Consumer Credit

21 Sep 2009 questionsarchive

I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question on consumer credit.

The Hon. J.M.A. LENSINK: Through the COAG process, a number of the current roles of the states and territories are being transferred to a national system and, indeed, the minister replied in estimates that it would take place, under referral powers of the states, on 1 November 2009.

In media releases, the Hon. Chris Bowen MP, federal Minister for Financial Services, Superannuation and Corporate Law, has stated that there would be no gap in consumer protection between the turning off of the state and territory credit regimes and the turning on of the new commonwealth regime. He has also referred to a deferral of commencement of the scheme to give the credit industry more time to make necessary changes to the new regime.

My questions to the minister are: how does she make the claim that there will be no gap in consumer protection between the transition from states and territories to the commonwealth? Does she expect that this parliament will be required to pass legislation in order to refer those powers, and is she aware whether the additional red tape and the concerns raised in this place previously on behalf of the mortgage broking industry have now been addressed?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (15:06): I thank the honourable member for her important questions. Indeed, they are questions that draw attention to certain frustrations that we have had around the implementation of some of these COAG reforms. Indeed, the federal government set very ambitious time frames to achieve national reforms around credit, consumer law, trade measurement, and a wide number of other reforms as well. The federal government is to be commended for that. I am not criticising it for that; they were reforms that were long overdue. We saw that the previous federal Liberal government sat on its hands and did nothing about these areas of reform. That led to a great deal of frustration for various industry sectors and businesses throughout Australia, including those in South Australia.

So, the federal government is indeed to be commended; however, the time frames are somewhat ambitious. There are various components of the credit reforms, but they are to be in place from the end of this year, early next year, and then I think the next round is mid year. They are going to be very tight time frames for us to achieve. South Australia has not yet received the referral powers from the federal government. The bill is still before the commonwealth government; I understand it is still in the Senate. I am unsure at this point in time whether there will be any amendments or changes to the bill, so we are still not sure what it will look like once it has been through the federal jurisdiction.

A bill will then come here to refer our powers. As I have said, it is a very ambitious target, but we expect and hope that it will be able to be tabled here very soon and will be able to proceed through both houses before the end of this calendar year. However, I do accept that it is an ambitious project.

A number of transitional matters have been put in place. First of all, I should say that the federal government has been late in delivering its legislation to the states. I think it was originally planned to be given to the states in around June or July this year. I think it was then deferred for a couple of months, and I have been advised that it has since been deferred again, which means that the states and territories have a tighter time frame within which to implement their referral powers.

Having said that, nevertheless, there are states other than South Australia that are having even greater difficulties meeting the time frames of the federal government. A number of contingencies have been put in place to ensure that protections occur throughout Australia and that consumer protection is maintained. I understand, for instance, that Queensland is responsible for the code of conduct around credit, and there was concern that that would be switched off by the end of this year, or very early in the New Year, and that that could leave some states exposed. I understand that negotiations have just occurred within a matter of the past few days to ensure that that will not occur, and Queensland is looking at a different time frame for that.

So, we are well aware of the imperative to ensure that our consumers retain protections whilst these transition arrangements take place. It is a very challenging task, and I can speak for South Australia and say that we are doing everything we can to assist the federal government to meet the time frames it has put in place, and we will continue with our efforts.