Taking out a home loan may soon be easier as the federal government announces changes to laws to “increase the flow of credit” to Australians.
The credit rule pages imposed on banks during the global financial crisis will be scrapped, which Treasurer Josh Frydenberg says will free more money into the struggling economy.
Mr Frydenberg said current credit regulations were outdated, especially with Australia in a pandemic-induced recession, and the changes would cut red tape.
Under the new rules, bank verification procedures will be reduced, which will shorten the time needed to guarantee loans.
This means that lenders will be able to rely on information provided by borrowers, unless there are reasonable grounds to suspect that it is unreliable.
Borrowers would also be more required to provide accurate information to lenders, replacing the current practice of “beware of lenders”.
At the same time, the Morrison government will strengthen consumer protections for vulnerable people who access “payday loans”.
Treasurer Josh Frydenberg said the changes would significantly reduce onerous processes.
“The Morrison government is implementing the most significant reforms of Australia’s credit framework in a decade to increase the flow of credit to households and businesses, reduce red tape and strengthen protections for vulnerable consumers,” said Frydenberg .
“As Australia continues to recover from the COVID-19 pandemic, it is more important than ever that there are no unnecessary obstacles to the flow of credit to households and small businesses.
“Maintaining the free flow of credit in the economy is essential to Australia’s economic recovery plan. “
If passed by the federal Parliament, the changes would come into effect in March.
About $ 13 billion in credit is given each month to help Australian families buy their own homes, while about $ 5 billion goes to real estate investors.
The Credit Act was put in place over a decade ago to ensure lenders don’t make inappropriate loans to consumers, but Frydenberg said his “one size fits all” approach unduly restricts lending.
Since the laws came into effect, a series of other changes have been made to consumer credit protection, including empowering the Australian Securities and Investments Commission to intervene and creating the Australian Financial Complaints Authority. .
But problems persist, such as existing mortgage holders facing refinancing delays even though they have a strong credit history, and savvy borrowers being subject to the same strict obligations as a high-risk borrower applying for a loan. on salary.
Consumers will also be protected from debt collectors, with Australians involved in disputes with debt collectors due to appear before the Australian Financial Complaints Authority, an independent dispute resolution body, reports the ABC.
Debt collectors looking for money will need to hold an Australian credit license.
Deputy Treasurer Michael Sukkar said the changes would protect vulnerable Australians.
“These reforms strike the right balance between protecting consumers while maintaining a viable industry to supply these products, and build on the successful implementation of ASIC’s intervention powers on products that protect consumers from harm. predatory lending behaviors, ”he said.
Daniel Andrews will face a quarantine investigation
Prime Minister Daniel Andrews is likely to be grilled over the fateful decision to hire private security guards for Victoria’s hotel quarantine program.
Mr Andrews is due to appear as the last witness before the inquest on Friday.
It comes after three government ministers, the chief commissioner of police, the chief health officer and senior officials all pleaded ignorance in the decision to use the guards.
Health Minister Jenny Mikakos on Thursday became the third government minister to deny involvement after Employment Minister Martin Pakula and Police Minister Lisa Neville on Wednesday.
The investigation learned that the decision was finally taken on March 27, the day the national cabinet announced the hotel quarantine program.
The prime minister held a press conference at 3 p.m. that day, during which he told reporters that private security would be involved in monitoring compliance with quarantine provisions.
Staff from the Department of Employment, Constituencies and Regions were not asked to start looking for security guards until a meeting at the state control center at 4:30 p.m.
At the meeting, Victoria Deputy Police Commissioner Mick Grainger said Mr Ashton preferred the guards to be the ‘first line of security’.
Mr Ashton, meanwhile, told the Australian Federal Police chief that the ADF would be making transfers to hotels, where private security would be used under an “agreement reached by our DPC (Department of Prime Minister). Minister and Cabinet) “.
Mr Andrews was repeatedly questioned during his daily press conference as to why the ADF was not involved in the state agenda.
He told a state parliamentary committee in August that it was “fundamentally incorrect to say that there were hundreds of proposed ADF staff and someone said no.”
“This is not, in my opinion, correct,” he said.
“It was provided in limited circumstances in New South Wales, not for security as such, but for transportation from the airport to hotels.”
During one of his daily press conferences in August, Andrews said ADF staff were offered “compliance monitoring and verification of self-isolation orders.”
The inquest has since heard that Victoria has turned down several offers of help.
Victoria’s second wave of coronavirus, which resulted in more than 18,000 new infections and 750 deaths, can be attributed to outbreaks at two Melbourne hotels used in the quarantine program.