AUSTRALIA GRIPPED BY H.P.

Press, Volume CIV, Issue 30802, 14 July 1965, Page 15

AUSTRALIA GRIPPED BY H.P.

(Special Crspdt. NZ.PA) SYDNEY, July 12. Australia, the land of the wide open spaces with territory that seems to go on for ever, is rapidly becoming the land of the “never-never.”

At the present time Australians —there are now about 11,250,000 of them—owe £. r Im to hire-purchase companies for commodities ranging from motor cars to a pair of trousers. The bill a head of population is something like £45 14s for every man, woman and child. According to the economists

Australia still has some way to go before it gets to the American standard where hire-purchase accounts reach about one-fifth of the total income, but the warning signs are out. Estimates here of the ratio of debts to income is something like £1 ip £7 One of the worst features of the fantastic growth In private debt In recent years has been the percentage of bad debts.

In the last three years finance companies and retailers with hire-purchase subsidiaries have written off £4om as irrecoverable. As a strange contradiction of the trend, savings banks report a higher rate of saving by more depositors than ever before. At the end of the financial year, the average deposit a head of population was £2ll 10s—a climb of more than 10s in the year. Few food stores, apart from

the “corner shop” now allow purchasers on credit and a number of other businesses, notably in the clothing trade, which formerly allowed generous credit to their customers, are now working on a cash-only basis. In the appliance field, however, “king credit” reigns supreme and customers signifying their intention of paying cash are generally regarded as slightly odd. In some stores cash customers can virtually name their own price, but such is the competition 4n the appliance field that some stores give even their credit customers heavy discounts to get their signatures on the contract ’documents.

Some hard-talking salesmen, notably those engaged in door-to-door selling, have brought their companies to the brink of ruin—and beyond—by talking householders into taking on more than

they can- possibly deal with comfortably in hire-purchase debts. The sales are marked down on their commission accounts, but when the customer has to

default in his or her payment, the salesmen’s employer is the loser.

The total personal income of Australians is now about £7ooom, but the total Indebtedness to hire-purchase companies and department stores for consumer goods and to banks largely for housing amounts to £looom of the total.

A tightening of legislation covering hire-purchase and instalment credit is expected by some observers.