Shanks Katrina: Insolvency Amendment Bill — In Committee 
Shanks Katrina: Insolvency Amendment Bill — In Committee 
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KATRINA SHANKS (National) 
: 
 It is a pleasure to speak tonight to the Insolvency Amendment Bill which we are obviously supporting. I would like to respond to what Lianne Dalziel was talking about in terms of the length of time a debtor’s information remains on the public insolvency registers. This issue was discussed a lot at the Commerce Committee; it is an issue we took very very seriously. In the case of a no-asset procedure it is a big change for the term to go from 1 year to 5 years on the public insolvency registers. It is significant and it does have a significant impact on those people who are going through this process and on the credit they can obtain in the 5 years they are on that register. In particular we have to take into consideration those people who have gone through the no-asset procedure and who have fallen upon bad times in circumstances where it is not totally their fault they have entered the procedure. That can happen through redundancy through sickness or through injury so it is important that we get it right. We did not take it lightly at the select committee. We got a lot of feedback and the Privacy Commissioner had some very valid issues which we discussed thoroughly. We looked at international trends. We talked to the officials. They are here today and I would like to thank them very much for the hard work that they have put into this bill. They have worked very hard behind the scenes and we asked a lot of questions to which they always came back with good answers in a really timely manner without fobbing us off. 
Hon Dr Wayne Mapp 
: Ha ha! 
KATRINA SHANKS 
: He laughs beside me. The thing about lengthening the time to 5 years is that there is really no international average or consistency out there when people are using a no-asset procedure for how long debtors should be on it. It is a judgment call in effect and that is how we got to that term of 5 years. We also had to look at the balance between those who are debtors and those who are creditors to ensure that those people who lend money have the right to know when someone has a bad credit record. So it was a hard decision to come to but I think 5 years is a good place to be. We will run with that and see how it sits out there. At the moment it seems to be OK; we will see how it goes in reality when people using the no-asset procedure have been on the register for 5 years. 
Around that issue we also talked about multiple insolvencies. If debtors have multiple insolvencies—more than two of them which could mean a no-asset procedure plus a bankruptcy—then instead of their being on the register for 7 years we have made the term indefinite. That is also quite a big call for the committee to make but I think it is a fair call. We have to ensure that the people who lend money to those debtors know exactly what their credit rating is and whether they are a good risk or not. At the end of the day if people keep on lending money to the same debtors who cannot pay it back or who use it irresponsibly those people who are lending the money need to be allowed to know the types of risks they are taking. Obviously the interest would be calculated according to that risk. 
The other thing I would like to talk about apart from the public register is the fraud section within Part 1 which provides that if someone has committed an offence under bankruptcy the official assignee will terminate his or her no-asset procedure. That was a bit of a loophole; I think it is good that we have identified that loophole and that we are closing it. 
There is also the issue of the discharge of joint debtors. I think people did not realise that many people have joint debts in terms of their credit cards and trust accounts and that people were putting their whole joint debt in the no-asset procedure and getting everybody’s debt written off regardless of whose debt it was. That was another loophole we have closed. I think it is a really good loophole to have closed especially in situations when one spouse goes into the no-asset procedure and the other spouse does not because otherwise all of their credit cards could be taken in and written off as well. That happens also with co-trusts and joint debtors and partners so it is really good that we have closed that loophole. 
The one thing we discussed in detail in the Commerce Committee that did not go into this bill was budgeting advice and whether that should be part of the no-asset procedure. We discussed it because we know it is very important for those people who have problems with the way they spend money and budget and who get themselves financial problems—