Payday Lending

13 November 2019

Senator GRIFF (South Australia) (16:19): I wish to inform the chamber that Senators Bilyk and McAllister will also sponsor the motion. I seek leave to amend general business notice of motion No. 229 standing in my name and in the names of Senators Bilyk and McAllister.

Leave granted.

Senator GRIFF: I, and also on behalf of Senators Bilyk and McAllister, move the motion as amended:

That the Senate—

(a) notes that:

(i) on 12 November 2019 the Stop the Debt Trap Alliance has today released its report entitled, The Debt Trap, and

(ii) the report contains new data showing the scale of financial harm that payday lending is causing in Australia;

(b) recognises that:

(i) payday loans trap people in a cycle of debt and leave them in a significantly worse position than they were in prior to taking out the loan,

(ii) payday lenders target people who are economically disadvantaged and excluded from accessing mainstream finance,

(iii) over a five-year period, around 15% of payday loan borrowers fall into a debt spiral,

(iv) the number of women using payday loans has risen from 177,000 in 2016 to 287,000 in 2019 – this represents a rise to 23.13% of all borrowers,

(v) digital platforms have contributed to a rapid growth in payday lending, with payday loans that originate online expected to hit 85.8% by the end of 2019, and

(vi) in the 2015 report of the Australian Securities and Investments Commission entitled, The cost of consumer leases for household goods, it found in one case a dryer cost a Centrelink recipient the equivalent of an interest rate of 884%;

(c) further notes that:

(i) in 2015, the Federal Government initiated a review into Small Amount Credit Contracts and accepted the vast majority of recommendations made in the final report of the review delivered in 2016, and

(ii) in October 2017, the Federal Government released exposure draft legislation on Small Amount Credit Contract and Consumer Lease Reforms but since then has taken no action to introduce or attempt to pass the bill; and

(d) calls on the Federal Government to urgently introduce and pass legislation to provide critical protections and stop the harm caused by payday loans and consumer leases.

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