Act 2013, the institutions can only invest any funds in excess of their operating costs in very conservative ways, which limit the return they can obtain. According to the bill's explanatory memorandum, this is a problem in attracting private philanthropy.

Representatives from all six of the national institutions were called to a short Senate inquiry into this bill and were asked what their views were on this part of the bill. According to those present, this flexibility was at the request of the institutions themselves, many of whom have to kept their donated funds in cash due to the restrictions of the PGPA Act. In the ultra-low interest rate environment that we currently find ourselves in, you can appreciate that this would be a source of frustration both to the institutions and to their donors.

Australia's national collecting institutions have never had the same kind of culture of private philanthropy as their peers in the United States and the United Kingdom, and it is appropriate that they be given the means to attract more donated funds. Labor could never and would never stand in the way of more funding for our national collecting institutions, and we're reassured that the request for this change in investment mandate came from the institutions themselves. Of course, it's important that this flexibility comes with a high level of oversight and prudence in terms of the investments chosen, so it's good to hear that some of the institutions have already started putting together investment plans to be approved by their boards.

I do, however, want to strike one note of caution. This line from the explanatory memorandum, explaining why the government wants this change to happen, should give us pause:

This focus of actively seeking philanthropic support aligns with the Government’s broader position of encouraging NCIs to increase their financial sustainability through non-government sources of funding.

Now, let me tell you what that sounds like to me. The government wants the institutions to attract more private money so it can give them even less. That's the first I've heard of this government's 'broader position', and it doesn't give me any confidence that this government won't use the bill, once passed, to say to the institutions, 'Oh, well, you can go and attract more private philanthropy now, so don't come to us asking for more public funds.' To me, that sounds like exactly the kind of thing this government would do.

At the Senate inquiry hearing, the Office for the Arts denied that this was an objective of the bill and said no modelling had been done to predict what the private-public funding mix would look like once this bill was passed. But it remains a concern to me. Why do I worry about this? Because we've already seen it happen in other parts of the arts sector. As we see a systemic withdrawal of public funds for the arts by the federal government, private philanthropists are asked again and again to step into the breach—and they do. I expect they will continue to do so, but it is not their role to support the entire national arts ecosystem; nor could they afford to do that.

That's the government's role, and never more so than when it comes to our national collecting institutions. These institutions—the Australian National Maritime Museum, the National Film and Sound Archive of Australia, the National Gallery of Australia, the National Library of Australia, the National Museum of Australia and the National Portrait Gallery of Australia—are the keepers and promoters of Australian stories. With the exception of the Maritime Museum, they're based in Canberra, the home of our federal parliament. They're a big part of Canberra's tourism economy and local employment. The role for the federal government in supporting these institutions is clear, and the passage of this bill must not be seen as a green light to the government to withdraw even more public funding.

Schedule 2 of the bill is where things get pretty complex. Its stated intent is to standardise the legislation that governs the national collecting institutions so that everyone has the same legislative framework. It makes sense—except it means that some of the institutions will be subject to rules and ministerial powers they've never had before. I'm going to pull out the most important of these and then discuss them in turn. The biggest example is in the case of the National Gallery and the National Library. For the first time, these two institutions will be subject to ministerial direction. While it is true that all the other collecting institutions are already subject to ministerial directions, this expansion is not a small thing. Consider the National Gallery, for example. We all remember Blue Poles, which caused tremendous controversy when purchased in 1973 for A$1.3 million. That purchase, which had to be ticked off by then Prime Minister Gough Whitlam, was seen as outlandish and overpriced. That painting, considered a master work of American abstract expressionism, is now worth up to $350 million—a pretty good return for the taxpayer.

Art is meant to challenge us, and that's not always popular. Sometimes, in fact, it can be very unpopular. That's why we should always tread carefully when talking about politicians having a say in deciding what is and what is not good art and how galleries or indeed libraries should run. Importantly, this bill states that these ministerial directions must be of a general nature only. This is an important safeguard, ensuring that the minister cannot issue a direction—for example, that this or that artist should not be in the national collection. Nevertheless, the ministerial direction power should be used very infrequently and with extreme caution.

Labor is reassured somewhat by evidence given by Stephen Arnott, First Assistant Secretary of the Office of the Arts, that not a single ministerial direction has been issued to any national collecting institution since the current government came to power in 2013. It is worth noting, though, that such a direction would not be disallowable by parliament were one to be made. That gives the minister quite a lot of power, and it should be used very, very sparingly.

The second part of this schedule worth drawing attention to is the financial thresholds for acquisitions that trigger a need for ministerial approval. Such thresholds already exist—for example, for the National Gallery it's $10 million—so that in itself is not controversial. What this bill does though is shift the thresholds that apply to each of the institutions from legislation to regulation. This lowers the bar for changes to be made to the thresholds, as they do not have to be passed through parliament. It was welcome though, as part of the Senate inquiry process, to have confirmation from the department that such regulations would be disallowable by the parliament should they be remade—for example, if the $10 million threshold for the National Gallery were reduced to an unacceptably low level as a way of increasing ministerial oversight of purchases.

The third part, which will be of interest to some of my Canberra colleagues, is that for the first time the National Gallery will be allowed to store its collection outside the ACT. It is the only institution that does not currently have this flexibility. The department gave evidence that this was purely to save on costs, as the availability of large storage facilities in the ACT is limited. As the legislation is written, it should not mean that there will be any change to the works on display at the Gallery's home in Canberra.

In the sum, after examining this legislation through the committee process, Labor is satisfied that it has been drafted with sufficient input from the institutions and is heartened that there are no parts of the bill that the institutions object to. Labor will be supporting this bill. In doing so, however, it's important to note that no amount of legislation can fix the longer term structural underfunding of our national collecting institutions that has been a feature of this current government. If you really want to make a difference, that's where you need to start. With that in mind, I move the second reading amendment circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to address the structural underfunding of our national collecting institutions."

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Is the amendment seconded?

Ms McBain: I second the amendment and reserve my right to speak.

Dr ALLEN (Higgins) (10:12): The national collecting institutions are a key component of our cultural and creative economy. The national collecting institutions attracted more than 4.5 million onsite visitors in 2018-19 and comprise the following institutions: the National Gallery of Australia, the National Museum of Australia, the National Portrait Gallery, the National Library of Australia, the National Film and Sound Archive, and the Australian National Maritime Museum. Any Canberra visitor will know these intimately because they are the backbone of why you visit Canberra.

These institutions house some of this country's greatest treasures and finest works of art. They also preserve and maintain our most important historical documents, including films, photographs and everything in-between. The work of these museums, galleries and libraries is central to the telling of Australia's story. We invest in, preserve and cherish these institutions and their articles so future generations too can enrich themselves with an understanding of Australia's story. It is important that we work in this place to ensure that these institutions are sustained into the future and can continue to play an important and robust role in Australian society. That is why the Morrison government is bolstering the investment powers of the national collecting institutions and promoting efficiencies by harmonising administrative inconsistencies.

Alongside strong government funding, the national collecting institutions benefit greatly from public philanthropic partnerships. This includes donations from individuals, foundations, bequests and other entities that kindly and generously support the arts, culture and history that these institutions curate and maintain. In 2019-20 alone, the six institutions received approximately $14 million in donations. The National Collecting Institutions Legislation Amendment Bill 2020 amends the six acts that govern the handling of donations for the national collecting institutions to provide them with greater investment powers in relation to their donated revenue.

This move is directly in line with feedback we have received from the philanthropic sector as to how they wish to see their donations handled. It will allow these institutions to develop a tailored investment policy which factors in the funds available to invest, the governing body's appetite for risk, and both internal and external financial expertise. Such investment policies are to be made publicly accessible via the institution's website. It is important to note that these investment changes apply only to private and philanthropic donations. They do not impact the ordinary appropriations of the national collecting institutions or alter their base funding. Likewise, this bill does not force national collecting institutions to invest, nor does it override current or future obligations attached to donations. The bill will instead allow the national collecting institutions the autonomy to better optimise their donations for their long-term benefit and sustainability.

This bill otherwise seeks to rectify inconsistencies between the enabling acts for each national collecting institution. Amongst other minor changes, this includes standardising delegation powers, term limits for members of governing bodies, and the removal of ministerial approval requirements related to routine financial transactions and asset disposal, such as utility contracts. These amendments are grounded in improving the efficiency and productivity of our national collecting institutions.

The Morrison government is attuned to the views of the philanthropic sector and keen to support the modernisation of our national collecting institutions. That is why we're proposing this important bill. As it currently stands, the national collecting institutions face legislative restrictions on their operations and governance, such as simple expenditure requiring ministerial approval, or blocks on how they invest donated funds. For example, the Public Governance, Performance and Accountability Act 2013 currently restricts national collecting institutions from investing donated funds in high-return investments, which greatly diminishes the impact of donation receipts. National collecting institutions are instead currently restricted to government backed securities like bonds and bank deposits. This disadvantages our national collecting institutions in the highly competitive market of philanthropic funds, with non-public institutions achieving greater returns and thus having more funds available to fund new programs. This can give the outward appearance to philanthropists that the national collecting institutions will achieve less impact with donations than their non-public counterparts. Indeed, the feedback from governing bodies is that current arrangements hamper their ability to realise the full financial potential of the philanthropic support they receive. This ultimately undermines many of the very successful fundraising strategies that these institutions have implemented.

As someone who is on the foundation board of an education not-for-profit, I know how important it is for an institution to make every donated dollar work hard for both the donor and the recipient institution. It's an incredibly competitive market out there. The generosity of donors is hotly contested, and it's important that donors feel their money is going to have a significant impact, for the values they care about and for the institutions they support. Allowing the national collecting institutions to set their own investment policies will ensure they're on an even footing with non-public institutions in the market for philanthropic funds.

This bill sits alongside the Morrison government's strong track record of supporting our national collecting institutions. In 2020-21 the government provided $249 million in funding to the six national collecting institutions. That's way more than their philanthropic support. The National Gallery of Australia, here in Canberra, which houses approximately 160,000 works of art, is one of the major beneficiaries. Please go and see the fantastic Know My Name exhibition at the National Gallery of Australia, celebrating 100 years of Australian women artists. This is an important exhibition as we approach the celebration of International Women's Day on 8 March. On top of their annual Commonwealth funding, the NGA received an almost $22 million capital works package in the 2017-18 budget, along with an additional $14 million in ongoing funding in 2018-19. I'm pleased to say that, in December 2020, they received a further $20 million to upgrade lights and electrical systems, with aging halogen globes to be replaced by LEDs. It's fantastic to see a sustainable future emerging.

Another example is the National Film and Sound Archive, which has received $5.5 million over four years for the digitisation of at-risk audiovisual material. We all know those wedding videos that we want transformed into something that will be future-proofed are incredibly important for our own personal stories. So, too, it is for our collective stories that are stored at the National Film and Sound Archive. This is in line with the Morrison government's vision for our national collecting institutes to modernise.

Throughout COVID-19, these institutes have been supported with $19.5 million to weather the cost of lost revenue typically derived from ticket sales, gift shop sales and the like. During COVID-19, the national collecting institutes reached new audiences through social media and digitally accessible content, including online and virtual tours. It is so important to see creativity pivoting to the ways of having to manage through COVID. This creative rethink is a testament to the vitality of the institutions themselves. I hope to see remote and improved accessibility a legacy of the COVID-19 pandemic—always looking for opportunities and always open to changing the way they do things to be able to engage and deal with the public as it changes, too.

This bill fits neatly with the current inquiry of the Standing Committee on Communications and the Arts into Australia's creative and cultural industries and institutions. I'm proud to be one of those who called for this last year as a member of that committee in response to feedback from my constituents in my electorate of Higgins. Importantly, we're considering the following five issues. The first is the direct and indirect economic benefits and employment opportunities of creative and cultural industries and institutions and how to recognise, measure and grow them. We're also looking at the non-economic benefits that enhance community and social wellbeing and promote Australia's national identity. Who we are as Australians is reflected in our creative and cultural industries and institutions, and it's important to recognise, measure and grow them as well. This is the Australian story as we know it. We're also looking at the best mechanism for ensuring cooperation and delivery of policy between layers of government. So often I've heard how state, federal and even council funding mechanisms are not working together to make sure that they're supporting, in a cooperative way, these very important areas.

The fourth area of investigation is the impact of COVID-19 on the creative and cultural industries. As we know, there has been a great deal of pressure applied as lockdowns have had an impact on ticket sales. Lastly, we are also looking at avenues for increasing access and opportunities for Australia's creative and cultural industries through innovation and the digital environment. We know the world is transforming digitally and so, too, must our cultural and creative industries and institutions.

Last week, the committee heard that the creative and performing arts sector has been a major beneficiary of JobKeeper through the COVID-19 pandemic. This is contrary to what the members opposite would have you believe. I was actually astounded to hear the level of support from JobKeeper to the performing arts was $560 million across the sector. This was to 25,000 organisations and 122,000 people. That's an extraordinary level of support. We understand that the coverage for all employment of JobKeeper was around 30 per cent, but the approximate coverage of JobKeeper within the creative and performing arts was around 50 to 60 per cent. It was necessary because of the lockdown and because of the public health measures that were taken to keep all of us safe. But I'm glad to hear that JobKeeper was there to support this incredibly important sector as it had to deal with an incredible change to the way it operated in 2020.

The Morrison government's support for the creative and performing arts before, during and after the COVID pandemic remains unwavering. The Morrison government understands the cultural and creative value of our national collecting institutions, now and long into the future after we have all left this place. I'm proud that we've worked so closely with the philanthropic sector and the governing bodies of these institutions to develop this bill to ensure their long-term financial viability. Giving our national collecting institutions greater autonomy and modernising and streamlining their functions will mean they remain the cornerstone of our cultural society. I commend this bill to the House.

Mr THISTLETHWAITE (Kingsford Smith) (10:24): We all know that the Liberal and National parties have a very poor record of supporting the arts and our nation's collecting institutions. Remember the furore that occurred in the 1970s when the Whitlam government purchased Jackson Pollock's artwork, Blue Poles? Remember the roar that came from the conservative side of politics and many conservative media commentators about it being a waste of money? Of course, it was one of Australia's best investments in the artistic space. It's a very, very important part of our cultural history, and it's there for all to see in the National Gallery of Australia.

The institutions that are subject to this bill, the National Collecting Institutions Legislation Amendment Bill 2020, have seen cuts under the coalition government that stretch back to the 2015 budget, resulting in job losses and a reduction of services. Most recently, the National Gallery of Australia announced 30 to 40 job losses. We all know that this government never really takes the arts seriously. It's been far too slow to respond to the queries from those in the arts industry, particularly their fears about the end of JobKeeper in a few weeks. Whether it's the independent cinemas or local arts organisations, they're facing a tough time when JobKeeper ends.

This legislation is important. It makes a number of changes to the governance of six of our national collecting institutions—the Australian National Maritime Museum, the National Film and Sound Archive of Australia, the National Gallery of Australia, the National Library of Australia, the National Museum of Australia and the National Portrait Gallery. The stated aim of this bill is to standardise the operating conditions of these six institutions. The key changes are as follows. For the first time, the governing bodies of the National Library and the National Gallery will be subject to ministerial written direction. The financial thresholds which trigger ministerial approval for the acquisition of works, land and other assets will be removed from the legislation and put into regulation, but we understand that those regulations will be disallowable. The investment mandates of the institutions will be made more flexible. There is a concern about that. Many see the investment-mandate changes as an opportunity for the coalition government to further reduce funding for these important institutions. I don't think it's unreasonable to say that it's probably the wish of the government that these organisations look more at investment as a means of generating income, rather than government support. Specific to the National Gallery, the bill removes the requirement for the national collection to be exclusively housed in the ACT. That's probably a positive development, particularly when we're talking about Indigenous artworks and cultural items. Properly, on the basis of consultation with Indigenous communities, these should be housed and displayed on country so that members of those communities can learn about and understand the significance of those important artworks.

This bill also allows those national collecting institutions to dispose of material without the need for ministerial approval, where an item is valued below a specific threshold. To date, there have been different thresholds across those collecting institutions, and this bill will introduce a consistent threshold of $2 million, except in the case of the National Gallery of Australia, where the threshold will be $10 million. An issue has been raised with this particular element of the bill, and I think it's a reasonable one. It's been raised by First Nations representatives, who submitted to the Senate inquiry that it's very important that, before asset disposal occurs, there is consultation with Indigenous communities and elders about the significance of those assets.

In her submission to the Senate inquiry, Elizabeth Pearson commented on the notion of a financial threshold for Indigenous cultural artefacts. She argued:

The value of Indigenous cultural heritage to Traditional Owners simply cannot be accurately measured or conveyed through monetary value thresholds.

It is important that statutory provisions relating to the disposal of NCI artefacts are culturally competent and provide appropriate recognition of and consultation with First Nations Peoples in considering disposing of items of Indigenous cultural heritage.

Ms Pearson also argued that the bill should contain provisions that require the national collecting institutions to consult with First Nations peoples when an NCI proposes to dispose of an Indigenous object in its collection. It's a point that I agree with and that Labor agrees with. There must be consultation with elders and with Indigenous community groups prior to the disposal of important cultural artefacts. I note that, in the evidence that he gave to the Senate inquiry, Mat Trinca from the National Museum said that the museum does have in place policies and procedures that are to be followed in instances of disposal of important cultural artefacts such as those. I would hope that all of these institutions would take a similar approach.

I must say, in respect of the National Museum and certain displays and exhibitions they have had, that there has been in the past a tradition of consultation with First Nations elders and communities. There's an exhibition in the museum at the moment about Captain Cook's Endeavour voyage. The exhibition is called Endeavour Voyage: The Untold Stories of Cook and the First Australians. The exhibition charts Cook's 126 days up the east coast of Australia when he arrived here, and the particular significance of this exhibition is the consultation that has occurred with First Nations people and its view of the Cook expedition from the shore. In much of history and much that's taught to Australians, the view is always from the journals of Cook and his expedition, with very little of the view from the shore. That's why this is an important exhibition. I know there was consultation with the La Perouse Local Aboriginal Land Council, in the area I represent, and elders and representatives of that community in putting this exhibition together.

I think it is important to recognise that when Cook set foot on Kurnell in 1770 at Kamay, or Botany Bay as it's now known, to claim the east coast of Australia in the name of King George, it began the process of First Australians being dispossessed of their land, robbed of their culture and cut off from their language. When Cook's expedition left our shore, it took with it the sovereignty of the First Australians over the land they had nurtured and inhabited for tens of thousands of years. It also took many spears, shields and other cultural items and pieces that tell an important story about our nation's true history. These are deeply cherished and significant cultural relics that connect today's First Australians with their ancestors and traditions. Yet in 2021 these items are still predominantly housed in displays in museums throughout Europe.

It's my view and the view of many on the Labor side and indeed the view of many First Nations peoples that those cultural artefacts belong on country. They belong with the descendants of those who created them. They belong in Australia. A major symbol of this dispossession is an artefact known as the Gweagal shield and a series of spears that are actually on display at the moment in the Australian Museum as part of this Cook expedition. When that expedition left our shores, those items were stolen and taken from the Gweagal people who inhabited the shores of Botany Bay. The shield and those spears, which are on loan at the moment to the National Museum, are housed in British museums in a collection of some 6,000 Australian items, many of them questionably acquired. Most of them aren't even on display, and those that are on display are down the back and are not prominently displayed, particularly those in the British Museum.

The museum has refused repeated requests from descendants of the Kamay men and women for the return of these artefacts. There are a few cases where the requests have been agreed for other artefacts, but the practice is the exception. In 2015 the British Museum loaned the Gweagal shield and other artefacts to the National Museum of Australia for its Encounters exhibition but only after the federal government—the Labor government at the time—passed legislation, the Protection of Cultural Objects on Loan Act, rendering these items that were loaned back to Australia legally immune from Indigenous claims. I know that that was necessary to ensure that the British Museum would loan those artefacts to Australia for display here, but it shouldn't have had to happen. It simply should not have had to happen.

These are very, very important artefacts that tell the truth about Australian history, and, as a gesture of truth telling, as a gesture of recognition and as a gesture of reconciliation, these artefacts should be returned to their original owners, the First Nations peoples whose ancestors created them. These artefacts should be returned to country so that the descendants of those from whom they were taken can learn about their history and their culture and pass on this important heritage to their children—not only Indigenous children but other Australian children as well, so that we may learn more about the significance to Australia of history pre Cook. That may help us—and I believe it certainly will help us—to overcome this barrier that has existed in Australia, particularly on the conservative side of politics, to amending our constitution to finally recognise the First Australians and listening to what they have had to say to us for the past decade about what they would like to see and how they would like to see government work with First Nations communities through a constitutionally enshrined voice to parliament.

If we can have these cultural artefacts returned and learn from First Nations people and their ancestors, to whom these remains and artefacts are important, maybe we can overcome some of the barrier that has existed not only on the conservative side of politics but in this parliament more generally and overcome the inability to put up a referendum and ask the Australian people whether or not they believe it's important that a voice to parliament is enshrined in our constitution and that we finally recognise that truth telling is important. There is precedent for this, and I ask the British government to take note that, this week, 2,000 Indigenous stone artefacts have been repatriated to Australia by the Israeli Museum with the support of the Israeli government. I thank the Israeli government for doing that. It's an important gesture and it will be important to truth telling in our nation. It proves to the British government and the British Museum that we can do the same, and that they should do the same and work with the Australian government and bodies like AIATSIS, the Australian Institute of Aboriginal and Torres Strait Islander Studies, who have been specifically mandated and allocated a budget to work with other foreign governments, organisations and museums to negotiate the return of these cultural artefacts.

This bill is important because it highlights the fact that our national collecting institutions are important in telling the stories of Australia and, most importantly, in telling the stories of the First Nations people. These institutions have a role to play in returning artefacts such as those I've mentioned so that those stories can be told.

Mr STEVENS (Sturt) (10:39): I rise to make a brief contribution on the National Collecting Institutions Legislation Amendment Bill 2020. It's a great pleasure to talk about our national collecting institutions. To digress slightly: when I think of our national institutions, I am reminded of how lucky we are to have this purpose-built national capital city, Canberra. The great thing about our national collecting institutions is that they are situated in such a beautifully designed city. I think it's appropriate to acknowledge Walter Burley Griffin and Marion Mahony Griffin, the co-designers of this city. On the eve of International Women's Day, it's one of the great wrongs that Marion Mahony Griffin is not equally credited with her contribution to designing the city of Canberra alongside her husband. They were genuinely a team, and I think we need to do a better job of making that point going forward. I know that some corrections of historical records have been occurring, but I still think that we could do much more in that regard.

I actually spent a few years growing up in Canberra, and it was a great pleasure as a young child to have all the natural and built-form attributes of this capital city at that point in my childhood. At the time of Federation, of course, there was a debate between the two great cities of this continent, as they would describe themselves—Sydney and Melbourne—about where the capital might be. I think it was a very sensible compromise of the founders of the federation of Australia to determine that we should build a new city to be our capital. When we're talking about our great collecting institutions, I don't think they would be the same if they were crammed into the existing footprints of Melbourne or Sydney. I can't imagine where a national library would've been built or a national gallery would've been built. We are so blessed to have this great 'Rome of the South' that is Canberra thanks to the way it's been planned and designed, with the opportunities for those institutions to grow, spread their wings and achieve their full potential on the dedicated footprint that the Griffin husband and wife team designed.

That, of course, means that we have this beautiful parliamentary triangle and we have a city that was designed and intended to have these great institutions. There are the collecting institutions, of course. There are other ones, like this very beautiful building we're in right now and the other major institutions of a modern nation. Nonetheless, the collecting institutions are a part of that, and this legislation is very important for giving them the opportunity to continue to seek out support from beyond the taxpayer.

Philanthropy is something I think we could do a much better job of encouraging in this country. There are some great philanthropists who make spectacular contributions across a wide range of areas. The member for Higgins talked about her own history and experiences when it comes to people philanthropically supporting medical research in this country. I think we have a reasonably good culture of that. We probably don't have as good a culture as some nations when it comes to other institutions, particularly those that people might instinctively feel should be funded by the taxpayer. That's one of the challenges with institutions like our galleries, the library et cetera: there's probably an assumption that supporting them is not necessary, because the taxpayer provides them support, and that should be enough. Of course we proudly provide taxpayer support to these institutions, but it would be great, obviously, to encourage more private citizens with the capacity to add to that taxpayer contribution.

So one element of this bill is to give these institutions a better ability to explain to potential philanthropists that they will achieve maximum value from the contributions that might be potentially made to them. Clearly, when the boards of these collecting institutions are given more latitude around how they will be investing funds they might receive—which, of course, is relevant to the person making the donation; they want to see the money that they contribute achieve maximum value for the institution—if there is a decision between these institutions being contributed to versus others, an issue for the philanthropist or potential philanthropist is worry that the conservatism of the way their funds will be invested is going to mean the money they give is not going to go as far as it might by donating to another institution that doesn't have those restrictions. So, it seems completely logical that we remove that factor in the decision-making process. People will make a decision to contribute to our national collecting institutions purely on the strength that that's where they see the maximum value for the money they are wanting to contribute being achieved, not because they've got these concerns in place.

This is a largely administrative correction. It's nice to have the other harmonies created across the institutions. I think that's very sensible. They've all got a common purpose. They perform different functions from a collections point of view, but there's no logical reason why their governance structure need be different. So the harmonisation there is sensible. Restricting the length of service for board directors et cetera is, frankly, just bringing them into line with the way in which best practice occurs with any board across this country and around the world.

The adoption of this bill will be good for these collecting institutions. It is a good demonstration from this government that we want to encourage philanthropy in this country not only in the other very worthy places where people choose to donate their funds; we also put a focus on seeking philanthropic support for our institutions that, yes, receive government support and are taxpayer funded but could do so much more if they are equally able to supplement that support with further financial support from private citizens in this country. I therefore commend the bill to the House.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Before I call the next member, I will just remind members to read standing order 62(d) and show some respect to your colleagues.

Mr FALINSKI (Mackellar) (10:46): I would like to start today's contribution on this very important bill, the National Collecting Institutions Legislation Amendment Bill 2020, by acknowledging the fact that the minister in the chair, Minister Tudge, turned 50 this week. He has now obviously entered the age of wisdom, and because we are a generous government—

Opposition members interjecting—

Mr FALINSKI: Members opposite ask when I entered the age of wisdom! Of course it's not a matter of time on this planet, as they would know. The minister in the chair has been wise for many, many years. I too am 50 and I welcome him to my age bracket.

Opposition members interjecting—

Mr FALINSKI: You are quite right; it does not automatically convey wisdom upon you! But because we are a generous government that has been installed as government by the benefit of a generous people, we reward people once they have turned 50. The minister has this to look forward to: a free bowel cancer test. He can enjoy that process! I can tell him from personal experience, having just been through it, that it's not one of life's things to look forward to. Anyway, back to the bill.

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Yes—not before lunch, please!

Mr FALINSKI: On the issue of wisdom, George Orwell once said, 'Those who control the present can control the past, and if you control the past you can control the future.' Our national collecting institutions are an incredibly important part of the institutional framework that Australia and any liberal democracy has, to ensure we know what happened in our past and that that is left not to the interpretation of ideologues but to the interpretation of the original documents which formed that part of our nation's history. This is critical, because, as Orwell pointed out, without that basis of truth you cannot find wisdom. Fifty-year-olds in this place cannot be wise unless they can access original documents that provide the truth to that wisdom.

This legislation is important because it further instils in our nation the critical elements of ensuring that our national collecting agencies allow for and provide for the collection of original documents that future generations can base decisions on. It was a wise man—Genghis Khan, I believe—who once said: 'We here will make enough mistakes on our own. We should ensure that they are different mistakes. We should learn from the mistakes that our elders made so that we have the opportunity to make new ones that we can pass on to future generations in order to make this planet a better place.' It is important that we ensure that our national collecting agencies do have all the resources and the buy-in from the Australian public to ensure that these documents are maintained and that they are critically available to as many people as possible, especially future generations.

This legislation modernises the arrangements for six national collecting institutions in the arts portfolio, and I would urge the government to look at other institutions outside the arts portfolio that could benefit from similar modernisation. The six that we're looking at today are the Australian National Maritime Museum, the National Film and Sound Archive of Australia, the National Gallery of Australia, the National Library of Australia, the National Museum of Australia, and the National Portrait Gallery of Australia. These institutions are all critical to the future of our nation and the future of policy development in this nation. This bill that is before the parliament today did not come out of thin air. It did not sprout forth, as Nyx did, from the unavoidable void. It comes from consultation with these very same institutions. We have responded to their concerns raised over a long period of time. This government is acting.

The national collecting institutions are the caretakers of our shared stories. In a world where there is so much division, where there are so many people trying to pull us apart, it is important that we have institutions that remind us that our history is shared, that our purpose is common, that our goals and our visions move in the right direction—that is, the empowerment of the individual—to ensure this nation is left better by this generation for the next than it was when passed to us by previous generations.

This bill enables the institutions, for the first time, to invest donated funds in a range of investment options that attract a higher rate of return and which are not currently permitted under the Public Governance, Performance and Accountability Act 2013. Who knew that government regulation could get in the way of good governance? But, as amazing as it may appear to this chamber, it has occurred once again.

The member for Sturt referred to Canberra as the 'Rome of the South'. Never have truer words been spoken in this chamber. Indeed, our greatness, the greatness of this city, is not in the treasures it possesses but in the wealth that it shares, and these collecting institutions are the collectors of great wealths of knowledge that need to be shared with so many of our people. From major philanthropic gifting through to individual contributions, financial donations enable audiences and patrons to express concrete support for our cultural institutions, but, more importantly, their appreciation—individual Australians showing their appreciation—for the work that these institutions do and the contributions they make to our nation. It does that by ensuring the value for donated money is optimised. National collecting institutions are able to honour private benefactors and build foundations to nurture ongoing partnerships and encourage new ones with the philanthropic sector. I would just make this important point: it is not just in the receipt of the money; it is in the partnership, it is in the skills, the knowledge and the connections that philanthropists bring to a partnership that we can further improve and advance the work of these collecting agencies.

As noted by the institutions themselves, donors have expressed concern at the constraints to usefully investing their money to deliver returns. Indeed, one institution noted that donors have been horrified when they've realised how little could be earned for their money. This bill will put the national collecting institutions on a level playing field with other sectors, enabling them to attract greater support in the highly competitive realm of philanthropic giving, and recognises the role donors already play in investing in these institutions.

This bill establishes provisions to ensure transparency in risk management through processes that include the development and publication of an institution's investment policy. The bill is not about diminishing the level of government support for these institutions; it is about enhancing that support. It is about allowing these institutions to become more agile and more nimble. In 2021 alone, the government is providing them collectively with over $250 million to enable all Australians to engage with and understand these institutions' diverse and significant collections.

The bill will also improve administrative consistency across the enabling legislation of each of these institutions. It will improve efficiency; align governance obligations with the more recent Public Governance, Performance and Accountability Act; and, rightly, vest responsibility for day-to-day and collection related transactions to senior management of these institutions and their governing boards and councils as accountable authorities. This would include removing the requirement for agencies to seek the minister's approval prior to entering into arrangements for the supply of utilities, security and cleaning services. I note that the institutions themselves have unanimously welcomed the proposed changes to their investment powers and to other administrative arrangements, and I thank them for their contribution to the development of the bill.

If we are truly to rise to Rome during its great majesty, this is our time to do so. This chamber can make that happen. I commend this bill to the chamber.

Dr MARTIN (Reid) (10:56): I value and have enormous time for Australian museums, and the people of Reid love our museums also, so today I stand in support of the National Collecting Institutions Legislation Amendment Bill 2020. Australia's national collecting institutions play an incredibly important role in preserving, promoting and shaping Australia's intellectual and cultural landscape. Museums and galleries are places that allow our nation's history and culture to be accessible to everyone. Whether through history, culture or art, these institutions preserve and cultivate the soul of our nation. I love taking my children to our national museums during school holidays to immerse them in Australian history and culture. These visits are always interesting for them and often stimulate incredible conversation while we're there and also on the way home. So, museums have an important place and play an important role for our future generations.

Whether it be through Indigenous Australian or through international collections, museums provide a forum for new perspectives and world views to be shared and to shape the conversation about our nation's future. As a parliamentarian I have of course spent a great deal of my year down in Canberra, and here we're fortunate to be surrounded by a number of incredible museums and exhibitions. One of my favourite memories from this time last year was getting to visit the National Gallery of Australia during a sitting week, after parliament had risen, to enjoy the Picasso exhibition. While it is wonderful to see the work of such renowned artists, it was the most beautiful portraits by Australian painter Hugh Ramsay that really transfixed my attention. While I came for an international exhibit, it was Indigenous and Australian art collections that delayed my departure by several hours. These collections and exhibitions challenge and inspire Australians and international visitors alike. They share our talent and tell our stories—and they are powerful, powerful stories.

The National Gallery of Australia is home to the National Indigenous Art Triennial, Australia's first large-scale re-occurring exhibition dedicated to contemporary Aboriginal and Torres Strait Islander art and artists. Our Indigenous Australians have one of the oldest living traditions of art in the world, and we all have the privilege of being able to learn and understand this culture through the art displayed in these spaces.

Currently, the National Gallery of Australia is holding an exhibition titled Know My Name: Australian Women Artists 1900 to Now. Drawn from the National Gallery's collection as well as loans from across Australia, it is the most comprehensive display of art by women that has ever been assembled in this country. It not only places the focus on Australian female talent in the arts but also plays an important role in offering alternative histories, challenging stereotypes and sharing the stories of all women artists. The National Gallery is just one example of how Australia's national collecting institutions shape meaning and culture in our country. They preserve our history but also offer powerful perspectives and diverse world views that shape our understanding of the past and the future. Many donors, patrons and supporters play a significant part in investing in these institutions, and it is important—particularly as we bounce back from the COVID-19 recession—that these institutions have greater freedom in how they invest funds raised from donations.

This is what the National Collecting Institutions Legislation Amendment Bill sets out to do. The bill reforms and modernises legislative arrangements for six iconic national collecting institutions in the arts portfolio: the Australian National Maritime Museum, the National Film and Sound Archive, the National Gallery of Australia, the National Library of Australia, the National Museum of Australia and the National Portrait Gallery. The bill was developed in consultation with these institutions and responds to concerns that they have raised over a period of time.

The bill enables them, for the first time, to direct donated funds in a range of investment options that attract a higher rate of return and which are not currently permitted under the Public Governance, Performance and Accountability Act. By ensuring that value for donated money is enhanced, national collecting institutions are able to honour private benefaction and build foundations to nurture ongoing partnerships and encourage new ones with the philanthropic sector. These institutions have noted that their donors are concerned about the current constraints that limit the way donations are invested, with little opportunity to deliver returns. One institution noted that donors had been horrified when they realised how little could be earned from their money. This bill will put the national collecting institutions on a level playing field with other sectors. These new reforms will enable them to attract greater support in the highly competitive realm of philanthropic giving, and they recognise the role that donors already play in investing in these institutions. The bill establishes provisions to ensure transparency and risk management, through processes that include the development and publication of an institution's investments policy.

From major philanthropic gifts through to individual contributions, donations enable audiences and patrons to express support for our cultural institutions. However, we know that these institutions cannot rely on donations alone. These institutions add significant economic, social and intellectual value to our nation, and it is important that we invest in them. Government support is necessary to ensure that these institutions thrive, and this bill in no way diminishes the level of support being delivered to these institutions. In the last year alone, the government has provided these institutions with over $250 million, collectively, to enable all Australians to engage with and understand the diverse and significant collections.

The bill will also improve administrative consistency across the enabling legislation of each of the institutions. It will enhance efficiency; align governance obligations with the recent Public Governance, Performance and Accountability Act; and rightfully place responsibility for day-to-day collection related transactions with senior management of these institutions and their governing boards and councils as accountable authorities. This would include removing the requirement for agencies to seek the minister's approval prior to entering into arrangements for the supply of utilities, security and cleaning services.

The institutions themselves have unanimously welcomed the proposed changes both to their investment powers and to other administrative arrangements. It was through their contribution that this bill was developed, and I am confident that these reforms will strengthen our national collecting institutions. I recommend that the House pass this bill.

Mrs ANDREWS (McPherson—Minister for Industry, Science and Technology) (11:04): I would like to thank those who have contributed to today's debate on the National Collecting Institutions Legislation Amendment Bill 2020. The bill provides for a range of measures to support the six national collecting institutions. The changes proposed by this bill will offer immediate opportunities and efficiencies for the national collecting institutions. The institutions themselves have unanimously welcomed both the proposed changes to the investment powers and the administrative amendments, and I thank them for their contribution to the development of the bill. I commend the bill to the House.

The DEPUTY SPEAKER ( Ms Bird ): The original question was that this bill be now read a second time. To this the honourable member for Macquarie has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.

Mrs ANDREWS (McPherson—Minister for Industry, Science and Technology) (11:06): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

The DEPUTY SPEAKER ( Ms Bird ) (11:07): The original question was that this bill be now read a second time. To this the honourable member for Whitlam has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Mr WALLACE (Fisher) (11:07): The bill before the House, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, is urgent and necessary because the Gillard government's responsible lending provisions quite simply are now throttling businesses in this country. The intent behind these provisions in the wake of the global financial crisis were good. We must always ensure that lenders are careful not to give loans to people or businesses who manifestly cannot pay them back. However, in the context of the financial services royal commission and the rightly powerful enforcement messages coming from Australian regulators, the responsible lending provisions have become a millstone around the neck of this country. $34 billion a month in credit sits under these regulations. In a post-COVID world, we will need that credit to flow quickly and efficiently. As sound businesses in the worst affected sectors around the country continue to struggle and whilst unemployment remains elevated, we must drive growth and investment with a finance system that can adapt to changing circumstances.

Finance brokers in Fisher have described to me how the Gillard government's responsible lending laws took a noble concept and turned it into a bureaucratic nightmare. The Institute of Public Affairs have gone further. They've described responsible lending laws as:

… a disaster—drying up credit long before COVID-19 hit, and especially when credit is most needed.

In creating regulation to protect customers, we must ensure that the rules remain flexible enough to adapt to worsening circumstances and serve customers in harder times.

To be fair to the Gillard government, the responsible lending regime was not intended to be as onerous as it has become. Nor was it intended to apply to small business loans. However, in the strict regulatory environment that has understandably followed the financial services royal commission, the reality has become very different. Regulators and loan providers alike have become substantially overcautious, introducing requirements that go far beyond the basic legislative tests and spreading responsible lending practices to all kinds of credit. ANZ CEO Shayne Elliott, giving evidence to the House of Representatives Standing Committee on Economics, summed it up:

The only rational response … is to stay away from the line. So you just stay away from the line; you build a buffer … we have become more and more cautious.

This response is all the more understandable in the context of the conflicting advice that can be provided around this issue by the Australian Securities and Investments Commission, or ASIC, and the Australian Prudential Regulatory Authority, or APRA. While ASIC, for example, states that lenders do not need to conduct a full responsible lending assessment for individuals converting from a principal-and-interest loan to an interest-only loan, APRA requires a comprehensive review. According to Mr Elliot's evidence, the Australian Financial Complaints Authority takes its own third approach to responsible lending. Even Reserve Bank Governor Philip Lowe agreed that this system needs to be revised. As he said during the aforementioned inquiry:

I think the principles in the legislation are sound, but I think the way we've translated those principles into reality needs looking at again.

He went on:

On a portfolio basis, we want banks to make some loans that actually go bad, because if a bank never makes a loan that goes bad it means it's not extending enough credit.

We need legislative clarity to replace the increasingly complex guidance provided by regulators and to get the flow of credit moving again. I cannot stress how important this is for Australian businesses today. Of particular concern are the extreme practices which have been introduced by ASIC's guidance on lending obligations to verify the information that they are provided with. ASIC has introduced some 90 pages of guidance with detailed processes which go far beyond the original intention of this legislation and, in effect, force many lenders to examine every line on customers' bank statements. Finance brokers have come to me in absolute despair, as have people who have applied for home loans, telling me that the banks have been reviewing how much they are spending at a coffee shop each month and how much they're spending at Domino's or a pizza shop each month.

Applications for finance can now take eight weeks to assess, with more than half of that time spent trawling through existing expenses which tell us little or nothing about an individual's capacity to pay. Anyone who has ever taken out a mortgage knows that your lifestyle when you have the debt is very different to what you have experienced before. Justice Perram of the Federal Court expressed this truth very colourfully:

I may eat Wagyu beef every day washed down with the finest Shiraz but, if I really want my new home, I can make do on much more modest fare.

He went on:

Without additional information, I do not consider that it is possible to accept that the consumer's declared living expenses tell one anything about their capacity to meet repayments under the loan.

Yet it is exactly this kind of detail which currently makes the difference between whether or not a hardworking family can get a loan, and it can even impact the flow of much-needed credit to a local small business. In the process, given the number of new loans issued each year, this approach is undoubtedly adding tens of millions of dollars to the cost of getting finance at a time when it has never been more needed.

Madam Deputy Speaker Bird, I invite you and anybody else listening to this to think for a moment what happens to Australian businesses and Australians when they can't get finance—they can't buy a car, they can't buy a house, they can't buy earthmoving equipment and they can't buy that new piece of equipment for their business that might drive innovation. That's what happens when we overcomplicate this system. The bill before the House will cut that cost and get credit moving again, by removing the existing inflexible responsible-lending obligations from those larger lenders offering home and business loans that are in many cases already being regulated by APRA. In the case of non-bank lenders who are not, the bill will give the minister powers to determine new lending standards that will align with APRA's requirements.

Under the new standards, lenders large and small will still be required to maintain strong consumer protections, to run appropriate credit assessments and to examine their customers' capacity to pay. However, the bill will allow lenders to apply flexible processes that are appropriate to the borrower and the type of product offered. It will also allow them to rely on the information provided by consumers, unless there are reasonable grounds for believing it to be unreliable. This will remove the sword hanging over the heads of those who write loans and will streamline the approvals process to deliver faster and fairer outcomes for all Australians.

While freeing up the flow of credit and ensuring that lenders can support our economic recovery, the bill also strengthens the protections available to vulnerable consumers. Small-amount credit contracts, also called payday loans, are disproportionately taken out by low-income Australians. These individuals are at particular risk from unscrupulous lending practices and from the spirals of debt and fees that can too often result from their use. The bill before the House protects these consumers by prohibiting small-amount credit contract providers from charging monthly fees after a small-amount credit contract is discharged. It also requires that these payday loans have equal repayments and equal repayment intervals so that repayments are clear, predictable and upfront and do not increase unexpectedly.

Finally, the bill directly protects those most vulnerable Australians by prohibiting small-amount credit contract and consumer lease providers from providing credit to individuals who receive significant proportions of their income from Centrelink where the resulting repayments would consume a large amount of that income. Credit providers would be prohibited from writing any payday loans or consumer leases that require a person who gets 50 per cent or more of their income from Centrelink to allocate more than 20 per cent of that income to those repayments. In the case of individuals who receive less than 50 per cent of their income from Centrelink, there would be separate caps of 20 per cent for each of small-amount credit contracts and consumer leases.

In an ideal world these risky high-interest products would not be necessary. The tactics used to promote them should be carefully controlled. This bill thus helps protect vulnerable consumers from experiencing pressure to take out a payday loan, by prohibiting unsolicited invitations to current and former customers as well as door-to-door selling of consumer leases. These protections have another important aspect that I want to touch on briefly.

These measures to increase consumer safety around payday loans will be important in the context of the use of credit in gambling. Study after study tells us that gambling leads to increased cost-of-living pressures on hardworking families, increases crime, antisocial behaviour and family and domestic violence, and drives up drug and alcohol abuse. It is clearly harmful enough that the growth of online gambling today allows vulnerable Australians to wager and lose everything they own, anywhere, anytime, with just a few taps on a phone. What is worse is that, today, credit cards can be used to gamble online, leaving vulnerable problem gamblers with huge debts that they cannot afford to pay.

As I've said, I believe we need to close this loophole; however, it is not the only way that credit can be used to facilitate gambling. Payday loans provide a destructive fallback option for problem gamblers who bet and lose more than can afford ahead of their next pay cheque. The use of these loans can, if unchecked, effectively facilitating gambling harms through short-term credit. The welcome provisions in this bill, extending the responsible lending requirements for these loans and introducing new regulations to limit the proportion of income that those receiving income from Centrelink can spend on credit contracts, will help to minimise the likelihood of these gambling-fuelled debt spirals in the future. However, in the case of traditional lower-interest credit products, where bank staff are expected to run through an individual's account, line by line, to check whether they have a Netflix account and how much they spend on pizza, we have a problem.

It is frustrating enough when responsible Australians in good credit cannot get finance for a sofa, a mobile phone, a car, equipment or a house, but the current situation is much more serious than that. Hardworking Australians with no record of defaulting on credit are in some cases unable to get a mortgage to buy a home. Successful construction businesses in my electorate of Fisher cannot get a loan to buy much-needed equipment which will help them grow their business. In those sorts of circumstances, the current regulations, if left unamended, are a handbrake on our economy, on our businesses and on innovation. In an environment where we are all, collectively, trying to assist Australians and Australian businesses, giving them a leg-up so that we can claw our way out of this pandemic, we need to do everything we possibly can in this place to facilitate that economic growth. This bill will do just that, and I commend it to the House.

Dr CHALMERS (Rankin) (11:22): I rise to speak on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. The primary purpose of this bill, as we now know from the earlier speakers, is to unwind the responsible lending obligations which apply to most consumer credit contracts. The reason that we are opposed to this is that it is an attempt to unwind or ignore the very first recommendation of the Hayne royal commission: that the responsible lending obligations shouldn't be amended. It beggars belief in lots of ways that those opposite, who opposed the royal commission for two years, voting against it 26 times, and dragged their feet on implementing the recommendations—only a third of them have been implemented and are in force, two years after the report was received—are now in here arguing that the government should be allowed to contradict the very first recommendations, on responsible lending laws, which act as consumer protections in the banking system.

Our view is that the government should not be using the pandemic or the recession and its aftermath as an excuse to do what they always want to do, which is to unwind important consumer protections in the financial system. It's like they weren't paying attention to the Hayne royal commission and the rorts and rip-offs that it uncovered. Those opposite get given a big report about all the rorts and rip-offs in the banking system, and their first inclination is: 'How can we unwind these protections, which the royal commission advised in its first recommendation that we should keep?' That is ridiculous. It really is next level to use this pandemic as an excuse to go after consumers. We won't be supporting that effort. We won't be supporting it for a range of reasons that I'm happy to take the House through.

In addition to that major change, the bill contains a number of other changes to the law relating to small amount credit contracts, or SACCs, and consumer leases. It sets a cap on payments for small amount credit contracts and leases: 20 per cent of a consumer's income, or 10 per cent if it's another arrangement. It sets a maximum cost of four per cent per month for consumer leases, requires that payments be equally spread and prohibits providers from charging monthly fees on the residual term if it is paid off early. Others have gone through the detail of the bill as it relates to those small amount credit contracts.

But we need to remember that this is primarily about unwinding those responsible lending laws. The responsible lending laws were introduced in 2009—as you may recall, Deputy Speaker—by the Rudd Labor government. They introduced the National Consumer Credit Protection Act, which put in place a range of directives around the conduct of credit providers, including requiring them to abide by a set of responsible lending obligations. What those obligations require is that credit providers make reasonable inquiries about a customer and assess whether a credit product will be unsuitable for a customer. In other words, these responsible lending laws are about making sure that people don't get in over their head, that people aren't caught signing up to loans that they can't repay, with all of the damage that that might do to their financial situation.

There's a big issue here, a big set of facts. If the government doesn't want to take our word for it that this is not necessary and not wise and not well motivated, just consider what's actually happening to credit access in this economy. We are all for the free flow of finance. We understand how crucial that is to this recovery from the recession, obviously. We want people to be able to access funds and access loans and borrow and pay for homes and pay for cars and all of that sort of thing. We want that to work as efficiently as possible. Those opposite—including the speaker before me, unfortunately—were going on about how there'd been some kind of choking of credit, that the laws are responsible for that, and that's why we need to change it. But, respectfully to that member, that is complete and utter rubbish.

This bill is a solution looking for a problem. If you listen to Kevin Davis from the University of Melbourne, he says:

… it is difficult to discern evidence in public statistics that responsible lending obligations have adversely affected loan growth or the cost of household-sector borrowing.

It's just absolute rubbish to suggest that we need to remove these consumer protections because there's been this chokehold on lending. The facts tell a very different story. Just look at the recent ABS data, the lending indicators for December 2020—they were released earlier this month—showing the total value of new loan commitments for new housing and the value of owner-occupied home loan commitments each reached record highs in December 2020—record highs! Yet still those characters over there will jump up, one after another, and say, 'We've got a big problem here: we're not getting enough loan commitments.' We had record highs in December 2020, the highest ever.

Another stat: the total value of new loan commitments for housing rose 8.6 per cent to $26 billion in 2020. That's a 31.2 per cent increase on December in the year before. It is laughable that they're pretending that there's been a choking off of credit because of these responsible lending laws. The responsible lending laws are about making sure that lending is appropriate, that people don't get in over their heads. They say there's been a choking off, but the facts show it's at record levels. Lending is at record levels.

A third and final fact is that the number of owner-occupied first home buyer loan commitments rose 9.3 per cent to reach 15,205. That's a 56.6 per increase cent since December 2019. This is the highest level since June 2009.

All of those facts absolutely torpedo the central premise of those opposite arguing for the removal of consumer protections. If it's not about removing obstacles to lending, which is at record highs, we know what it's really about: it's about unwinding consumer protections. They've never seen consumer protections that they haven't wanted to junk. They always side with the big banks against the interests of ordinary working people.

The people of Australia are doing what they can to work hard and get ahead. They're trying to borrow responsibly. You can see from that data that people are doing their best to sign up for loans and to service those loans. That lending is at record highs. Those opposite say, 'The problem we want to address here is there's not enough lending,' when lending is at record highs, and that exposes the complete and utter farcical rubbish at the core of what those opposite are trying to do.

Treasury's own submission to the banking royal commission said that appropriate responsible lending laws could enhance rather than detract from macroeconomic outcomes. Those opposite want to get up—and no doubt the next speaker will—and say, 'We've got a big problem here, and it's holding back the economy,' and all the rest of it, but we would save a lot of time if they just got up and said: 'We want to unwind protections for people in the banking system. We want to ignore recommendation 1 of the Hayne royal commission. We never wanted the royal commission in the first place. We want to junk it as soon as possible. We're using the pandemic as an excuse to do that.' That's what is really happening here.

I said it before, and I say it again: if there are legitimate issues that need to be addressed here, then let's have a conversation about that. If there are legitimate issues that need to be addressed, let's refine the system, let's speak with the financial institutions, as I do, let's speak to the consumer groups, as I do—if there's a legitimate problem here. But there's nothing in the data, nothing in the expert independent academic opinion, nothing in the Treasury's submission to the royal commission in the first place that suggest these responsible lending laws are anything other than important. They're certainly not holding back lending when you look at those astronomical numbers that I just quoted. They should stop using this pandemic as an excuse to unwind important consumer protections that are adding to the robustness of our financial system, rather than detracting from it.

Now, again, you don't want to believe the data, you don't want to believe the Treasury, you don't want to believe the University of Melbourne academic and you don't want to believe us. But, a decade after these laws were put in place, laws introduced by Labor in 2009, there was a survey of financial counsellors, and what they found was that 97 per cent of financial counsellors said that responsible lending laws should remain in place. Ninety-three per cent of them had used responsible lending laws to advocate for their clients. These guys are doing really important work looking after people in the financial system. They want those protections to stay in place, and so do we.

Even with these responsible lending laws in place, we've still seen some heartbreaking examples of irresponsible and predatory practices in the banking and financial services industry. Think about Financial Counselling Australia's survey of their members. Just think about it. The Financial Counselling Australia survey asked counsellors, 'What's the worst example of irresponsible lending that you've seen?' In my home state of Queensland, which is the home state of the minister at the table, the Minister for Industry, Science and Technology, an elderly man with mental health issues who was on the DSP was given three loans within a very short period because he'd been a good client. He was in severe financial distress over a long period. He was too embarrassed to see anyone as he felt ashamed of it. He said he walked past the front door of a financial counsellor six times before he could even go in. The FCA wants to leave these laws in place for people like that.

In a second case study a company gave an elderly man who was close to retirement a $60,000 car loan. After owning the car for a year he was forced into retirement because of poor health. He moved onto the aged pension and couldn't pay the car loan. The company made no inquiries regarding his ability to pay, and should have identified that the man was close to retirement age.

Unfortunately, these are not isolated cases; they're not one-offs. We saw from the Hayne royal commission that, even with these laws in place, there are still practices which are indefensible, there are still practices where people are encouraged to get in over their heads. We should be looking for ways to support them, not looking for ways to leave those people on their own, to leave them in the lurch and to leave them behind, as those opposite would do if and when this bill is passed.

What makes this bill even more galling is that, four years after the government announced they'd do a review into payday loans and rent-to-buy schemes, they've barely lifted a finger to clamp down on loan sharks and payday lending, despite repeated promises to support the 24 recommendations of the review

Here I want to commend my colleague the member for Oxley for his tireless and powerful advocacy in this area. Payday loans are almost exclusively used by people on low incomes in communities like his and communities like mine, next door. People who are trying to keep their heads above water are often preyed upon by these companies, who trap them in horrific debt cycles as a result of outrageous fees and interest rates which are hard to believe.

Even before the pandemic, the Consumer Law Action Centre said over 4.7 million payday loans worth an approximate total of $3.09 billion were written between April 2016 and July 2019, which represents around 1.77 million Australian households. Too many of those people end up in a debt spiral. A 2018 report examining financial literacy in my part of the world, where I grew up, where I live and where I represent now, Logan City, found there were 43 banks and credit union shopfronts and 45 high-cost credit businesses clustered in suburbs with low socioeconomic indexes like Woodridge and Logan Central, where my electorate office is. Obviously a lot of those businesses are targeting people who cannot afford to repay.

I think it's reprehensible that those opposite want to rewind responsible lending protections for consumers. They don't want to do anything meaningful on payday lenders and loan sharks, and that has diabolical consequences for the people I represent, the people the member for Oxley represents and people represented by so many members of the House. This is a solution looking for a problem. It's badly motivated, it's not supported by the data and it's not supported by expert opinion. Instead, as I've said again and again because I believe it, this is nothing more than an opportunistic attempt to use the pandemic to come after people and to unwind the protections which are necessary to make sure that people don't get in over their head.

We're on the side of people who want to work hard and take loans they can afford to repay to provide for their loved ones and put a roof over their head and all the rest of it. We are on the side of those people. Those opposite are on the side of the loan sharks and the payday lenders. They want to make it easier for the financial institutions of this country to do more of the kind of rorts and rip-offs the Hayne royal commission uncovered. They want to deliberately ignore, if not contradict, the Hayne royal commission recommendations with this legislation. We will continue to fight for the interests of ordinary working people in the banking system who deserve better. We want the banking system to be strong and profitable, but we also want it to be fair.

Mr TIM WILSON (Goldstein) (11:37): It's a great privilege to speak on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, focusing on Australia's restricting lending legislation and why we need to drive reform to enable Australians to go to a bank and get money. That's ultimately what this legislation is actually about: enabling Australians to access credit.

Restrictive lending laws that deliberately seek to deny or limit people being able to access credit don't hurt the top end of town. Truthfully, it actually favours them, because they just get to sit there in their cushy jobs, guaranteed there is no real risk, and take the cream off the top. It doesn't hurt the rich, either. It's not as if they've got a problem with access to credit most of the time, because they've got the assets to back it up, to have security, so that they can borrow the cash and get access to money. They're a safe bet. The restrictive lending legislation harms the poor. It harms the people on low incomes. It harms small businesses that want to grow. It harms people who don't have security. We all understand there's got to be proportionate risk around security as part of the process of lending, but these laws needlessly make it harder and create extra hurdles and barriers to the young, to those on low incomes, to those who want to get ahead and take risks so they might have their opportunity too. Is it really a shock that since we have introduced restrictive lending laws we've seen a massive growth in demand and credit from non-bank lenders? Is it really a shock that it's become harder and harder for people who live off their salaries and who don't have assets to access credit? Frankly, these laws are farcical in their operation today.

I will give you an example. I'm going to use a personal one. The other day I went to get an increase on my credit card limit. It was, politely, two-fifths of nothing, and I had to fill out 30 pages and wait three weeks. I'm fine. I can handle it. It's more annoying than anything else. But, for some people who need access to credit, secured or unsecured, to support their circumstances straightaway, it can be the difference between whether they can provide finance for their business or not. It can be the difference between whether they're able to purchase a property or not or a home or not.

And so it's absurdity we hear from the shadow Treasurer and others railing against it because they're the so-called champions of the poor; they're the ones trying to keep the poor in their place. We are trying to lift them up and give them opportunities to stand on their own two feet, because that's the essence of what liberalism is about—empowering individuals, families and communities. That's the foundation for the success of our country. It's not about trying to keep people in their place to maintain our political relevance, as those on the opposition benches do. The poor are the ones who are hurt most by the current legislation, and that's why reform is so essential.

But the scary thing is it isn't always just the poor; sometimes even the asset-rich are hit by restrictive lending laws. A number of self-managed superannuation fund holders who are out of the formal workforce and get income through dividends off their assets now can't go to the bank to borrow money. It's just absurd. That's people with millions of dollars in assets and rivers of revenue through dividends as the basis of their income and they can't go to a bank and borrow money. Whether it's for themselves to purchase another asset or whether it's to help their children to buy their first home—whatever it is—restrictive lending means they can't get cash. And for what? It's for the vanity of the opposition because they introduced a Northern American solution to a Northern American problem after the global financial crisis and won't accept they actually just got it wrong. Their legislation doesn't help Australia. It isn't solving an Australian problem. They have created a problem out of nothing to the detriment of everyone except for those with high incomes and large assets who are still in the workforce. It creates needless piles of regulation and processing and capital going towards creating jobs for regulatory compliance for nothing.

But the truth is it's not just for nothing. That's because the people being hurt by it are those people who want to get ahead. It's harder and harder for first home buyers to get a loan. It's harder for women who have found themselves divorced to get a loan to buy a home. This fits into a very long pattern of behaviour that we see from the Australian Labor Party. We know, with their prioritisation of superannuation over homeownership, they're throwing young Australians to the kerb on their dreams and aspirations to own their own homes. For those people who find themselves going through significant life events, such as divorce, in their 40s or their 50s, particularly women, the biggest impact on their retirement security is whether they're able to get into homeownership before they retire with enough time to retire their debt on a mortgage. They are being told by the Australian Labor Party, the Labor opposition and their mates in the super sector, who want to cream those same people's superannuation for their own profits and bonuses, 'No, we know what's best for you.'

The Labor Party doesn't care about these people's concerns or interests, because at the heart of its political agenda is a patronising world view that it has better judgement than people who can stand on their own two feet. Those opposite would rather older women had their superannuation eaten away by rent than for them to be able to enjoy the benefits of home ownership. They would rather keep them poor. That is their legacy. It may not be their intent, but it is most certainly the outcome. We see this consistently in their constant efforts to prioritise superannuation and their fund manager mates, to prioritise their fund manager mates' bonuses over the aspirations, dreams, opportunities and empowerment of Australians and their families. It's disgusting. They run interference when we raise and highlight fees for no service charged by industry funds. Why? It's because of their political proximity to them. It's because of their alliances and their interests and because they take donations, fees and support from exactly the same funds.

On this side of the chamber, we make no apology. We are in favour of empowering Australians and their families. We want them to be able to stand up and own their own home. It is the foundation of their security, it is the foundation of their opportunity and it is the foundation of their success in life. That's why I am proud to stand for 'Home first, super second', and I make no apology about it. What it will do is provide an opportunity for tens of thousands, if not millions, of Australians to have a better, more prosperous working life, and it will put them in a better position to save for their retirement than the alternative would.

The DEPUTY SPEAKER ( Ms Bird ): Can I just interrupt the member for a moment and draw him back to the topic of the bill. I understand he was talking about super in the context of credit availability, but I ask that he now come back to the topic of the bill.

Mr TIM WILSON: There is absolutely a congruence between access to credit, home ownership, superannuation and priorities in life, as well as the principles that sit behind them around empowerment for individuals and families. That's why these issues have such a relationship. The shadow Treasurer spoke specifically about home ownership, access to credit and the ability to borrow from the bank. Access to other forms of capital are a critical part of that story, too. The dishonesty from the Labor members who oppose regulation and legislation that remove restrictive lending comes from a fundamental misunderstanding of credit availability. You just need to listen to the Reserve Bank of Australia's governor, who often appears before the Economics Committee. I see the former deputy chair of the Economics Committee in the chamber right now. He knows that, when the Reserve Bank governor comes before the committee, he tells us exactly what his attitude is towards economic conditions and circumstances and the issues before him. Every time the Reserve Bank governor came before our committee last year, he spoke about, and was asked questions about, Australia's restrictive lending laws. He said that the guidance notes that were being issued by the regulators were directly hampering the capacity of people to access credit.

More critically, the removal of restrictive lending laws would not lead to the ridiculous circumstances boasted by those on the opposition benches. The macroprudential framework that has been put in place by the regulators would ensure that lending was appropriate. What we wouldn't have is needless paperwork and needless delay to 'yes'. We wouldn't have needless situations where young Australians who want to buy their first home miss out because the law gets in their way. What we want to do is make sure that the law not only protects consumers but also empowers them.

That's why empowerment through home ownership is so critical. Under our current laws, not just in restrictive lending but in other areas, like the prioritisation of superannuation over home ownership, we see the empowerment of capital at the expense of the consumer—at the expense of the citizen. That any member could sit in this place and say they're going to put capital before citizens and their empowerment, you'd have to start to question who it is they're here to represent. It's only citizens who vote for them, and they vote for them to come into this place to stand up for them, their community, their family and their country.

That's why I support this legislation. The pattern of behaviour from our opponents has been to stand up for capital at the expense of citizens. We on this side of the chamber are in favour of laws which empower citizens over capital.

Opposition members interjecting—

Mr TIM WILSON: I hear some protests from members opposite, like the member for Kingsford Smith, who should know better about making sure that young Australians, new Australians and low-income Australians can have their opportunity at the Australian dream too. That's why the current laws don't work and why the current laws don't protect people, but pity them. Our focus is on what we need to do to mobilise people—individuals, families, communities and country—to be successful. That's what we want to empower: every Australian's chance at their own success.

Mr THISTLETHWAITE (Kingsford Smith) (11:51): Recommendation 1.1 of the Hayne royal commission into banking and financial services reads:

Recommendation 1.1 – The NCCP Act

The NCCP Act should not be amended to alter the obligation to assess unsuitability.

The first recommendation of the Hayne royal commission into banking and financial services, which, remember, came about because of irresponsible credit practices and irresponsible lending by the banks, was that the National Consumer Credit Protection Act should not be amended to alter the obligation to assess unsuitability. And yet that's exactly what this government is doing. That's what this bill does; they're flying in the face of the first recommendation of the banking royal commission. Have they learnt nothing? What short memories they have!

This National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 scraps responsible lending obligations under the National Consumer Credit Protection Act. What are those responsible lending obligations? There are three of them. Firstly, the licensee must:

(a) make reasonable inquiries about the consumer's requirements and objectives …

That's completely reasonable, completely understandable and should be there. The second one is:

(b) make reasonable inquiries about the consumer's financial situation; …

That's what the bank or lending institution is required to do. Of course, that's entirely reasonable and entirely appropriate. You're not going to lend money to someone without making inquiries about their income and their expenditure, are you? It happened in the lead-up to the global financial crisis, and that's why the world ended up in a mess. The third one is that the licensee is required to:

(c) take reasonable steps to verify the consumer's financial situation; …

That includes both their income and their expenditure. Again, that's a very, very reasonable requirement for a bank or a lending institution, to ask about those who are applying for credit and whether or not they have the financial wherewithal to pay the loan back. Of course that's a reasonable obligation on a credit provider. And yet these are the obligations that this government wants to remove from our national consumer credit laws. It is unbelievable!

These obligations apply only to consumer credit contracts; they don't apply to commercial credit contracts. They've never applied to commercial credit contracts. So we're talking here only about the average wage earner—a mum and a dad trying to buy a new home, a young person trying to get into the housing market or someone going to get a loan to buy a new car. Of course the banks and the lending institutions should ask these reasonable questions about whether or not someone has the ability to pay that loan back and, indeed, what their income is. These are reasonable laws, yet this government wants to get rid of them.

In removing those responsible lending obligations for products other than small amount credit contracts and consumer leases, what this government is doing is potentially damaging Australia's economy into the future. I've asked myself: 'Why are the government doing this? Why are they getting rid of these reasonable laws, particularly in the wake of the Hayne royal commission, which recommended in its No. 1 recommendation that these laws remain?' Well, the Treasurer and the Assistant Treasurer, who introduced this bill, have said that the current regulation is damaging the supply of credit. Those were the Assistant Treasurer's words, and the Assistant Treasurer, in his second reading speech, said that 'flexibility for lenders' was required. Whenever the coalition talk about flexibility, it should raise alarm bells amongst Australian workers and Australian consumers. But, when they talk about flexibility for banks, it should raise even more alarm bells, because we saw what happened over the last decade when the big four banks and other massive lending institutions had flexibility in laws not only around providing credit but around pandering to people to get them to take on credit, particularly around credit cards and other loan instruments. So people should be very, very sceptical of the government when in the outline of this bill, when they present it to the parliament, they say that they are trying to present more flexibility for banks in Australia.

I want to go to some of the findings of the royal commission about this notion that credit regulation is damaging the supply of credit. The Treasury had something to say about this in their submission to the Hayne royal commission:

There is little evidence to suggest that the recent tightening in credit standards, including through APRA's prudential measures or the actions taken by ASIC in respect of RLOs—

responsible lending obligations—

has materially affected the overall availability of credit.

That is the view of Treasury. It's the view of the Treasurer's own department, submitted to the royal commission. The Assistant Treasurer's own department has said that the responsible lending laws have not harmed the availability of credit. Yet the Assistant Treasurer comes in here and completely contradicts his own department, the evidence that was presented before the royal commission and the findings of the royal commission to present this bill, which does the complete opposite and relaxes those responsible lending obligations. It goes completely against the Assistant Treasurer's own department and their advice.

It gets worse. Treasury goes on to say:

… there has likely been an improvement in the credit quality of marginal borrowers.

The Treasury have said to the royal commission, 'These laws are working and we want them to remain in place,' yet the Treasurer completely ignores his own department and completely ignores the royal commission and gets rid of these responsible lending laws through this bill.

The royal commissioner himself, Hayne, said in the conclusion to this section around the responsible lending laws in the report:

… if 'appropriately managed, ensuring the industry consistently meets the requirements of existing laws will likely enhance rather than detract from macroeconomic performance'.

There you've got it. It's actually going to be better for the Australian economy if we leave these laws in place. Yet this government is completely ignoring that advice and the advice of its own department and is getting rid of them. And it's getting rid of them despite the protest of consumer groups, who've also said that it's irresponsible to scrap these laws and that it would potentially lead to significant consumer harm.

These organisations include the Consumer Action Law Centre, the Financial Rights Legal Centre, Financial Counselling Australia, Choice, the Indigenous Consumer Assistance Network, and Redfern Legal Centre. A significant part of these organisations' work is providing assistance and legal advice in relation to consumer credit in Australia, particularly when it goes wrong for the consumer and particularly when people experience that disadvantage and end up in a difficult financial situation. These organisations have deep expertise in our credit laws based on lived experiences of the people they help. It's no surprise that they strongly oppose this bill. They say that the Morrison government's changes will result in harm to individuals, families and communities and set Australia up for household debt disaster in the wake of the COVID-19 crisis.

The chief executive of the Financial Rights Legal Centre, Karen Cox, said that her organisation 'continues to see the financial hardship legacy of irresponsible lending practices that pre-date the banking royal commission'. She said:

Our Government wants free-flowing credit to reign at a time when unprecedented numbers of Australians have had to ask for loan deferrals amidst COVID-19. It simply defies logic. The last thing people need now is inappropriate and unaffordable credit.

Fiona Guthrie, the chief executive of Financial Counselling Australia, said that financial counsellors were shocked by what was being proposed. She said:

If these laws are scrapped, financial counsellors will see more people drowning in debt with all that entails: greater risks of suicide, more bankruptcies, more family violence and family breakdown, more homelessness and the negative flow on effects to people's mental and physical health.

That is the view of the people who deal with the ugly side of this every day. Yet this government ignores that. They ignore the advice of Treasury, they ignore the advice of the Hayne royal commission and they proceed with these laws.

Why were those responsible-lending laws put in place? They were put in place in the wake of the global financial crisis, where we saw banks and financial institutions across the world lending for basically anything, lending with very little evidence of incomes and expenditure. That, of course, led to asset price bubbles, particularly in housing. When the whole thing came crashing down, it wasn't the executives at the banks and the lending institutions who suffered. No, it was the workers and the people who had taken out those unsustainable loans, because the price of the assets against which they'd borrowed crashed, and the banks foreclosed on the assets because the value of the loan was greater than the value of the asset, and people were left without housing.

That's what those consumer groups are talking about in relation to these laws being removed once again. In the Australian context, that was pre-dated by the wealth scandals that occurred in our banks, in our financial institutions—the pushing of financial products, particularly credit cards, and other unsuitable loan products onto consumers because of the incentives that were given within these organisations, through bonuses and other pay advances, to get people to take on credit that they couldn't sustain.

Government had to act; we were forced to act. Government doesn't just wake up and say, 'Hey, let's regulate the banking industry!' It was well over a decade of pain and suffering—literally hundreds of thousands of Australians losing billions of dollars—that forced government to act. And Labor forced the government into a royal commission that they had voted against 26 times. They never wanted it. They didn't want to see a spotlight shone on what was going on with their mates in the banking sector. The government voted against it 26 times. These laws were put in place to ensure that that can't happen again in Australia, and this government wants to get rid of those responsible lending laws.

I make this prediction: in years to come, when we are looking back on the next financial disaster in this country and saying: 'How did we allow this to happen? How did we allow the housing crash to occur? How did we allow millions of Australians to lose their homes and lose their incomes?', we can point to this point in time when this bill went through. It will be on this government to explain to those millions of Australians who will be suffering at that point in the future why they did this to them, why they allowed this to occur in this parliament and another global financial crisis style recession to ensue for a lot of people to suffer through. It will be on this government to explain to people why they allowed that to occur.

That is why Labor is opposed to this reform. The government is taking away the regulation that was put in place after this parliament was forced to act by the Australian people, by workers and consumers, because they'd had a gutful of the rip-offs and the scandals in this industry. This government is now turning its back on those people who suffered, and, again, marching down the path of deregulating this industry and ensuring that in the future people will be vulnerable and potentially subject to credit that they can't afford. When the whole thing comes crashing down it will once again be up to the Labor Party to try to restore some decent regulation and some reasonableness to this industry.

Mr HAMILTON (Groom) (12:06): The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, which I'm very happy to speak in support of, is a bill that Australians would expect of this coalition government—that is, one that supports jobs and growth. In the simplest understanding of this bill lies the very clear intention to support those individuals who wish to take advantage of the rising tide that is currently lifting all Australian boats. All around us, the evidence of economic recovery can be seen; I will describe some of that in a moment.

First, it's important to view this bill in the context of the world around it. The year 2020 saw the greatest economic challenge the world has seen since the Great Depression. Stories that were once passed down to our generation from grandparents and great-great-grandparents are once again the stories of our time. I think of my uncle, Don Prentice, telling stories of his time during the Great Depression, of packing up his swag and going to find work. We aren't there, but those memories remain.

The year 2020 changed us. It shocked our economy and hurt many people's health and security. Whilst Australia has done very well in comparison to other economies, we have hurt. Just as the National Consumer Credit Protection Act 2009 can be viewed as responding to the challenges of its time, as the previous speaker detailed—in our case it was the global financial crisis—this bill responds to the challenges of today, and they're very different challenges. As difficult and dark as 2020 was for so many of us, Australia ended 2020 with consumer confidence at a 10-year high and the people of Australia found their feet after the initial turbulence of the pandemic. They found faith in the community's ability to work together, in our health system's ability to guide us towards safer shores and in the Morrison government's plan to rebuild our economy.

This bill offers something of an opening up of Australia's ability to access credit, and that is exactly what the people of Australia's confidence calls for. As a people we understand now is a time of growth, that 2021 must be a time that Australia proudly and deliberately takes a step forward out of the uncertainty that engulfed us in 2020. As a government we support that confidence. As a government we understand that a confident nation needs our support, not our suppression. As a government we understand the importance of leading with our strengths, and today we must view that 10-year high in consumer confidence as a great strength of this nation.

Earlier this year I spent time with Downs Group Training, listening to their plans to develop workforce capacity and capability in the Toowoomba region. I heard from their CEO, Kris McCue, on his organisation's optimism for the year ahead. We're talking about young tradespeople entering the market, viewing all the work that's happening, particularly as a result of the wonderfully received HomeBuilder scheme. It's great to see them entering their careers with optimism. As I often, do, I popped my head into one of Toowoomba's many fine cafes—on this occasion, The Finch. I had a great chat with the owners, Dan and Edwina, who confessed to me the worst-kept secret in Toowoomba, which is that they are expanding—a second Finch. I'm sorry, guys, but the word is out. This is a business that was initially hit hard by the pandemic shutdowns but which survived with the help of the Morrison government's economic recovery plan and their lifelines and which has now come out on the other side of that very difficult time with confidence. They are no longer looking for the light at the end of the tunnel but are now looking for the sunglasses as a bright new day dawns. It's not here yet, but it is dawning.

My local Toowoomba Toyota dealer tells me that his sale lots, which were almost completely empty only 12 months ago, are now full of people looking to take advantage of the government's economic recovery plans. The comeback is on. Almost 800,000 jobs were created in the past seven months, and the participation rate has recovered and reached a record high of 66.2 per cent. We know that our temporary JobKeeper payments and the billions in economic support provided enabled Australians to stay in work or connected to their employer. That is great news. It's a great thing for households, businesses and the economy. We know that our COVID-19 economic support measures helped families and have boosted business balance sheets by more than $200 billion. Again, at the heart of this government's efforts was a desire to support individuals and businesses during the pandemic.

We are continuing to work with business so that the private sector can lead our recovery. The government's full expensing for new business investments, creating jobs and our loss carry back scheme provides a much-needed cash flow boost for those who continue to do it tough. In Groom, that's assisting some 4,000 small and medium businesses. I believe the Prime Minister described this as 'a game changer like no other' and I heartily agree with that assessment. These measures saved not just livelihoods but lives. They kept food on the table, ensured that bills were paid and, importantly, ensured that the breadwinners of households stayed connected to employment. This meant there was significant economic flow across the economy, supporting jobs, particularly in small and family businesses. Feedback from business across the Toowoomba region has been clear that this support was critical during the lockdowns, particularly in regions such as mine, where case numbers were relatively low and people were going about their business safely and as normally as possible.

To support those businesses to get back up and running more quickly, with existing staff back at work, serving and selling, JobKeeper supported some 4,700 businesses in Groom, keeping us connected as a community. As JobKeeper steps off and businesses get stronger, our government will continue to support Australian households and businesses, and we'll do that by putting more money back into Australians' pockets and protecting more of what they have earned. In my electorate of Groom, 65,600 taxpayers benefit from this government's tax relief measures, and that's great. It means there is more money circulating in our local economy across the Darling Downs, supporting businesses in our community. As a result, we've seen the consumer and business confidence recover as the strong restrictions come off. It is the intent of the bill before us to support households, small businesses and the economic recovery. It's critically important that we deliver our economic recovery plan and provide households and businesses with more confidence to invest and create more jobs.

Part of that plan is simplifying Australia's credit framework and supporting the flow of credit to the Australian economy, with interest rates remaining at historic lows and fiscal policy having a greater role in supporting national economic growth, especially on the back of a coronavirus induced economic downturn. It's important that our regulatory settings are adequate for the issues of today. This bill will help facilitate, rather than hinder, the economic recovery and protect consumers and borrowers. This is not about the short term. This is not about getting a rush of credit. As part of our recovery plan, this bill is about improving the financial services sector for the medium to longer term. This bill removes excessive, duplicative barriers that hamper access to credit approval and make the process more timely. Our regulatory framework does not have to be burdensome to be strong, and this bill demonstrates as much. As businesses recover and seek credit to invest, we need to ensure our regulatory framework incentivises investment in jobs in our economy. This bill will enable that, while also protecting consumers, particularly vulnerable consumers.

This bill ensures authorised deposit-taking institutions will continue to comply with APRA's lending standards, requiring sound credit assessment and approvals criteria. The bill adopts key elements of APRA's ADI lending standards and applies them to non-ADIs. In reducing the duplicative burden, the bill enables lenders to rely on the information provided by borrowers, replacing the current practice of 'lender beware' with a borrower responsibility principle. The credit assessment process relying on information provided by a consumer, particularly by a small business where, in large, information is preverified through an accountant or other financial adviser, will avoid the need for extensive and intrusive verification processes. Of course, if there are reasonable grounds to believe the information being provided is unreliable, the bill maintains that lenders can make inquiries in relation to a consumer's situation like the existing conduct obligations. This enables a strong regulatory standard of assessment as to whether a credit application is suitable prior to making a loan without overburdening the applicant.

The government recognises that we need to simplify the system, and this bill does that by moving away from a one-size-fits-all approach while at the same time strengthening consumer protections for those who need it. This bill will protect the vulnerable in my community, especially within Toowoomba city. Toowoomba has for many years been designated by the federal government as a refugee and humanitarian settlement area because of the success of well-established collaboration and partnerships at different levels of government, settlement services, NGOs and the diverse community who provide support to new arrivals. On 22 June 2013 Toowoomba Regional Council became the third local government area in Queensland to become a refugee welcome zone. We are one of the largest regional refugee settlement areas and are very proud of that. I acknowledge Mayor Paul Antonio's fine leadership in this.

Our most recent arrivals include 2½ thousand Yazidi people with a refugee background. Many experience language difficulties and, unfortunately, trauma issues. Catholic Social Services, through the Toowoomba Refugee and Migrant Service, TRAMS, provide refugees and migrants who are new to our region with support to get settled into community life and enjoy a smooth transition into Australian society. The TRAMS program provides these refugees and migrants with assistance to become self-reliant and to participate equitably in Australian society as soon as possible after their arrival in the Toowoomba community. I note two small businesses in central Toowoomba are run by Yazidis. It's great to see them engaging so heartily in the community and doing so well.

At a recent meeting with Catholic Social Services it was highlighted that, due to trauma, these new residents are vulnerable and this often results in uninformed decision-making that consequently ends in bad outcomes, including bad financial outcomes. This section of society are still settling in and finding their way. They often have the barriers of learning a new language, learning how to read and write, learning new skills, customs and laws, and engaging in the workforce. This bill, particularly as it relates to small-amount credit contracts, helps protect these groups. These changes will make it easier for the majority of Australians and small businesses to access credit, will reduce red tape, will improve competition and will ensure that the strongest consumer protections are targeted at the most vulnerable Australians. I recommend this bill to the chamber.

Dr MULINO (Fraser) (12:18): Late last year when the Treasurer announced this policy in the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 some commentators who were sceptical of it and were opposed to it said that this is a solution looking for a problem. On reflection, I actually think that that characterisation of this policy is far too generous. It is true to say that there is no problem, but it is far too generous to call this policy a solution to anything. It is not a solution; it is a massive retrograde ideological step backwards in our regulatory framework. It is a step backwards that is going to put at risk many of the most vulnerable in our community. So, please, let's not at any point in this debate mischaracterise what we're seeing here today as a solution. It is a highly risky step backwards to a time long ago when the financial services sector contained many more risks for the most vulnerable. It is an unwinding of some of the most important protections in our financial regulatory structure.

What is the context in which this absurd bill is being brought to this chamber? The context of course is that we are now two years down the track from having received a very hefty, rigorous and well-received royal commission report from Commissioner Hayne. That's two years where only a third of the recommendations have been acted on in any meaningful way. That's far, far too long, when so many substantive recommendations are sitting idle. And yet in this chamber now today, we're being asked to support a bill from the government that is actually going to fly in the face of the very first recommendation of that royal commission. So at a time when two-thirds of the recommendations from that royal commission stand idle and when so much of the poor behaviour, so much of the malfeasance that shocked the public and so much of that behaviour which generated the public policy recommendations, stand idle we're being asked to unwind, to fly in the face of and to contradict recommendation 1.1. As earlier speakers on this side have noted, recommendation 1.1 was that the national consumer credit protection laws not be changed. And now we're being asked to gut them, to totally weaken consumer protections that have proved to be so vital.

This bill is a remarkable act of maladministration. As other speakers have noted, the National Consumer Credit Protection Act was brought in by the Gillard government in response to the GFC. What we're being asked to consider in this bill is a structure in which the protections in that act are going to be materially wound back. We're going to have an arrangement where lending decisions by ADIs—by authorised deposit-taking institutions—will be regulated by APRA, a body which is very expert in prudential regulation but does not have a consumer-facing expertise. And non-ADI lenders will be regulated by legislative instruments by the Treasurer and will be enforced by ASIC. So rather than the strong current arrangements, we're going to end up with consumer lending being regulated by three separate sets of rules and two different regulators. The remarkable achievement of this government is that they're going to simultaneously water down provisions and make them more complicated. This will become a case study for public policy departments around the country in how not to undertake regulatory change. Of course, as speakers on this side have noted on numerous occasions, this watering down and overcomplication of current arrangements flies in the face, not surprisingly, of one of the key recommendations of the Hayne royal commission.

This is a very disingenuous proposal being put by the government. Speakers opposite, to the extent that they've been able to mount any kind of rationale for it, claim that it's based on insufficient credit growth when, as speakers on this side—the shadow Treasurer and other speakers—have pointed out, credit growth is strong and many areas of credit are at record levels. It is a completely specious argument. Other speakers mount the argument that it's critical for the protection of individual rights, that people should be able to borrow absolutely whatever they want in any circumstances. That's a hollow rhetorical flourish. Let's be clear: it's a highly disingenuous flourish by those opposite. If they genuinely believe that—if they're genuinely so wedded to individual rights above anything else, then why don't we get rid of consumer protection altogether? If it's such a great thing to water down these provisions then let's get rid of them altogether.

Let's look at what the experts say in relation to this proposal from the government and the Treasurer. Karen Cox, the CEO of the Financial Rights Legal Centre, who was the opening witness to the banking royal commission, said:

The problem people are having right now is too much debt and not enough income. @ausgov solution is to take on more debt with fewer protections.

Watering down credit protections will leave individuals and families at severe risk of being pushed into credit arrangements that will hurt them in the long term.

Fiona Guthrie, the CEO of Financial Counselling Australia, an organisation that represents the people at the coalface of having to help vulnerable people who have been abused by the system, said:

As we learnt to our cost during the GFC, weaker lending standards mean people will be loaded up with as much debt as possible. There is significant profit to be made in pushing borrowers to the edge.

Financial Counselling Australia undertook a very important survey of financial counsellors. Ninety-seven per cent of those surveyed said that responsible lending laws should remain. So they agree with Commissioner Hayne; they agree with the Commonwealth Treasury; they agree with the experts—97 per cent. And 94 per cent of financial counsellors either strongly agreed or agreed with the proposition that responsible lending laws are an important component of consumer protection.

Alan Kirkland, the CEO of CHOICE, said:

We got rid of the idea of 'buyer beware' in consumer law decades ago.

This is a completely retrograde step. As Alan Kirkland points out, this is going back decades to a completely old mindset in terms of how the regulatory system should be structured.

Gerard Brody, the CEO of the Consumer Action Law Centre, said:

The Hayne Royal Commission was a 'watershed moment'.

He also said:

The Commonwealth Bank recently said that the flow of credit is above pre-COVID levels and that lending is growing at a strong pace. And none of the big banks opposed the responsible lending laws at the recent House of Representatives Economics Committee hearings

As Gerard Brody rightly points out, all big four bank CEOs gave evidence over the last few months to the House economics committee. None of them argued that these laws should be gutted. None of them contradicted recommendation 1.1 of the royal commission. The big four bank CEOs are also instrumental in the credit system, and they all supported the notion that suitable protections should remain in place.

Kevin Davis, one of the most distinguished independent academic experts on financial regulation and the macroeconomy in Australia, said:

The axing of responsible lending obligations … is particularly egregious … This is the triumph of ideology and vested interests over logic and evidence.

Kevin Davis's comments had great foresight. It is a triumph of ideology, because all that we've heard from those opposite are these hollow rhetorical flourishes on individual rights, with very little intellectual content behind them. If they truly believe some of those rhetorical flourishes, as I said, why not get rid of consumer protection altogether? As Kevin Davis said, it flies in the face of logic and evidence, because, as multiple speakers on this side have indicated, credit growth is strong and some components of credit are at record levels.

It is absolutely absurd to come in here and to assert that this is necessary for the economic recovery. It is clearly not. Economic experts say it's not. Treasury says it's not, the big banks say it's not, and even a superficial reading of basic ABS statistics says it's not. Treasury has said that responsible lending laws are providing stability to the finance system overall. They have said that they are not impeding the flow of credit and that scrapping them will lead to 'more instances of consumer harm'. Josh Mennen, from the Australian Lawyers Alliance, said that axing banks' responsible lending obligations is 'a recipe for financial hardship'.

Importantly, APRA and ASIC weren't properly consulted. Sean Hughes, ASIC's commissioner with responsibility for credit, had no input. He told the House economics committee late last year that he was first advised about these plans when he read the Treasurer's media statement. Now he's going to have to be responsible for an important part of regulating this new dog's breakfast, this more complex but watered-down set of arrangements. The banking regulator only got notice in early August. The process was rushed and lacked consultation.

So there are all these experts. We have experts across consumer advocacy. We have experts from financial counselling—the people who are actually seeing these complex cases of financial abuse. We have macroeconomists in Treasury and macroeconomists in academia. We have commercial experts. We have big four bank CEOs. We have lawyers. We have regulators. We have the government's own advisers in Treasury. None of these people support contradicting the royal commission. So this government sits on two-thirds of the royal commission's recommendations but comes in here with the most specious of arguments to overturn the royal commission's first recommendation, which is one of its most important.

This, of course, is going to be absolutely disastrous in many communities around Australia—communities like mine, in Fraser. I hear many harrowing cases of Australians dealing with situations of financial abuse, financial distress and insecurity. Brimbank Melton Community Legal Centre has told me harrowing examples of many residents of Fraser who have been financially abused. They shared examples like that of Sarah, whose lack of fluency with written English was exploited by an unscrupulous lender to saddle her with unsustainable debt, culminating in repossession and severe hardship. Some of those opposite might come in and say that individual rights trump all, but, as I say, it's a hollow rhetorical flourish. If they genuinely believe that I want those same people to come in here and say, 'Be gone with all consumer protection,' I think it's a very disingenuous ideological argument for a sham piece of legislation.

What about Laura—of course, not the person's real name—who applied for a credit card? She's another vulnerable, low-income person. She applied for a zero per cent credit card. When the credit card was approved and provided to her, she found out later that she was actually paying interest. Without her ever finding out, she was given a different credit card to the one that she was offered. The onus is on those opposite to explain how these new laws will be sufficient to provide protection for people in Sarah's situation or Laura's situation. The lawyers and the financial counsellors and the other experts—the commercial experts and macroeconomic experts—are very concerned that watering down these laws will mean that people like Sarah and Laura will have far less recourse to remedies. Those opposite have to justify why putting people like Sarah and Laura in harm's way is justified, and they have no arguments—no justification whatsoever.

Let's be very clear what we're facing in this chamber today. It is an absolutely reprehensible bill that we're facing. We have a government that resisted a royal commission 26 times. They did not want the royal commission to happen. It shouldn't be a surprise that when they begrudgingly received the royal commission's findings they dragged their feet to implement those recommendations. Two years later, two-thirds of them still sit on the shelf. What's even more galling than the fact that two-thirds of the royal commission's recommendations sit unattended to when they're so important, when people continue to be vulnerable, when people continue to be abused, is that the government is now coming into this place and arguing that we should unwind what has been done.

As I've said, it's a highly, highly disingenuous set of arguments that they're running. It flies in the face of evidence. There is no argument possible to be made that the economic recovery relies on watering down consumer credit protections. Consumer credit growth is strong, and all of the experts—experts at Treasury, experts at the big four banks, expert macroeconomists in academia—point to the fact that we do not need this bill today to support the economic recovery. Other experts in financial counselling, experts in the law and experts in consumer advocacy groups point to the fact that there is real vulnerability. So this is not a solution looking for a problem; this is a massive, detrimental step backwards with a disingenuous argument in its support.

Mr YOUNG (Longman) (12:33): I rise to speak on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. Unlike some others who go and talk to groups, I have actually been out in my community and talked to actual businesses, and they are telling me something completely different—that they are struggling to get finances to expand, to open new businesses. So this is a welcome bill, in their view.

For many of us, borrowing money from a bank or some other lender has become a simple fact of life. If you want to buy a house, chances are that at one time or another you've spoken to a bank representative or a broker to find out how much credit you can borrow and what your repayments would be. If you've ever operated a business, there's a strong chance you've had to borrow money, particularly to manage the startup costs. The amount you can borrow is based on many factors such as your family's income, existing debts and day-to-day expenses, like putting food on the table, sending the kids to school and keeping the lights on. Let's not forget there's always a certain amount of risk a person takes on when entering a contract to borrow money, and there's also risk to the lender. These are the things that happen in our lives, things unforeseen, that can change our circumstances.

Take the COVID-19 pandemic, for example. When it struck in early 2020, many businesses had their bottom lines wiped out overnight. Thousands of hardworking people across the country lost their jobs through no fault of their own. Businesses were still expected to pay their rents to their landlords, and the landlords relied on that income to pay back their loans. That's fair enough. The government introduced measures to minimise this impact, and now, around 12 months since the pandemic first hit, the economy is back on track. There are some sectors and many people who are still doing it tough, but as a nation we are headed in the right direction. The COVID vaccines are now being rolled out and the nation is bouncing back from the devastating impacts of the pandemic. In fact, we are beating market expectations. Last month, 29,000 new jobs were created. The unemployment rate is now at 6.4 per cent. It's the first time since April last year that the unemployment rate has been this low.

Back in the good old days of 2019, no-one could have predicted what 2020 would bring. That's why it's more important than ever to find the right balance between having an efficient flow of credit and ensuring there are adequate safeguards in place. I believe the proposed amendment we are debating here today achieves this balance.

I can remember starting a new business in May 2007, just before the GFC, and going to the bank, backing myself and putting our family home up as security to start a new venture. Since then, I have had the pleasure, along with my business partner, of purchasing another business. Had I been refused that business loan due to lending laws that were too tough, I would not have been able to employ around 15 people, contribute millions of dollars in GST and thousands of dollars in income tax; rent two commercial premises, which creates income for the owners of those buildings; and purchase millions of dollars in goods, which keeps truck drivers, warehouse people, bookkeepers and sales staff in jobs—the list goes on and on. All of these benefits to our economy would not have happened had we not got our initial business loan.

So these changes we have put forward will become a vital part of our ongoing economic comeback. As I have already stated, credit is a fact of life for many of us. Credit can be used to establish or expand a business and create new jobs. Credit can be used to build a house, helping to keep tradies and builders in jobs. Credit can be used to buy other household items, like a car, computer, dishwasher or whatever it might be. These purchases support our economy and keep people in jobs.

The amendment that we are proposing will make existing responsible lending obligations apply only to high-cost credit products or small amount credit contracts and consumer leases. The reforms will remove unnecessary barriers to credit while maintaining important consumer protections for those who need them. It's our job as a government to remove barriers, not put them up. It's our job to make it easier to do business in this country, not harder. And these reforms will do that. The existing obligations have brought about greater risk aversion in credit assessments than originally intended. They've imposed burdensome regulations on consumers and lenders, resulting in delayed credit approvals and increasing borrowing costs. They've also acted as a barrier to borrowers wanting to seek out new credit, refinance or get a better deal. These obligations have led to a one-size-fits-all approach to credit assessments which is overly burdensome for both borrowers and lenders. They are no longer fit for purpose and they risk slowing Australia's economic recovery from the pandemic.

The changes we are proposing will reduce the time and cost of credit assessments for consumers and businesses, cut red tape for consumers seeking a credit product, improve competition by making it easier to switch lenders and enhance access to credit for small businesses. It's important to note, though, that improved lending flexibility will not diminish the consumer protections in place. In fact, for some products these protections will be enhanced.

The amendment seeks to retain responsible lending obligations for small amount credit contracts and consumer leases. These are high-cost forms of borrowing and are more typically accessed by some of Australia's most vulnerable consumers. For example, a loan of up to $2,000 with a short-term contract is considered to be a small amount credit contract. A consumer lease lets you rent an item like a laptop, TV or fridge for a set amount of time, after which either you must return the product or you may have an option to buy it outright. While these products can be useful for people to access as an emergency source of funding, repeat borrowing can pose significant issues for a person on a low income. It can lead to a spiral of debt, with repayments consuming a large portion of that person's income. The repayments can become crippling.

Let's be honest about this: crippling debt can ruin lives. It can destroy marriages and families, and it can even lead to suicide. This is something of particular concern to me, as my electorate of Longman contains some true Aussie battler suburbs. The last thing I want is to see people in my electorate who are already doing it tough get into further financial trouble by borrowing money they should never have had access to in the first place. That's why the proposal here today seeks not only to retain responsible lending obligations for those types of high-cost products but to introduce even more protections.

These reforms will: introduce a cap on the costs a lessor can charge; introduce new protected earnings amounts for these products; prohibit providers of these products from making unsolicited invitations to current and former customers; and prohibit door-to-door selling of consumer leases. The government supports the principle that consumers should only apply for a consumer lease when they proactively choose to do so. The new protected earnings amounts will limit the proportion of income consumers can devote to these products.

These reforms are designed to limit consumer harm while maintaining access to these forms of borrowing. Responsible lending obligations will be retained on these products regardless of whether they are provided by a bank or some other lender. For other credit products banks will continue to be regulated by the Australian Prudential Regulation Authority, APRA. The standard requires banks to implement a credit risk management framework. This includes having prudent policies and processes to manage credit risk and maintain sound credit assessment and approval criteria to appropriately assess a borrower's credit risk.

Banks will continue to be subject to a broader range of prudential regulations administered by APRA which reflect their importance to the financial system as holders of Australians' deposits. Tough new lending standards for non-bank lenders will be introduced that will maintain consumer protections while reducing the compliance burden for both lenders and borrowers. They require lenders to have a sound credit assessment and approval processes to ensure consumers are able to meet their obligations without substantial hardship.

These standards are adopted from APRA's prudential standards to ensure consistency between bank and non-bank lenders. They also introduce a borrower responsibility principle, enabling lenders to rely on information provided by consumers unless there are reasonable grounds to believe that the information is unreliable. This process addresses the current practice of 'lender beware' and addresses the excessive risk aversion which has progressively entered the system, restricting the flow of credit.

The main new change here is that, unlike responsible lending obligations, the new lending standards do not impose individual conduct level obligations. This enables lenders to adopt more risk based lending that is attuned to the needs and circumstances of the borrower and credit product. It is a move away from the onerous tick-a-box verification practices of the past. People will still have access to the Australian Financial Complaints Authority when they have a financial dispute with their lender. These new lending standards for non-bank lenders will be enforced by ASIC.

It's important to note that the new standards will not apply to credit which is in part for a small-business purpose. In essence, this will make permanent the temporary small-business loan measure that was extended following the start of the pandemic. Small-business lending was never intended to be captured by the credit act, but recent interpretation of the responsible lending obligations has meant some small businesses have struggled to access credit. This has been particularly evident for primary producers, where it is difficult to distinguish between home and business. The new lending standards avoid this confusion. They will give small-business customers the confidence to approach lenders for business purposes knowing that the process to obtain approval will be less complex and intrusive. In practice this means that once a lender identifies that part of the credit is for a small-business purpose it will switch off the obligations contained in the non-ADI standard. However, a safeguard will be included to ensure that the small-business purpose is not minor or incidental to the overall purpose of the credit. This will address the risk of consumers inappropriately nominating a small-business purpose to avoid the lending obligations.

These reforms retain consumer protections. Lenders must put in place systems, policies and processes that comply with the standard, to ensure they assess a borrower's capacity to repay the credit being extended without substantial hardship. A lender will be in breach of the law if they lend without having in place systems, policies and processes that comply with the law. Lenders that repeatedly fail to comply with the processes or practices they have in place for credit assessment will also be in breach of the new lending standards. Both contraventions attract significant penalties. Borrowers will retain access to the Australian Financial Complaints Authority for dispute resolution and restitution. Protections are being increased among credit assistance providers, with the bill extending the best-interests obligations to other credit assistance providers. This will ensure credit assistance providers act in consumers' best interests and place consumers' interests before their own when providing credit assistance. These obligations will begin six months after royal assent, to allow industry time to prepare for the new requirements.

Despite what some would have us believe, these reforms will not lead to irresponsible lending. The new standards for non-bank lenders will ensure lenders have sound credit-assessment-and-approval processes to assess a consumer's capacity to repay debt without substantial hardship. The new standards align with the APRA standards that apply to the banks. They will ensure that, regardless of lender, credit continues to be extended in a manner attuned to the needs of the consumer and the credit product. Additionally, the government's reforms increase consumer protections among credit assistance providers. This will ensure that providers assisting consumers to access credit act in consumers' best interests and place consumers' interests before their own. It is vital that credit continues to flow in the Australian economy, with the appropriate consumer protections in place. It is my belief that this amendment achieves that outcome.

Mr HILL (Bruce) (12:46): I've heard for some months, in the lead-up to this debate, how bad this bill was. I've been written to by my local community organisations—South East Community Links and Casey North Community Information and Support Services. Financial counsellors have written to us. CHOICE Australia has been all over the media for months. But I have to say, having now spent a bit of time over the last couple of days looking at the detail, I'm shocked that the government would introduce a piece of legislation this bad. It is truly appalling for Australian consumers.

This bill, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, scraps entirely the responsible lending laws introduced over a decade ago, after the global financial crisis, which protect Australian consumers from predatory lending. While the government were dragged kicking and screaming into calling the banking royal commission, they at least said afterwards, 'Well, we accept the recommendations.' This bill breaks recommendation 1 of the royal commission's report. The royal commission into banking said, 'Do not amend the responsible lending laws.' They do not need to be amended. They're there for good reason. They provide stability in the financial system and protection for consumers. The government have effectively broken their promise in trying to scrap these laws.

It's instructive to look at who wants this bill. It's not a long list. The big banks want the bill, the finance industry wants the bill and the Australian Banking Association wants the bill. That's about it. Why? So they can lend more money without checks and balances. It's that simple. I will give a brief summary of what the laws do. All they do is ask the banks to do a bit of work and check documents properly, and they put a responsibility on the banks to do so. This is to protect consumers, most especially vulnerable consumers, of whom there are thousands in my electorate—and I'll get to that. They put the responsibility on the lenders to meet the standards—to verify documents and to understand who they're lending to. That's it. Why is the government doing it? Because the big banks want them to. The banks want to lend people more money; that's it. The government can't say that, though, can they, because it wouldn't sound very good. They don't want to be caught doing what the big banks want them to do, so they're pretending it's because of COVID. Just like with the wage cuts that we debated earlier this week, they're pretending, 'Because of COVID we've got to do these awful things.' They say there's a consumer credit squeeze that's threatening to derail the recovery. Apparently, according to the government, Australians can't get loans; they can't get credit.

The only problem is that that's patent nonsense. Just stop for a minute and think about the macro picture, the context that this sits in. Under the Liberals, Australian household debt as a share of GDP in this country, as of last year, was 119.4 per cent. The 2020 assessment of our global position showed that that's the second-highest of 41 countries in the world. Households in Australia are already bearing the second-highest percentage of debt of 41 countries, as assessed by the Bank for International Settlements. That's the context in which this bill comes trying to get households to borrow even more money, whether they can afford it or not.

Right now, in the real economy in Australia, lending's up by 10 per cent. Auction clearance rates are pushing north of 90 per cent in Sydney and have skyrocketed back in Melbourne. House prices are booming. Consumer credit has never been easier to get. The government's claim that we have a credit squeeze just doesn't add up. The statements and data from UBS bank and some others—members of the Banking Association and other industry associations—show limited to no evidence of any actual problem.

That's who wants it: the banks, the finance industry and the Banking Association. When you have a look at the range of people and organisations that have come out and said, 'Do not do this, government and parliament; do not pass this bill,' aside from the banks there's pretty much no-one who supports it. CHOICE, the peak consumer organisation, are strongly opposed. They're worried that the relaxation of lending standards will let lenders off the hook and allow them to make more loans that are unsuitable for vulnerable borrowers.

Then there are the consumer groups. I said earlier that my electorate is lucky to be served by a number of wonderful local organisations—some of them with funding from the federal government, ironically. The government don't listen to the people they fund, who do this day in, day out: the financial counsellors who sit there and help the most vulnerable in society, who've got themselves into all sorts of messes, sometimes through bad choices and sometimes through life circumstances and sheer bad luck. Financial Counselling Australia have sent around a survey, and it's instructive just to have a look at this survey. It's been sent to all members. I haven't heard any of the government members even acknowledge these concerns. It's all tickety-boo! There's no problem! This is going to be terrific! Government speaker after government speaker is saying this. This is pretty much a guarantee they're giving that no-one's going to get themselves into trouble. What nonsense!

The financial counsellors are the people who sit there at the coalface talking to Australians with financial difficulties. Ninety-seven per cent of financial counsellors said the responsible lending laws should remain—97 per cent. Ninety-four per cent of financial counsellors either strongly agreed or agreed that responsible lending laws are an important part of consumer protection. Just about every one of them—over 90 per cent—uses these responsible lending laws every day in communities across Australia—regional areas and city areas.

Financial problems are not confined to disadvantaged areas, but they are concentrated in them, including my electorate, which on the statistics is one of the most socioeconomically disadvantaged places in the country. There are a lot of people in temporary work, casual work, already suffering from the government's wage cuts, cuts to penalty cuts, casualised work and insecure work. Wages in this country since this government was elected have fallen in real terms. It's a shocking indictment on its so-called great economic management. Real wages have fallen. We're fifth last in the OECD for wage growth, out of 37 countries. This is the context in which these laws to allow people to borrow more money come: flat wages growth, casualised work and insecure work. It's a recipe for disaster. It is truly life-destroying when people get themselves into serious financial difficulties. For a lot of people in my electorate, 20 bucks is a lot of money. That's the extent to which people budget: down to their last 20 bucks.

Ninety-two per cent of financial counsellors agreed that, if the laws are repealed, they can expect to see many more clients with unaffordable debt. The majority of financial counsellors, 71 per cent, agreed that, if the laws are repealed, this will actually hinder the economic recovery, because once people get themselves into financial trouble they don't spend in the real economy; they spend every dollar of their income and everything they can scrape together servicing unaffordable debt.

Irresponsible lending, of course, still occurs despite these laws. It's these laws which enable financial counsellors to actually argue the toss and get a go for people who've been treated appallingly by banks and financial institutions. I'll quote from a letter from Susan Magee, the CEO of the Casey North Community Information & Support Service: 'Our financial counselling team are regularly assisting clients who are overcommitted financially and experiencing severe financial and emotional distress as a result. Any reversal of these laws will further impact on workable outcomes for our clients and potentially leave them in a lifetime of debt, with the risk of losing assets including the family home or bankruptcy. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry quite clearly demonstrated the need to retain these laws.'

Both of the local organisations have sent me case studies, all members have been sent case studies, of real-world impacts that happen to people right across Australia. Melissa, a 55-year-old woman in my electorate, fell prey to a scammer who preyed on lonely and vulnerable women living alone. She ended up with $120,000 worth of debt. This had been financed over 12 months by the bank—more personal loans; more mortgage advances; repeated increases to her credit card limit—all the signs were there—with no checks whatsoever made by the bank. A financial counsellor helped her make an ombudsman complaint, and they discovered there was a breach of the responsible lending laws. It saved her house. She was 55 years old; she had eight more years of working. If these laws were not there, Melissa would have lost her house and retired into utter poverty.

John's a guy in my electorate who's close to homelessness. He's a jobseeker. He's living from fortnightly JobSeeker payment to fortnightly JobSeeker payment. He went to his bank. He said: 'I need a $1,000 credit card. I need that to help manage my cash flow.' The bank said, 'No, you can only have $5,000.' He said: 'I don't want $5,000. I want $1,000.' They said, 'Don't worry about it; you can just spend the $1,000.' Of course, with the pressures of life, within six to 12 months John's drowning in debt. Five thousand dollars might not sound like a lot of money to people in this place, but it is a lot of money to people like John, trying to exist from pay cheque to pay cheque. He's already close to homelessness. This was resolved. They wiped most of the debt and left it at a level that he could pay off. It was only resolved due to the responsible lending laws.

I have another example. A person whose only income is from the disability support pension was given a loan for a car where the payments left them without money for food or utilities. If these laws are scrapped, where's the protection for ordinary Australians? I have the most multicultural council area in the whole of Australia. They'll be particularly harsh for culturally and linguistically diverse people whose backgrounds have languages other than English as their primary language. I have heard of gamblers offered multiple $50,000 home loans within 12 months of each other with an unproven capacity to pay. A 72-year-old client was given a 30-year home loan. It's these laws which protect Australians from this kind of predatory lending, and the government wants to scrap them.

It's also instructive, when thinking about these kinds of proposals, to look at what the experts say. People who actually reflect on good regulation and credit regulation, and whose job, day-in day-out, it is to look at the balance between credit and consumer protection. The academic criticism is clear. They say that relaxed consumer lending standards may lead to financial instability in the financial system, or a debt crisis when interest rates rise. The peak irony for this debate, though, is the Commonwealth Treasury's submission to the royal commission into banks. This is not what the government might call a 'do-gooder organisation', worried about vulnerable people. It's not financial counsellors. It's not Labor MPs sticking up for consumers. It's the Commonwealth Treasury's own submission, made less than three years ago, made in 2018, to the government's own royal commission. That submission noted that the responsible lending laws enhanced, rather than detracted, from macroeconomic outcomes.

I'll just read a few quotes from the other experts. Eliza Wu, who is an associate professor of finance at The University of Sydney, said these reforms could 'sow the seeds of the next housing boom and the next debt crisis'. Karen Cox, the CEO of the Financial Rights Legal Centre, said:

Watering down credit protections will leave individuals and families at severe risk of being pushed into credit arrangements that will hurt in the long term.

And, as I said, the Treasury's own submission, the government's own economic advisor, said the laws enhance rather than detract from economic outcomes. You've got consumer groups, you've got financial counsellors, you've got vulnerable Australians, you've got academics and you've even got the Treasury saying: 'This is a dumb thing to do, government. Don't do this. You don't need to do this.' Why are you doing this? Because you've invented a fake credit squeeze when all the data is pointed in the other direction. There's no problem getting credit in this country. There's no evidence that the government have put forward. They're just doing the bidding of the big banks.

There are a couple more points I'd like to make. Even when you look at the regime they're putting in, it's downright confusing and inefficient. Under the proposed changes, lending decisions will be regulated by APRA for authorised deposit-taking institutions—banks—using their existing power to set prudential standards. What does that actually mean? Well, it means that APRA's current lending standards focus on prudential protections—that is, ensuring that the banks don't make lending decisions that destabilise the banking or financial system. That's what APRA does. That's their job. It's an important job. But APRA doesn't worry about consumers. That's not their job. Their job is to worry about the stability of the financial system. Yet the government's placing all their hopes and dreams—the idea that somehow vulnerable Australians will be protected from predatory lending—on APRA. But it's not a job that they have to do.

Under the new rules, under the government's proposals—I hope these die in the Senate—consumer lending will be regulated by three separate sets of rules and two different regulators, depending on the nature of the credit provider and the credit contract. They're taking a simple, proven, effective system that was recommendation 1 of the royal commission—'do not change these laws'—and replacing it with a mishmash to suit their mates in the big banks.

A very final thing I'll say: I was listening to the previous speaker in this debate, and I've heard it in the government's talking points—it's about small business apparently. Is it? They're scrapping the dominant-purpose test. The current rules say that if you go to the bank and say, 'I want a loan; it's a little bit for me personally and a little bit for the small business', you have to pass the dominant-purpose test, and the dominant purpose of the loan is what it will be regulated by. But the government's going to get rid of that. Well, I say our travel entitlements are governed by the dominant-purpose test. If we're going somewhere that's predominantly for work, that's the standard we are held to and the standard we hold ourselves to. If it's good enough for us, why is not good enough in this situation, when it's stood the test of time in consumer credit regulation? The government's on the wrong track with this. I hope they see sense and change their mind—or, if not, that this bill just dies in the Senate, as it should.

Mr DICK (Oxley) (13:01): This government is yet to find a bank or a loan shark that they don't want to help or one that, when it puts its hand out, they don't want to lift up. It's a pity they won't do the same for consumers, customers and vulnerable Australians. I think it's now been almost four years and nine or 10 months—the member for Macquarie might be able to help me out here—since I arrived in this chamber, and I think probably from the second week of parliament when I was sworn in I have been talking about protections for people who are being ripped off by the loan shark industry or by banks in this country. Many people on this side of the chamber are starting to sound—although I hate to use a cliche in a debate—like broken records. But I fear that the record player has completely broken, because this government has gone down the path of a lack of respect and a lack of any protections for Australians.

Even during a pandemic, in legislation before the House today the government is asking the Parliament of Australia to remove responsible lending obligations for a majority of consumer contracts. During a global pandemic, during a national recession and with rising unemployment—a million Australians unemployed, record household debt, terms that are crippling businesses in this country—why would the government want to put people on the scrap heap even further? That's exactly what I believe these laws will do.

Responsible lending obligations were part of the National Consumer Credit Protection Act 2009, which was introduced by the Labor government, partly in response to the global financial crisis. Responsible lending obligations require credit card providers to make reasonable inquiries about a customer and assess whether a credit product will be unsuitable for them. These are commonsense, practical laws that have served our country well. Responsible lending obligations apply only to consumer credit contracts, not commercial credit contracts—for example, small business lending. As we know, that is another jurisdiction. But the remainder of the bill relates to small amount credit contracts and response to the independent 2016 review of the small amount credit contract laws, which I will focus on a little in my remarks. I know the member for Lalor will be champing at the bit to talk about this in today's debate, just as she has every week, it seems, that this parliament has sat.

We know the bill has been discussed quite widely in the media, not because of anything the government's done or any advice or information that the Treasurer has delivered to the people of Australia. I add that not even the banks have requested this. Let's put that on the record. This is not something the Banking Association or the big four have issued public statements about or have written to the Treasurer about, demanding that the Prime Minister take action. I won't speak for the major lending facilities in this country, but I reckon if I were one of them I'd be scratching my head and saying: 'What on earth is the Treasurer on about? We didn't ask for this. We have enough to deal with as far as I'm concerned.'

Just last week, we saw 23,000 Australians call for responsible lending laws to be strengthened, not removed. In the lead-up to the Senate Economics Legislation Committee inquiry, which hosted hearings in Canberra last Friday, which I carefully looked at and followed, we saw more than 23,000 individuals sign a letter to every Australian parliamentarian demanding protections be maintained. The request, as organised by consumer advocacy group Choice, is backed by 125 charities, unions, academics and financial counsellors. Let's put that in perspective: the banks and the Banking Association didn't call for these reforms and 125 charities, financial institutions, financial counsellors and leading consumer advocates didn't ask for these reforms. So I've got a really simple question for the government: Who did? Who came up with this idea? Who possibly thought it was a sane or sensible move to put this into legislation?

These checks and processes that banks and lenders have to abide by when offering consumers loans are critical to ensuring that consumers are protected. The aim is to lend only to those who are in a position to repay debt, rather than see repayments missed and interest and fees incurred, leaving the borrower facing greater financial hardship. As I said, these laws were introduced in 2009 under the National Consumer Credit Protection Act in response to shoddy lending practices which we saw during the global financial crisis. Watering down unfair lending restrictions is unacceptable now and in the future. The government knows doing this will expose people to significant financial harm. The profit is not worth the pain. Without responsible lending obligations in place, a bank could send a pre-approved $5,000 limit credit card to a person in my electorate of Oxley whose only income is a disability pension. The bank could do this even when they know that the person's income is not enough to service a loan.

This bill will leave vulnerable people in our communities open for attack. It will hurt young people, elderly people, people on the disability support pension, people in abusive relationships, Indigenous Australians and people of non-English-speaking backgrounds. Now, of all times, we need to be looking after people, not harming them. As we heard from the Financial Rights Legal Centre in their submission:

Our Government wants free-flowing credit to reign at a time when unprecedented numbers of Australians have had to ask for loan deferrals amidst COVID-19. It simply defies logic.

The last thing people need is inappropriate and unaffordable credit. This is another example of the government's COVID-19 recovery strategy leaving people behind. It's happy for businesses and banks to thrive at the expense of vulnerable Australians.

I want to turn in my remarks to the regulation legislative instruments set by the Treasurer and enforced by ASIC. These are the non-ADI-lender regulations, which I believe are poorly thought out. Consumer lending will be regulated by three separate sets of rules and two different regulators, depending on the nature of the credit provider and the contract. I want to know: why are we making this even more complicated? Why disconnect regulators and make it harder for safeguards to be enforced?

This is another example of the government directly going against recommendations from the royal commission. Treasury's own submission to the banking royal commission noted that the responsible lending laws are better for the economy. That's not Labor saying that. That's not the charities, the academics and the financial counsellors saying that. We've now got Treasury's own submission saying that the responsible lending laws are better for the economy. We need to put our efforts into advancing legislation that ensures the economy is, as the government like to say, built back stronger after COVID-19, so why are the government trying to get in the road of that?

I refer now to some remarks about the irresponsible changes to the small-amount credit contracts law. The bill contains changes to laws governing small-amount credit contracts and consumer leases: a cap on payments for small-amount credit contracts and consumer leases at 20 per cent of a consumer's income, which is separate for SACCs or consumer leases, or at 10 per cent of a consumer's income; setting the maximum cost of four per cent per month for CRNs; requiring that payments be equally spread over the course of a loan; and prohibiting providers from charging monthly fees in relation to the residential term of a loan when it's paid out early. There are problems with these. Some of these details are incorporated in the draft regulations rather than the primary legislation, but the biggest concern I have is that these changes were the government's response to the independent small-amount credit contract review commissioned in 2016 by then minister Kelly O'Dwyer. Once again they fall short of actually what was recommended.

A member of the government came up to me and said: 'You must be happy we're dealing with the SACC reforms. You've been talking about this a lot, Milton.' I said: 'You've got part of the equation right; I have been talking about this non-stop for about four years and 10 months, but it doesn't do what your own reform said. It doesn't do what Minister O'Dwyer recommended. It doesn't actually deliver the legislation that the now Deputy Prime Minister, Mr McCormack, promised when he delivered the explanatory memorandum to this House. It doesn't do that. It waters it down.' I'm not going to give any credit to the government for watering down their own legislation and their own proposals that their recommendation said they would deliver.

All credit to former Prime Minister Malcolm Turnbull—and that is not a name you hear from those opposite any day of the week. He wrote to me in July 2019 and said, 'After a long wait, the exact legislation you've been calling for will be introduced.' The only problem is that the now Prime Minister and Minister Dutton decided to see him off as Prime Minister. So we're seeing a shortfall of the recommendations that were actually promised.

The law this government is proposing doubles the debt repayment cap for people whose income is not predominantly from Centrelink. This bill makes it perfectly legal for people to be charged up to 40 per cent of their monthly income to pay back lending fees. In the Oxley electorate the average household income per month is $3,660. If a family spends 40 per cent of that income on debt repayments, that brings their funds down to $1,464 per month to pay their rent, to pay bills, to get school supplies for kids and to put food on the table. The fact that this government are even entertaining those changes shows once again that they are not on the side of working families; they are simply on the side of big business.

The SACC review recommended that fees for consumer leases be capped at four per cent of the retail price of a leased good. The proposed law allows for four per cent of fees to be calculated on the price plus delivery and installation fees, plus establishment fees of 20 per cent on top of that cost cap. This means that consumers could be paying equivalent annual interest rates of over 100 per cent. As we know, the devil is always in the detail when it comes to the fine print of this legislation that the government is trying to ram through the parliament today. This fine print will, I believe, have devastating impacts on people.

Yet again this government has put forward a bill that doesn't make sense. Under this bill it's easier for banks to saddle working Australians with debt—debt that the banks didn't even ask the government to deliver. It will be harder for those Australians to get out of debt. It will be leaving people behind at a time when we should be building confidence and supporting consumers to grow the economy. This bill appears to be a shameless move by the government to give a big free kick to the banks at the expense of ordinary people. The government, we know, has ignored the first recommendation of the banking royal commission. The very first recommendation has been ignored and blown apart by this government, proving once again that this government can't be trusted to do the right thing by Australians and regulate the financial sector properly.

This bill has enormous consequences for vulnerable and working Australians. It has consequences for the community groups and advocates that I have been working with over the last couple of years to give justice to the people who just want a fair go. It has consequences for the businesses that have been ripped off by the loan sharks in the financial sector. It has consequences for the pensioners and their advocates who have been out there trying to get their money back and make sense of the contracts that they've signed. We're simply asking for a fair go for people who need support.

This bill waters down the lending provisions. It puts vulnerable Australians entering into contracts at risk—and I use those words 'at risk' strongly. It's not good enough for the government to simply say, 'Well, it's a piece of legislation that we've been working on for a while,' without any due explanation. As I said, the Treasurer of Australia can't explain why these laws are required. The members of the government can't explain why these laws are required. Last week, we saw 23,000 Australians, including financial counsellors and people from the non-profit sector, voice their concerns. I know from speaking to them firsthand how fearful they are of this legislation. I simply ask the government to rethink this strategy. Rethink what you're doing. Think of those Australians who need the financial sector to be on their side.

Ms RYAN (Lalor—Opposition Whip) (13:16): I'm pleased to make a contribution to the debate about the legislation before us today, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. I'm also pleased to follow my friend the member for Oxley. I say 'friend', but he's also a great colleague, and we have lots of things in common, not least of which has been our advocacy in the space of payday lenders and the damage they're doing in communities across this country. The legislation before us does two things: it removes the responsible lending obligations from the banking sector, and it seeks to implement changes in the space of payday lending. We call them 'small amount credit contracts', but, for those tuning in at home, these are the payday lenders and loan sharks that you've heard me speak about many times. The government want some credit today for implementing changes in the payday lending space. The problem is that they had their own review into this in 2016 and what's before us today has failed to put in place the recommendations of that review, so they're not even listening to themselves or addressing what they uncovered in their own review.

The bill will do something, but not enough, to protect people in my community and in communities across this country who are preyed upon by businesses to buy debt and pay it back at exorbitant rates. To get to the nub of the matter, the recommendation from the review was that 10 per cent of someone's income should be the upper limit of what they could be required to pay back. The government have ignored that recommendation and taken that limit up to 20 per cent. They've flagrantly ignored their own recommendations, after waiting four years, since 2016, to bring in any new regulation in this space, and this is despite them recognising the need for it. The other thing this legislation does is ignore the first recommendation of the Hayne royal commission into financial services, which was: do not undo the responsible lending laws, which were implemented after the global financial crisis.

Like many here, I know that when I was first elected I sat with victims who eventually gave evidence to the banking royal commission and I heard their harrowing stories—they were absolutely harrowing stories. I want to put on record today how disappointed I am that they've been ignored. I also want to make the point that part of this legislation has no friends. The legislation before us has no friends. The big banks haven't asked for this and the community legal centres have been at pains to explain to us why this will be a disaster for vulnerable people in our communities, and even for the not-so-vulnerable people in our communities. The Consumer Action Law Centre in Melbourne and my own community legal centre, WEstjustice, have met with me time and time again around this. Financial Counselling Australia wrote to us and outlined what they perceive to be problems with this legislation. I've even heard from my local mortgage brokers; they don't like this piece of legislation either. And the academics don't like it.

So it has no friends, but here we are in this parliament, under the cover of COVID, undoing something under the banner—looking at the name of this legislation—of the National Consumer Credit Protection Act. What we're doing in this chamber today is opposing the government for undermining and taking away consumer protection. I've been listening, as have my colleagues, to those opposite, and I was particularly perturbed to listen to the member for Longman, who spoke about the battling Australian communities that he represents in this place. He went on and on about a supposed impossibility, because of the recession, for people to get credit. Let me tell him what the outcome of this will be: there are people in my community who, while the responsible-lending laws are in place, are now working with community legal centres in trying to weave their way out of debt and trying to get the banks in this country to act responsibly under the existing law. And the member for Longman is going to allow that to be removed, leaving these people with less capacity to weave their way out of the problems they have got themselves into because institutions have been too quick to give them credit when they didn't have the capacity to repay it.

There's one case that I know of locally which I think is worth considering in this space. This is a couple who have a mortgage with one major bank, and they then have four separate loans across the four banks. This is under the current legislation, which says that the banks shouldn't lend if there isn't a demonstrable way to pay it back. This family couldn't possibly pay back all of those loans on their income. That was pre COVID—they couldn't possibly do it.

Let me just be really clear for the folk listening at home: working in schools for most of my adult life, I know what this kind of financial stress does to families. I know the chaos that this kind of financial stress brings into kitchens. I know the pressure it puts on children who are living in that chaos, who are getting up in the morning and going into the kitchen to find a stressed-out parent sitting at the kitchen table with 17 bills in front of them and wondering: 'How am I going to get through this week? Which bill should I pay first?' This legislation is going to make that happen in homes in my community. This legislation is going to enable the banks to give loans to people who cannot afford to pay them back, with full knowledge of what that's going to do to families. It's going to mean that there are children sitting in classrooms who have come from a chaotic morning where parents have been yelling at one another because they're stressed out.

Financial stress has emotional consequences, and those emotional consequences are felt by children around this country. Do you want to do us all a favour? Go back and give this some more thought. Nobody thinks this is a good idea. Nobody thinks that allowing the banks to give credit to individuals when they cannot afford to pay it back is a good idea. Nobody does.

We know what the impact of this legislation will be. For those members opposite who somehow think that this about credit for business, that's not what this is about. This is about credit for individuals. This is about people being able to take out loans to get through this week but, beyond this week, only driving themselves down into a debt cycle. The impacts will be very real, and the government are being incredibly irresponsible to even think about bringing this into the parliament. They're ignoring the royal commission. We know they voted against it 26 times. We know they didn't want to hear. We know they didn't want to sit with the victims of the banks through that period. But to have them actually undermine recommendation 1 is appalling.

As to the outcomes of the royal commission's recommendations, I sat with mortgage brokers in my community and I listened to their concerns about some of those recommendations. I just want to share with the House a mortgage broker's response to this. He's written to me to say that he's obliged to put the customer's interests first but this legislation will mean the banks don't have to. They won't be held to the same standard as a mortgage broker.

We have countless examples given to us by Financial Counselling Australia and others who work with people to try and undo this harm, to try and find a way through. They think that the responsible lending laws should stay. They believe the laws protect consumers. They use the laws to help their clients. They predict they will see more clients with unaffordable debt if these laws are scrapped—in other words, if this legislation goes through this parliament. They believe scrapping the laws will hinder the economic recovery from COVID-19. They're very concerned about the impact of repealing the responsible lending laws on their clients and on the broader community, and they believe such a move will be harmful to individuals, families and the public. And they're tired. They're tired of working with people who are being preyed upon in both spaces here: in the credit space and in the payday lending space. They're incredibly disappointed that the payday lending recommendations will not be fully implemented by this legislation—the recommendations, as we've said, that the government itself put forward—and they're absolutely disappointed that this government would be acting under cover of COVID to undo laws that were designed to protect people in our communities, at a time when people are under enormous financial stress anyway, as well as suffering anxiety about their futures.

So, from this government, what we're seeing is layer upon layer upon layer. 'We want to make workers less secure in their jobs.' That's what this government is doing in this place this week. 'Then we want to be able to give them credit they can't afford to repay.' It leaves me wondering which planet those opposite live on. Do they live in the same Australia as those of us on this side do? Do they sit at tables in their electorate offices, speak to real people on the ground and hear the impacts that their ideology has in real homes, on real people? Do they understand that the laws we make in this place have very real impacts in the community?

This piece of legislation is absolutely reprehensible. It flies in the face of logic. Most importantly, it flies in the face of the government's own recommendations around payday lenders and loan sharks, and it flies in the face of a royal commission—the first recommendation from a royal commission. It is really difficult to walk back into this chamber day in, day out and watch this government pass legislation that is actually going to mean real harm to the people in the communities that I represent.

The DEPUTY SPEAKER ( Dr Gillespie ): Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.

Mr HAWKE (Mitchell—Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs) (16:22): I move:

That the requested amendments be made.

Question agreed to.

The DEPUTY SPEAKER ( Mr Llew O'Brien ) (16:23): The Speaker has received a message from the Senate informing the House of changes to the membership of the Joint Standing Committee on Northern Australia. As the list is a lengthy one, I do not propose to read it to the House. Details will be recorded in the Votes and Proceedings.

The DEPUTY SPEAKER ( Mr Llew O'Brien ) (16:25): The original question was that this bill be now read a second time. To this the honourable member for Whitlam has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Mrs PHILLIPS (Gilmore) (16:25): After everything we saw in the banking royal commission, I am shocked to be standing here defending the current consumer protections from being watered down. Sadly, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 is yet another case of this coalition government conducting a review and then doing the exact opposite of what that review recommended.

Australia was horrified—I know I certainly was—at what it heard from that royal commission: unscrupulous behaviour by financial institutions that were hurting local people, saddling consumers with debt they knew they couldn't afford and destroying lives. It was more than heartbreaking; it was absolutely devastating, and it should have been a catalyst for strong action to strengthen consumer protections.

Recommendation 1.1 of the royal commission—yes, that's right, recommendation 1.1—said that responsible lending obligations should not be amended:

The NCCP Act should not be amended to alter the obligation to assess unsuitability.

It was the very first recommendation. Treasury's own submission to the royal commission noted that appropriate responsible lending laws could enhance, rather than detract from, macroeconomic outcomes—that they make the system stronger, not weaker. But what does this bill here today do? It is not only attempting to alter responsible lending obligations; it's attempting to remove them from most consumer credit leases.

In a nutshell, this bill will shift the responsibility from lenders to borrowers, reducing protections for borrowers in the event credit decisions are made on the basis of incorrect information. These laws work to ensure loans are affordable, not unsuitable, for the customer. In other words, they make sure that people in desperate financial circumstances don't get themselves into a situation where they have borrowed more than they can possibly afford to repay. This bill is a direct contradiction of the Hayne report's recommendations.

I cannot comprehend why the government is looking to do this after everything we have learned from and seen throughout the royal commission process. It's a betrayal of every witness, of every Australian who has had their life devastated by irresponsible lending. More than that, it is dangerous and will have shocking consequences for so many vulnerable people.

The National Consumer Credit Protection Bill was introduced by Labor in 2009 to ensure lenders had a set of responsible lending obligations to abide by. They mean credit providers have to make reasonable inquiries about a customer and assess whether a credit product will be suitable for them. This applies to things like mortgages, personal loans, payday loans, car loans and credit cards. They are flexible and scalable, depending on the circumstances, and they are vital to ensuring we have a stable financial system. Bad debt is bad for everyone—bad for individuals, bad for the economy. Some academics have even gone so far as to say these changes could lead to financial instability or a debt crisis when interest rates begin to rise, which they inevitably will. It's dangerous.

Household debt is at historic highs. In May 2020 Fitch Ratings reported that household debt in Australia was at 186.8 per cent of disposable income—one of the highest levels among AAA rated countries. It is a threat to our economic and financial stability. What I want to know is: why is the government doing this? House prices are booming. I know they certainly are on the South Coast. Only yesterday our local newspaper, the South Coast Register, posted an article which showed that Callala Beach in Jervis Bay has risen to No. 3 in Australia's fastest price growth for small towns. The median house price rose by 14.1 per cent in the 12 months to December 2020.

Debate interrupted.