The federal government’s bill to wind back responsible lending laws received strong endorsement from the Senate last week when the Economics Legislation Committee tabled its report recommending that the bill be passed.
Echoing the Morrison government’s rationale for introducing the bill, the official view of the committee includes a statement describing the “current credit protection framework [as] potentially overly prescriptive”.
The bill has caused substantial debate within interest circles in recent months. The potential for substantial negative impacts from the rollback is now being debated in the context of rapidly rising property prices.
In an interview with ABC’s Nassim Khadem last week, property data analyst Martin North argued that if the bill is passed through parliament it “would place most obligations on borrowers”. Banks will have fewer obligations to determine the financial situation of borrowers under the proposed changes.
However, concerns about a looming disaster as borrowers take on too much debt have been dismissed by some critics. Economist Andrew Wilson from Archistar spoke with John Collett at the Sydney Morning Herald, asserting that “ongoing risk-averse lending policies” would ensure the banks continue to lend money responsibly.
The bill was further debated in the Senate on Monday 15th March. The proposed changes were tabled for consideration by Senator Dunium.
We could know the outcome of a vote by the end of this week.
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