Small Amount Credit Contracts

Mr TEAGUE (Heysen) (14:34): My question is to the Attorney-General. Can the Attorney-General update the house on the outcomes of the recent Consumer Affairs Forum meeting with respect to small amount credit contracts reform?

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (14:34): I am delighted to. I thank the member for Heysen for his question. The former attorney-general, as many would remember, the Hon. John Rau, in one of his last contributions to this house lamented the slow pace of commonwealth reforms in the area of consumer protection and his lack of success in reforming payday lending regulations. He raised that payday lending significantly affected a number of constituents in his area, and I'm sure in other members' areas. Certainly I have heard from some of you about the exploitive practices and predatory behaviour by payday lenders that sometimes occur.

Indeed, the former attorney put to me that there is a lot in common between a glacier and the pace of reform in the Consumer Affairs Forum. He wished me luck, and I am delighted to inform the house that I think I have risen to the former attorney's challenge. Firstly, it was on the list at the recent meeting of the Consumer Affairs Forum, which includes all those ministers across Australia and territories and New Zealand.

Members might be aware that the commonwealth Assistant Treasurer confirmed that the commonwealth will be proceeding with the recommendations arising out of the 2016 review into small amount credit contracts, as well as the further recommendations arising out of the Hayne royal commission, particularly in respect of these matters. We are pleased to have received that. It's a positive development from the commonwealth.

I am very pleased to report that I have received unanimous support from every state, territory and New Zealand to recognise the urgent action that is now needed, particularly given the advent of instant cash machines and the proliferation of online applications. I have also given notice that states are still able, particularly our state, to regulate on small amount credit contracts. If there is any delay that is not expeditiously dealt with at the preferred commonwealth national model, then I will propose that we take action in this state and that we get on with it.

This is an issue that is far too important to have been left for what is now 10 years since it has been an identified public problem. One egregious example submitted by ASIC, who attended our conference, was of a washing machine costing $769. It was offered on a three-year lease and ultimately cost $4,517. There is no justification for consumers to be effectively slugged with these exorbitant costs.

Some of the new protections proposed are a cap on the total repayment amount, amending the affordability provisions based on gross earnings to net earnings, requiring that there be equal amounts paid at equal intervals, not charging additional fees for the ordinary life of the loan in cases of early repayment, and preventing these lenders from making unsolicited invitations to apply for credit to current or former customers. I look forward to further updating the house and I will make sure that the former attorney-general knows.