Submission to the Inquiry into the Social Security Legislation Amendment (Debit Card Trial) Bill 2015
The Bill before the Senate seeks to extend compulsory income management into new geographical areas in which there are particularly high levels of people receiving income support payments. Although not explicit in the Bill, it is clear from its background that it will be targeted at Indigenous communities in remote areas.
We believe that the legislation continues Australia’s paternalistic approach towards Indigenous Australia, by delivering top down ‘solutions’ to the deep disadvantage that has developed as a direct result of the invasion of this country more than two hundred years ago. History shows that this will only lead to more suffering, and evidence tells us that compulsory income management simply does not work.
Instead, the Society supports a vision of Australia based on self-determination of the First Peoples, where they have a hand in their own destiny. We believe in deep engagement with those experiencing disadvantage, so that we as a nation can provide whatever tools are required so that all people currently bearing the brunt of structural and historical inequality are able to empower themselves to fulfil their potential.
On 10 August we made a submission on the above topic: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Credit_Card_Interest/Report
The Committee has now reported: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Credit_Card_Interest/Report. The report broadly supported our argument that those on low incomes are hit hard by credit card interest rates (our submission is quoted on p 20). However, instead of taking up our suggestion that an appropriate response was to legislate so that falls in the RBA cash rate were passed on to credit-card users, the Report supports market-based mechanisms, like increased competitiveness, and heightened consumer awareness (at 3.21). While we believe that the market has failed so far in protecting these consumers, we would support any new market-based measures to drive down the costs of credit cards to the poorest Australians, including increased competition (though any deregulation must be pursued with caution) and increased education of consumers of financial products (Recommendation 9). We would argue, further, that these programs should be targeted at the most vulnerable: older and younger credit card users, Australians with less education, those from non-English speaking backgrounds, and those on the lowest incomes. The Committee’s suggestion that “credit card advertising and marketing material should be required to include a prominent statement of a card's ongoing headline interest rate and annual fee” is a step in the right direction, and we strongly endorse Recommendation 3: government work with key stakeholders to develop a system that informs consumers about their own credit card usage and associated costs. St Vincent de Paul is definitely keen to partner with government in developing such a system.
2015-11-10 | 612 kB