Penny Wright (SA, Australian Greens) Share this | Hansard source

I move Greens amendment (2) relating to the threshold for overdue payments:

(2) Schedule 2, item 69, page 65 (line 31), omit "$100", substitute "$150".

The Australian Greens are seeking to extend the threshold from $100 to $150. There was evidence given in the committee inquiry from various stakeholders, including the Consumer Credit Legal Centre who said:

We now have a generation of young people with mobile phones. Over 50 per cent of the default listings on the current credit reporting list are for telcos. It should not be, under any circumstances, that people's lives completely stop for five years over a hundred bucks. A hundred bucks is just too small an amount. We need to put that up tojust too small an amount. We need to put that up to $300. Another example is electricity: many, many people are struggling with paying their electricity bills. A hundred dollars for a default listing is catastrophic; it should be higher. I understand that some of the energy and water ombudsmen are advocating for that minimum listing to be increased. I also understand the Telecommunications Industry Ombudsman is as well.

In its submission, the centre said:

The overdue amount needs to be commensurate with the detriment caused by a default listing. A listing for $200 being a small amount remains on a consumer’s credit report for 5 years. This is a severe detriment for a small amount of money overdue. … The overdue amount needs to reflect rising loan amounts. Many years ago $100 would be a reasonable amount but now as loans get larger, it is inappropriate to list a default over such a small overdue amount. For example, it is possible to have a home loan and an investment loan and suddenly be unable to refinance due to a mix up at the bank on the payment amount over a 60 day period in the amount of $200 on a $400,000 home loan. … There are a number of utilities where it is very common for consumers struggling with living expenses and other financial hardship to be a bit behind on payments. As it stands that “bit behind” in the Bill would be $100. With rising electricity prices and problems with capping costs on mobile phones, it is essential that consumers are given a bit more leeway than $100 overdue before they are prevented from getting a home loan, credit card, personal loan etc. for 5 years.

That came from the submission by the centre.

Comments by the Consumer Credit Legal Centre for increasing the overdue amounts from $100 to $300 were supported by the Energy and Water Ombudsman New South Wales and the Australian Communications Consumer Action Network. The purpose of increasing the threshold of overdue amount is to exclude small utility bills from the adverse consequences of credit listing. It also recognises increases in the cost of living over recent years.

The Australian Greens agree that there should be an amendment here to reflect recent changes in costs of living and, after some negotiation and an awareness of what is likely to be agreed to by the chamber, we suggest that the threshold amount be changed from $100 to $150. We also note that there is a provision in the bill for a higher amount to be prescribed by regulations, which provides flexibility in responding to consumer concerns down the track that $150 is not in fact sufficient. However, we do think that this minor change will go some way towards a more realistic situation. We feel that these changes will improve consumer protections in the Privacy Act.