THE CLASH BETWEEN IDEALISM AND REALITY A SUBMISSION to the SENATE ECONOMICS LEGISLATION COMMITTEE INQUIRY into the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011: formerly the Exposure Draft entitled the National Consumer Credit Protection Amendment (Enhancements) Bill 2011 from the FINANCIERS’ ASSOCIATION OF AUSTRALIA / INDUSTRY / SMILES TURNER DELEGATION Consultants: Phillip Smiles LL.B., B.Ec., M.B.A., Dip.Ed. Lyn Turner M.A., Dip.Drama Smiles Turner Ph: (02) 9975 4244 Fax: (02) 9975 6877 Email:
[email protected] © Smiles Turner, November 2011 1 “You certainly, in a modern economy can’t regulate interest rates. That’s economics discarded for the last 30 years.” - Prime Minister Julia Gillard, 4 November 2010, Today Show, TCN Channel 9 © Smiles Turner, November 2011 2 INDEX Content Page Executive Summary 4 About this Submission 11 Section 1 - Market Characteristics and Supply Realities 14 If the Bill Proceeds to Enactment Unchanged 14 Section 2 - The Delegation’s Simple Alternative 24 Section 3 - A Detailed Analysis of the Current Bill 30 Section 32A 49 Section 4 - Explanatory Memorandum and RIS Deficient 57 Concerns in Regard to the Explanatory Memorandum 57 An Analysis of the Regulation Impact Statement 65 A Major Government Study Ignored by Treasury 76 An Analysis of the Minister’s Second Reading Speech 77 Section 5 - Non-Commercial Alternatives Grossly Inadequate 81 Decisions Demanding Alternatives, Without Timely Research 81 Not-for -profit, Non-commercial Credit Opportunities 82 Other Possible