PARLIAMENT HOUSE CANBERRA
MONDAY, 30 NOVEMBER 2020
SUBJECTS: Responsible lending laws; Banking Royal Commission; superannuation.
STPEHEN JONES, SHADOW ASSISTANT TREASURER: The Treasurer should start this week by announcing that he proposes to drop his plan to axe the responsible lending laws. Consumers don't want it. The banks didn't ask for it. The Royal Commission recommended against it. It's time for Josh to get off the island. He’s Robinson Crusoe on this one. We need to keep the responsible lending laws in place.
You know, the Prime Minister said they were going to implement every single one of the Royal Commission recommendations. They've delayed them six months. They said they were a priority and they’re not even on the agenda for this week. So it's time for the Government to do the right thing. Drop their plan to axe the responsible lending laws. Consumers don't want it. Banks didn't ask for it. The Royal Commission recommended against it. It's not in the interest of the economy. It's a reckless move which dumps the very first recommendation of the Royal Commission. You can't say you're in favour of the recommendations of the banking Royal Commission if you reject the very first recommendation and do exactly the opposite.
So it's time for the Prime Minister and it’s time for the Treasurer to announce today that they won't be going ahead with their responsible lending law back flip. The back bench don't support it. The crossbench don't support it. It probably won't get through the Parliament. But if it does it do untold damage to the economy and our households.
You know, these laws were put in place after the GFC after we saw a farmers, after we saw households, being sold loans that they couldn't afford and they didn't understand. We don't want to return to the bad old practices. Time for the Treasurer to do the right thing, get off the island. He’s Robinson Crusoe on this one. Dump his plan to axe the responsible lending laws and get on with the proposals of the Royal Commission. Get on with implementing the Royal Commission Bill. Bring it into Parliament today. It's unacceptable that you haven't even put it on the agenda for the week. That shows that the Government that voted against the Royal commission 27 times hasn't changed Its spots. Still opposed to it. Still won't implement it.
REPORTER: The Government would argue that these laws are pushing up the cost of borrowing for ordinary people because of the excessive or, in their view, excessive regulation and costs on the banks. Australia also didn't have any subprime mortgage crisis like that of the United States. Doesn't the Government have a point that it needs to, you know, get these loans flowing through the economy, get credit flowing through to consumers?
JONES: Look at the evidence that the Government and the Treasury gave to the Royal commission. The test is not what they say today, but what they said to the Royal Commission. And when they went to the Royal Commission, the Treasury said this: There is no evidence that the responsible lending laws are impeding the flow of credit. In fact, the evidence is that they're adding to economic and finance industry stability. So we can't buy what the Government’s saying. The banks didn't ask for it and if you talk to the banks they’ll say well, actually we intend to proceed, business as usual. We want responsible lending and the responsible lending laws aren't impeding the flow of credit.
If there is an issue with the way that the regulators are implementing those laws, let's sit down and have a talk about that. We're happy to ensure that we can cut down the pages and pages of regulatory guidance. But saying that a bank must ensure that a loan is suitable and affordable to a customer is not a very high hurdle to get over.
REPORTER: Just on that that, who are these laws protecting? Like can you take us through, you know, what kind of process will we see here where these laws would you know help consumers?
JONES: The crux of the responsible lending laws is that it protects consumers, it protects banks and it protects the economy as a whole. It means that we won't have the same sort of subprime mortgage meltdown that brought on the global financial crisis, started in the US with shoddy lending practices driven by high commissions to salespeople. So they are protecting consumers. They're protecting the banking system. And they're protecting the economy as a whole. That's why they should be put in place. It's protecting the banking system. It’s s protecting consumers. It's protecting the economy as a whole. That's why they should be kept in place.
REPORTER: What do you make of these calls from I guess the likes of Andrew Bragg and Tim Wilson for young people to be able to raid their superannuation for a house deposit? Is that a good call?
JONES: Everything that Tim Wilson and Andrew Bragg say about superannuation is motivated by one thing and one thing alone, and that is to pull down our world-class superannuation system. Now, we've got a problem with housing affordability. But if you wanted to write yourself a list of all the policies you’d put in place to make housing more more unaffordable for young people, you’d look at the list of things that the Liberal Party, state and federal, have done over the last two decades that has driven up high house prices. That's your list. So if the Liberal Party have got concerns about housing affordability, they should look to their own woeful policy record. I mean these guys have been in Government for 17 of the last 25 years. If there's a problem with housing affordability, housing affordability has gone up, unaffordability has gone up and up and up on their watch. So if there's a problem with housing and affordability, they should look at their own policies. Their policies are the policies that have driven up house prices and made it harder and harder for young people to enter the market.