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Legislative Assembly for the ACT: 2001 Week 3 Hansard (6 March) . . Page.. 568 ..

MR STEFANIAK (continuing):

As stated in Mr Humphries' presentation speech, credit will only be refused where an applicant receives a low score across a number of factors. I am informed that the finance industry assigns each factor a weight based on how strong a predictor of credit risk is by statistically analysing large samples. These are then adjusted and reviewed periodically.

Credit applications are commonly rejected, particularly in the case of young people, due to insufficient savings, a poor savings record, and over commitment. I think Mr Rugendyke or someone else gave an example of concerns about over commitment. Age alone will not be a determinant of credit refusal, and nor should it.

I would like to further assure members that the proposed amendment would not make it any easier to discriminate against young people or our senior citizens. Any age discrimination must be statistically supportable or based on relevant data upon which it is reasonable to reply. Hence, mere assumptions by credit providers that the very young or the very old are poor credit risks are not acceptable for the purposes of the provision. Such assumptions would also fail the reasonableness requirement imposed by the provision. Again there is that word "reasonableness".

The amendment recognises the importance of making sound commercial decisions in the assessment of credit applications. Finance providers have obligations to protect not only their own interests but also those of their shareholders, creditors, guarantors and other third party security providers who have assumed the risk of default of the finance provider's customers. It is in no-one's interest to lend money to people who do not have the capacity to pay it.

Quite seriously, the third party security providers are very important here, Mr Speaker, because that is required. They are required by law, and have been for about the last six or seven years, to get independent legal assessment of what they are going into. I want to point out that there are lots of checks and balances in any system in terms of issuing credit.

Mr Humphries also mentioned uniformity. That is a very important point. Things like this do not have any boundaries. We are a small island within New South Wales. I think uniformity with our neighbouring states of New South Wales and Victoria-Mr Humphries also mentioned Tasmania-is also a relevant factor. It makes good business sense. It makes good practical sense for the territory to have similar credit assessment laws as those states.

Mr Speaker, I hark back to what Mr Rugendyke said earlier. I think this legislation complements what I believe he is trying to do. It would not be inconsistent, I would suggest, with what he indicated he will do some time down the track. I simply urge those members who have spoken so far to reconsider that and to support this sensible piece of legislation.

Question resolved in the negative.

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