Sector Articles of Interest - 15 October

Written on the 14 October 2020 by SAFCA

Stop The Debt Trap Further detail on Government's Planned SACC Reforms Update

Update from Stop the Debt Trap:

On Tuesday 6 October, Treasury provided us with some more detail on the specifics of the reforms the Government intends on introducing for payday loans and consumer leases.

Overall it was again more bad news than good, so it largely reinforced our view that we won't be supporting the Bill which we communicated to Treasury. I've summarised a few key points that came out of the discussion below.

On the process before this is tabled in Parliament:

• Treasury confirmed the SACC Reforms will be part of an omnibus Bill including the repeal of responsible lending obligations (still waiting on further detail on what responsible lending changes involve);
• draft Bill likely coming late October/early November; and
• they will not be consulting further at all on the SACC Reform aspect of the legislation the Bill will be the Government's settled position. Some targeted consultation will occur on the responsible lending obligations and debt management changes soon though.

In regard to some specific clarifying information on how the law will work (if passed):

• the current rebuttable presumptions that a payday loan is unsuitable if a consumer has defaulted on one, or had over two, in the last 90 days, will still be removed. This contradicts the SACC Review recommendation that this protection only be removed if a 10% protected earnings amount cap was introduced for everyone;
• for consumer leases, the monthly 4% fees will be calculated on the price of the good, GST, and any delivery or installation fees;
• delivery and installation fees will need to be 'reasonable'. ASIC will have an instrument making power to deal with this further;
• the extra 20% establishment fee consumer lessors are permitted to charge will be calculated on the price of the good only. The establishment fee can be repaid pro rata across all the payments throughout the lease (so it is essentially an additional cost on top of the 4% per month cost cap). It is unclear what happens if the lease is paid out early;
• the 'base price' will be the recommended retail price, but more detail on its meaning for second hand and other goods will be contained in the accompanying Regulations, which will be consulted on next year. The protected earnings amount caps will also be in the Regulations, but it seems these will not be consulted on;
• the anti-avoidance provisions are apparently designed to be broad, and will hopefully (pending enforcement action by ASIC) catch lenders like Cigno and similar - but are unlikely to catch buy now pay later;
• any decisions about removing consumer lease providers' access to Centrepay rest with Services Australia, so the legislation will not address this.

Essentially, on top of what we discussed in the briefing last week, it provided additional confirmation that lobbying by consumer lease providers had succeeded in basically watering down the cost cap. It sounds like these were simply 'government decisions', not really based upon any real evidence which is super frustrating to hear.

ConnectEd Home Energy Assessments

Through the ConnectEd program, Uniting Communities is able to offer free, in home, phone or video call assessments for people around their electricity, gas, water or telecommunications.
People access our service when they have high energy bills, would like to learn more about managing their energy, or when they have concerns about the accuracy of their bills/unexplained large bills.

This free service supports people to:

Read and understand their bills

• Ensure that they're on the most appropriate plan for them
• Understand the running costs of their appliances
• Understand where their main energy costs are in their household
• Access all appropriate concessions
• Negotiate and advocate with energy retailer
• Other support as required

This program is able to support anyone in SA, and additional support is now able to be provided to:

• Those with very high bills, and/or
• Struggling to identify the source of the problem, and/or
• People from CALD or ATSI backgrounds, and/or
• Those with disability

To refer into this program please email us on connected@unitingcommunities.org with the client contact details, suburb and reason for the referral (eg, high energy bill).

VIEW home energy assessment flyer

Legal Aid NSW Elder Abuse

Elder abuse is not new. It has been around a long time listen to Micky Rooney speak about his experience of elder abuse. What is new is the growing recognition of elder abuse and the support for those who speak out. In this newsletter (link below) we support the very talented Elder Law students of UTS by sharing with you some of their research work on elder abuse.

Read more here in the Legal Aid NSW newsletter:

https://news.legalaid.nsw.gov.au/pub/pubType/EO/pubID/zzzz5f5eaca0a3f6f324/?aid=90eed392456b4f9d&#90eed392456b4f9d

SACOSS Insights on 2020 Budget

The 2020 Federal Budget offered a glimmer of hope for the community services sector, but missed key opportunities to invest in vital social housing and a permanent, adequate increase to JobSeeker and other income support payments.

We have produced a short video of SACOSS CEO Ross Womersley that outlines the SACOSS response to the 2020 Federal Budget. The video focuses on three key areas: Jobseeker, Social Housing, and Equal Renumeration.

Watch it here: https://mailchi.mp/7f605618630e/sacossmarch-ebulletin-3421178?e=18d9abe426#Budget%202020