Page 1819 - Week 07 - Wednesday, 22 August 2007

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colleagues, invariably they are as keen as you are to get something done. I am sure that, through the good offices of the attorney—and we can all keep him up to it—and through those of his staff, Mr Quinton and others, that can happen.

The figures are of concern. Whilst they are not all that stark, they do give rise to the need to ensure that we do get this right, that the proper protections and enforcements are in place. The law needs to be fine tuned and further amended so that people taking out loans will, as far as you can possibly tell, have the ability to repay them. This is a difficult area because people’s circumstances change, for all sorts of reasons. You will never completely stop the circumstances arising whereby people default. But I am pleased to see that action is being taken. Obviously, Dr Foskey’s motion will not be agreed to, but it will serve to encourage the government, and hopefully all the other Labor state and territory governments, to expedite this matter as soon as possible. That, I think, will be to the benefit of everyone, including the finance industry and the people who take out these loans.

MR CORBELL (Molonglo—Attorney-General, Minister for Police and Emergency Services (10:55): Can I just clarify whether the amendment that Mr Stefaniak just moved is different from the one circulated by Mr Mulcahy?

MR SPEAKER: It is the same one.

MR CORBELL: I see; there is a bit of a demarcation dispute over there. The government welcomes this motion from Dr Foskey but cannot support it in the form proposed, and I would like to outline our reasons for that and our thinking on this matter.

The government believes that issues going to prudential loan management and housing affordability are of very significant importance to members of the Canberra community. There are considerable concerns over the degree of regulation of so-called low doc or no doc lenders, which require little documentary proof of an applicant’s capacity to repay a loan.

These products are the newest phenomena in the old “easy credit” market—the market where it is easy to get a loan but very hard to pay it off. The regulation of credit providers who offer low doc or no doc loans is already governed by the Consumer Credit (Administration) Act 1996 and the national Consumer Credit Code. However, the states and territories remain concerned about the role of finance and mortgage brokers in the consumer credit market. It is the activities of finance and mortgage brokers that are of most concern to us.

The reason for that is that the finance and mortgage broker has no risk in terms of their involvement in the market. The credit provider still has to face the prospect of gaining repayment of a loan should the recipient of the loan default. But the mortgage broker or the finance broker has no risk. They get their money as soon as they get the deal done and provide the finance, or facilitate the provision of finance, to the person seeking it. It is the activities of mortgage providers, mortgage brokers and finance brokers that are of most concern to us. That is where we are seeking to address this issue. The ACT is in partnership with the other states and territories in dealing with these issues concerning finance brokers.


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