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Strategies for reducing reliance on high-cost, short-term, small amount lending

24 April 2012 | Discussion Paper

The Minister for Financial Services and Superannuation, together with the Minister for Community Services, have jointly released a Discussion Paper setting out a range of strategies and options to provide alternative assistance for those consumers who would otherwise utilise high-cost short-term small amount loans.

The paper covers a range of possible measures aimed at reducing the dependency of consumers on these small amount loans, including by:

  • minimising the use of these loans where other solutions to a consumer’s financial needs are available (for example, by negotiating directly with their utility provider, where the credit would otherwise be used to pay an electricity bill);
  • encouraging the use of existing alternative forms of credit (such as no interest or low interest loan schemes); and
  • promoting the availability of financial counselling services that can provide constructive and long-term solutions.

The measures discussed in the paper complement proposals to regulate small amount loans included in the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011. This Bill is scheduled to be debated in Parliament in the Winter 2012 sittings.

Submissions closed on Monday 4 June 2012

Key Documents


26 submissions were received for this consultation.

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