The latest news on responsible lending laws has reiterated why we don’t get our financial plans from the pollies.
It was 2015 when I began to suspect politicians don’t always get personal finance policies right.
I found myself yelling at the image of Joe Hockey on the TV:
He had just announced an intended new policy for using your superannuation to buy a home.
I wondered how the Treasurer, our land’s most senior financial decision maker at that point, could go against the foundational principles of super?
Was it incompetence? Ignorance? Bowing to popular pressure from voters? Succumbing to the wishes of some of our biggest businesses?
I wondered if it was just Joe, or was this a more widespread problem?
It’s a widespread problem.
Nearly four years later, I figured it was the latter when Kenneth Haynes choose not to shake hands with Josh Frydenburg as he symbolically handed over the report from the Banking Royal Commission.
Haynes was wearing the same expression I wore before I started yelling at Hockey.
Now, I realise I’m late to the party here. Pollies announcing popular policies that aren’t good news for all consumers isn’t new.
I also realise yelling at the TV isn’t a sign of intelligence.
I know Hockey couldn’t hear me. Even if he could, there’s a good chance he’d have laughed at me, or ignored me. Or perhaps he would have done a ScoMo and interrupted me.
So what do we the people do when our pollies start acting like muppets, making financial policy decisions with the potential to damage the lives of millions of Australians?
Aside from voting against idiocy with our feet and our ballots, how to we ensure we don’t personally suffer when bad decisions are made?
I reckon you’ve got two choices:
1. Lobby against stupid changes.
Sign a petition. Send a letter to a minister and your local member explaining why you don’t support a specific change. Take to social media stating what you oppose and why. Get loud and proud about your objections.
2. Make your own judgement calls.
You’re allowed to use super for your home, but that doesn’t mean you have to. You can get multiple Buy-Now-Pay-Later (BNPL) accounts without any due diligence from the lenders, but that doesn’t mean you should. Don’t go thinking the policies enacted will protect you, or that it’s always a good idea to take advantage of them.
Sadly, the poor decisions aren’t going away. If anything, they seem to be more frequent (…or is that just me?)
In the last couple of months we’ve seen two acts of immense stupidity announced:
I reckon you can expect another Royal Commission in a decade or so. I hope the ASIC team that made the call are still around to take the stand then and admit that this decision ruined lives.
Secondly, the government is attempting to roll back responsible lending laws.
These laws were put in place to protect consumers from the kind of misconduct that we know is rife in Australian banking. If the Royal Commission taught us anything, it’s that when you give the banks enough rope, they hang their customers – not themselves.
The proposed roll-back is in direct contravention of the recommendations from the Banking Royal Commission. It risks throwing millions of Aussies into the poor house through debt that isn’t good for them. If you think this is #PeakIdiot like I do, you can sign a petition to send the message that responsible lending laws are essential. I hope you will.
Whether you do or don’t, please take to heart this message:
Just because you can, doesn’t mean you should.
Don’t assume that because a law has changed, it’s suddenly in your best interests to push your lending limits, or take money out of super, or any of the other stupid changes we’re seeing. If these muppets do manage to roll back responsible lending, don’t let yourself fall prey to mercenary behaviour from those institutions.
No one will ever care more about your financial situation than you do.
Make decisions that work for you, with full understanding of their implications.