Hire-Purchase Problems

Press, Volume CIV, Issue 30783, 22 June 1965, Page 15

Hire-Purchase Problems

(Special Correspondent N.Z.P.A.)

SYDNEY, June 21.

To purchase goods—anything from motor-cars to blankets —on credit has become part of the Australian way of life in recent years.

The habit also has created for the country’s governments a serious economic problem, in that bad debts throughout Australia are mounting at an alarming rate.

Over the last three years, for instance, Australian finance companies and retailers with hire-purchase subsidiaries have written off more than £4om in uncollected debts.

The newly elected New South Wales Liberal-Country Party has decided to do something about the situation for that State.

Through its Minister for Justice, Mr J. C. Maddison, the Government has given this warning: “People who incur bad debts with their eyes open

must be made to meet their obligations, and the law should not stand in the way of recovering such debts.” Mr Maddison hinted that the Government would introduce legislation to make it easier for creditors to recover bad debts.

At present, N.S.W. laws in relation to small debts are regarded by many companies as the most favourable in the world for debtors.

They say that the high costs involved in taking debtors to court, and the cumbersome procedures, make it impossible for firms to recover profitably any such debt. In its approach to the problem. the State Government intends to see whether the garnishee provision of the N.S.W.

law can be brought into line with those that operate for public servants. The Public Service Board, on receipt of a judgment order and a statutory declaration from a creditor, automatically deducts instalments from the salary of any employee in the service until his debt is cleared.

With private employers, however, a new order and declaration would have to be served each pay day. This means debts of less than £5O cannot be profitably collected. Also, in N.S.W., if goods are under hire-purchase, firms must give 21 days’ notice to the hirer if they intend to re-possess, which, in effect, gives him that much time to clear out if he so desires.