Give Consumer Lease Customers and Industry a “Fair Go”
To the Australian Federal Government and Shadow Ministry
“Give Consumer Lease Customers and Industry a “Fair Go”.
We ask Members of Parliament and Senators to stand-up and amend the Financial Sector Reform Bill 2022 as without change it will close a 90-year-old industry, deprive hundreds of thousands of Australians Consumers access to essential products and drive significant financial increases to the Australian Federal Budget.
To replace the Consumer Lease model will cost Government over $1 billion and its removal will cause great social exclusion for hundreds of thousands of Australians, which surely is not the outcome sought by government.
Based on track records any Government body created to meet the welfare demand will eat up more than half the funds provided, in administration costs that Consumer Lease businesses provide now, at no cost to the taxpayer.
When in opposition in 2018, the Labour Party then agreed to changes to the proposed bill. These changes have now been abandoned in the proposed bill. The industry supports the bill with some critical amendments needed:
- Protected Earnings Cap – to be 20% of net income (not 10%)
- Establishment Fee – to be 20% of total lease value (the same as SACC)
- GST – to be added to the permitted cap
- Delivery Fee – to be charged at cost
- Base Price – to equal the RRP of the product.
A ‘Public Hearing’ by the Senate Economics Legislation Committee was held on 14 October 2022 on the Financial Sector Reform Bill.
The Senate Economics Legislation Committee chaired by Senator Jess Walsh did not give Consumer Lease businesses, or its customers a “Fair Go “as it:
- Excluded consumer lease businesses from an ‘invitation only’ public meeting
- Asked ‘consumer advocates’ about Consumer Lease issues not Consumer Lease companies, and were told untruths
- Refused to meet with Consumer Lease companies to get the real facts
- Ignored a supportive petition from 49,000+ Consumer Lease customers
- Ignored a 95% strong message from Consumer Lease customers saying, “it’s our money don’t tell us how to spend it.”
- Ignored Consumer Lease businesses telling the committee they cannot survive on the current legislation
- Excluded some Consumer Lease business submissions from the public without any reason being provided
- Treated Consumer Lease customers and businesses with no respect
And then the committee said, “the committee believes that further industry regulation is required, and the proposed reforms strikes the right balance between enhancing consumer protection, while ensuring these financial products and services can continue to fulfil an important role in the economy.”
No, the right balance has NOT been found and the committee has not listened or even engaged with the Consumer Lease industry. It is treating Consumer Lease customers like second rate citizens who cannot think for themselves or know how to control their finances which is completely incorrect.
We call all Senators and Members of Parliament to care enough about these needing Australians and businesses to listen to what they have to say!
The bill must be amended. Senators and MPs should stand up and support the 5 amendments if they are truly representative of the Australian people.
One industry participant has over 40,000 customer signatures stating that customers want and need consumer leasing available to them.
A recent survey shows that 95% of customers reject the 10% Protected Earnings CAP – these customers don’t want to be told by the new Government how to spend their income and that they want and need Consumer Leases.
The industries evidence-based information has not been considered by the Government, which is disappointing, un-Australian and arrogant.
During the 2016 SACC Review, the Panel was challenged: “to find the correct balance between consumer protection and industry viability.”
If the bill passes as proposed, it will kill the Consumer Lease Industry.
Please support the critical amendments to the Financial Sector reform bill 2022.
Stand up to this injustice for the good of hundreds of thousands of Australians and the 90-year-old consumer lease industry.
Yours sincerely,
Steven King
President – CHERPA