Mr O'DOWD (Flynn—Deputy Nationals Whip) (10:01): I present the 23rd report of the Petitions Committee for the 46th parliament.

Ms STEGGALL (Warringah) (10:04): I move:

That this bill be now read a second time.

The Sex Discrimination Amendment (Prohibiting All Sexual Harassment) Bill 2021 is critically important. So many women and men around Australia are saying enough is enough today and are marching for justice.

It is baffling that these amendments have not already been implemented and even more so that the government did not take up my invitation some weeks ago to present it themselves.

Kate Jenkins, the Sex Discrimination Commissioner, summed it up nicely in her foreword to the Respect@Work report tabled last year:

Sexual harassment is not a women's issue: it is a societal issue, which every Australian, and every Australian workplace, can contribute to addressing.

Workplace sexual harassment is not inevitable. It is not acceptable. It is preventable.

Sexual harassment is not illegal in all circumstances. Many are not adequately protected, nor personally liable, for sexual harassment, in particular MPs—members of parliament in this place—and judges.

In 2008, the Australian Human Rights Commission submitted that the act should be clarified so statutory appointees, judges and members of parliament were adequately protected, as well as personally liable.

The Prime Minister, following the inquiry into the former High Court Justice Heydon, called those allegations 'very disturbing and very concerning'.

Shockingly, much of what Dyson Heydon did was not 'illegal' under the current legislation due to the nature of the employment arrangement between judges and their associates.

This year, we have heard of allegations of sexual harassment and sexual assault of very grave nature 'occurring' in this place.

While some of those instances were assaults and are therefore covered under criminal law, it is important to recognise the enabling conditions that can contribute to assault.

Sexual harassment must be prohibited in all circumstances.

We need to talk about it and we need laws that support victims.

The legislation as it stands is not good enough to protect all in their workplaces, and we need this amendment.

Respect@Work

The Respect@Work report delivered by the Australian Human Rights Commission to the government in March 2020, a year ago, had 55 recommendations. Three have been partially implemented.

The foreword to that report states that Australia was once a leader in prohibiting sexual harassment. It further states:

However, over 35 years on, the rate of change has been disappointingly slow. Australia now lags behind other countries in preventing and responding to sexual harassment.

The Australian Human Rights Commission survey in 2018 found that one in three people experienced sexual harassment at work in the last five years. Those statistics should be shocking.

The Human Rights Commission also found that 'the current legal and regulatory system is simply no longer fit for purpose'.

The amendments presented today go some way to addressing the gaps in advance of broader reform.

Based on data from the Australian Institute of Health and Welfare, in the last 12 months:

1.6 million people were sexually harassed, the majority of which were not formally reported;

201,000 people were allegedly sexually assaulted;

police were notified of 23,000 of these assaults, just over 10 per cent of the cases; and

approximately 5,000 people were convicted of sexual assault.

This has a dramatic impact on the health and wellbeing of the Australian population and even translates into an economic impact. To give the coalition a fact that speaks to its focus:

Deloitte found that workplace sexual harassment costs the Australian economy $3.5 billion annually, including approximately $2.6 billion in lost productivity.

We need legislative reform to urgently address this issue.

Parliament

The allegations we have heard this year from Ms Higgins and others of their harassment and even assault here in Parliament House reinforce the need for a change to the legislation.

Grace Tame, the Australian of the Year, has told us that the most powerful thing we can do for victims is to talk about the incidence of harassment, grooming and assault.

It is empowering and it encourages others to come forward to tell their story.

It helps to prevent further incidents of abuse.

And it reduces the stigma on victims, shifting the shame to the perpetrators where it rightly belongs.

Conclusion

Creating legislation to make sure that MPs and judges are held to the same standard as others in their workplaces is important.

To the members in this place, it is our job.

To the government, adopt this bill and demonstrate a commitment to integrity and reform.

The standard you walk past is the standard you accept. If you fail to adopt this amendment, you are endorsing sexual harassment in our workplace. You are saying MPs should not be held to the same standard as others.

This amendment has been recommended in various forms by the Law Council, the Human Rights Commission and the Senate Committee on Legal and Constitutional Affairs since 2008.

The people of Australia are tired of words, they want action.

It has been on the to-do list for too long.

It's time to make this change now.

In the spirit of the late Ruth Bader Ginsburg, we need to tackle inequality in the law with one piece of legislation at a time.

What better place to start than the Sex Discrimination Act.

The SPEAKER: Is the motion seconded?

Dr HAINES (Indi) (10:10): I second the motion. It is a pleasure to second this vital and overdue bill from the member for Warringah, and I commend the member's leadership and initiative. It's this kind of initiative that, regrettably, we haven't seen from the government to amend this bill themselves. As the member for Warringah pointed out, a mere three of the 55 recommendations from the Respect@Work report that Sex Discrimination Commissioner Dr Kate Jenkins handed to the Attorney-General over a year ago have been implemented. Three out of 55 is quite simply appalling.

I'm certain Australians will not tolerate similar treatment of any recommendations that come out of Dr Jenkins's next review of workplace culture here in Parliament House. This bill corrects a glaring gap in the Sex Discrimination Act. The act specifies the circumstances in which sexual harassment is prohibited. Unfortunately, it's drafted in a way that excludes statutory appointees like MPs and judges from being protected from or liable for sexual harassment. For over a decade, inquiries and reviews have pointed this out and called on successive governments to amend the act to expressly include MPs and judges. A decade of no action is also quite simply appalling.

Since I arrived in this place, it has, sadly, become clear to me that the government has essentially no interest in advancing integrity policy and reform in this country. For example, last October I introduced the Commonwealth Parliamentary Standards Bill to this House. That bill would establish a code of conduct for all MPs and their staff that prohibits the mistreatment and harassment of any person in this workplace, including sexual harassment. That bill would also establish an independent parliamentary standards commissioner, who would confidentially handle complaints from MPs and their staff who've been mistreated, and would put the needs of victims first. I asked the Attorney-General on numerous occasions last year to allow me to debate that bill, but I was refused.

This afternoon, tens of thousands of Australians will march in the streets to tell the government that they're fed up with inaction on important issues like this. Just imagine if the government had actually tried to progress the work a year ago when the Respect@Work report was handed over to the Attorney-General. Just imagine the position we'd be in to respond to the horrific allegations that have surfaced over the past months if the government had been courageous enough to debate the Commonwealth Parliamentary Standards Bill. Just imagine if this bill brought today by the member for Warringah was debated and enacted.

How long will it take for the government to realise that bills like these are not political show ponies or dog whistles, that bills like these are real, urgent, evidence based reform that would make our workplace safer; that bills like these would start to restore the respect and trust that Australians have lost in this government and this institution? I commend this bill to the House and I call on the government to debate this and other integrity bills that are before the House without delay.

The SPEAKER: The time allotted for the debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.

Mr ANDREWS (Menzies) (11:57): On behalf of the Joint Select Committee on Australia's Family Law System, I present the committee's report, incorporating dissenting reports, entitled Improvements in family law proceedings: second interim report.

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

Mr ANDREWS: by leave—The 1973 bill to establish the Family Law Act was based on a series of principles, including that the financial dispute between the spouses should be resolved as quickly and finally as possible and that the whole process should be performed with dignity, relative privacy and as little expense as possible. Regrettably, some of these objectives remain elusive almost half a century after the introduction of the Family Law Act. Throughout the course of this inquiry, four issues have been raised continually in submissions and hearings: extensive delays, excessive legal costs, the difficulty of enforcing court orders, and timely and fair resolution of family violence allegations.

People find themselves in the family law system because of a breakdown of a relationship. For the most part, they are ordinary families who entered a marriage or relationship with the best of intentions but, for various reasons, find it difficult or impossible to sustain. They are generally of ordinary means with little apprehension that the breakdown of their relationship can result in very substantial legal fees. And, if parents suffer financially, so do their children.

While legal advice is necessary to ensure that the interests of the parties are properly considered and fair fees are charged, lawyers and other professionals should not be profiteering from the financial and emotional stress of a relationship breakdown. That is contrary to the principles of the Family Law Act and the principles upon which it was based.

The maxim 'Justice delayed is justice denied' has been applicable to the Family Court for many years. Hundreds of Australians have told the committee of the emotional and financial strains of being trapped in seemingly endless processes of multiple court appearances, ongoing delays and confidence-sapping years of unresolved litigation. To their credit, the current leadership of the courts has made considerable efforts, despite the challenges occasioned by the COVID-19 restrictions, to reduce backlogs and hasten proceedings. This has involved a greater use of judicial registrars, the practice of call-over of cases and the creation of a special COVID court list. The committee is of the strong opinion that these measures should be incorporated into the ongoing operation of the court. Accordingly, the committee has recommended an increase in the number and in the role of the registrars.

Complaints about excessive legal costs are not new. Almost 30 years ago, Justice Michael Kirby observed: 'Something appears to be seriously wrong in the organisation of the provision of legal services in this community when charges of this order'—in the case he was referring to, of some half a million dollars—'can be contemplated, still less made.' Judges have made similar complaints in a series of more recent cases. In 2014, Justice Loughnan observed that 'a forest of trees has been killed' in one case before him. A year later, Justice Bennett stated that there was something askew in the proportionality of the wife's representation when her retention of senior counsel had contributed in no small part to the wife being left with nothing more than a modest business and an unpaid debt to her legal advisers. The committee has heard evidence of legal costs nearing or exceeding the total value of the assets of the parties. In 2017, Justice Benjamin said:

… the consequences of obscenely high legal costs are destructive of the emotional, social and financial wellbeing of the parties and their children. It must stop.

The committee concurs. These practices must stop, wherever they occur—hence our recommendations to cap fees in property disputes, introduce a proportionality requirement in Family Court costs generally and to ban so-called disappointment fees. Unless approved by a judge or a registrar in exceptional circumstances, the committee proposes that legal fees in property matters be capped at $50,000 or 10 per cent of the parties' identified property and superannuation, whichever is the higher. This cap will not include mediation or arbitration. Secondly, the committee recommends that there be a requirement for proportionality of costs in all family law matters. And, thirdly, the majority of the committee recommends a prohibition on the use of disappointment fees, adopting the comments of Justice Benjamin:

… I have grave difficulty in endorsing, as fair and reasonable or proportionate, terms in fee agreements which provide for barristers to be paid for doing nothing.

The third significant cause of complaint to the committee concerned the fact that many court orders are simply ignored by parties and not enforced by the courts. This is an injustice which brings the court processes into disrepute. Accordingly, the committee recommends the establishment and funding of a registrar-driven national convention list to deal with parties breaching orders of the Family Court. This would involve the appointment of additional registrars to ensure that all contravention applications can be triaged within 14 days. The committee also recommends that the Australian government review the act to consider whether additional penalties should be included to deter the contravention of orders, including specific penalties for repeated noncompliance.

As detailed in the first interim report of the committee, a series of issues relating to family violence were raised in many submissions to the inquiry. The committee has made a series of recommendations about the subject, including the need to have a consistent definition in Commonwealth, state and territory legislation and more streamlined and consistent procedures for investigating claims and determining applications. The committee has made 29 recommendations in this second report. Important other proposals include the implementation of procedures to enable the court to investigate claims of a party wilfully misleading the court and accreditation of professionals in the family law system. There are also a series of recommendations about making the family law system less adversarial. This second report represents the committee's final and concluded views on the matters contained in it. However, the committee has had insufficient time to consider several issues relating to child support that were raised in many submissions. Accordingly, the committee will conduct a further short inquiry into these matters, utilising the evidence already provided to it, before tabling a third and final report.

I thank my colleagues on the committee, some of whom are in the House today, for their constructive and thoughtful consideration of often very complex issues. I also thank the members of the secretariat for their untiring and professional assistance to the committee. I commend the report to the House.

Mr PERRETT (Moreton) (12:06): by leave—I speak today on the tabling of the second interim report of the Joint Select Committee on Australia's Family Law System. Before I do so, I'd like to particularly commend the chair of the committee, the member for Menzies. I don't think there is a more disparate group of cats in this parliament than was on that committee, but he managed to herd us together. I say, with all respect to some of my fellow committee members, that he managed to herd us together very well and did an exceptional job. I again commend the member for Menzies for his great work.

This report details the committee's views on the family law system and makes 29 important recommendations. We do so after receiving over 1,700 submissions from organisations and individuals with direct or indirect experience of the family law system. We conducted 12 public hearings and 13 in camera hearings. More than 40 hours of evidence from 85 witnesses was heard during the in camera sessions. I thank each of the submitters and witnesses, who provided the committee with very valuable evidence to consider when compiling this report. Thank you to the secretariat for undertaking that compilation because much of the evidence, I know, was distressing and many of the witnesses were presenting information in a highly charged state. For many witnesses, the process of giving evidence before the committee was very daunting, particularly because of comments made by the deputy chair prior to the inquiry commencing. The deputy chair publicly declared that women lie about domestic and family violence in Family Court disputes. I am pleased that the committee unanimously concluded that false allegations are actually not prevalent. I don't think an inquiry was needed to come to that conclusion; nonetheless, I welcome the committee's finding.

The report makes a total of 29 recommendations to improve the family law system, and I particularly welcome more funding for legal aid commissions and community legal centres; funding for an additional 25 to 30 registrars in the family courts to address backlogs and delays; a mandatory accreditation scheme for family report writers; the urgent release of an exposure draft of legislation to address the current misunderstanding of equal shared parental responsibility; amending the Family Law Act to reflect the impact of family violence on property settlements; expanding legally assisted family dispute resolution; the recommendation that the Family Law Council be reconstituted; and continued funding for non-legal support services for all victims of family violence.

These are all sensible recommendations that will improve the family law system. Each recommendation I listed had already been made in previous inquiries and reports. Those recommendations are collecting dust on the shelves in the Attorney-General's office right now. We didn't need this inquiry to know that these are all measures that will improve the family law system; we already knew what to do. This parliament knew what to do. There has not been the will from this coalition government to do it. There have been 67 previous reports and inquiries into family law. I think the member for Menzies was on one of those back in the early 1990s. Just the two most recent reports collectively made 93 recommendations to improve the family law system. The 2019 Australian Law Reform Commission report into family law has still not been responded to by the Morrison government. We were told in Senate estimates that the Attorney-General had the government response to this report on his desk 17 months ago. What happened to it? Obviously responding to the most comprehensive review into family law commissioned by his own government isn't a priority for the Attorney-General, despite him implementing the biggest structural reform on the family law system since the Family Court was established way back in 1976.

I'd like to just touch on that. The Attorney-General rammed through his bill to merge the Family Court of Australia with the Federal Circuit Court last month. He didn't listen to the overwhelming calls from experts, academics and advocates that it was a really bad idea. He didn't wait for this committee to table its final report. He pushed through a bill that was designed to abolish the only standalone specialist family law court. Had the Attorney-General waited for this committee to report, he would have received further evidence given to the committee of the harm the merger will bring to families navigating the family law system.

I'm greatly saddened by the abolition of the Family Court of Australia, but now more than ever the family law system needs to be well resourced and strengthened. I urge the Attorney-General and the Prime Minister to actually read the committee report, to read the 29 recommendations and to read the additional comments by Labor members of the committee. Don't just receive it; actually read it. Many of the 29 recommendations in this report are not new. They have been recommended by previous inquiries and previous reports. There is no reason to delay implementing these recommendations. In fact, the work should have been started years ago. The family law system has been neglected for far too long. I urge the government to urgently implement these recommendations. There should be no more inquiries and no more reports into the family law system until the current government addresses and implements the recommendations already made.

Mr ANDREWS (Menzies) (12:12): I move:

That the House take note of the report.

The DEPUTY SPEAKER ( Dr Gillespie ): The debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.

Mr ANDREWS (Menzies) (12:12): I move:

That the order of the day be referred to the Federation Chamber for debate.

Question agreed to.

The DEPUTY SPEAKER ( Dr Gillespie ) (12:13): The original question was that the 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. If it suits the House, I will state the question in the form that the words proposed to be omitted stand part of the question.

Mrs PHILLIPS (Gilmore) (12:13): I rise in continuation on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. Across Australia lending is up 10 percentage points. Where is the problem that responsible lending laws are causing? Perhaps that's the wrong question to ask. Perhaps the better question to ask is: what problems are responsible lending laws solving? I have that answer.

A couple of months ago, after the government made this announcement, a group of local financial counsellors came to see me. They were genuinely and seriously concerned about the consequences of this legislation. Among others were representatives from the Shoalhaven Women's Health Centre and Lifeline South Coast, who deal with vulnerable locals on a daily basis. They all told me about the work they do to help people who have gotten into desperate financial situations because of irresponsible lending. What they were most concerned about was the impact on the mental health of their clients. The Shoalhaven Women's Health Centre helps women in a range of vulnerable circumstances, including domestic and family violence, financial abuse, relationship breakdowns, disability, mental health and chronic health issues. This means they often have very little, if any, disposable income, and many of them are overwhelmed with debt. That is with these laws in place, where financial counsellors can help these women hold creditors accountable when that's needed. They have recourse if creditors behave badly, and they can work with these women to get their heads back above water.

I just want to share some of the case studies that the health centre spoke with me about so you can see the real human face of what these laws do and what the harm will be if they are removed. One client they are working with has an intellectual disability and has been diagnosed with a mental illness. This client was coerced by a so-called friend into going into a local store to take out a cash loan as a favour for them. Once they had left, the client handed the money from the loan over to the friend, who has not been heard from since—heartbreaking actions of one friend taking advantage of another, yes, but where was the responsible lending from this institution? Where have they fulfilled their obligations under the responsible lending laws to make sure this loan was suitable for that person? Did the customer even have the capacity to understand the contract that was in front of them? Could they afford to repay it? Their only income is the disability support pension. They were already in arrears on their electricity and phone bills. They had no capacity to repay this loan. What will happen to this lady now? What would happen without responsible lending obligations?

Another client, who fled domestic violence and left all her belongings behind 10 years ago, used a 60-month interest-free option to purchase whitegoods to set up her new home. Even now, 10 years later, she is sent unsolicited credit cards in the mail by the same lender. These can be activated at any time with no inquiries and no checks to see if she can afford it.

In yet another case, the client's son took out a $5,000 loan with an interest rate of 43 per cent per annum. His mother, who is on an age pension, was put down as a guarantor. When her son stopped making payments, the lender started to direct-debit money from his mother. She couldn't afford it. With the help of the Financial Rights Legal Centre, the women's health centre was able to argue that, had the lender made proper inquiries, they would have known she could not afford those repayments. They managed to get her taken off as guarantor. But what would have happened without these protections?

Lifeline also told me about one of their clients who was experiencing both financial and emotional hardship due to an unmanageable level of debt. Lifeline's financial counsellors deal with people who are totally overwhelmed by debt every day. They spend time helping their clients deal with unscrupulous lenders, which the current laws allow them to do. They told me about one of their clients who was unemployed, has mental health issues and is on the disability support pension. The client went to a retail store to buy a laptop on a payment plan. She had a budget of $1,000 and she was sticking to it, until the salesperson told her she had been approved for $10,000 on the payment plan. The client, sadly, experienced an episodic period of mania and spent the money that she couldn't afford to repay. By the time she sought help from Lifeline, she couldn't meet the repayments and was experiencing high levels of stress and anxiety over the debt. She should never have been given such a high level of credit. Yes, she also acknowledges that she shouldn't have spent it. But, as you can see in each of these cases, the people involved were not coming from strong positions of clarity and consideration. They were vulnerable, and they were taken advantage of and left in terrible situations.

Lifeline told me how many of their clients have identified with suicidal ideation because of their despair over unaffordable debt. As Lifeline rightly pointed out, the South Coast has a high level of unemployment and low income levels. In fact, 27.9 per cent of households in the Shoalhaven reported their gross income as $650 or less, compared with the national average of 20 per cent. This makes our community especially vulnerable to financial harm. The consequences of these reforms will put people at risk of homelessness, repossessions and bankruptcies. We know that financial strain can harm people's mental health and, as Lifeline said, can lead to suicide. Vulnerable people in our community are already experiencing this under the current framework. The royal commission showed this. It proved it.

Tony in my electorate has been dealing with the unscrupulous conduct of a bank for 30 years. In 1985, he was given a simulated foreign currency loan and agreed to pay five to six per cent interest to build his factory near Nowra. What he didn't realise was that this was in the middle of Australia's foreign currency loan scandal. Before long, he was paying 50 per cent interest on something he had agreed to pay five per cent for. Tony says he didn't know about the risks. It ruined his business and has had a profound impact on his life and that of his family. He is still dealing with that.

William from Milton also says his bank so badly mismanaged his superannuation that it cost him and his wife over $800,000. They too are still seeking appropriate recourse many years later. They too have experienced undue harm to their health and mental health, because financial matters have strong impacts on consumers. Where is the help for people like Tony and William? It was meant to be in the royal commission, but the government has squandered it. Removing these protections puts people at more risk of harm and is exactly the opposite of what we should be doing. It won't help to protect our financial system. It puts the whole system at risk and is completely counterintuitive.

The Treasurer is also proposing changes to small-amount credit contracts and consumer leases. Once again, the government is ignoring the recommendations of their own review from 2016, which recommended capping payments at 10 per cent of a consumer's income. The proposed laws would double this for employed people, meaning that consumers could be paying up to 40 per cent of their monthly income in payday lending fees. The proposed laws would also see enforcements spread across two different regulators, ASIC and APRA, but APRA does not have a consumer-facing mandate. Their role is to make sure banks don't make lending decisions that destabilise the bank or the financial system.

Another concerning change in this bill is the way it deals with business loans. The changes will exempt any business lending from protections, regardless of the proportion of the loan that is for business purposes. Right now, a loan would have to have the predominant purpose as the business, but that bar has been removed. This just opens the door for even more exploitation of families through sham business loans.

I share the concerns of consumer groups and financial counsellors like those at the Shoalhaven Women's Health Centre. Without these laws in place, there is no deterrent for lenders to give loans to people in precarious financial situations. There will not be adequate avenues for consumers to take action when a lender has acted against their obligations. It risks leaving people in my electorate with a lifetime of debt they cannot repay or, worse, homeless, distressed and suicidal. This bill will harm local people. It will harm vulnerable Australians. It will hurt our economy and hurt our financial system. It goes against the recommendations of the banking royal commission. It goes against the government's own review of small-amount credit contracts. It goes against common sense. I hope the government can take another look at this. I hope they will look at it from the point of view of those locals I mentioned earlier—from the point of view of those who are most vulnerable in our community and who are most at risk from these changes. I will always be standing up for them and doing all I can to make sure their voice is heard.

I want to thank all the financial counsellors and other advocates who have contacted me with their concerns about these changes, not only for bringing some of these issues to my attention but for everything they do every day to help and protect those who are most vulnerable in our community. The work you do is so tough, but it is so important and it is making a difference to the lives of local people.

Mr STEVENS (Sturt) (12:23): I rise to make some brief comments in support of the second reading of the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. Obviously, the flow of credit in our economy is vital for economic growth: getting capital through the arteries and veins of the economy to the businesses and the households that need it. If we're a society that doesn't support people being able to borrow money, then we're limited to our equity capacity. That's obviously a spectacular handbrake on economic growth and creating jobs and a better life for all Australians. It's equally important that there be a balance in place not only so that we have mature, flowing credit and capital markets but also so that people are protected from potential exploitation. I think these amendments are sensible and are going to make sure that the balance between those two objectives is right.

During my adult life, there have been two major economic shocks or challenges that we've faced in this country, but of course both were global. One was the global financial crisis and the other is what we've faced in the last 12 months because of the coronavirus pandemic. Both times we have seen how surprisingly robust the financial sector is in this country. It is actually something to proud of. There is bad conduct and behaviour that occurs, and we should be making sure that we find that when it happens and that appropriate punishments are in place so that there is a disincentive to seek to take advantage of people. But, by and large, I would say that we're very well served by the mature financial sector that we have in this country. We certainly saw during the global financial crisis our four major banks become four of the largest by market capitalisation for a period of time there, because they were able to stand strongly, with some balance-sheet-underwriting support from the Commonwealth, of course. But they didn't need to be bailed out. They were protected and they survived and they were strengthened through that process. Equally, in the last 12 months, we've seen the resilience of our financial sector.

So the reforms in this bill are quite timely because it is important that we encourage our financial sector to support lending and provide lending, and I think there is reasonable evidence that, in certain categories of lending, things have become too restrictive, and that's leading to people who might have been able to access finance and capital not being able to do so and subsequently limiting how they can grow their businesses and grow our economy and create jobs. Clearly, the amendments here are designed to apply these restrictions back to the small amount credit contracts and consumer leases and other credit products. Banks will continue to be regulated by APRA, as we heard from the previous speaker, and 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. High compliance burdens only lead to higher costs, and we in the Liberal Party know that we need appropriate levels of regulation, not unnecessary levels of regulation, and, if they are preventing banks and institutions from lending money when they otherwise would have, then we should strongly consider why that regulation is in place. Why is it necessary and why are we preventing people from accessing the capital that they need?

There are some key reforms here that extend to small amount credit contracts and consumer leases. We're introducing a cap on costs that will limit what a lessor can charge. We're facilitating the introduction of a cap on the amount consumers can devote to leases. We're requiring the SACCs to have equal repayments and equal-repayment intervals in order to prevent SACC providers from artificially extending a loan. We're prohibiting SACC providers making unsolicited SACC invitations to current and former customers, prohibiting door-to-door selling of consumer leases and introducing broad anti-avoidance provisions to prevent SACC and consumer lease providers from circumventing the law.

I also make the point that the Australian Financial Complaints Authority is one of the key institutions that the government has to provide consumers with protections and avenues to address issues that might arise for them in dealing with financial institutions. To briefly digress, I had an experience with them recently, with a constituent who had had money—a substantial amount of money—transacted out of their account without their authorisation or knowledge. We were able to work with the Australian Financial Complaints Authority to achieve a complete resolution of that matter, and the entirety of the funds that had been removed were restored to the gentleman's account. That, to me, was an excellent example of the institutions that we've got that protect consumers, and particularly the smaller parties in the relationship between a big financial institution and an individual borrower. That was an excellent experience for me, and I'm glad that we've got AFCA in place to help ensure that consumers are protected and that financial institutions are following the laws. That is the case with APRA as well, and ASIC and all of the government integrity institutions that we've got this country.

As I said at the outset, this is about making sure we get the balance right between protecting vulnerable people and ensuring that credit is flowing to the maximum capability, safely and fairly, within a rules based structure, so that we've got mature financial markets that are supporting businesses to grow and create jobs. For those reasons, I commend the bill to the House.

Mr GEORGANAS (Adelaide) (12:30): I too rise to speak against the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, because we on this side of the House believe it will be a very damaging bill for Australians and the Australian economy. If there's one thing that the current health and economic crisis has taught us, it has been that it's vital that we focus on long-term reform and not chase short-term gains, as is being done through this particular bill. Chasing short-term gains is precisely what this bill does.

The government wants to remove key responsible lending protections as an attempt to simplify Australia's credit framework, but this will have a disastrous effect in the long term both for the economy and, more importantly, for individuals' livelihoods. The changes proposed by this bill will shift responsibility from where it is, with lenders, to the borrower. It will reduce protections for borrowers if credit decisions are made on the basis of incorrect information, for example. It's important to note that recommendation 1.1 of the Hayne royal commission explicitly warned against amending this framework. So what does the government do? It ignores one of the key findings of its own royal commission. But we shouldn't be surprised by that, because the government always opposed holding a royal commission. It only held one very, very reluctantly following pressure from this side of the House and from media and following a widespread outburst of community support.

The government claims that these reforms will enhance credit supply for businesses and for consumers by removing barriers, but let's not forget that there are a range of other barriers to business like business certainty, investment and credit demand because of government policy uncertainty and economic conditions. We've got one of the lowest rates of wage growth in the history of this country, low productivity and, of course, high unemployment. If you want to remove barriers, those underlying foundations are the things you have to fix to get a good economy going so people can borrow and can pay their loans back.

Responsible lending obligations are a very important part of safeguarding both the individual and the economy. They were introduced as part of the reforms to credit law, which were undertaken by the Rudd government in 2009, which established a nationally consistent framework for consumer credit known as the credit act. The act sets out responsible lending obligations so the lender has obligations and the borrower has obligations which require lenders to assess whether a credit product is unsuitable for a customer before providing that product to the customer. The provisions of the credit act are also enforced by ASIC.

The government is claiming that responsible lending obligations are causing significant constraints to credit supply. But statements that we hear—media announcements and data released publicly by UBS and some other members of the industry, for example—show that there is limited evidence of any problem with credit supply. In fact, Treasury's own submissions to the Hayne royal commission, which was made in 2018, suggested that responsible lending laws actually enhanced, rather than detracted from, macroeconomic outcomes. So it's no surprise that industry groups—the Banking Association, the Customer Owned Banking Association and the Australian Finance Industry Association—are publicly very supportive of these reforms. After all, they're the ones that stand to gain from them. But consumer groups led by Choice, for example, have expressed strong concerns about this bill. They're concerned about the relaxation of lending standards, which will allow lenders to make more loans that are unsuitable for vulnerable borrowers. Consumer groups are also concerned that reforms to payday lending protections don't go far enough. As reported on the ABC this weekend, more than 33,000 Australians and 125 community groups have signed the open letter against this bill.

We share these concerns on this side of the House, and many experts feel that axing safe lending laws during a pandemic is extremely risky and would fuel an already overheating housing market. As Eliza Wu, an associate professor of finance at the University of Sydney, said, 'These reforms could sow the seeds of the next housing boom and'—very importantly—'the next debt crisis.' Have we really learnt nothing from the global financial crisis? If people can easily get unaffordable loans because of the changes, it will have dire consequences in the future.

Australia already has one of the highest levels of consumer debt per capita in the world. This bill will give banks and credit suppliers a licence to entice people into even more debt. This reform would mean that banks and other lenders would not need to do the same degree of verification and checks and balances, for example, to make sure that loans are affordable and suitable for people, depending on their income. According to recent data, at the moment two in five Australians are already struggling to pay their bills during this COVID pandemic crisis. So, if people turn to easy credit to get them through a crisis, it could lead people further and further into financial hardship.

What's worse, the laws are being wound back at a time when Australia's housing market is running hot. Property analyst CoreLogic says the market is in one of its strongest growth phases on record, and experts consistently warn that Australia's high household debt is a big risk in a recession. Low interest rates allow people to borrow big. As long as we have measures in place that assess and verify that people can afford to repay the loans, disaster can be averted. If this bill passes and interest rates increase by the slightest bit—and we can expect that to happen; at some stage in the future, interest rates will increase—people will then find themselves in extreme hardship and will be unable to pay their mortgages.

The coronavirus recession has left 1.4 million Australians in mortgage stress. Almost 100,000 could default after JobKeeper ends. We don't know how many people could lose their jobs when JobKeeper ends, but the number is likely to be high. Now we hear and see that the government wants to make it easier for people to borrow more money than they can afford to pay. Uniting Communities is an organisation located in my electorate in South Australia. I've met with them on a number of occasions. They do amazing work to support very vulnerable people. Uniting Communities contacted me back when this bill went out for public consultation. They were already concerned then. Uniting Communities are deeply concerned about the harm that will be caused to Australians if consumer credit protections are diluted. They said to me that they felt this bill may potentially lead to a whole-economy debt disaster. To illustrate the potential danger, they told me about a case study and the story of one of their clients, a woman called Kelly. Kelly was receiving the DSP, the disability support pension, and living in Adelaide with her husband and three children. Kelly had lived with her disability all her life. She faced family violence in her marriage. Kelly depended on her husband to access financial service providers due to her disability, and, over time, Kelly experienced financial abuse. Kelly had received a settlement sum for a compensation claim before she married. The proceeds were used to pay off his car loan and his credit card. Kelly was told that this was necessary so that they were eligible to get a home loan.

Kelly and her partner then purchased a home. After a few years, Kelly's husband became interested in purchasing a new car. Kelly objected to buying a new car and told her husband that they were struggling to meet their home loan repayments and could not afford a car loan. He insisted, and the finance broker at the car dealership filled in the car loan application. The car loan was later found to be unsuitable, as Kelly and her husband could not make repayments without substantial hardship.

Kelly's family were living below the poverty line and getting assistance from agencies, including the Smith Family. They were getting emergency food relief hampers from them. The car loan came to the end of its term but had a balloon balance that Kelly and her husband just could not afford. The car loan provider again contacted her husband, to enter into a new contract to finance this outstanding balloon balance. Kelly didn't want to sign the new credit contract, as she knew this would mean they would struggle to meet their home loan repayments, which were far more important than the car to Kelly. However, Kelly and her husband still owed money on the car—the car that her husband owned and drove.

Due to the financial pressure that this family felt—and the pressure that Kelly felt and the experience that she had at home, being pressured to sign—Kelly attempted to leave the situation, because it was one of financial abuse. Kelly was afraid for her safety and of what might happen when she protested. When she did protest about the loan, the domestic abuse would escalate. In the end, Kelly signed the credit offer under duress. The matrimonial money was directed to making the car loan repayments. Prioritising the car loan in turn resulted in their home loan going into arrears, as payments were not being made, and Kelly received a notice of default.

There is no doubt that the stress and danger these changes could pose for vulnerable people like Kelly is significant. It can snowball and ruin people's lives—not for a short period but for the long term. There are other examples in my electorate. Karen Cox, CEO of the Financial Rights Legal Centre, has 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.

This bill proposes to remove the existing responsible lending obligations and replace the current practice of lender responsibility with borrower responsibility. As a result, vulnerable people like Kelly, who have found themselves in an even more vulnerable position since COVID, will suffer. We can't let this happen to vulnerable Australians.

Dr LEIGH (Fenner) (12:43): Credit for the most awkward photo opportunity of recent years must go to Treasurer Josh Frydenberg and that moment when he was accepting the Hayne royal commission report. It was very clear that Treasurer Frydenberg wanted to wrap his arms around Kenneth Hayne and get a full endorsement for his economic policies. He didn't get that, and he hasn't returned it. Despite the government saying at the time that they received the royal commission report that they would act on all its recommendations, there's now a bill before the House—the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020—which sees the Morrison government going against recommendation 1.1. That's it. The first recommendation of the Hayne royal commission—don't water down responsible lending laws. What are we doing today? We're debating the Morrison government's attempt to water down responsible lending laws.

Did the big banks ask for it? No. It doesn't look as though they did. From all accounts, it appears to be an ideological frolic from the Morrison government in reducing consumer protections. This is the very same coalition that fought against sensible reforms to protect consumers against financial misfeasance, put in place by the Rudd and Gillard governments. I remember being here in this place while then shadow Treasurer Hockey railed against the responsible lending changes that were being put in place by Labor. What do responsible lending laws do? They ensure that lenders assess whether a credit product is suitable for a customer before providing that product to the customer. Those provisions are enforced by ASIC and have not caused a great choking off of credit supply. Indeed, if you look at what's happening with credit at the moment, we have an Australia in which the level of household debt is among the highest in the world.

Is Australia really in need of more irresponsible lending? Do we need to further increase the debt ratios of Australian households? Right now, we have some of the highest auction clearance rates on record. Housing markets, particularly in our big cities, are going gangbusters, making it more difficult than ever for young people to get into the housing market, yet this government says the answer to all that is more irresponsible lending, watering down the standards, and taking the responsibility away from the borrower and putting it on the lender. It's always the way with the Liberals. Give them a chance, and they will resort to that old 'caveat emptor' approach. They think the job of deciding whether lending is responsible shouldn't fall on the multibillion-dollar institution that is extending the funds. No, they say it should fall on the mums and dads—the same mums and dads who were victims of Storm Financial's collapse, leaving them not only with no savings but sometimes with debts that lingered for decades.

The very behaviour of big financial institutions that led to the Hayne royal commission—and, indeed, in the United States, the sort of poor behaviour that preceded the global financial crisis—is now being encouraged by the coalition. The watering down of financial protections that we see from the US Republicans that caused so much damage to the United States' financial system is now playing out here in Australia. For lack of any clear economic agenda and for lack of a plan for boosting productivity and increasing wages, we have instead the coalition dipping into their ideological top drawer, looking to do the bidding of the big financial institutions against the interests of regular Australians.

What do the consumer groups say about this? A letter from 122 organisations and 97 prominent Australians last year urged the federal government not to go ahead with its watering down of safe lending laws. Supporters of that letter included the Australian Council of Trade Unions, the Australian Council of Social Service, Anglicare, religious groups, community groups, and legal and family violence associations from across Australia. As Alan Kirkland, the CEO of CHOICE, has said:

Without safe lending protections many Australians will be exposed to the terrible lending practices we saw in the lead-up to the global financial crisis.

Fiona Guthrie, CEO of Financial Counselling Australia, said:

Many people are struggling financially at the moment and the last thing they need is to be loaded up with more debt. Financial counsellors see at first hand the harm caused to people and families when they struggle to make repayments.

She went on:

We cannot in good conscience sit by and let these laws go through without doing what we can to stop them. That's also why financial counsellors from around Australia are writing to their local politicians …

Karen Cox, the CEO of the Financial Rights Legal Centre, said:

Before safe laws were introduced, lenders regularly sold unaffordable loans to people, including pensioners, people on Centrelink payments and casual workers, who they knew would never be able to repay the loans.

As she pointed out:

It's beyond belief that less than two years after the royal commission made this its first recommendation that the Government wants to go directly against it.

The real risk is that we change the incentives for lenders: we remove or weaken penalties for breaching safe lending laws, and then we see an increase in irresponsible lending.

These changes will reduce verification requirements for lenders, replacing the current practice of lender responsibility with borrower responsibility. There will be two separate enforcement regimes, with enforcement of lending standards staying with APRA for authorised deposit-taking institution lenders but moving to ASIC for lenders that are not authorised deposit-taking institutions, separating the enforcement regimes and again creating a risk of multiple standards and the watering down of protections for consumers.

There's going to be an exemption of business lending from protections, regardless of the proportion of the loan that is for a business purpose. That replaces the existing predominant purpose test designed to prevent avoidance. So, if you just ensure that a small share of the loan is for business purposes, you've taken yourself out of the financial protection regime. But we know that many small businesses operate as family businesses. Indeed, if anyone knows that, it should be the coalition, because they put the word 'family' in next to 'small business' in their portfolio and in the title of the ombudsman. They ought to know the way in which these loans can be intertwined. They ought to be standing on the side of small and family businesses. But yet again the coalition have found themselves—as when they voted 26 times against a banking royal commission—standing on the side of the big banks, not on the side of mums and dads, and standing on the side of large financial institutions, not on the side of Australians who need protection.

Academics have warned about the risk posed by these changes. Eliza Wu from the University of Sydney says these reforms could 'sow the seeds of the next housing boom and the next debt crisis'. Treasury's own submission to the banking royal commission said:

There is little evidence to suggest that the recent tightening in credit standards … has materially affected the overall availability of credit.

So there's no case being made for it by Treasury. There's no case being made for it by consumer groups. We're in an economy in which lending for housing has increased, house prices are booming, consumer credit is broadly available and many economists are warning of the danger to the economy of a crushing household debt burden, the risk that too many Australian households could be exposed to excessive debt.

The Treasurer said that the events that preceded the royal commission were, in his words, 'appalling'. Indeed, as the member for Whitlam pointed out, the Treasurer confected concerns about a teenager with Down syndrome who was sold life insurance by an unscrupulous, commission-hungry bank salesman. Yet, when that young man's father wrote to Treasurer Frydenberg and begged him not to scrap responsible lending laws, he never even got a response. Treasurer Frydenberg is willing to cry crocodile tears for past victims of banking misconduct, but he's not willing to listen to those victims when they say, 'Don't water down responsible lending laws.'

The industry will, of course, accept it. They'll take anything that reduces their responsibilities to do lending checks. But they're not out there demanding it. This is not a core demand from the industry. And consumer groups, such as the Consumer Action Law Centre, have told stories about the clients that they assessed. The Consumer Action Law Centre give a case study of a woman whom they call Silvia, whose only source of income is the pension, who has no savings, who suffers from depression and has had past issues with addiction, and who has done all her banking for the last 20 years with the same big four bank. The case study says:

Earlier this year, Silvia went into her bank branch in the outer suburbs of Melbourne and took out a $25,000 loan, which was secured over her home (which she previously owned outright). Silvia says that she had originally asked for $20,000 and told the bank representative that she wanted it to pay off $5,000 she owed on her credit card, and to do some home improvements.

Silvia recounted that the bank representative asked her some questions about her finances, and then the representative told her she was going to receive a $25,000 loan—$5,000 more than she asked for. She felt that they didn't really give her a choice about getting a loan for a lower amount.

Silva needed to pay $133 a fortnight, 14 per cent of her pension, at a time when she was already having troubles making ends meet with her groceries, home and contents insurance and health insurance, when she was already living from one cheque to another. The case study goes on:

While Silvia managed to make the repayments, the loan was causing her a great deal of stress. She has attempted suicide because of stress. The loan repayments were direct debited from her account a few days after her pension is paid each fortnight. The real reason Silvia didn't miss any repayments is because she still had the loan funds to pay for things. She spent most of the loan funds already, and she only has $7,000 left.

Silvia complained to the bank, claiming the loan was provided in breach of responsible lending laws as it was larger than the loan she requested and the repayments were causing her financial hardship. The bank acknowledged that it could have been more prudent in advancing the funds, and offered to waive all future interest on the loan, and refund any interest already paid.

What would have happened to Silvia without responsible lending laws? Without responsible lending laws, the bank could have simply told her to go away. They wouldn't have had any obligations. Silvia, a pensioner who suffers from depression and who attempted to take her own life, would not have had the protection of responsible lending laws.

This bill before the House, mark my words, is the kind of bill brought before the parliament by a government with no agenda. They have no plan for rapidly vaccinating Australia. At a time when the vaccine rollout is occurring apace in countries like Britain and the United States, it is falling behind in Australia. The Treasurer told us last year that the state lockdowns of the economy were costing $4 billion a week, but, now, as a delayed vaccine rollout prevents a full reopening of the economy, the government is refusing to take responsibility for the economic cost that it is inflicting, not to mention the health risk that exists for vulnerable Australians.

Over the weekend, we saw fresh outbreaks of COVID, and it points to the urgency of moving ahead with the vaccination. But, at the same time, Australia needs a government with ambition, a government that acts, as the governments of Curtin and Chifley did at the end of World War II with the full employment white paper that said: 'Let's not just put the place back the way it was in 1939. Let's do better and aspire to full employment and aspire to increasing homeownership.' The Morrison government stands for nothing. It has no agenda, it is lacklustre and this bill before the House reflects all that is rotten with the government today. (Time expired)

Mr KEOGH (Burt) (12:58): It's often said by observers of federal politics in Australia for some reason—reasons that I clearly can't understand—that the government parties here are the parties of good economic management, that somehow they have a better approach, a sounder approach, to economic management. This bill, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, demonstrates everything that is wrong about this government's approach to economic management and in particular that intersection of economic management and consumer protection, because, if there is one topic that has been discussed time and time again in this place since I was elected in 2016, it would have to be the need for a banking royal commission—a banking royal commission that was called for for years and years, a banking royal commission that the Labor side of the parliament voted for time and time again, a banking royal commission that the government voted against time and time again. But eventually they were dragged kicking and screaming by Labor and the baying masses of the Australian people saying: 'It is time. We need this royal commission.' And the royal commission was finally held. Then, of course, it was all too hard for the government to bring about the legislation to implement the recommendations of that royal commission before the 2019 election, despite offers of cooperation from our side of the House to make that happen.

One of the key recommendations out of that royal commission is about making sure that we have appropriate consumer protection and responsible lending obligations on our banks. It's a key recommendation, right up there: 1.1, right at the top. Here today, we have legislation before this parliament. It's not implementing the recommendations, no; it's doing the precise opposite. Two years after we got this recommendation from the royal commission, the government is now legislating the opposite thing to what that royal commission recommended. The government likes to fall back and say, 'Oh, well, there are protections that will be applied through APRA regulation,' but that fundamentally misses the point, because there's something else government likes to talk about, and the banks mentioned this too. They said: 'Well, we're not going to lend money irresponsibly. We're not going to give money to people who can't repay it and in a way that may cause them financial detriment, because, of course, it's our money that we're lending them. We don't want to do that. That would be against our own interests.' Of course, in making that statement the government and the banks seem to completely overlook all of the behaviour that had occurred for the decades leading up to the royal commission and why we held the royal commission in the first place. Amazingly, it would appear the government now thinks that the banks will not do the same thing that they did before when these requirements are removed.

There is a critical and important distinction—I know it's somewhat difficult for the government to understand this distinction, but it is a distinction nonetheless—between APRA regulation and ASIC regulation of responsible lending laws. The distinction is this: the purpose of the responsible lending regulations in the APRA regulation is to make sure that the bank doesn't lend money in such a way that the bank can't get back its own money. Notice I didn't mention 'consumer' or 'borrower' in that statement. That's because it's got nothing to do with the consumer or the borrower. This means that, if the bank is confident that if the borrower does default and can't repay then the bank will get the money back by selling that person's house, that meets the APRA requirement. That's fine, because the bank got its money back. It's about prudential regulation. It's about the stability of the financial system and the bank. The ASIC consumer protection element of responsible lending is about making sure that the borrower is not put under such financial stress by taking out the loan that they would not only be unable to repay it but also be unable to properly live whilst repaying that loan. It's to make sure that the borrower is not put in an extortionate position of not being able to put food on their and their children's tables because of having to repay that loan, and that they don't end up losing their house, which is the house that their family is living in. That is what the government is trying to unwind in the name of economic recovery. Well, just explain to me this, government: how much of an economic recovery are you going to get when people start losing their houses? That is not an economic recovery; that is literally undermining the foundation of the Australian economy. It's hard enough as it is. Why would you go about making it worse?

The government also says that this is going to help credit supply to business. This is curious for a number of reasons. One of these reasons is that, as part of the government's economic support package in response to the coronavirus pandemic, it is now—and has been in some other guises—offering low-interest or deferred-interest loans to business. But what business tells us—and, in fact, what business was telling us back at the time of the bushfires when a similar scheme was introduced—is that business isn't interested in taking on yet more debt in an economically uncertain time. All the government is actually doing through this legislation is creating even more uncertainty in the area of credit supply to the nation. It's creating more uncertainty. It's already got the uncertainty that is the coronavirus pandemic, and now it's making it worse at a time when business isn't saying, 'We want to borrow money.' Businesses are finding it hard enough as it is. The last thing they want is more debt. Where they do want to borrow and get access to credit, the government has now put in place many different schemes to do so. It announced a new scheme just recently. Why does it now want to put the owners of those small businesses, their families and their homes at risk by enabling them to borrow money when it would be inappropriate to do so? I just want the government to think about that for a minute. I want all Australians to think about that.

As I said, we spent years in this place trying to get a royal commission up. Going directly to this point, the royal commission came out with recommendation 1.1: make sure that we've got appropriate protections and make sure that we don't have unfair lending practices. We saw what happened in the decades leading up to this, in the government's response during the coronavirus pandemic and in the government's response when it was elected in 2013. How could it unwind all of Labor's reforms, which were designed to protect consumers and strengthen—and I say strengthen, not make harder—the regulation of the financial system in Australia? Our financial system is actually, overall, a pretty good one. We have the benefit of Labor's great superannuation policy, another policy the government is trying to dismantle before our very eyes. The government is undermining confidence in the superannuation system and trying to convince people that there shouldn't be increases in the amount of compulsory superannuation. It's all consistent. Since they were elected in 2013, those opposite have wound back the protections that Labor tried to put into the system.

That's only one part of this legislation. There are some other interesting protections in this legislation. They go to the issue of payday lending. This is a really important part of what we are discussing here today, not only because of the way in which payday lenders—for those who don't know—effectively use extortionate interest rates over a short period to capture people in desperate need of financial assistance. They get them locked into a cycle of financial reliance on one payday loan after the other and then ramp it up to pay the interest costs. It looks like a small cost because you're only going to borrow it for a month. But, lo and behold, when you can't repay it, wham, that interest is capitalised. Now you've got to borrow the principal plus the interest and pay it within one month. Another month goes by and, wham, the interest is capitalised again. Now you've got to repay that, along with the principal, and on it goes. Quite frankly, it's unconscionable. I say that because it is unconscionable! Under the existing protections for borrowing, if you were to go into a bank and say, 'I want a personal loan, as a consumer,' the bank would not be allowed to capitalise the interest. That's actually unconscionable under the ASIC legislation. They're not allowed to do that. But, with short-term or separate loans, they can get away with it. This legislation is designed to fix that, in part, just a little bit. It's not really a great job, but they're getting there. They're learning slowly. They're getting somewhere.

What's quite interesting is this: the government had actually already prepared legislation on this for the last parliament. They prepared it, sent it out for consultation and got feedback on it. Labor said: 'This is a great idea. We've been saying you should do this for quite a while.' Then it just got slipped into a pocket somewhere. It sort of disappeared. The Senate has looked at this legislation and—this may surprise some—Labor members of that Senate inquiry said: 'Look, this legislation is not great, but we're not going to let the perfect be the enemy of the good. We support this legislation. We think it's a good idea. We think you should go further, government, like your original legislation, but we'll support this.' On the other hand, the government members of that committee—remember, this is government legislation—said they didn't support it. They didn't support their own government's legislation, even though it had support from Labor. The executive proposed the legislation, the opposition said, 'We'll support you,' but the government's own senators didn't support it. That probably tells you everything you need to know about this government. So here we've got similar provisions dropped into this bill to provide some protections to consumers, some caps on the nature of this payday lending that can go on. I think there's a very strong argument to say that those protections are not strong enough; however, we will support them because we're not going to let the perfect be the enemy of the good. We welcome their inclusion in this legislation today.

I mentioned before some curious rhetoric coming from the government about how removing some of the regulatory responses to ensure appropriate consumer protection is going to free up capital for business and credit lending for business, and that the government's already got some other programs. I mentioned one of those programs, where they're going to allow for low-interest deferred repayment loans. They will, fortunately, unlike their policy response during the bushfires, allow these loans to be used to consolidate existing debt. That is a good thing for our small business community. But let's just put that in the full context. The full context of this announcement is that in just 13 days time the JobKeeper payment will cease under this government. On 28 March there will be no more JobKeeper under this government. Meanwhile, across Australia, thousands of businesses relying on JobKeeper and the 1.1 million employees that they employ will miss out. They will be left high and dry. We've had varying reports from Treasury that over 100,000 people—others estimate up to 250,000—will lose their job as a consequence of the removal of JobKeeper.

We're going to see a situation where businesses, with only 13 days to go until JobKeeper comes to an end and with no clarity from government—they've announced a loan scheme and they've announced a scheme to fly you to a handful of places you might not want to go to anyway or, in the case of Western Australia, are already full. That scheme supports aviation, and that's good, but it's not actually going to support any of the businesses in those areas. They've announced those schemes and they've sort of left it open that they might look at some other stuff. Well, with 13 days to go, those businesses relying on JobKeeper need to get some serious advice now. They're in a situation where they won't be able to provide sufficient notice to any employees that they may need to make redundant as a consequence of them not getting JobKeeper or any other support from this government come the end of March.

We need to look at that in this context because when those employees are made redundant—those employees who are also financial consumers—they're the ones who are going to need protection from the banks to make sure they also don't get in over their heads, that they don't those put up their house as collateral at risk of losing it. When we had proper protections in place, those protections would have made sure that that couldn't happen. But under this legislation that the government is bringing forward right now, when many Australians—over 100,000 of them—and business owners are going to find themselves at their most financially vulnerable, they're not going to have any protection when it comes to borrowing in Australia.

Mr BRIAN MITCHELL (Lyons) (13:13): I thank the member for Burt for his insightful contribution. I am pleased to have the opportunity to put on record my concerns about this bill, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. This bill makes several changes to existing consumer credit legislation, but the headline here is the amendments remove responsible lending obligations for most consumer credit contracts and potentially expose consumers to significant harm. This is in direct contradiction of the first recommendation of the banking royal commission. It really takes something for a government to go to the expense—very reluctantly, I must say—of actually setting up a royal commission, promising to implement the recommendations and then, at the first opportunity, seeking to unwind the very first recommendation of that royal commission. This essentially represents a massive gift to the big banks from the government, who cannot be trusted. They show us time and again that they cannot be trusted when it comes to financial sector regulation.

Labor are referring this bill to a Senate inquiry once it goes through the House and will settle a final position on the bill following that inquiry, but our overwhelming disposition, from the tenor of the debate on this side of the House, is to stand with Australian consumers in opposing this bill as it stands. It really says something that we've had Labor member after Labor member standing up to speak on this bill in this place on behalf of consumers, on behalf of Australians, and the government members are nowhere to be seen. They're so eager to support this legislation that they're nowhere to be seen.

Anglicare Tasmania in its submission to the Senate inquiry into the bill stated:

… there should be no weakening of current consumer protections and the Parliament should vote against this Bill in its entirety.

Anglicare has the largest team of financial counsellors in Tasmania. They support people to avoid and manage debt, they negotiate with creditors and they understand their legal rights and responsibilities. This is an organisation that knows what it's talking about. It has people in the field every single day dealing with vulnerable Tasmanians who are in debt up to their neck, and they are saying: 'Don't do this. It will hurt people.' Anglicare Tasmania works every day with people who will be most impacted by this legislation, and they should be listened to. It has warned that passing this bill will result in more Australians being pressured into loans that they are unable to repay.

I understand, like many on this side of the House. We come from fairly modest upbringings. My parents would take short-term loans—enter rental agreements for a new fridge or whatever—and then they'd have to try and pay them off. It always costs more in the long run, but they were so desperate to get the appliance that they went into these loans. I understand the appeal of these things, especially when salespeople are out there saying: 'Do this. You can have a new appliance—a new fridge, a new TV, a new whatever. Give your family what they deserve.' It's a very seductive proposition. When you're hoping for a better life and somebody's there saying: 'It's there, right in front of you. It's just a few short dollars a week,' it's very easy to grab onto it. A drowning man will grab onto anything, and he'll bring the next person down as well. It's our job as legislators in this place to ensure that we put protections in law to ensure that vulnerable people don't get into those positions.

This legislation will remove many of the tools that financial counsellors use to assist people affected by inappropriate lending conduct. The Tasmanian Council of Social Service, TasCOSS, also strongly opposes this bill. TasCOSS is the peak body for the community services sector in Tasmania. It advocates on behalf of Tasmanians on low incomes, especially those who experience vulnerability and disadvantage. TasCOSS argue that weakening consumers will lead to greater financial hardship that will hamper rather than support Australia's economic recovery. I know the argument on the government benches is that this will see investment flow into business. That's what they're saying this will do. Well, it won't. It will exacerbate vulnerable people and vulnerable businesses getting into more debt than they currently have.

The CEO of consumer rights group CHOICE, Alan Kirkland, has raised similar concerns to those of TasCOSS, saying that the timing of these changes is way off. He says:

Australia already has the second highest level of personal household debt in the world. Loading people up with even more debt will make it even more challenging for households already doing it tough.

It so happens that the member for Bruce on this side of the House has prepared a report. He's used his, I think, Christmas holidays to write this very detailed report. He's done a lot of research. It's all proper research. It's not a political document in terms of rhetoric. I'll briefly go through some bullet points. One is that household debt as a share of GDP in Australia is 119.4 per cent; we have the second-highest rate of 43 countries studied by the Bank for International Settlements. Another is that 37 per cent of Australians, more than one in three, admit to struggling to pay off personal debt, and this government wants to make it even easier to get into debt. Finally, as of 2016, Australians owed $2 trillion in private debt. I quote Richard Yetsenga, the ANZ chief economist:

… this pandemic has dialled up the risk profile of the economy because the most indebted sector — households — no longer have the buffer provided by future interest rate cuts."

That's where we are at the moment.

We are already massively in debt, at both the private and the public level, and this government wants to make it even easier for vulnerable people to get into debt. This has the potential to cause real harm, and not in an abstract sense. I'm talking about real people in real homes, in our neighbourhoods and in our communities, who will be harmed by this. It will affect children. It will affect pensioners. It will affect people who are least able to look after themselves.

As the member for Whitlam pointed out in his contribution to this debate, almost every Australian either is now or has been a bank customer. When things go wrong in that relationship, the effects can be devastating and life-changing for the customer. And it's never the banks that suffer. They have the power in the relationship. They always have the power in the relationship. The ordinary customer must rely on the law to protect them, and this legislation rolls those protections right back.

This is what I don't understand. We know what happens when consumers are not properly protected when dealing with the financial services industry. We know because we've just had a royal commission to tell us. We've just had witness after witness—more than 10,000 submissions to the Hayne royal commission—tell us about the costs to consumers, about what happens when the industry gets it wrong. That's 10,000 ordinary Australians who put their trust in a bank or a financial services institution and came out poorer for it at the other end.

Many years ago, when I was a journalist, we dealt with a gentleman who had buildings. He was a small developer. He was servicing his loans. His business was going well. The bank that he did business with was sold to a big bank. The big bank did a profile and decided: 'We don't want to do loans to small development businesses anymore. Call in those loans.' So they called in his loans. He was surprised; he'd been meeting all his obligations with no trouble at all. He said: 'Okay. Fair enough. Things happen.' He said, 'I'll need to sell one of those properties in order to release the capital so I can pay the loan.' They said: 'No, you can't do that. We put caveats over your properties. You can't sell them.' So he had no access to the properties in order to be able to sell them to meet the loans that had been called in. In the end, the bank sold those properties under him for an absolute song. He was massively into debt and, of course, went bankrupt. He was a successful businessman; he had done nothing wrong. And just because of the conduct of a bank, he went bankrupt like that.

That's one of the sorts of stories—one of 10,000 stories—that went to the Hayne royal commission, and this government seems to have learnt nothing from that. It's the first recommendation from the royal commissioner. The banking, superannuation and financial services royal commission identified the need for stronger, not weaker, rules and oversight of financial services. It's hardly surprising, because we know just how little weight this government really gave to the banking royal commission. It was absolutely dragged into that royal commission. They voted against it 26 times. There were votes in this place 26 times about setting up a banking royal commission, which Labor had called for consistently. On that side, the government side, they voted against it 26 times. They absolutely did not want a banking royal commission until they were dragged into it, until they just could not get out of it anymore. They've been reluctant about it ever since. They said it was 'a waste of time'.

And now they're walking back from Commissioner Hayne's first recommendation: to leave responsible lending obligations alone. It took bravery and courage for victims of bank misconduct to come forward to the royal commission. They did so because they wanted to protect their fellow Australians from experiencing what they went through. It was too late for them. They've lost their homes; they've lost their businesses. They've been through it all, but they presented evidence to the royal commission to help other people. What a slap in the face for the government to say to those brave Australians who fronted that royal commission, 'We're going to ignore the very first recommendation from that royal commission.'

Barely one-third of the 76 recommendations of the royal commission have been fully implemented two years after the government received the report. What an absolute crawl! They've failed to introduce the compensation scheme, which would provide relief to the victims of financial crime. When it comes to rorts and rip-offs in the banking system, this government has never been on the side of ordinary Australians. Those opposite were dragged kicking and screaming to the royal commission. They've done hardly anything over the two years since to really implement its recommendations, and they're ripping away the very first recommendation in this legislation. They've never cared about looking after Australians. They've never cared about really tackling bank misconduct. They believe that if you let the banks do what they want it's good for business. It doesn't matter if there's human collateral damage down the road. It doesn't matter if people lose their homes and businesses. That's just collateral damage. That's just the cost of doing business. The human wreckage that is left behind from this sort of legislation is just the cost of doing business.

After years of inaction, this government is using the pandemic as an excuse for everything. Those opposite have used it as an excuse to cut Australians' pay and to cut superannuation and now are using it as an excuse to undermine protections in the banking sector. In the current environment of high levels of unemployment, reduced income and the winding back of COVID-19 support measures, which come to an end on 31 March, introducing weaker consumer protections will result in more Australians being saddled with harmful debt or experiencing significant financial hardship. It will not support our economic recovery.

Supporting families, supporting small businesses and supporting workers should be the highest priority for this government, particularly at a time of greater community vulnerability due to the impacts of the pandemic and the winding back of the support measures. Instead, this government is leaving hardworking Australians exposed and vulnerable. Imagine what it's going to be like when JobKeeper comes to an end at the end of this month and people who are currently getting a certain level of income drop back to a JobSeeker rate. They'll still have bills to manage and repayments to make. Imagine, in those circumstances, being told by some spiv on the high street: 'You can get an easy loan. We'll wind back the protections.' In your heart of hearts, you'd think, 'Yes, I'll pay that back.' You'd be so desperate to do it. At the end of this month we're going to have a lot of people in this country suddenly bringing a lot less income into their households, at the same time as this government wants to bring in legislation which makes it easier for them to access credit which could harm them significantly. It's a recipe for disaster.

Unaffordable debt has a detrimental effect on physical and mental health, family wellbeing and the ability to pay for essentials such as groceries and electricity. People struggling with debt have been found to suffer from depression and suicidal ideation more often than those without financial problems. This legislation threatens to make harm worse and make Australians worse off, not better. I certainly do not commend this bill to the House.

Mr PERRETT (Moreton) (13:28): I rise to speak on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, but I should say that my heart is not in this speech. My heart—probably like the member for Griffith's, I would imagine—is outside this chamber right now, marching for justice around Parliament House. But, nevertheless, some of us do have a job to do, albeit for a short time.

Sadly, this bill removes responsible lending obligations for the majority of consumer credit contracts. Let me just remind the House that in 2009, partially in response to the global financial crisis, the Labor government introduced the National Consumer Credit Protection Act 2009. That bill introduced a range of measures around the conduct of credit providers, including requiring them to abide by a set of responsible lending obligations. It's bizarre to think that that legislation took until 2009. These responsible lending obligations require that credit providers make reasonable inquiries about a customer and assess whether a credit product will be unsuitable for a consumer. The obligations were designed to protect the consumer, and I was very proud that Labor brought them in.

The DEPUTY SPEAKER ( Mr Llew O'Brien ): Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. The member will have leave to continue speaking when the debate is resumed.

Mr DUTTON (Dickson—Minister for Home Affairs) (14:20): by leave—I move:

That the resumption of debate on the Prime Minister's motion of condolence in connection with the death of Grand Chief Sir Michael Thomas Somare be referred to the Federation Chamber for debate.

Question agreed to.

The DEPUTY SPEAKER ( Mrs Wicks ) (15:37): The question is that the words proposed to be omitted stand part of the question.

Mr PERRETT (Moreton) (15:37): I rise to continue my speech on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. I point out that Labor, when in government back in 2009, had brought in measures that were designed to protect the consumer. They only applied to consumer credit contracts, not to credit contracts for a commercial purpose, like small business lending. Commercial credit is primarily regulated by state governments. When Labor brought in those protections, that was a good thing to do for consumers. They required the lenders to take some responsibilities—not drastic measures, but just turning their mind to the person in front of them, rather than to the credit profits that would flow to the person providing the credit.

The Treasurer announced in September last year that the government would remove responsible lending obligations for most consumer credit products. The Treasurer's rationale was that the RLOs were damaging the supply of credit. The changes in the bill before the House today mean that lending decisions would be regulated by APRA for authorised deposit-taking institutions—that is, banks and credit unions. APRA's mandate is primarily concerned with ensuring systemic stability by ensuring the banks do not make lending decisions that destabilise the bank or the financial system. APRA does not have a consumer-facing mandate, as every politician in this place would know. Lending institutions that are not authorised deposit-taking institutions will be regulated by legislative instruments set by the Treasurer and enforced by ASIC. What the government is seeking to do with this bill before the House today is to have consumer lending regulated by three separate sets of rules and two different regulators, depending on the nature of the credit provider and the credit contract.

It doesn't sound like sensible reform to me, as was mentioned by the member for Whitlam. And, not surprisingly, these changes directly contradict recommendation 1.1 of the banking royal commission. Royal commissioner Hayne said that responsible lending obligations should not be amended. It also contradicts the Treasury's own submission to the banking royal commission, which noted that appropriate responsible lending laws could enhance rather than detract from macroeconomic outcomes. Consumer groups are very concerned that watering down the rules to protect consumers will result in significant consumer harm. The Consumer Action Law Centre said in their submission to the Senate inquiry:

Confusingly, ASIC would remain the regulator for bank misconduct such as unconscionable conduct and misleading and deceptive conduct, but not lending conduct. This overlap of conduct and prudential oversight will be confusing and inefficient. It will not be competitively neutral, and it will create conflicting regulatory objectives for APRA.

The Law Council of Australia noted in their submission:

25. Under this regime, non-bank lending to consumers will not be judged by whether unsuitable outcomes for consumers result but rather by whether:

(a) the systems and processes conform to the criteria in the regulatory

declaration; and

(b) the assessment of suitability was made in accordance with those systems and

processes.

26. Respectfully, the Law Council submits that this does not represent a simplification of RLOs, but rather makes enforcement of the standards complex and difficult. It would also make it highly difficult for a consumer to assess whether or not their own lender has breached the non-ADI standards.

Banks are also confused about these regulatory changes being championed by the Morrison government. Suncorp Group Ltd said:

Suncorp believes there is a lack of regulatory alignment between ADIs and non-ADIs which compromises consumer protections by incentivising credit applicants to use non-ADI lenders who have simpler credit assessment standards and less regulatory oversight.

These changes may have an even more sinister impact. Several stakeholders told the Senate committee that they were concerned the bill would negatively impact victims-survivors of family violence and leave them exposed to the risk of continued and increased financial abuse. Labor senators on that committee said in their dissenting report:

When responsible lending obligations (RLOs) are correctly implemented, they can help to prevent economic abuse because the lender will make reasonable enquiries about each applicant's financial situation, the accuracy of information provided and suitability of the loan. This process is an effective mechanism to expose undue influence, imbalance of bargaining power and the underlying dynamic behind economic abuse.

As Ms Dacia Abela, senior lawyer for economic abuse at WEstjustice, a member of the Economic Abuse Reference Group, told the committee:

If this bill is passed, we expect an increase in the number of loans being approved in circumstances of economic abuse, and victims-survivors will have reduced options to seek an individual remedy against those lenders. Whilst lenders will still be expected to consider the affordability of a loan, the bill removes entirely the requirement for lenders to make reasonable inquiries of the borrower's requirements and objectives. This represents a missed opportunity to identify red flags of economic abuse.

In regard to APRA being a body for consumer lending, Ms Abela went on to say:

Lastly, and importantly, APRA has probably not had to think much about how family violence intersects with financial services, whereas bodies such as AFCA and ASIC are developing practices and knowledge of how to deal with family violence issues. So APRA would effectively be moving into new territory with virtually no knowledge of or set practice in the area.

We know that it is crucial that professionals working with victims and survivors of family violence understand the complex dynamics of family violence. We heard much about that during the debate in this parliament when the government pushed through their bill to abolish the Family Court of Australia. I can't believe that the Morrison government still does not understand that family violence is complex—that perpetrators will try to game every law and regulation they can find to maintain control over their victim.

The Prime Minister and his cabinet colleagues don't need to walk very far today to hear from women who have been in this very situation. I know they were busy at lunchtime, but today there were people who gathered outside this building because they were angry and they wanted to talk about this situation. Many of those women who gathered on the front lawn of Parliament House today would be able to tell the Morrison government firsthand what it's like to suffer financial and economic abuse due to the actions of a former partner. If only we had a Prime Minister or a Treasurer or a Deputy Prime Minister who could find the time to go outside and listen to those women. There is nothing more important than the Prime Minister listening to the women of Australia. I hope he has got that message.

Sadly, we know this government has form. They don't listen to the experts. They don't listen to stakeholders. And they especially do not listen to women. It would be hard to hear the voices of the women in the Liberal Party, there are so few of them.

Despite what the coalition government says, it is abundantly clear that this bill before the chamber is not designed to benefit consumers. It will actually overwhelmingly benefit the lending market, banks and lending institutions. The government claims that the primary purpose of these amendments is to provide timely flow of credit to the Australian economy. But at what cost to real people—at what cost to consumers?

We've seen the same approach by the Morrison government to economic recovery measures that have been introduced. Last week, the government announced a tourism support package, which has gone down like a lead balloon—I won't quote Phillip Coorey on this occasion! The announcement allowed for a great photo op for the Prime Minister, pretending to pilot an aeroplane, waving a ticket to nowhere. But, beyond that, it will do nothing for the one million Australians who will be taken off JobKeeper in less than a fortnight's time. The tourism support package will give Australian travellers access to 800,000 half-price airfares to a limited number of destinations around Australia that, strangely, seem to be in marginal seats or in seats that the coalition need to win at the next election. There is only one eligible destination in Victoria and only one eligible destination in the most populous state, New South Wales.

There are four eligible destinations in Queensland, but Queenslanders will not benefit from the half-price airfares if they're travelling within Queensland, and I know—being married to someone from Cairns—how desperate that area is at the moment. On visits up there recently, it has seemed that every other shop is on reduced hours or is boarded up, almost.

Sadly, we saw this government—even though they're in coalition with the Nationals—forgetting regional centres. They've been almost completely ignored.

There are a million Australians on JobKeeper and two million Australians who can't get a job or the hours they need to work to support their loved ones. Support for the tourism industry is welcome, but the announcement from the Prime Minister was nowhere near enough and it will be no substitute for a JobKeeper payment. Cutting JobKeeper too soon is a ticket to unemployment for too many Australians. It's estimated that between 100,000 and 200,000 Australians will join the unemployment queue when JobKeeper is cut. It is too soon to be cutting support. It is too soon to be cutting JobKeeper. Many Australians were hoping for an extension of JobKeeper or some other kind of substantial support. What the government has announced is a measure that will be very targeted to a limited number of destinations and will only benefit businesses in those destinations if the people travelling there have the spare cash to spend—

The DEPUTY SPEAKER ( Mrs Wicks ): Order. The member for Moreton should return to the substance of the legislation.

Mr PERRETT: and I suspect that many won't. We know, from the Labor Party's competent management of the economy after the global financial crisis where we brought in legislation such as that before the chamber right now, the importance of not pulling back on support too soon—and, Deputy Speaker, that was my longwinded approach to that point. Australia came out of that crisis well.

The American economy did not fare so well during the global financial crisis. They initially spent huge sums of money to rescue their ailing banks and stimulate their economy. That worked well. But, as soon as they thought the economy was starting to turn around, they pulled back spending—in particular, spending aimed at supporting the poor and the unemployed. That turned out to be a disaster for the United States. Their growth slowed and it led to deeper structural problems in their economy that persist today.

We do not want to follow that example. We know how to implement economic recovery, and it's not to pull back support too soon. And that is what I fear the coalition government is doing. JobKeeper will stop in just a couple of weeks. There is nothing that will replace that support for those who still need it, and there are many Australians who still need that support. This bill will do nothing to support Australian consumers through this COVID recession, and I cannot support this bill.

Mr BANDT (Melbourne—Leader of the Australian Greens) (15:49): The royal commission into misconduct by the banks was a once-in-a-century examination of the behaviour of Australia's financial sector. The Greens were the first party to push for it in parliament. We moved in the Senate to establish a parliamentary commission of inquiry. We managed to get bills and motions passed, including ones that came down here to the House. And then, under pressure, the government agreed to hold the royal commission into the banks. It clearly didn't want to do it, because not only have the big banks been some of the most generous donors to the government but there's also the revolving door: people come out of the big banks, come into the government and go back out again, and we've seen that time and time again. So the government was forced—forced—to take action to wind back some of the excesses of the banks.

When that scrutiny was applied—because the parliament, led by the Greens, pushed the government to do it—what did the independent inquiry say, when it looked into the illegal and unethical behaviour, in the pursuit of ever bigger bonuses and ever bigger profits, by the big banks? The royal commission uncovered a trail of destruction. Businesses had gone under, households were upended and lives were destroyed. After receiving over 10,000 submissions, after 68 days of hearings with over 130 witnesses, and after sifting through all the tales of woe and misery that people in this country suffered because the big banks were interested in doing nothing more than making a profit, the very first recommendation of the royal commission—recommendation 1.1—was that the existing responsible lending laws, which mean banks can't lend people more money than they have the capacity to pay back, should not be amended. That's recommendation 1.1: keep the restrictions on the banks that stop them from going out and engaging in predatory behaviour, where they find people who clearly don't have the capacity to enter into a loan, encourage them to do it and sign them up. Why? Because the bank makes money out of it.

It's no accident that this was the very first issue addressed by the royal commission, because it goes to the heart of the privileged role that banks have in our society and the sort of responsible behaviour that must accompany this privilege. Having the authority to take deposits and write loans against them is what sets banks apart. They get a licence to do it, under law, in a way that everyday people can't. They get a licence to do it, and it's what makes them so powerful. So it is no surprise that the parliament has previously said, and the royal commission has said: 'Don't let them abuse that power. Don't let them abuse that power by writing loans that they know people can't pay.' This is why there were responsible lending laws. If that's not clear enough, let me quote the commissioner's own words. Commissioner Hayne was unambiguous:

My conclusions about issues relating to the NCCP Act—

that is, consumer lending—

can be summed up as 'apply the law as it stands'.

It couldn't be clearer. That's the first recommendation of the royal commission.

So what's this bill doing? It's doing the exact opposite of what the royal commission recommended and repealing those laws so that the banks can go out and start making huge profits through unconscionable behaviour that up till now would have been illegal. So it's trying to make legal what at the moment would be outlawed behaviour by the banks and what the royal commission into the banks said should be outlawed behaviour by the banks. This bill is ripping up the responsible lending laws that Commissioner Hayne said should be enforced as they stand.

This bill confirms that the government never had their heart in the royal commission. They only did what they were dragged to do by this parliament. They established it to quell a bit of a backbench revolt, because certain members of the backbench knew that what the Greens and all of the others in this parliament were saying was right: that we needed a royal commission into the banks, because the banks had engaged in unconscionable behaviour where they abused the power that they had. Now this is happening under the cover of a pandemic. Can you believe it? The government are using a pandemic that apparently we've recovered from it and are world leading in, according to the Prime Minister. But notwithstanding that apparently we're on the other side, so we can afford to cut JobKeeper and JobSeeker—we've got to cut people's payments, because apparently that part of the pandemic is over—apparently we're in so much trouble that what we need to do now is to give banks back the power to write loans that people can't pay, just so the banks can make some big profits.

This bill would remove the responsible lending obligations for consumer loans greater than $2,000, and it would ultimately make it easier for the banks to lend someone $2 million than it would currently be to lend them $2,000. Under this bill, the vast majority of borrowers would not be provided with the most basic of consumer protections, which is that the product being sold to them is fit for purpose. That's all the law says at the moment: if you're going to write someone a loan, it's got to be fit for purpose. This removes that.

Instead of having a specific conduct regulator—that is, someone who can regulate the conduct of the banks, ASIC—resourced and empowered to oversee the suitability of a loan from the perspective of an individual customer, it's going to rely on APRA, whose role is to look after the financial system as a whole. Many people may not understand the significance of the difference between ASIC and APRA. APRA's responsibility is not to look after consumers. That's the end of it. That's the basic difference. Their responsibility is just to ensure the financial system stays stable. If banks make more profit out of this, APRA may well say, 'Oh, well, this is good for the banks.' It is not looking after the consumer. The government has instead picked a regulator whose responsibility is to look after the banks.

As is befitting of this government's ideology, this bill will just leave people to fend for themselves. It's just designed to let the banks get on with writing loans as big as they possibly can, whether it's good for people or not. The big four are treated as too big to fail, so for them the risk of default barely registers. They know the government will step in and give them a handout if they ever get in trouble. So basically this is subprime dreaming. This is to let the banks squeeze whatever profits they can out of consumers while they can. If and when the music stops, it'll be someone else's problem. It'll be left to the taxpayer and the public to pick up the tab when we see a repeat of the GFC.

That's what is worth remembering. We are seeing these laws because bank behaviour got out of control. That's why we put restrictions on the banks, and we saw that with the global financial crisis. Again, it was left up to the public to pick up the tab while the banks enjoyed all the profit and none of them suffered any consequences, and the executives went on to enjoy millions of dollars in bonuses. When we wound it in a bit and said, 'No, actually you can't write loans for people who are not going to be able to afford them,' that offered some protection to people in this country, and now this government wants to rip it up.

This bill is an insult to the victims of the banks and it is rewarding the banks' rapacious behaviour. It's the latest example of this government using COVID as a cover to wind back protections for individuals and give even more power to the big corporations and the superwealthy that donate to the government. They're trying it on with the repeal of responsible lending obligations, which will give banks a licence to engage in predatory lending, and they're trying it on elsewhere with industrial relations legislation which will entrench insecure work and keep wages low. They're trying it on with this bill, which will also water down requirements for banks to ensure, before they write loans, that those loans are fit for purpose.

When, in this parliament, all of the people across the political spectrum except for the government agree on something, it should tell you that the measure that people are lining up behind has the support of the people in this country. That's what we saw here. We saw a few government backbenchers speak up and everyone else across the political spectrum agree that we needed a royal commission into the banks because they were engaging in terrible behaviour, including predatory lending. When that royal commission reported and said, 'Keep some of the existing protections,' and the government said it was going to abide by and implement the recommendations of the royal commission, some people probably believed it. Some people probably went to the last election thinking the coalition government was going to honour its word when it said it supported the royal commission and was prepared to implement its recommendations. And now barely is the ink dry and the government wants to give back to the big banks at the expense of the Australian people. We cannot allow that, and that's why we will be opposing this bill.

Dr HAINES (Indi) (15:59): I rise to speak against this bill, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, and again call on the government to abandon this effort to wind back responsible lending obligations. I acknowledge this bill contains some amendments designed to improve consumer protection in smaller credit products, but the main part of this bill will remove the obligations for lenders and the protections for consumers put in place after Australia's last recession.

Responsible lending obligations have become a core part of our credit regime. According to Treasury, approximately $34 billion in consumer credit that is subject to these obligations is issued each month. They require a lender to do basic due diligence about a person's capacity to pay back a loan. They work to protect against cowboy lenders and predatory loan sharks and to prevent Australians falling into the debt trap—saddled with debt they can't afford to repay. And, while they don't stop all unsuitable lending, they give lenders a standard to uphold and consumers an avenue for redress. What this act would do is remove responsible lending obligations from all forms of credit except small amount credit contracts and consumer leases. This effectively removes these obligations from loans of over $2,000, such as mortgages and personal loans—the everyday debt that is a staple of our economy and involves the biggest financial decisions we make in our lives.

As an Independent MP I represent only the interests of my constituents, and them alone. With them in mind, I look carefully at each bill before me to decide how to vote. I ask my constituents: is this good for you? I ask the organisations that support them: does this reform take us forwards or backwards? What I hear from my constituents is concern. What I hear from social and legal services, from churches and from consumer groups in my electorate is alarm and disbelief. And what I see as a person trained in evidence based decision-making is a case not yet made for winding this back.

I've consulted widely with my community on this bill, and my constituents are united, of one voice, in telling me to oppose this bill. This is what they're saying. Judith Beach of West Wodonga says:

It feels like it will make some of our most vulnerable people even more vulnerable to credit problems and to allow banks to return to the situation highlighted in the royal commission into banking.

Isabel Mary Dean from Euroa says:

Responsible Lending was addressed in the Banking Royal Commission but seems to have been ignored by Banks and Government, let alone the even less regulated lending bodies. Rolling back the already poor or flexible level of lending responsibility seems a very bad move.

Alex McMillan from Tarrawingee says:

I would like to urge you to vote against the lessening of credit lending responsibilities as the economy is surging and the housing market is booming. Lessening the onus on credit providers seems to be pandering to profits not to the care of people.

Neil Barclay says:

As a TAFE legal studies teacher I spent many years supporting/explaining these improvements to protect the vulnerable young and adults putting their toe in the water wanting to access finance … No vote from me

Jacinta Ludeman from Oxley simply said, 'Against.'

These constituent concerns are echoed by social justice, and legal and welfare organisations in my electorate. They've called on me to vote to strengthen, instead of repeal, safe lending laws. Hume Riverina Community Legal Service and Upper Murray Family Care tell me:

We already help people in our rural and regional communities who rely on emergency food relief because they can't make ends meet and others who are homeless because they are unable to afford rent as well as their loan repayments. We also see people being chased by debt collectors, and the extreme stress and anxiety this causes. We believe a change will lead to more debt, more bankruptcies, and more home repossessions. Clients we have been assisting have voiced their disappointment with the move to rollback the laws.

Sandra Blake, a respected and experienced financial counsellor currently working on the Small Business Bushfire Financial Counselling Support Line, tells me this about responsible lending obligations:

Banks and other lenders have and do breach these laws, but there has been some deterrent and form of redress for people when that happens. The Government is planning to remove these protections in the middle of a recession, when it is more likely than ever that people will be more vulnerable to being taken advantage of by lenders.

I thank my constituents for engaging with me in good faith on this significant piece of legislation and sharing their personal stories, which have informed their well-founded views.

The problems with this bill start with its title, specifically the part in brackets, 'supporting economic recovery'. The government says this reform is a key part of the economic recovery from the COVID-19 pandemic, seeming to claim that 'reducing the time and cost associated with the provision of credit' will make a material difference to getting back on track, yet there is no evidence that responsible lending obligations are holding us back. Across our country, our economy is rebounding at a rate that would have shocked the Treasurer when he first announced these reforms, in September last year. In December the total number of new loan commitments reached record highs, rising 8.6 per cent in a year to $26 billion, according to the ABS. The national accounts showed our economy expanded by 3.1 per cent in the December quarter, and last week the OECD upgraded our economic growth forecast to 4.5 per cent. The Treasurer himself said our economy was 'outperforming all major advanced economies' in 2020 and that the OECD points out that 'our level of economic growth is closing in on our pre-pandemic level'. This is fantastic news. With the government's other COVID-19 fiscal interventions, there is no shortage of credit being issued. But—and here's the point—I would say to the Treasurer: if you were intending to rely on COVID-19 to justify these reforms, your rationale has completely evaporated.

My electorate was economically battered by the 2020 trifecta of bushfires, COVID and border closures. I'm in constant contact with employers and businesses that have weathered these storms. They are grateful for the dramatic economic interventions of this government. They care, as I do, about business growth and creating steady, well-paid jobs. More than that, we care about the welfare of employees, the future of their children, and the young families so important to regional growth. Safeguarding these people from unsuitable debt strengthens the fabric of our society and therefore our economy. It is with them in mind that I am particularly worried about how removing these protections might affect my constituents wanting to buy their first home. The pandemic has seen a surge of tree changers lured to our regional towns by affordability, lifestyle and newly found working-from-home arrangements. We're thrilled to welcome these new families, but there's a consequence. The consequence has been that locals are competing with Melbourne buyers with significantly more purchasing power. The property market is running hot, and prices are skyrocketing. According to Domain's latest house price report, over the past year median prices have risen 13.7 per cent. In Wangaratta it's 13.1 per cent, in Myrtleford it's 13.4 per cent, in Euroa it's 17.11 per cent and in Bright it's a stunning 22.8 per cent. This is already locking local first home buyers out of their town. Young adults who grew up in Beechworth or Bright can no longer afford to buy there, even if they have two steady incomes. Our median household income is 22 per cent lower than the Australian average, which sets us even further back. We have in our hands a perfect storm of our young people overextending themselves, taking on more debt than they can afford, to get a foot into a real estate market that shows no sign of slowing.

When I think about the removal of these responsible lending obligations, I think of our young families, who have already made so many sacrifices to scrape together a deposit only to find out it's just not enough. How easy it would be for them to take a risk, a risk they can't afford, optimistically hoping that something will work out. We know that Australians will walk over hot coals to pay off a mortgage, sacrificing other essentials like doctors' appointments, getting the car serviced, late fees on credit cards and school books, just to keep a roof over their heads. This can have long-term impacts, like draining their emergency funds or affecting their future credit score. Where will this leave them? This is exactly the situation which responsible lending obligations try to avoid. It's not just bureaucratic red tape; it's a handbrake on incurring the type of debt that could lead to bankruptcy, ruin mental health and jeopardise relationships.

Of course, housing affordability won't be fixed by this law. But I'm sounding the alarm that higher levels of debt may become a fact of life for my constituents. Coupled with the uncertainty of the labour market and with JobKeeper stopping and JobSeeker being cut, at this moment we need more protection, not less.

This bill looks set to pass the House today, yet I cannot, in good conscience, support any legislation that would leave vulnerable people in my community saddled with bad debt, nor legislation that directly contradicts the very first recommendation of perhaps one of the most far-reaching royal commissions of our time. I urge the government to abandon these reforms. It's not too late. And I urge my Senate crossbench colleagues to take heed of the 33,000-signature strong open letter endorsed by Choice, ACOSS, the Consumer Action Law Centre and 125 community organisations. They're calling on us to strengthen, rather than repeal, these safe-lending laws and oppose this bill, put forward with the flimsiest of rationales—a bill that will do far more harm than good.

Ms SHARKIE (Mayo) (16:11): For some Australians, credit is a totally ordinary, mundane thing. They know their financial circumstances, their credit score and their superannuation strategy. They know how to deal with bankers, lenders and brokers. If there is something they don't understand, many of them have someone who can help: an accountant, a financial planner or parents and friends who are financially literate. For those Australians, getting into trouble is something that only happens with a significant life-changing event, such as a divorce or a death in the family, and they usually know what to do when that happens.

But that's not everyone. Many people in our community, in my own community of Mayo, are not financially literate. They don't understand credit and risk or have a budget. For many of those people, credit is a terrifying thing. They know how easily they can get into trouble. They've seen it happen to family members, to their friends or to neighbours. They've seen the terrible, enduring consequences that come from a loan going bad. They've seen people lose their homes, lose their rental properties, lose their relationships and lose their families. They also know it's necessary risk. There is no way that they can buy a home without credit—without a mortgage—or a car. And sometimes things go wrong and you just need a loan to cover a few bills until you're back on your feet.

For people who aren't financially literate, dealing with a lender can be stressful and anxiety ridden. They don't understand credit. They can't tell when they're getting a bad deal or when they're being taken for a ride. They have to place their trust in someone who may or may not be ripping them off. If you've read the submissions and the reports of the Hayne royal commission, you know that these fears are justified, because many Australians were, in fact, being ripped off time and again. For these people, consumer credit protections are the only thing that can actually prevent this from happening. It's not enough to keep them completely safe but it's something; it's some protection, and it's better than nothing.

So you can imagine how these people would be feeling when they hear the government wants to strip away these protections. You can imagine that these people, my constituents, would be feeling frustrated that the government is looking to undo the first recommendation—the first recommendation!—of the banking royal commission. They don't care about macroeconomic benefit to growth or private net capital investments. What they care about is losing their home and their future financial security, and ensuring that there's some protection so that their kids won't be ripped off by a dodgy lender or lose their credit rating.

I accept that there are complexities to this. The majority of borrowers in Australia are financially literate and they can handle credit well and don't require government intervention. They can access credit. Notably, Australia's household debt-to-income ratio has increased at a faster rate and to a higher level than most countries in the decade to 2018. As long as lenders act ethically, with integrity and decency, most people will be fine. But there are situations in which some people need protection. The policy challenge is that there is no silver bullet, not one thing that offers everyone the protection that they need. So we protect some people in the minority by strictly regulating products aimed at them, such as payday loans and consumer leases. But we don't do a very good job with these protections, and, for years now, members in this parliament have wanted to see change and tightening of the rules—even the government's own draft legislation brought into the parliament would be a good start. But at least right now there are some protections, and there are wraparound services such as financial literacy programs, counselling and zero-interest loans available. However, these are limited and they're not always easy to access, particularly if you're in a regional area.

So I can certainly understand the efficiency argument against the system we have; however, I don't think the government's approach on this is right. In all honesty, I could support a bill where there was greater emphasis on protection and support and funding, but there isn't. This bill just rolls back responsible lending obligations and strips away protections for the vulnerable. It places responsibility for unaffordable and unsuitable loans on borrowers, leaving them with fewer ways to combat the bad lending behaviour we heard about in the Hayne royal commission. It actually beggars belief. This is royal commission's first recommendation, and the government wants to take it away.

The bill removes the ability to access remedies for loss and damages suffered due to unscrupulous behaviour and implements watered-down reforms to payday loans and leases recommended by the small amount credit contract review in 2016. This bill would allow an employed person to contract to pay up to 40 per cent—nearly half—of their net income every week to payday lenders and consumer lease providers, or up to 20 per cent if the person is receiving Centrelink benefits. Consumer advocates know what this means for vulnerable people who present to them, needing relief for basic expenses like food because their incomes have been eaten up by repayments and then late fees on unaffordable loans. I can't vote for that and I won't vote for that. I would really encourage the government to take a long, hard look at this piece of legislation and actually assess who this bill is here to help. It's certainly not vulnerable Australians.

(Quorum formed)

Mr COULTON (Parkes—Minister for Regional Health, Regional Communications and Local Government) (16:21): I rise to make my contribution to this debate on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. With regard to regulation around lending, obviously both the availability of credit and the protection of consumers are incredibly important. To the people that I represent, the ability to have credit and be treated respectfully and within the law is incredibly important.

Firstly, I'd like to thank those members who have contributed to this debate. The bill forms part of the government's economic recovery plan and amends the National Consumer Credit Protection Act 2009, known as the credit act, to support the flow of credit to the economy and introduce additional protections for consumers accessing high-cost credit. To improve the timely flow of credit, the bill amends the credit act so that the existing responsible lending obligations apply only to small amount credit contracts and consumer leases. The reforms remove the one-size-fits-all approach, which has unduly slowed down the time it takes for consumers to gain loan or credit-limit approvals, from the assessment of all other types of credit.

The new lending standards will align with APRA standards and require lenders to have sound credit-assessment and approval processes to assess consumers' capacity to repay debt without substantial hardship. The bill ensures sufficient consumer protections are maintained. Consumers will continue to have access to the Australian Financial Complaints Authority in the event that they have individual disputes with the financial institution. The bill also extends the best-interest obligations, which will apply to mortgage brokers from 1 January 2021, to other credit assistance providers to ensure credit assistance providers act in the consumer's best interest. The bill also introduces new obligations for providers of small amount credit contracts and consumer leases, to support improved financial inclusion while balancing the need for continued access to these products.

The reforms include imposing a cap on the total payments that can be made under a consumer lease, requiring small amount credit contracts to have equal repayments and equal repayment intervals, and strengthening penalties to increase compliance with the law. The bill will also allow the National Consumer Credit Protection Regulations 2010 to set the maximum amount of income a consumer can allocate towards repaying their lease.

I commend this bill to the House.

Ms COKER (Corangamite) (16:24): The Morrison government has named this bill the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, but this flawed bill does not protect the vulnerable from financial hardship. Instead it exposes them to unscrupulous and predatory behaviour.

Schedule 1 of this amendment removes responsible lending obligations from most consumer credit contracts. In other words, it gets rid of regulations that exist to ensure or safeguard the rights of the client. What is worse is that this bill flies in the face of the first recommendation of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Remember, the banking royal commission was established in response to the disgraceful practices of the banking sector, which have led to anxiety, suicide, an escalation in the cost of housing, homelessness, predatory behaviour—the list goes on.

The banking royal commission states that the National Consumer Credit Protection Act should not be altered to lessen the safeguards that ensure responsible lending, and there is very good reason for the inclusion of this recommendation. It serves to enshrine protections in our lending laws to make sure that loans are affordable, suitable and ethical. Importantly, it puts the welfare of the vulnerable front and centre. So why would you remove it? It makes sense. To introduce this legislation shows a lack of compassion and insight into the lives of our most financially vulnerable. The Morrison government says that the removal of such a safeguard is required to free up the ability to get a loan and to stimulate the economy, but borrowings are at an all-time high. So the message is that these safeguards are not an impediment to getting a loan. We don't need to free up the system, and we certainly don't need to expose our most vulnerable Australians to predatory and unscrupulous behaviour.

The Labor government introduced the National Consumer Credit Protection Act in 2009, and there were two key reasons for these responsible lending laws. The first is that irresponsible lending leads to extreme personal hardship. This, sadly, occurs too frequently, at no fault of the borrower. It is often linked to family violence, abuse and other devastating life challenges. The second reason is structural and was in response to the global financial crisis. Irresponsible lending introduces weaknesses into the economic system. These weaknesses can have devastating impact, as we saw with the global financial crisis. Put simply, irresponsible lending generates bad debt. At low incidence, bad debt generates economic drag and lowers prosperity across the country. At moderate to high incidence, bad debt causes economic collapse and decimates prosperity across the country—the exact opposite of what we want during COVID. Even the officials from this government's Treasury department agree. These Treasury experts sat before the banking royal commission and very clearly explained that the laws the government are now trying to cancel serve to protect our economy. The Treasury department submitted this to the banking 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, has materially affected the overall availability of credit.

The department also noted:

… to the extent that firms are correcting lax credit assessment practices, there has likely been an improvement in the credit quality of marginal borrowers.

So, in summary, the government's own department said that credit standards and safeguards had not affected borrowings and had instead improved the integrity of the system—had protected the right of marginal borrowers. So it's incomprehensible to suggest that this draft legislation before the House today would have a positive impact on wellbeing or the prosperity of Australia. It will not.

Two clients of my community law centre, the Barwon Community Legal Service, clearly show the absolute importance of retaining responsible lending requirements. Sally has two children to her de facto partner, John, who had a gambling problem and was very controlling with money. John wanted a new vehicle, but his credit rating was poor and he was unable to get a loan. After several weeks of coercion, including physical and emotional violence, they went to a car dealership and John negotiated a purchase while Sally stayed outside. When it came time to sign the contract, John brought Sally into the store and explained to the car dealer that she would be the borrower, and they proceeded to complete the paperwork, with Sally not asked one more question. That lender issued Sally a $25,000 loan at 20 per cent interest per annum, via its own finance company. The car was registered in John's name and Sally never drove it. Sally only had her learner's permit. After they separated due to the ongoing family violence, John took the vehicle and left Sally with the debt.

Sadly, this government and the PM are introducing this legislation, which will expose vulnerable women like Sally to abuse. It's about time the Prime Minister listened to women. Today the Prime Minister let women down. He did not attend the March 4 Justice. He turned his back. But the Barwon Community Legal Service stepped up. They helped Sally. They argued that the finance provider had breached responsible lending laws by not making inquiries or verifying information despite clear signs of coercion. Eventually, after a complaint to the Australian Financial Complaints Authority, the debt was waived. This waiver would not have been possible and could not have been achieved without the responsible lending laws that this government intends to remove with the bill before this House.

Then there's Ahmed, another client of the Barwon Community Legal Service, who was deep in debt from business and personal loans and was looking for a way out. He signed up for a course with a private college on the promise that he would earn an extra $1,000 a week after completing the qualification. When he couldn't afford course payments, they offered to organise finance for him. Ahmed got a phone call from someone who asked for all his bank statements and other details. The caller, a finance broker connected to the college, applied for a loan on Ahmed's behalf at a rate of 22.9 per cent interest, using extremely inaccurate information. The course wasn't as advertised, and Ahmed was left with a loan of $30,000 to repay, on top of all his other debts. Barwon Community Legal Service stepped in and helped Ahmed make a complaint to the Australian Financial Complaints Authority, on the grounds that both the broker and the lender breached responsible lending laws. Ahmed eventually accepted a settlement from the finance broker. The lender wiped $22,000 of the debt and allowed Ahmed to repay the remainder at a rate he could afford, without interest. Like Sally, Ahmed is extremely thankful that Barwon Community Legal Service was able to advocate on his behalf. Without responsible lending laws, this would not have been possible.

I'd like to take this opportunity to pay tribute to the hugely committed team at Barwon Community Legal Service. The work they've done for Ahmed and Sally and thousands of others across my electorate is beyond commendable. They witness and fight the harm brought about by inappropriate lending practices and other social ills on a daily basis. In the last financial year, Barwon Community Legal Service saved clients over $350,000 in waived, renegotiated or revoked debts arising from breaches of the very legislation this government is rushing to water down. This service runs a tanker ship on the smell of an oily rag and makes our country a better, fairer and more compassionate place. So my heartfelt thanks go to the Barwon Community Legal Service.

The Barwon Community Legal Service bears witness to the harm caused by irresponsible lending. The Treasury has testified to the significant and negative economic impacts of irresponsible lending. But the Morrison government still has the gall to claim this bill will do Australia and the Australian economy good. What absolute rubbish! It will not. This bill scraps responsible lending obligations and exposes customers and the economic system to huge risk, and this bill is in direct contradiction to the banking royal commission recommendations. It makes absolutely no sense.

Labor does not support this bill, which will harm Australians and the Australian economy. We say no to any effort to strip back responsible lending. We say no to the Morrison government on this legislation. Instead, we stand with Treasury and community legal services, we stand for the banking royal commission recommendations and we stand with Sally and Ahmed and every Australian who relies on every MP in this chamber to do the right and the decent thing and protect them from harmful, irresponsible lending practices. It's time the Morrison government stepped up and took responsibility. It is the role of federal government to protect our most financially vulnerable. I urge this government to do its job and not pass this harmful legislation.

Ms CLAYDON (Newcastle) (16:35): I rise today to contribute to this debate on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. This is a deeply worrying bill. It continues the Morrison government's ongoing strategy of using COVID-19 as a cover to ram through damaging measures in its Liberal Party agenda. They've used it to try to slash the pay and conditions of some of Australia's lowest paid workers by trying to remove the better off overall test. They also used it to slash service standards and time frames for critical public services like Australia Post, and now, today, they're at it again. This time they're using the coronavirus as a justification to tear down hard-won consumer protections for vulnerable Australians.

This bill will wind back responsible lending obligations—the safeguards that were rolled out to address predatory lending practices. If removed, unscrupulous credit providers will once again be free to pressure customers into taking unmanageably large loans even if they know that their customer won't be able to keep up with the repayments. It will also swing the door wide open for companies to gouge consumers who take up small loans or consumer leases. This is shameful, it's disgraceful and it demonstrates that the Morrison government has learnt nothing from the shocking litany of egregious behaviour we saw time and time again in the banking royal commission.

We shouldn't be surprised, of course. The Liberals never wanted an inquiry into the banks, after all. In fact, they fought it, tooth and nail, right to the bitter end. Indeed, this Prime Minister voted against a royal commission not once, not twice, but 26 times, and this track record says a lot about whose side our Prime Minister is on. Make no mistake, when he voted against the banking royal commission, Mr Morrison voted against vulnerable Australians, and now it's more of the same. This bill is a win for the banks and indeed many companies that offer consumer credit, but it will be a dreadful tragedy if it proceeds. It will be the death of a fair go for mums and dads and the elderly Australians who can't compete with predatory lending tactics.

The Morrison government argues that these changes are necessary to keep credit flowing. I'd argue that, if you need to lumber customers with loans that they can't afford in order to be profitable, then the problem isn't with the law; it is with your business model.

No-one wins when thousands of Australians default on their loans. We learnt this the hard way during the global financial crisis. Indeed, this is the very reason these protections were brought in in the first place. Australia's national peak consumer group, CHOICE, has rightly pointed out that the livelihoods of millions of vulnerable Australians are now hanging in the balance, and it has led a vigorous community campaign against this.

Already, more than 23,000 Australians have signed an open letter to the federal parliament urging us to maintain the current protections, a call that has been backed in by 125 charities, unions, academics and financial counsellors. Now it's time for the parliament to listen. I urge the Morrison government to stop putting the interests of financial services ahead of the interests of the Australian people.

I'd like to go through a few of the specifics of the bill. As I mentioned, it does two main things. Firstly, it removes responsible lending obligations for the majority of consumer credit contacts. These obligations simply require financial services organisations to make reasonable inquiries about a customer and then use this information to assess whether a particular product is right for them. This is a sensible and reasonable provision. Banks have all the data and enough actuaries to know what debt people can comfortably manage. They shouldn't be allowed to sell them products that they cannot afford. If this bill proceeds, this will be allowed and indeed made worse. The burden of risk will be placed squarely on the shoulders of the borrower.

Of course, we know what will happen. We've seen how this story ends. Free from their legal obligation to act ethically, many operators will undoubtedly make choices to benefit themselves and not their vulnerable customers. As Fiona Guthrie from Financial Counselling Australia pointed out:

… 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.

What a disgusting proposition!

The Morrison government say these changes are necessary because the current restrictions are hurting the supply of credit, but even their own department won't support them on this one. Indeed, these changes directly contradict Treasury's own submission to the banking royal commission, which said the responsible lending obligations were working well to protect consumers and safeguard the economy. That's right: they were working well. This is backed up by the Commissioner of the Australian Securities and Investments Commission, Sean Hughes, who flatly rejected claims that responsible lending has had an impact on economic growth. If this bill proceeds, it will free up the banks to aggressively push credit onto their customers.

The second set of measures proposed in the bill relate to small amount credit contracts—more commonly known as payday loans—as well as consumer leases. These changes ostensibly respond to the government's own SACCs review, which it commissioned back in 2016, but they fall unacceptably short of the recommendations in that review. For example, the review recommended capping payments at 10 per cent of a customer's income, with a separate cap for small amount credit contracts and consumer leases. The result of the changes is that as much as 40 per cent of people's pay packets could soon be eaten up in payday lending fees. That is going to be legal with the passage of this bill. The SACCs review also said that fees for consumer leases should be capped at four per cent of the retail price of an item. In contrast, this legislation sets four per cent fees as the base amount that can be charged, plus delivery fees, plus installation fees, plus establishment fees—up to 20 per cent. The end result? Consumers could be paying the equivalent of annual interest rates in excess of 100 per cent. This is horrendous, and it will open the floodgate to egregious price gouging and drowning debt stress for those who can least afford it.

Labor has been alarmed by this bill from the beginning. That is why we sent it to an inquiry in the Senate. While the inquiry won't report until next month, the feedback from the submitters so far has been loud and clear. Indeed, it has received more than 100 submissions to date, with the vast majority rightly panning this legislation and blasting the government for lacking the moral fibre to back the interests of vulnerable Australians over those of the banks.

I've also been contacted by a number of people in my community, in Newcastle, about this bill. I'd specifically like to give a shout-out to Jonathan, who works as a financial literacy project officer for the Salvation Army's Moneycare service in Newcastle. Jonathan wrote to me to warn of the dire circumstances should this legislation pass. He noted the large power imbalance between consumers and the providers of financial products, and he said that many people in the community simply don't have the resources needed to effectively make complex financial decisions. He also warned me of the dire outcomes that can result when people are pressured into taking on financial products that that are unsuitable, unaffordable and leave them worse off.

Jonathan told me the story of a Bien, a 20-year-old Congolese born refugee. When he was 19, with only six months of work under his belt, Bien signed his first significant financial contract, on a ute. Unfortunately, it wasn't fair and it wasn't sustainable. The salesman pressured Bien heavily into taking the loan but didn't explain what it would mean for him. As a result, Bien signed the contract expecting to pay $19,000 for the vehicle. But the terms of the contract meant he would be required to pay a total of $48,000—on a minimum wage. Within six weeks of taking on the loan, Bien defaulted on his repayments. Soon after, understandably, massive stress set in. Bien wasn't eating or sleeping, and he withdrew from his social life. Feeling silly, embarrassed and hopeless, he reached out to a friend who referred him to the Salvation Army. Thankfully, they were able to hold the lending organisation to account and get a good outcome for Bien. How did they do this? By using the very provisions that this bill now seeks to trash. Bien's story shows clearly why we need these responsible lending obligations and what a disaster it would be if this bill was passed.

Debt can have terrible impacts beyond our financial lives. It can hurt our relationships, our work lives, our health and, indeed, our very sense of self. It can quickly drag people down into despair. It can lead to an ever-worsening cycle of debt when people try to stay on top of things by taking out loans in order to pay off other loans. Not everyone has the financial skills to understand the long-term impacts of their financial decisions. But the banks do know how much debt people can manage. They should never, ever be allowed to give people loans that they know the customer simply cannot afford.

Of course, the Morrison government knows very well that this legislation puts people like Bien at risk of falling into desperation and despair. They won't admit that they know. In fact, they deny there's even a problem. But they're not telling the truth. Do you know how I know this? It's because it's not just peak bodies that have been warning the government about this; indeed, Treasury advice uncovered by a freedom of information request shows that the Treasurer was warned in March that dumping responsible lending obligations would harm consumers. Yet, this is exactly what he has proposed four months later. He really should be ashamed of himself.

In summary, this legislation sends a clear message to the financial services sector. It says that, despite the appalling exploitation of Australian consumers revealed by the banking royal commission, the Morrison government will continue to use the federal parliament, this very House and chamber, to do the bidding of bankers. It says they have no qualms with introducing legislation that reduces transparency and shifts the burden of risk from the lender to the consumer. It says that the government simply isn't on the side of Australian borrowers.

Well, let me assure you that Labor is on the side of vulnerable Australians, that we are on the side of justice and that Labor is very much on the side of a fair go in this nation. The government should withdraw this legislation immediately.

(Quorum formed)

Ms MURPHY (Dunkley) (16:52): There's something about this government that I struggle to understand. It's true that we all come from our own backgrounds and experiences. It's true that the families we were born into, the schools we attended and the institutions that we have worked for have or that have shaped our lives have all influenced not only the lives we've led but also the way that we view the world. It's inevitable, and it's fair enough. But what most people try to do, even if it's just occasionally, is to step outside of their own world and their life experience and try, just for a moment, to put themselves in the shoes of people who haven't led the same life they have. That's what I struggle to understand about a lot of members of the current government. If members of the government took a moment to stop and genuinely listen to the stories of the lives of people—people who weren't born into a family that could afford to send them to a private school; who weren't born into a family that had multiple investment properties from which they could live; who weren't born into a family where there were two parents at home; who weren't born into a family where there was any parent at home who had a job; or who weren't born into a family that thought nothing of being able to pay $40,000 a year to send them to an elite school so that they could make the right connections and have the right friends to be able to ascend to positions of power—then we wouldn't have to be standing in this parliament debating pieces of legislation like this.

Perhaps they should come to my electorate and meet some of the hardest-working people you will ever come across. They are scraping from pay cheque to pay cheque but, even worse than that, scraping from shift to shift, never knowing when the next shift is going to come; not knowing necessarily how much they're going to get paid for that shift, because it's for a different employer or a different labour hire company; never knowing whether or not they're going to be able to pay the rent, put food on the table or buy a netball top or a pair of footy boots for their kids; and absolutely vulnerable to predatory financial institutions because they're so desperate for a bit of extra money just to get by. That's who the Treasurer should spend some time speaking to, and then maybe he would understand why it is that members on this side of the chamber—even those of us who have never had to go to a payday lender or have been fortunate enough to always be able to tick all of the boxes to get a loan no matter how stringent the rules are—are standing here to say this sort of legislation causes harm.

Maybe we should step back for a moment and stop talking about the technicalities of what financial institutions can and can't do and about lending laws, and just focus for a moment on the health impacts of financial stress and living day to day in that precarious world. We have in Frankston in my electorate—just round the corner from my electorate office, in fact—one of the new mental health services that, to their credit, the current government has funded as a result of the increase in mental health stress during the pandemic. It's called a Head to Health site. It involves both being able to attend at a clinic—in this case, it's the Young Street medical clinic—or being able to access mental health assistance online. The Australian government's Head to Health website notes the following:

Mental health and financial safety are strongly linked. Experiencing a mental illness can add to financial stresses, and financial stresses can add to a mental illness.

The Senate inquiry looking at this legislation heard from organisations that represent everyday people who are in financial stress because they're in underpaid and low-paid jobs and have fallen prey to either predatory payday lenders or loans that they can't, and never were going to be able to, repay. The representatives of those hardworking, decent Australians told government and opposition members alike:

Should lending standards reduce as a result of the repeal of the RLOs this is likely to create greater overindebtedness. The impact of unaffordable debt on individuals, families and communities is immense. Community lawyers and financial counsellors speak to people every day who are struggling to pay their debts, while trying to juggle other expenses like energy bills and groceries. Over-indebtedness can result in significant longer-term impacts on individuals as it affects their capacity to provide for housing, health, education and retirement.

The submission to the Senate inquiry went on to say:

Debt can also have a harmful effect on relationships with family and friends, increase isolation and exacerbate mental health issues. Studies have found that people with unmet loan payments had suicidal ideation and suffered from depression more often than those without such financial problems.

I'm sure there are members of this chamber who have, at periods in their lives, had financial stress. There may well be people in this chamber who have had financial stress caused by a loan that they couldn't service. If there are, they should be calling on that experience and calling on their humanity to oppose this legislation. It's just almost inexplicable that the government would choose to call this bill 'supporting economic recovery'. Whose economic recovery is this legislation supposed to be supporting? The evidence to the Senate committee at the end of last year was that there was no lack of available credit. Whose economic recovery is being supported by going against the first recommendation of the royal commission into banks and the financial services sector? It was the first recommendation.

This government, under this Prime Minister, voted time and time and time again against establishing a royal commission into the banks and financial institutions. We know that they got dragged kicking and screaming, and this Prime Minister reluctantly announced such a royal commission. Then we heard over and over again words that sounded like commitment to the inquiry. When the final report was tabled, we heard words from the Prime Minister and the Treasurer that sounded a lot like commitment to the recommendations of the inquiry. But we haven't seen the action. The Treasurer's own implementation schedule for the recommendations of the royal commission isn't written on paper, because it's online, but it isn't worth the internet that it's written on. He hasn't come close to following it. The real truth—not the words but the real truth—of the government's commitment to making sure that Australians don't have their lives, their families and their physical and mental health ruined by the actions of the big banks is in their walking away from the first recommendation of the royal commission.

I almost can't work myself up to get angry, because it's just sad and disappointing. Today has been a day of disappointment. Today has been a day where women's rage and distress and hope have been dashed by a Prime Minister and a government that know the words but don't have the actions and that weren't brave enough to go and listen—really listen—to Australian women calling for gender equality and real systemic response to endemic domestic violence and sexual assault in this country. Today is a day when the Prime Minister, on indulgence at the start of question time, gave a speech which one can only imagine he thought would justify his pronouncement from on high that he couldn't be seen to go out to address a rally of thousands and thousands of Australian voters, most of whom happened to be women, but that three or four of them could come to his office and listen to what he had to say.

The DEPUTY SPEAKER ( Mr Andrews ): The member for Dunkley is now straying from the topic of the bill before the House, and, whilst it may be an important matter, this is not the appropriate place for that discussion.

Ms MURPHY: Thank you, Deputy Speaker, and I'm getting there. I'll get there. It's because the Prime Minister wouldn't listen, and here we have legislation that is in exactly that vein. You have financial services representatives, community legal centres and individuals taking the time and effort to make submissions and give evidence to this government through a Senate committee about why this legislation should not go ahead, and it's almost as though the Prime Minister refused to go out and listen to them. It's almost as though the Prime Minister's attitude is 'I'll tell you what you need, and what you need is what I've got to say'. It flows through this entire government, and it starts with where I started. If you are a government that believes that you rule the country—you don't govern the country and you don't lead the country, but you believe that you rule the country—because your privilege has led you to a life that means that you cannot even comprehend the life that other people have to lead, then you don't listen and learn from other people and do what they need.

There is a difference between people who grew up being told they were the conquerors of the world and people who grew up understanding that they were going to need to conquer the world. I'm here to be a voice for people who grew up knowing that they were going to have to work to conquer the world, and so are my Labor colleagues. That's why we won't support this legislation which makes it easier for those institutions that are the conquerors of the world to take advantage of people who are just working day to day to conquer the difficulties that are put before them. Deputy Speaker, I draw your attention to the state of the House.

(Quorum formed)

Ms McBRIDE (Dobell) (17:09): I rise to speak on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 and to support the amendment moved by the member for Whitlam. The key features of this bill, as others have discussed, are removing the existing responsible lending obligations and instead applying APRA's lending standards for most purposes for most lenders, including non-bank lenders not currently covered by APRA; enforcement of these lending standards staying with APRA for ADI lenders but being with ASIC for non-ADI lenders, creating two separate enforcement regimes; reducing verification requirements for lenders, replacing the current practice of lender responsibility with borrower responsibility; and exempting any business lending from protections regardless of the proportion of the loan that is for a business purpose, which replaces an existing predominant purpose test designed to prevent avoidance. The reform is also accompanied by some additional consumer protections and changes to the small amount credit contract and consumer lease protections, for which responsible lending obligations will remain—changes that do not line up with the recommendations of the government's own review of payday lending laws—and also by a requirement that debt management firms hold an Australian credit licence.

Responsible lending obligations were introduced as part of the reforms to credit law undertaken by the Rudd Labor government in 2009, which established a nationally consistent framework for consumer credit. This government is now removing key responsible lending protections as part of an attempt at a so-called simplification of Australia's framework. The changes will shift responsibility from lenders to borrowers, reducing protections for borrowers in the event that credit decisions are made on the basis of incorrect information. Recommendation 1.1 of the Hayne royal commission was explicitly against amending this framework.

On 25 September last year, the Treasurer announced the government would remove RLOs from most consumer credit products, except in relation to certain small amount credit contracts and consumer leases. The justification for these changes was that the current regulation is damaging the supply of credit. In his words, the removal of RLOs would 'increase the flow of credit to households and businesses'. He went on:

As Australia continues to recover from the COVID-19 pandemic, it is more important than ever that there are no unnecessary barriers to the flow of credit to households and small businesses.

Responding to this announcement and the Treasurer's words, Consumer Action Law Centre CEO Gerard Brody 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.

These are hardly the words of a sector crying out for laws to ease lending restrictions.

Last month, Financial Counselling Australia released its Save Safe Lending survey. Some of the key findings of this survey of their financial counsellors—and they would be no surprise to many—are that 97 per cent of financial counsellors surveyed think that responsible lending laws should remain, and 92 per cent of financial counsellors surveyed think that, if the laws are repealed, financial counsellors can expect to see many more clients with unaffordable debt. In their summary of this report, Financial Counselling Australia concluded:

Under current laws, financial counsellors are able to seek redress and help for their clients who experience irresponsible lending. If the laws are axed, financial counsellors will find it much harder to assist, leaving some of the most vulnerable members of society with debts they will struggle to repay.

Following on from this, in January I received a letter from a constituent who happens to be a financial counsellor for the Salvation Army, working with one of their local financial counselling services, and she was greatly concerned by the changes proposed in this bill. She wrote: 'I see many vulnerable clients as part of my role as a financial counsellor, including those impacted by physical and mental ill health, job loss and relationship breakdown, and others who are not skilled in basic money management. Many of our clients take out loans because they are in desperate situations.' She goes on, 'Even with the existing protections, I have seen vulnerable clients lent money when they realistically could not afford the repayments on many occasions.'

She went on to share the story of Albert, whose name has been changed. He took out many small loans to make ends meet and, already in a vulnerable position, was repeatedly lent money that he could not afford to pay back. These repayments quickly became unmanageable, and the overwhelming stress of his debt exacerbated his pre-existing mental health issues. Albert attempted to take his own life. He was then referred for financial counselling, and the Salvation Army were able to provide relief for many of his loans due to the current responsible lending laws and the obvious unaffordability of the repayments for a person who was the recipient of a Centrelink benefit. The point that she's making is that, without these lending protections in place, without the existing laws that this legislation is removing, his only option might have been bankruptcy.

At the height of the pandemic, on the Central Coast in my community, there were 36 jobseekers for every job vacancy and there were 4,902 businesses with 18,734 employees supported through JobKeeper—just in my electorate, on one part of the Central Coast. We see many people in a situation like Albert's where financial distress leads to a mental health crisis and then suicidal ideation. Sadly, this link is well established. In this economic recovery, when communities like mine and others across the country, communities built on tourism, hospitality and retail that have really borne the brunt of COVID-19, are only just getting back on our feet, the government does something like this—when we've already got vulnerable people at financial risk, in distress, who might be more exposed through this.

I met with a financial counsellor in my electorate who works at one of the community centres, and I sat in on a financial planning session that he had with a young parent who, like many, was fleeing family violence. She was there grappling with her bills. She had all the bills there and she was looking at how she could pay her rent, which was over $400 a week; how she could pay her utility bills; and how she could pay her phone bill to at least keep being connected with people. These are the people who are at risk in our community who will be more vulnerable because of this bill.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released its report back in 2019. Recommendation 1.1, which I referred to earlier, stated:

The NCCP Act—

the National Consumer Credit Protection Act—

should not be amended to alter the obligation to assess unsuitability.

This amendment bill from the government flies directly in the face of this recommendation and its intention. Even the Treasury department said that appropriate responsible lending laws could enhance rather than detract from macroeconomic outcomes. It doesn't make sense for individuals and it doesn't make sense for our economy.

I will turn now to more of the mental health impacts of this legislation. It is clear that this legislation as it's drafted has the potential to have a significant impact on the mental health and wellbeing of many Australians, as the member for Dunkley mentioned earlier. As I said, in this patchy recovery, we've seen a rise in insecure work, and, instead of the government looking to strengthen employment and address underemployment and job security, they're exposing those in financial distress and vulnerable borrowers to greater stress by removing these RLOs.

In a news report last month, financial counsellor Kane Johnson, who works at the National Debt Helpline, day to day assisting people in financial crisis, was blunt about the impact these changes will have. Kane said:

The most important thing is … people's lives that are going to be impacted …

With these laws in place we get calls on a daily basis from people so stressed they can't sleep, their mental health exacerbated, a huge impact on their lives … and that's with these protections in place.

He went on to say:

It's just going to happen on a much wider scale if these laws are eradicated.

The Prime Minister has consistently said that mental health and suicide prevention are a No. 1 priority of this government, and I believe him. I believe that he's genuine in this. But this legislation has the potential to harm the mental health of many Australians. As pointed out by Financial Counselling Australia in a media release on their Save safe lending report:

These changes will harm individuals and families and are the last thing Australia needs as we chart a path to economic recovery. More debt is just a recipe for disaster.

Before I came to this place, I worked for 15 years in mental health and nearly 10 years as a specialist mental health pharmacist at Wyong hospital in my electorate on the Central Coast. I saw firsthand the very real consequences of financial distress, mental health crisis and suicidal ideation. It is clear from the response to this amendment from financial counsellors that the removal of these laws will increase the risk of people experiencing financial distress and, in turn, increase the very real risk to their mental health and wellbeing.

The National Suicide Prevention Adviser's interim advice recommended that the government should:

Develop a Commonwealth process for reviewing new policies or initiatives to ensure they assess any impacts (positively or negatively) on suicidal risk or behaviour.

I wholeheartedly agree, and I think the government should adopt this. They should cast a mental health lens over this legislation, which is being introduced at the very same time that the government is winding back JobKeeper, cutting JobSeeker and closing Centrelink shopfronts in communities like mine on the Central Coast at Ettalong, making it harder for people to get the help they need.

Last November, the government released the Productivity Commission's final report from its inquiry into mental health—five months after the government received the report, so missing any opportunity to respond in the October budget. Why I mention this is that, in the final report, the estimated cost of mental ill health in Australia each year—and this was recognised as a conservative estimate—was around $200 billion to $220 billion. This is, from the PC report, the estimated cost of the impact of mental ill health in Australia each year. This report has 24 recommendations and over 103 actions. And how does the government respond? They announce a House Select Committee on Mental Health and Suicide Prevention to review the report, which was worked on for over two years. This committee's first report, the interim report, is due on 15 April, and the final report is due in November. Again, this misses the opportunity after the May budget to respond to the mental health crisis in Australia. As I said, the government missed the opportunity to respond in last October's budget. It can't waste this opportunity by doing nothing in the May budget while it waits for another report.

As a former mental health worker—someone who has seen firsthand, from working in mental health acute adult-inpatient units, the impact that financial distress has on individuals, on relationships, on families and households—I see the very real risk. As I said, the Prime Minister has said his No. 1 priority is mental health and suicide prevention and to work towards zero suicides. But well-meaning strategies, reports or committees won't help lift mental health and wellbeing in this country if the government continues to introduce legislation which makes it easier for people in financial distress—vulnerable borrowers—to enter into more debt. No amount of funding for mental health services or projects or programs will help reach the towards-zero target if the government continues to introduce legislation which undermines the financial security of vulnerable Australians.

The Black Dog Institute, at the very start of the pandemic, identified those who were most at risk of mental health problems associated with the pandemic, and they've mentioned that the common consequences of disease outbreaks include anxiety, panic, depression, anger, confusion, uncertainty and financial distress, with estimates that upwards of 25 to 33 per cent of the community would be experiencing high levels of worry and anxiety during this pandemic. We heard from Lifeline recently that, on one Saturday in February, they had the most calls in their 58-year history—the most calls—from people in crisis seeking urgent support.

And what is this government's response? A confetti of announcements, sprinkling a little bit of money on a project here or a program there, while, at the same time, their whole legislative agenda as to industrial relations—like the legislation that we discussed in the House only in the last sitting—removes protections for gig workers or makes them more exposed or at risk. We know the very real risk of financial distress, mental health crisis and the consequences of that.

So there are enough concerns to suggest that removing the RLOs will increase the financial risk for people who are already facing financial distress. This pandemic has led to upheaval and uncertainty for so many Australians, especially those with pre-existing mental health problems. The recovery is a chance to build a fairer Australia and to give everybody the chance to live in a society that encourages and supports people's mental health and wellbeing. This legislation does the exact opposite.

(Quorum formed)

Mr GILES (Scullin) (17:28): I'm very pleased to have the opportunity to make a contribution to the debate on this bill, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, and to support the second reading amendment moved by the member for Whitlam. I was also pleased to be present in the chamber for the contribution of the member for Dobell. It's always of interest to hear what the member for Dobell says, particularly when she brings to this place the experience and passion she had for her previous work. I think any members opposite who had regard to her contribution would be prompted by her reminding them, as she reminded all of us on this side of the House, that this is a debate about people. In particular, it's about the vulnerabilities that people can have. We have a government that talks a big game when it comes to mental health, an issue that we are all committed to advancing. But those words will continue to ring hollow if they are not matched by action, and this is an area where that action is required.

In this place and this building today, it's hard to be hopeful. This is a government that, throughout its time in office, has been bereft of a vision for Australia and for Australians. It has been obsessed with managing the tactical questions that come up from day to day. From time to time I convinced myself that that led to a dynamic that could on occasionally be positive—that members of this government would do the right thing when they had exhausted all other alternatives. We have seen that time and time again. Indeed, we saw that as they stumbled into calling the royal commission that ultimately led us to the propositions that we are debating right here and now. They got there in the end, dragged kicking and screaming, due to the advocacy not only of consumers, the bravery of advocates and the consistent advocacy of my parliamentary colleagues but of members within their ranks who thought that this was an issue that could not continue to be ignored.

Now, though, there appear to be no brave advocates within the ranks of the government or, indeed, amongst some of those on the crossbench who continue to vote with the government consistently despite having said they would approach issues on the basis of their conscience, a matter that the member for Whitlam outlined in respect of the member for Hughes and his background on this issue. But we have seen today in this place, in the most shocking manner, that this is a government that from time to time will fail to do the right thing even when it's staring them in the face. It will fail even to listen. It's a government that's not listening to the voices of Australian women. It's a government that won't enable debate on the most serious of issues in this place. It's a government that in this case seems to be thumbing its nose at the first recommendation of a royal commission it itself called.

The first recommendation, recommendation 1.1, of the Hayne royal commission explicitly recommended against amending the responsible lending framework, but this government—now that courageous voices are no longer found within its ranks when it comes to these issues—seems to be determined not to do what's right on the basis of ordinary Australians but to do the bidding of the banks in circumstances where it seems the banks have invented the problem that this part of this legislation is designed to solve. My colleagues have gone through the evidence, and the evidence is wanting. The evidence that is before us is that which has been presented by advocates and that which came before the royal commission.

I think we should reflect on the royal commission before any of us passes judgement on the bill before the House. There were 10,000 submissions to the royal commissions—10,000 difficult stories which those of us who have the capacity to respond to must respond to. We must not ignore their stories, as members of this government turned their backs on the voices of millions of Australian women today, but we must honour them and think about how we can do justice to a lending system that does the right thing by ordinary Australians—starting, of course, with the recommendations of the government's own royal commission. There were 10,000 stories. The member for Whitlam, the shadow minister, acknowledged this. Not all the most powerful stories were contained in the 10,000. There are more and, sadly, I'm very confident there will continue to be more. We have a chance to make that number smaller by doing the right thing and supporting the amendment proposed by the shadow minister.

Government members who, once again, don't seem to have had a lot to say in respect of this legislation should reflect on that when they come into this place shortly and vote on it. They should reflect on those 10,000 stories. They should ask themselves how many more they are interested in hearing and think about the words of the member for Dobell about the people that are at the core of this responsible lending regime and doing the right thing by them, rather than extending a licence to people who, quite frankly, in too many cases, don't warrant it. There were 10,000 stories, 68 days of hearings over nearly two years and 130 witnesses who bravely, in many cases, gave their evidence and told stories that were difficult to tell. That led to this first recommendation—all of these stories, all that evidence by one of Australia's most eminent jurists—to keep the responsible lending laws as they are. It shouldn't be a difficult proposition.

Indeed, when this report was handed down, the Treasurer, the member for Kooyong, promised to implement the recommendations. There's a whole other story about how he is going about implementing the breadth of those recommendations, and my colleagues the member for Fenner and the member for Whitlam have unfortunately had many opportunities to advise the House and the wider community on the utter lack of progress in attending to this responsibility—although I guess it's consistent with the sort of progress he has had more broadly in his role. But to simply ignore recommendation 1.1, to go in the face of it, is quite extraordinary, even by the standards of a tone deaf and visionless government.

I think it's worth going back to where this story began, before the royal commission, when the Rudd government—a government with a sense of the possibilities for Australia and a sense of the responsibilities of national government—introduced these obligations as part of reforms to credit law to establish a nationally consistent framework, the credit act. This sets out responsible lending obligations—those obligations which require lenders to assess whether a credit product is unsuitable for the customer before that product is to be provided to them. There's an argument that's been put forward, although not with any vigour, in this place, in Australia's parliament, that these obligations are causing constraints to credit supply. That's not something that there's any particular evidence for, and there's a broader debate to have about that. But what we're seeing here is a government that is allergic to the evidence and indifferent to the views of those who are speaking on behalf of those most directly affected. I touched before on those 10,000 submissions to the royal commission. Some weight has to be attached to a response of that nature, some weight must be attached to the 130 witnesses and some weight has to be attached, surely, to the findings of the commission. This is a government, however, that won't listen to the voices of ordinary Australians and won't listen to the experts.

The consumer groups have expressed in the strongest possible terms their opposition to the reforms—the reforms contained, of course, in the first schedule of the bill which is before the House. I should also note—and this is not something that I'm particularly going to direct my remarks towards—that very serious concerns have also been expressed by these groups that the reforms put forward which go to protections in respect of payday lending don't go far enough. Again, this has been one of those other issues where members of the present government have failed to understand what is happening in communities. They've failed to understand exploitation. They've failed to listen and have only been dragged to it kicking and screaming. I think it is incumbent on them to reflect on whether they have gone far enough in this regard.

I think members opposite could also, as well as having regard to the royal commission and to the voices of ordinary Australians, have regard to the submission of their own Department of the Treasury to the Hayne royal commission, which suggested, again, that responsible lending laws enhanced rather than detracted from macroeconomic outcomes. You'd think that the Treasurer would be mindful of this sort of advice from his own department when he comes into this place puffed up, telling his version of a good news story. But, in this regard, as in so many other aspects of his performance in this role, he is only interested in a version of the truth that suits his purposes, and generally they are the purposes of the day, not the long-term vision for recovery that Australia so desperately needs and not, indeed, the vision for recovery that I have noted that the secretary-general elect of the OECD seems very keen on. If only he had been keen on those sorts of reforms and that sort of agenda when he was the finance minister for Australia, when he set our country on precisely the opposite agenda! So perhaps former Minister Cormann, Secretary-General Elect Cormann, can have a chat to his former cabinet colleagues about the right way forward, about a green recovery and a green transformation. How ironic that someone as responsible as he could make that argument!

Mr Stephen Jones interjecting—

Mr GILES: Thank you, member for Whitlam. That was where I was going. This man—the man who talks now as the representative of an organisation that has been determined to convince its members about the necessity of a path towards inclusive growth—is the same person who proudly described low wages as a deliberate design feature of the architecture he was proud to hold in place. I hope the new Mathias Cormann speaks to his former colleagues and advises them to reconsider.

Again, when we think about the issues that we're concerned about here, they can't be divorced from the wider economic agenda, or lack thereof, of this government and, in particular, its agenda. At a time when wage growth is at record lows and when our economy is more dependent than ever on consumption, the plan is to drive people who may be vulnerable further into debt, rather than to increase their spending power through labour market reforms that are actually good for working people. It's quite extraordinary to see the priorities that this government puts forward. For these reasons, I'm very proud to stand with the member for Whitlam and support his second reading amendment. In fact, it's very difficult to understand how any responsible member of this place could argue with that proposition, although, only a couple of hours ago, we saw members opposite deny even the prospect of debate on the most straightforward motion—responding to, without a hint of criticism, the movement and the moment that is Australian women demanding action and equality.

This, I think, is a matter that is less all-embracing but equally straightforward. Why wouldn't members opposite stand up for respecting the findings of Commissioner Hayne? Why would they want to weaken Australia's credit laws and deny the purpose for which they have been enacted? And, instead of looking after mates, why won't they focus on passing legislation and on engaging more broadly in actions that will support an economic recovery for all Australians—the people that the member for Dobell was speaking about, the people I represent, and the people who are expressing their concerns in my electorate and in electorates right around the country about the human impact of these changes, should they be enacted?

There is a choice facing Australians, just as there is a choice facing members opposite. They can take a step back. They can reconsider this. They can look at the work that has been done for them by Commissioner Hayne and honour the contributions of the thousands of Australians who have bravely told their stories. They can reflect on their responsibility to those Australians and to their former colleagues. I think of Senator Williams. I wonder what he's thinking right now. It was almost his life's work to have that royal commission established, and I'm sure he would have been proud to see its recommendations. But, as soon as he's no longer in the other place, we see those recommendations discarded. I ask members opposite to think about that when they cast their vote on this matter. Deputy Speaker, I draw your attention to the state of the House.

(Quorum formed)

Mr ZAPPIA (Makin) (17:45): This legislation, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, effectively reverses legislation introduced by Labor over a decade ago. That legislation was enacted in response to the very concerns that consumer groups are now raising about this legislation, consumer groups who have seen the problems in the past and know what to expect if this legislation is adopted by parliament.

The legislation, as other speakers on this side have made clear time and time again, even flies in the face of the banking royal commission recommendation that the National Consumer Credit Protection Act 'should not be amended to alter the obligation to assess unsuitability'. It is fiercely opposed by the very community groups that every day are left to deal with the consequences, and, not surprisingly, it is the subject of a dissenting Senate report from both Labor and the Greens. Indeed, I suspect the only reason that the Senate committee recommended adoption of this legislation was that the government had the numbers on that committee.

At a time when COVID-19 has shattered the Australian economy, when there are two million unemployed or underemployed people throughout the country, when JobKeeper is nearing an end, when other government COVID support measures are being phased out, when credit card debt in January was at $21 billion and when unemployment conditions are less secure than ever before, lending laws should not be relaxed. Indeed, they should be tightened because irresponsible lending ultimately will cause additional financial harm to people already struggling to make ends meet.

In a media release issued jointly by CHOICE, the Consumer Action Law Centre, the Financial Rights Legal Centre and Financial Counselling Australia, the authors make this absolutely clear. In that media release, which was issued only on Friday. Alan Kirkland, CEO of CHOICE, says:

This report ignores the clear economic evidence: that the housing market is already overheating and removing safe lending laws will push home ownership out of reach for many more Australians.

We already see high levels of mortgage stress in states like Queensland, South Australia and Tasmania. Giving more power to the banks in these circumstances will be bad for people who are already struggling to repay their mortgage and bad for people trying to get into the housing market.

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

One bad loan won't break the bank, but it can definitely break the borrower. That's why we need to keep our safe lending laws – without them, the regulator focus will be on the stability of banks, not the protection of borrowers.

He goes on to say:

The Government's plans will dismantle our effective and sound financial services regulatory framework. The reality is that the prudential regulator, APRA, does not provide individual consumer protection. It focuses on whether loans cause a credit risk to the bank, not on whether loans are affordable to individual borrowers.

The same press release goes on to quote Karen Cox, the CEO of Financial Rights Legal Centre:

This plan to roll back responsible lending was concocted as a knee jerk response to the pandemic related recession. Now we are facing record lending levels and runaway property prices. It's time to drop this crazy plan and avert a potential debt disaster.

It then lastly quotes Fiona Guthrie, the CEO of Financial Counselling Australia:

The effect of irresponsible lending on everyday people is enormous; it sends too many people into debt spirals which often leads to financial stress, family breakdown, mental health issues and even homelessness.

Indeed, Fiona Guthrie issued a press release today on this very subject. Attached to the press release were several case studies from around Australia highlighting the impacts of what poor lending does to consumers. The press release says:

Financial counsellors are at the front line, witnessing the harm that is caused by irresponsible lending. This bill will exacerbate financial stress, family breakdown, mental health issues and homelessness.

Rather than refer to one of the examples provided by Fiona Guthrie, I'll provide my own example of a recent case in my own electorate.

Several weeks ago I was contacted by a relatively new arrival to this country who had a wife and, from memory, four children to support. This person had a stable job and was on basic pay, but he couldn't make ends meet, with a mortgage to pay, with a motor vehicle lease purchase contract that he had committed to and with normal living expenses for himself and his family. He simply wasn't earning enough to pay his everyday bills. He was behind in his payments and was facing repossession of his car and, even worse, losing his home. His motor vehicle repayments, in particular, were dragging him down. I asked this question: where was the responsible lending and the scrutiny in respect of his case, where the motor vehicle dealership could have looked more carefully at his financial situation before allowing him to commit to the repayments that he made? I referred this person to a friend, a former financial counsellor and adviser, who looked at his case exhaustively. They were not able to help but made it clear that he should never, ever have been allowed to get into the situation he did. But he did so because, in my view, he was vulnerable to the fact he was a new arrival, didn't necessarily know the laws of this country well and perhaps didn't understand Australian life as well as he might have thought he did, which ultimately got him into the mess that he's now in.

What is the government's justification for this legislation, particularly given that the banking royal commission didn't recommend it—in other words, there's no call from the royal commission; in fact, as I said earlier, it recommended the opposite—and that so many experts have already argued against this legislation as well? It is that the changes will simplify lending laws, make credit easier to get and increase credit supply throughout the country. However, that particular view is not supported by all.

In their submission to the Senate inquiry, the Law Council—and I'm referring to laws being made simpler and easier to understand—said of the legislation:

… the Law Council submits that this does not represent a simplification of RLOs, but rather makes enforcement of the standards complex and difficult. It would also make it highly difficult for a consumer to assess whether or not their own lender has breached the non-ADI standards.

That's what the Law Council said in respect of supposedly making it easier. It actually makes it more complex. With respect to it being a measure to help release more money into society, Maurice Blackburn in their submission pointed out to the committee that there is not a need for this bill as it is seeking to solve an issue that simply doesn't exist. Maurice Blackburn point to some data. I quote the data that they refer to:

The total value of new loan commitments for housing and the value of owner occupier home loan commitments each reached record highs in October 2020.

…   …   …

Commitments for the construction of new dwellings rose 10.9 per cent …

…   …   …

The value of new loan commitments for fixed term personal finance rose 4.3 per cent in October, seasonally adjusted.

The government is saying that we need to have more money out there in society because it will help stimulate the economy. It is saying that people cannot get credit and this is restricting the ability of the economy to grow. But the stats simply don't support that argument. In fact, the reverse is happening.

What is notable about this legislation is that the underlying argument for it is to speed up economic recovery by releasing more private money through loans and extending credit. Unsurprisingly, therefore, this legislation is being backed by many of the business associations, whose members will obviously benefit from the easing of credit. If the government wants to boost the economy, it should continue to do what has been proven to work and what it has been doing over recent months with respect to the COVID stimulus package—that is, ensure that people on low incomes have money in their pockets to spend. If they have money in their pockets to spend, they won't need to resort to credit. If they don't have the money in their pocket, then they will be forced to try to secure credit which they simply cannot afford. This will slowly take them further down in terms of their ability to survive financially.

What was the Morrison government's response to that argument? It was to cut the JobSeeker supplementary payment. Now it comes back with a proposition that it will increase JobSeeker permanently by a measly $25 a week. It is simply not enough. It will not lift people out of poverty. It will ensure that they continue to struggle through life, and it will ensure that, because they are struggling, they will try to access money through credit that they simply cannot afford.

Of course we want people to have money for the things that they need to get on with their life, but this is not the way to do it. The reality is that there are better ways for the government to manage the economy and support people on low incomes than to simply make access to credit much easier. The arguments in favour of this legislation—and I believe it was initially intended to boost the economy during COVID-19—simply don't stack up, and they will not stack up in the months ahead as the economy reverts to a more normal economy.

As I said earlier, unsurprisingly, the Labor members on the Senate committee that looked at this bill did not support the recommendation that it be passed. Indeed, they moved a recommendation that the bill not be passed. They also made the very sensible point that the Senate should immediately pass the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2019 (No. 2), which probably would make a difference to people's ability to manage their financial affairs. It is clear that this legislation does not have the support of the broader community. It is clear that this legislation will only cause more hardship and suffering for people who are already doing it tough. As we on this side of the House have said, it should not be supported.

The SPEAKER: 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 immediate question is that the words proposed to be omitted stand part of the question.

The DEPUTY SPEAKER ( Mr Goodenough ) (18:10): Is leave granted for the third reading to be moved immediately?

Leave not granted.

Mr EVANS (Brisbane—Assistant Minister for Waste Reduction and Environmental Management) (18:10): I move:

That so much of the standing orders be suspended as would prevent the motion for the third reading being moved without delay.

Mr STEPHEN JONES (Whitlam) (18:11): I want to return to some of the questions that are immediately before the House in schedule 1 of the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, which seeks to overturn the very first recommendation of the Hayne royal commission, recommendation 1.1, in which the royal commissioner, Commissioner Hayne, made it very clear that the responsible lending laws—those provisions within the national consumer credit protection legislation that the bill now before us proposes to amend—should be left alone. He did this for a very good reason, and I want to return to some of the history that led to the royal commission and to these provisions which are before the House at the moment.

I want to particularly focus on the circumstances facing bank customers in rural and regional communities, because in speeches given at the second reading stage I heard the member for Mayo, the member for Corangamite and the member for Indi give very moving addresses which went to examples from their own communities—examples from consumers and from consumer groups. Members in the House may not be moved by examples that have been given by the member for Mayo, the member for Indi and the member for Corangamite, but I was. Perhaps, however, members would be moved by the story of a gentleman who dedicated the latter part of his life to having a royal commission established and to having these laws improved and protected. I'm talking about a farmer, originally from South Australia, by the name of Williams. This farmer walked into a Commonwealth Bank branch in Inverell looking for a loan of $200,000. When he walked out of that bank he ended up with a loan, denominated in Swiss francs, of $675,000. Of course, given the fact that the loan was denominated in Swiss francs, very quickly, when the Australian dollar was dramatically devalued against the Swiss franc, a loan of $675,000 blew out to $1.5 million. The farmer lost his farm and his marriage, and he ended up living for a considerable period of time in a caravan.

The gentleman that I'm talking about is well known to all members on that side of the House because he used to sit in their party room. His name was Senator John 'Wacka' Williams. He was absolutely passionate about his experience and the experience of farmers like him not being repeated. So he campaigned for a royal commission. The royal commission found that these laws were absolutely critical to ensuring that inappropriate loan products were not sold to unsuspecting farmers. You see, the loan that was sold to Mr Williams—Senator Williams as he was—was done prior to the introduction of these provisions within the national consumer credit act. Had these provisions been included, that loan probably couldn't have been sold to him, and, if it was, not only would he have been entitled to personal compensation but the bank would have been liable to huge fines for breaches of this provision.

So I guess the questions that I have for the minister are: has he consulted with members of the National Party, and do members of the National Party give the minister full support for these changes to the national consumer credit laws? Does the National Party support rolling back the consumer protections that have been so important to protecting the livelihoods of the rural families that they pretend to represent? Does the National Party back the Liberal Party, or does the National Party keep the spirit of John 'Wacka' Williams alive? It's an important question, because I'm sure that there are members and constituents in rural communities all throughout the country who are looking very closely at their National Party representative. The minister responsible is not a member of the National Party—

The DEPUTY SPEAKER ( Mr Goodenough ): Minister Evans, on a point of order?

Mr Evans: It's on relevance. The honourable member is speaking as if this is the consideration in detail debate, rather than to the suspension. Questions like that can be put to the responsible minister in the next stage of the debate.

The DEPUTY SPEAKER: Yes. Could you please be relevant, member for Whitlam.

Mr STEPHEN JONES: The reason that standing orders should not be suspended is that these matters need to be addressed in full. The government has sought to ram this legislation through the parliament without due consideration. The Senate report was far from conclusive on this. We had three separate reports. If you read in detail the evidence that is included and adduced in the majority report from the Senate committee, you'll read that all the evidence goes one way and the recommendations go the other. So this matter should not be rammed through the parliament without due consideration. For these reasons, the government's motion should be rejected. We should not be rushing headlong into passing this bill that is before the House.

There are other reasons why we shouldn't be doing this. Anybody who's been reading the papers over the last few weeks, anybody who's been following the news over the last few weeks, would be aware that we are in the middle of a housing price boom. Housing prices are going through the roof. There are a lot of consumers out there who are very anxious, if not heartbroken. They turn up to an auction week after week after week, and they are unable to even meet the opening price, let alone the closing price. When we see that we are at the beginning of a housing price bubble, this is the very last moment and a disastrous time for us to be looking at loosening the lending standards and rushing a bill such as this through parliament. There is no good time to be removing the responsible lending laws. There is no good time to be rejecting the very first recommendation of the Hayne royal commission. But this is the absolute worst time to be doing that. For this reason, the government's motion should be rejected.

Mr EVANS (Brisbane—Assistant Minister for Waste Reduction and Environmental Management) (18:18): I move:

That the question be now put.

The SPEAKER: The question is that the question be now put.

The SPEAKER (18:26): The question now is that the motion moved by the assistant minister, the contingent motion, be agreed to.

Question agreed to.

Mr EVANS (Brisbane—Assistant Minister for Waste Reduction and Environmental Management) (18:26): I move:

That this bill be now read a third time.

Mr STEPHEN JONES (Whitlam) (18:27): Schedule 1 of this bill that we are considering rolls back the very first recommendation of the Hayne royal commission. Recommendation 1.1 of the Hayne royal commission was to leave the national consumer credit protection standards in place.

I think the House needs to know where the National Party stands on this, because in the second reading stage we heard some very powerful speeches from members representing rural and regional Australia. We saw members talking about stories from consumers and consumer organisations about the harms and potential harms associated with relaxing consumer credit laws. We know that members of the National Party have been historically very outspoken on this issue. We know that former senator John 'Wacka' Williams dedicated a large part of his time in the parliament campaigning against improper lending practices, campaigning in favour of a royal commission into the banking and finance system, and campaigning to ensure that the responsible lending laws stayed in place. We know that members of the National Party threatened to cross the floor when this government had voted 27 times to oppose the implementation of a royal commission. We know that several members from Queensland who are in the chamber right now threatened to cross the floor because of the subject matter that is before the House right now.

So the question that the minister needs to answer is: is this National Party policy or is this Liberal Party policy? Is the National Party 100 per cent behind the matter that is before the House today? Is every single National Party member going to vote in favour of this Liberal Party proposition or are members of the National Party going to keep the spirit of John 'Wacka' Williams alive?

He's the man who lost his family farm, the man who lost his marriage and the man who lived in a caravan for several years because these laws did not exist, and the man who has called on every one of his National Party colleagues to do the right thing and oppose these laws. So the question for the minister and the question for all of the National Party people is: are they going to vote with their conscience, or are they going to vote for the Liberal Party?

Mr EVANS (Brisbane—Assistant Minister for Waste Reduction and Environmental Management) (18:30): I move:

That the question be now put.

An opposition member: What?

An opposition member: Did the debate just finish?

Mr Burke: I rise on a point of order. I appreciate this would normally be put immediately, but, just to assist the House: if this motion is put and not withdrawn, we will have two divisions. If this motion is withdrawn, we will have one and we will have it immediately, on the third reading. It's up to the government. I'm just inviting: if you wish to withdraw that, we will go immediately to the third reading because there are no other speakers. If you want two divisions—

An opposition member: We're offering to speed it up for you guys!

Mr EVANS: Noting there are no further speakers, I withdraw.

The SPEAKER: The question is that this bill be now read a third time.

The DEPUTY SPEAKER ( Ms Vamvakinou ) (18:39): The Speaker has received advice from the Chief Opposition Whip that members have requested to be supplementary members of certain committees.

Mr EVANS (Brisbane—Assistant Minister for Waste Reduction and Environmental Management) (18:40): by leave—I move:

That:

(1)Dr Haines be appointed a supplementary member of the Standing Committee on the Environment and Energy for the purpose of the committee's inquiry into the Australian Local Power Agency Bill 2021 and the Australian Local Power Agency (Consequential Amendments) Bill 2021; and

(2)Mr Wilkie be appointed a supplementary member of the Standing Committee on Social Policy and Legal Affairs for the purpose of the committee's inquiry into the Ending Indefinite and Arbitrary Immigration Detention Bill 2021.

Question agreed to.

Mr STEPHEN JONES (Whitlam) (18:41): This bill, the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021, extends the operation of certain measures that were put in place at the height of the COVID-19 economic recession, changes that concern the Corporations Law. Schedule 1 of the bill allows companies to hold virtual annual general meetings and to execute a range of other governance activities using electronic means until 16 September 2021. Without the passage of this bill, this measure would otherwise expire on 21 March 2021. This measure and other measures reduce the ability of shareholders to hold company directors to account through questions and votes at physical AGMs; however, as COVID-19 border restrictions may continue through 2021—though we all hope that will not be the case—Labor sees the sense in this measure continuing.

Schedule 2 is an entirely different matter. Schedule 2 extends a COVID-19 measure which will permanently weaken Australia's continuous disclosure laws and the misleading-and-deceptive-conduct provisions. We opposed that provision, which was put into place by regulation during the height of the COVID-19 recession, and we will be opposing it again. Under the pre-COVID continuous disclosure regime, which was introduced by the Howard government in 2001, companies and directors were required to disclose publicly any information that was not generally available and that a reasonable person would expect to have a material effect on the price or value of a company's share price. If a company or company director failed to comply with these obligations, they could face a civil penalty action either by shareholders or by the corporate regulator, the Australian Securities and Investments Commission. However, a director was not liable for a civil penalty proceeding for breaching those obligations if he or she took all reasonable steps to ensure that the company complied with its disclosure obligations and, after taking those reasonable steps, believed that the company was complying with its obligations.

Under the temporary COVID-19 regime, which schedule 2 would make permanent, companies and directors that fail to disclose price-sensitive information, either at all or in a timely fashion, are only liable to shareholders for that failure if the company or director acted with knowledge, recklessness or negligence. That means these changes would make it easier for companies and directors to get away with failing to provide price-sensitive information to the market. As the government's explanatory memorandum puts it, they would reduce the amount of time entities and officers must spend on assurance that they have complied with the continuous disclosure and misleading and deceptive conduct laws. In other words, the changes at schedule 2 would make it easier for companies and directors to get away with withholding information from, or providing misleading information to, the market and shareholders.

The only reason the government has given for making the changes in schedule 2 is the asserted need to protect Australian companies and directors from the risk of opportunistic class actions. The changes in schedule 2 would put the interests of individual company directors above the interests of mum-and-dad investors. This is an important point. Every member of this House would remember the campaign that the coalition waged in the lead-up to the last election, where they alleged that they were championing the interests of mum-and-dad investors. It now appears that the very government that purported to champion these interests has dropped mum-and-dad investors like a hot, mouldy potato. These measures are anti shareholder—or, more accurately, anti small shareholders—and pro director. Large institutional investors always have an advantage. They have many means at their disposal, such as large research units and ongoing investor briefings, to interrogate company directors and hold them and their companies to account. Small mum-and-dad investors don't. It is for this very reason that small mum-and-dad investors are reliant on these continuous disclosure obligations. Our great concern is that these proposed changes will ensure that we have, built into our company law, a 'don't ask, don't tell' culture. It is absolutely against the interests of small mum-and-dad investors, and this schedule to the bill should be rejected.

By way of background, both of these measures were introduced by the government as temporary measures. We were deeply concerned by this second measure in schedule 2, and we opposed it at the time. If ever there was an argument for putting this in place as a temporary measure, there is certainly no argument for making it permanent. The government is quite simply choosing the interests of directors over the interests of shareholders in a company. That is untenable, and we will not be supporting it. We know the government backbenchers have been agitating for this change for some time, in some mistaken belief that there is somehow a whole bunch of invalid, vexatious claims being made via class actions. There is no evidence at all to substantiate this claim. What there is evidence of is that this change will harm small mum-and-dad investors. The government, I'm sure, will say in its contributions that it has the support of the business community. That is simply not true. It is true that the Business Council of Australia—that is, big business—is going to support it. Of course the Australian Institute of Company Directors is going to support it because the government is choosing the interests of directors over shareholders. But not all business organisations are supporting it. A 2020 survey of 195 senior company executives, conducted by the law firm King & Wood Mallesons, found that only 21.5 per cent of executives thought that the temporary changes to continuous disclosure laws should be made permanent. That is to say that nearly 80 per cent of company executives said that it was a bad idea. That was only one year ago. I'm sure that, if asked today, those same company directors would say it's still a bad idea and that it should be rejected.

There is also strong opposition from the Australian Shareholders Association, who described this new bill as 'a curate's egg'. They have concerns but understand that there is some merit in the virtual AGMs. The chair of the Australian Shareholders Association, Mr Alan Goldin, had this to say:

I personally dislike the virtual AGM that allows chairmen to effectively dodge any real questions and offer any answer they like as there is no comeback… Until 15 September …

Then we return to the real world of directors and management being held accountable once a year to their owners—

the shareholders. He personally dislikes them but can understand that there is perhaps an argument in favour of them, but he does not support changes to director liabilities and describes them as a 'bad' change, saying:

BAD is the change in continuous disclosure regulations. "Previously if there was any failure to keep the market informed under the current 'Continuous Disclosure' rule, it was a simple black and white situation, don't tell shareholders something material and the Company and its Directors were liable. This was great for shareholders because they do not have insider or special interest knowledge and all they know is what they are told and what they read."

What Mr Goldin is saying, quite simply, is that the existing arrangements are pro shareholders; the government's changes are against the interests of shareholders and they should be rejected. He says—his words, not mine:

So the new instruction to management from Boards could be, if you want to keep some information to yourself or exaggerate a bit just make sure you don't tell me so no one can sue me—

that is, don't ask, don't tell. That is the culture which is going to be legislated for if this bill passes the House. It should be opposed.

Another argument that has been put forward by the government is that, somehow, if this bill passes the House, there will be a reduction in premiums paid for director liability insurance. That was put to the test by the Senate committee which inquired into this bill. The Insurance Council of Australia punted that out of the park. It said there can be no hope that there will be a significant reduction or any significant change in insurance premiums as a result of this change. Evidence from the Insurance Council indicated that a best-case scenario would result in little or no change to the price of directors and officers insurance. In the short to medium term, at best, there would be no change. The government's arguments for doing this, when held up to scrutiny, quite simply dissolve, and for these reasons they should be rejected.

For these reasons, we are moving a second reading amendment in the form that has been circulated in my name. I move:

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:

(1) notes that the Government's measures in Schedule 2 of the bill would strip shareholders of their rights to be adequately informed, damage Australia's corporate governance regime, and allow company directors to get away with failing to disclose important information; and

(2) further notes these measures could damage Australian investment and hurt Australian investors and retirees."

I foreshadow that at the third reading stage we will be moving a substantive amendment to separate schedules 1 and 2 of the bill. As we've said, we can support and are willing to support the provisions for extending the arrangements for virtual AGMs; we can see the case for that. But we do not support and will not support the provisions for dissolving or reducing the director liability requirements. With those remarks, I thank the House.

The DEPUTY SPEAKER ( Ms Vamvakinou ): Is the amendment seconded?

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