TIM COX:
The Minister for Superannuation and Corporate Law, Tasmanian Senator Nick Sherry, has announced that it will be easier for you to make a change to your credit contract if you can demonstrate that you are currently in financial hardship.
How will this work? Nick Sherry, good morning to you.
NICK SHERRY:
Morning Tim. Good morning to your listeners.
TIM COX:
What - under what sort of circumstances might someone need a change?
NICK SHERRY:
Well today I'll be releasing new national consumer credit protection laws that will replace current state laws. One of the changes I'll be announcing is that currently, if you're experiencing hardship with respect to credit - now, this could typically be mortgage or credit card debt - there's a threshold for hardship of up to $300,000. We're increasing that threshold to $500,000. So you'll have the right to go to the provider and seek relief, depending on your hardship circumstances; and then if the provider doesn't grant it, you can then appeal to a low-cost independent tribunal.
TIM COX:
So will this be for someone that has a television on an interest-free loan, cons… store credit, or what sort of circumstances are you talking about?
NICK SHERRY:
Any sort of consumer credit. So it could include those. It could include a mortgage. It could include credit card. It could include store purchase, credit purchase, any form of credit. In addition to this, I'll be outlining today new, responsible lending laws. What will happen is that the provider, the credit provider for the first time in Australia will need to assess the suitability of the product they sell to an individual. And secondly, and very importantly, they'll need to assess the capacity to repay that credit debt.
And that's a new, responsible lending provision we'll be introducing in the national laws for the first time in Australia.
TIM COX:
I - let's just assume this goes through without any difficulty, given the current circumstances. How quickly will it come into play and do you advocate still penalties for credit providers that aren't up to the task of assisting?
NICK SHERRY:
The new credit laws we want to operate from 1 November, as soon as they've gone through the Parliament. And then what will occur is providers - and there'll be thousands of providers - and tens of thousands of advisers who will have to be fully licensed. There'll be an assessment. And that will take place over the three to six months after 1 November.
So there's a big job ahead in a practical sense.
I am very confident. This will also include areas like margin lending where people borrow, pay credit for borrowing shares. And there is no law at the present time setting out the regulation and supervision of margin lending, and there've been a number of very unfortunate, and I think, high profile cases of people losing not just their assets but their house as a consequence of margin lending.
So it's a significant overhaul in the introduction of single standard national regulation with improved protection for consumers.
TIM COX:
All right. We'll look forward to seeing how that works, and how the increase in the threshold will assist families in this state in particular. Can I ask you very quickly while I've got you about the remuneration tribunal increasing the annual allowance for Federal MPs to $30,000 a year - that's about an extra $90 a week. Bob Brown's going to try and block it in the Senate.
I know that the tribunal works independent of the Parliament, as it should.
Will you support the rise? Or do you think the time for further restraint, even on the allowance level is now.
NICK SHERRY:
Well this allowance, it's not to part of our pay. This allowance, I can give you my personal circumstances, this allowance goes out to the community. It's there to pay for functions, shows, donations to sporting and community organisations; prizes, raffles. There's a whole range of payments that I make to organisations, mainly on the north-west coast where I live. And that's what the money's for.
It's not personal pay as such - it's for community and sporting organisations.
That's where the money goes.
TIM COX:
Do people understand that, do you think? Do people understand as well what happens to the unused portion of the allowance?
NICK SHERRY:
Well certainly, in my case, I used the lot for community organisations. I mean, I don't have anything left over at the end of the financial year. When I add up all the various payments I've made for the function shows, sporting organisations, donations, community organisations - when I add it all up, there's nothing left over.
TIM COX:
Nick Sherry, thanks for your time.
NICK SHERRY:
Thank you Tim.
TIM COX:
That's the Minister for Superannuation and Corporate Law, Nick Sherry; Tasmanian Labor Senator Nick Sherry.