Mr WETTENHALL (Wednesday 14 April 2010) (3.14 pm): It is good to hear the member for Mermaid Beach acknowledging the brilliant legal mind of the minister-and of course there are plenty of brilliant legal minds on this side of the House. I rise to speak in support of the Credit (Commonwealth Powers) Bill 2009 and the amendments that are to be considered in detail. There is one particular aspect of the bill that I wish to concentrate on briefly, and that is the provisions relating to the Commonwealth licensing regime
and specifically how that will work.

The overarching aim of this bill is to refer to the Commonwealth the power for the Commonwealth to regulate consumer credit and, in doing so, establish a single, national law governing consumer credit. This will be achieved via the National Consumer Credit Protection Act 2009.

One of the key features of this act is the establishment of the Australian credit licence, which will encompass all credit providers and finance brokers. Licence holders will be required to meet minimum entry standards before they can offer products and services to consumers. The licensing regime will be supervised by the Australian Securities and Investments Commission, ASIC, and will replace regulatory regimes that currently exist across different
states and territories. This is an important step forward for consumer protection in Queensland and throughout the nation.

As I understand it, already ASIC has commenced activities around licensing. From 1 April 2010, ASIC has commenced the registration component of the licence. Credit providers can now start the necessary processes leading up to them being licensed from 1 July 2010.

Currently, Western Australia is the only jurisdiction that licenses credit providers and finance brokers. Victoria and the Australian Capital Territory have registration systems covering credit providers and brokers. This national credit licensing system will build upon work that the states and territories had been doing previously in a proposed national finance broker bill.

Consumers will be consistently protected across Australia, as a person who loses their licence or registration will be excluded Australia-wide. I think that is a particularly important feature of these new arrangements. Consumers can have the confidence, whether they be Queensland consumers or consumers from other states, that they can be protected from those who would transgress the new standards.

Credit providers or finance brokers who break the rules will incur penalties including fines, a loss of licence and even prison terms. Questionable operators on the margins who cannot meet these new national standards will not be allowed to engage in credit activities and will be forced to exit the industry, and that is a good thing.

Uniform national licensing will also enable a major reduction in red tape for credit related businesses as all regulation will move to one jurisdiction. This is one thing that all members in this House will have heard.

But everyone in business looks forward to a reduction in red tape, whether it be at a state level or at a Commonwealth level or at a local government level. That is a very important part of these new arrangements.

I just want to talk in general terms about the amendments and why some of the exclusions in those amendments are necessary. The exclusion, or ‘carve-out', amendments provide clarity around the extent of the Commonwealth's powers in relation to the credit referral. Presently, clause 4(1)(b) of the referral bill
gives the Commonwealth a limited amendment power. There was concern from Victoria in particular, backed up by other jurisdictions, that the wording of the clause could be interpreted to empower the Commonwealth to make laws about credit that encroached on state responsibilities. This could stretch to
the collection of stamp duty, sale of land and/or the regulation of mortgages.

Obviously, these are issues of considerable interest to Queensland, so clarity around the Commonwealth's role in them was necessary. In order for a referral of power to be effective, the Commonwealth and the states must agree to the terms of the referral of powers given.

The government had introduced its credit referral legislation to this House in November 2009, satisfied that any risk as a result of these ‘carve-outs' not being included was very low. As well, the Commonwealth had consistently
resisted moves from the states to include these ‘carve-outs'.

However, in December 2009 and after Queensland had introduced its bill, the Commonwealth gave notice that it would agree to include the exclusion clauses in the respective referral bills. So the new exclusion clauses, as part of the amendments, explicitly exclude the collection of stamp duty, the sale of
land and the regulation of mortgages from the referral in clause 4(1)(b) of the referral bill.

While the risk of the Commonwealth exceeding the limits of its power in relation to credit on these matters was always considered by Queensland to be low, the addition of these ‘carve-outs' puts the limits of the Commonwealth's powers beyond doubt. Inclusion of the ‘carve-outs' is, therefore, a good outcome for Queensland as the state's interests are appropriately clarified and safeguarded. Other states and territories are following suit and including the ‘carve-outs', thereby ensuring that the seamless national system of consumer credit regulation can be established.

In conclusion, this bill and the amendments to be considered later, if passed, will mark a very important reform. It is an adjustment in the federal-state system of consumer credit regulation. It will create national standards, and those arrangements are unequivocally in the best interests of consumers in
Queensland and throughout the nation.

I commend the bill to the House.