Ms TRISH DOYLE (Blue Mountains) (17:15): I speak today on the Government's proposed Fair Trading Amendment (Commercial Agents) Bill 2016. This is an amendment that will repeal Labor's 2004 legislation that introduced protections for consumers and vulnerable people from aggressive and harassing debt collectors. This amendment will have the effect of abolishing altogether any licensing regime for debt collectors operating in New South Wales. Twelve years ago Labor introduced new legislation to regulate and licence the commercial agents and private inquiry agents industry—that is, the industry of process serving, debt collection, repossession of goods, surveillance of persons and investigation of persons. This legislation came about in response to national competition policy reviews and in response to community concerns about industry overreach and exploitative practices by industry against vulnerable people.

In an industry where there is a long history of intimidation, harassment and thuggish behaviour, it is crucial that the character and standing of individuals and businesses engaged in this type of work is checked and double checked against specific licensing criteria. Today the Baird Government, under the guise of cutting red tape, is busily abolishing what little protection the working poor and vulnerable people have against bullying and harassment by debt collectors. The Government and all of us in this place should be discussing what extra protections could be extended to consumers and the working poor, rather than smoothing the way for thugs and stalkers to come after young families, workers, single mums and pensioners.

It is worth noting too that this bill represents a transfer of power away from the Minister for Justice and Police—the failed Deputy Premier—that is a first. As members would be aware, it has been the practice of this Government to vest undue power in the office of the Minister for Justice and Police and to give him far‑reaching oversight of the Justice, Police and Attorney General's departments. It is a pity that when the Liberal-Nationals finally realised their mistake, they decided to remedy it by throwing vulnerable people to the wolves, with legislation like this that strips the community of key protections from harassment and exploitation.

We have heard that advocacy groups and legal aid organisations have grave concerns about the impact of this legislation and the deregulation of the debt collection industry. We can be sure that self-regulation will open up the industry to abuse. Legal Aid NSW has reiterated its preference for the existing licensing model over the so-called negative licensing scheme that this bill seeks to introduce. Negative licensing is a system that assumes all people are suitable to hold an imaginary licence but that some people might be excluded after being caught engaging in bad behaviour. This is an absurd failure of logic, given what we know of the history of the industry and some of the people it attracted in the years before Labor cleaned it up. Indeed, it is important to note that Legal Aid NSW has written recently of improvements in the conduct of the industry, which highlights that the existing licensing regime—the one which Labor implemented back in 2004—is effective and is promoting good behaviour.

The opinion of Legal Aid NSW is that New South Wales has made progress toward an ethical, sustainable and cooperative industry. The Government's proposal for a deregulated industry puts this progress at risk. The Financial Rights Legal Centre, formerly the Consumer Credit Legal Centre, has called for external regulation and oversight of the industry, mandatory standards of conduct, and mandatory compliance regimes, rather than deregulation. It is the opinion of the Financial Rights Legal Centre that oversight by the Australian Securities and Investments Commission [ASIC], or some other body, should be accompanied by investigative and sanctioning powers to discipline rogue operators and revoke licences on an individual level, as well as dealing with systemic or industry-wide malpractice.

In 2013, Legal Aid NSW assisted more than 15,000 individuals with debt issues. A significant proportion of Legal Aid civil law grants related to debt recovery matters. This informs us that there are a great many people affected by this area of law who would meet the criterion of vulnerable citizens. Legal Aid noted in its submission to the Legislative Assembly's Committee on Legal Affairs Inquiry into Debt Recovery in NSW that it is very common for clients who bring debt matters to them to also have housing, mental health and drug or alcohol problems. The Government is proposing a system that causes people with prevailing pressures in their lives to face the prospect of harassment and intimidation by unscrupulous, unlicensed debt collectors. It is proposing to deregulate debt collection. It is absurd.

As a rule, conservative governments who champion the abolition of red tape are to be treated with caution, as the motive is to benefit big business and big capital. Red tape means something is getting in the way of profit-making. Groups such as the Environmental Protection Authority are considered red tape; industry assistance is red tape; local environment plans are red tape; heritage orders are red tape; the Threatened Species Conservation Act is red tape; likewise, the licensing of debt collectors is red tape. Anything that stands in the way of business maximising its profits at the expense of the community, the environment or a healthy society is red tape. That is why members should be sceptical of Minister Dominello's promise to do away with red tape. Doing so will remove key protections for society's voiceless and vulnerable.

The evidence given by Legal Aid NSW to the debt collection inquiry is supported by the Financial Rights Legal Centre evidence to the same inquiry. In its experience, the vast majority of debtors are diligent and honest people that do not wilfully ignore or avoid the payment of their debts. They are most often forced into a position of being unable to pay due to illness, unemployment or other factors beyond their control. It also notes that New South Wales presently has the lowest level of statutory protections for consumers experiencing debt recovery action by a creditor. The lack of statutory protections places pressure on welfare, community services, health services, and charities. It steers struggling debtors towards bankruptcy, which is a lose-lose situation for all concerned. The Financial Rights Legal Centre goes on to make a series of recommendations to reform the industry and introduce legislative protections for consumers.

There is also an imperative for this House to debate and consider additional protections or regulations in other industries that will prevent people from accumulating debts they cannot hope to service. Predatory lending in the form of banks pushing financial services products or retailers selling consumer goods at sky-high interest rates must be curtailed. Debt collection action on behalf of state-owned corporations or essential infrastructure operators should be eliminated. It is absurd that private tollway operators refer debts of less than $10 to debt collection agencies. It is absurd that energy retailers providing an essential public service should need to engage debt collection agencies when expert testimony to parliamentary inquiries informs Government that the majority of debtors intend and are willing to pay off the amounts owing.

These are the issues members should debate, not this absurd proposal to deregulate an industry that has the potential to ruin the lives of vulnerable people if unscrupulous and unethical people rejoin its ranks. This bill amounts to an ideological legislative change that will punish the vulnerable and reward unethical lenders. I note that the Opposition will be moving amendments to this legislation in the Legislative Assembly and in the other place. I will be supporting those amendments. I implore the crossbench of the Legislative Council to support our amendments and in doing so safeguard vulnerable people from the thuggish behaviour that will flourish if the Baird Government's current bill is passed.

Ms JENNY AITCHISON (Maitland) (17:25): I contribute to the debate on the Fair Trading Amendment (Commercial Agents) Bill 2016. Let us be clear, people who owe money are often the most vulnerable in the community. As previously stated by the members representing the electorates of Granville, Swansea, Wyong and the Blue Mountains, all members have a responsibility to protect the rights of the vulnerable in our community—those with mental health issues, addiction issues, those suffering housing stress, homelessness and illness. Often the most vulnerable people in our community go into debt against their wishes.

This bill will affect another vulnerable group: those that have acquired sexually transmitted debt, or relationship debt. If a person were to assist their partner to purchase an item or service because that partner cannot afford it, or does not have a credit rating enabling them to increase their own debt, they will be threatened by this bill. One scenario is a young woman who assists her partner to purchase a mobile phone because he has a terrible credit history and cannot purchase it himself. He states he requires it for work and she takes on the debt as her own. A few months later the relationship breaks down due to domestic violence and the woman is left with the debt, the physical intimidation of her ex-partner, and a debt collector at her door intimidating and bullying her in order to extract money from her.

Presently, the Commercial Agents and Private Inquiry Agents Act 2004 requires commercial agents, or debt collectors as they are commonly known, to hold an operator licence. It provides consumers and other members of the community with reassurance that the person identifying themselves as a debt collector is a fit and proper person who will undertake their duties in a fair and proper manner. Currently, licensees are required to undergo training and be fingerprinted. When 20 per cent of this work is undertaken face to face these are important requirements to ensure public safety. A debt collector will often arrive on a person's doorstep unannounced to recover a debt. Debts have the potential to create significant financial hardship for all parties involved in a dispute. The process of debt recovery must be fair, effective and efficient. It is vital that the process balances the rights of creditors and debtors and ensures that those most vulnerable in the community are treated with respect.

It is with this aim in mind that the terms of reference for the Legislative Assembly Legal Affairs Committee provided a succinct explanation of what the industry and sector needed to ensure that the debt recovery process became more efficient. The committee received more than 30 separate submissions from government departments, non-government organisations, legal centres and collection agents. The committee made 22 recommendations designed to overhaul the sector. Recommendation one stated that the New South Wales Government should introduce negative licensing for commercial agents who have no face-to-face contact with debtors while positive licensing be retained for field agents. This does not seem unreasonable.

For many people in my community, and in communities across New South Wales, a level of reassurance and confidence can go a long way, particularly when an unknown person arrives on the doorstep saying that they are a debt collector. The committee recognised that. Many submissions recognised that. The Opposition recognises that. It is a pity that the Government does not also recognise it. So many scams are taking place in the community at the moment. There are burgeoning internet scams where people are told they have debt, whether for parking infringements, for speeding or for tax matters. These scams are limited to the internet because people can hide behind it. They do not have to go to someone's house and prove that they are an authorised representative of the organisation seeking to recover the debt. Imagine the number of people who are taken in by these kinds of scams and how that number will increase when anyone can arrive on the doorstep and demand money.

How will that work in a situation where a family member has not told the rest of the family that they are in debt? The debt collector may try to collect money from someone who has no knowledge of the debt. Positive licensing must be retained for those agents who work face to face with people, consulting with individuals in their own front yards. Those agents need a physical licence. We expect police officers, tradespeople and property agents to have a licence to identify themselves. Why is it different for debt collectors? Legal Aid has publicly voiced concerns about some debt collectors. It says it has "ongoing concerns about the tactics employed and behaviour directed towards vulnerable consumers by debt collectors". This industry does not work at the normal end of commerce. It works at the gritty end. This is where people are the most vulnerable and have the most to lose. This is where people are subjected to violence and intimidation.

I am concerned about what the impact of this legislation will be on vulnerable people in our community. As shadow Minister for Small Business I recognise that there is a move in the business community to reduce red tape. This Government, despite its claims to the contrary, is not very good at that. Again we see here the removal of red tape to help business bypass a licensing regime, but it puts at risk the protection of those in our community who owe money. If a debt collection agency, like any small business, is operating efficiently, effectively, ethically and with compassion then it should have no problem complying with the rules. We need to ensure that we retain regulation that protects the most vulnerable people in our community.

I call to the attention of Government members the significant concerns this legislation will raise for people across New South Wales who get into financial trouble. We see that happen often through predatory lending practices. We see it happen to young people who do not understand contracts. There are programs in our schools to alert young people to how easy it is to get into debt. I urge Government members to think about what they are doing to those people. We hear of people being sent to jail for unpaid fines. People who owe money can get into terrible situations. Once a person gets into debt it escalates. The fees increase. The charges levied by these agencies contribute to greater debt. We need to ensure that we provide protection. Allowing someone to go unsolicited, unannounced, at any time of the day, to someone's door to demand money from them is not the kind of deregulation that we want to see in any small business. I urge the Government to consider the Opposition's amendments and to support our position.