Announcement date
8 September 2022
Link to announcement
Hayne Royal Commissi...~https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/hayne-royal-commission-recommendations-advanced
Problem being addressed
The 2016 Review of Small Amount Credit Contract (SACC) Laws made a number of recommendations aimed at increasing financial inclusion and consumer protections for SACCs and consumer lease consumers. In particular:
- while SACCs can be used as an emergency source of funding for one-off expenses, some customers engage in repeat borrowing which can, over time, become unaffordable
- consumer leases can be high cost and are provided to financially vulnerable consumers through Centrepay, a voluntary deduction service for Centrelink recipients.
Proposal
The Department of the Treasury is seeking to progress a list of reforms relating to SACCs and consumer leases to address the outstanding response to the Review of Small Amount Credit Contract Laws.
Assessed RIS outcome
Independent review
Assessment comments
Consistent with the Government's Regulation Impact Statement (RIS) requirements, the Review of Small Amount Credit Contract Laws has been certified by the Department of the Treasury as meeting the requirements of a RIS. The OBPR does not assess the quality of independent reviews and RIS-like documents used in lieu of a RIS, but does assess whether the options analysed in the independent review are relevant to the regulatory proposal. The OBPR assessed that the options analysed in the independent review are sufficiently relevant to the regulatory proposal.
Regulatory burden
The Department of the Treasury estimates an increase in regulatory costs of $17.62 million per year, averaged over ten years.