Labor's $60m plan to help low-earners with no-interest loans
More than 300,000 cash-strapped Australians will be able to access low or no-interest loans, under a $60 million Labor plan to prevent low-income earners from falling deeper into debt.
9News can reveal details of the Opposition's new policy, which it claims will provide around 77,000 extra no-interest or low-interest loans per year, over four years.
If Labor is elected, the money will be used to expand loans programs run by Good Shepherd Microfinance at providers across the country.
Opposition leader Bill Shorten told 9News the plan aimed to give financially struggling Australians an alternative to high-interest payday lenders and consumer leases.
"A lot of Aussies are doing it hard, and these are people hold down a job or raising kids and they're one financial bit of bad news away from a crisis," he said.
"If you've suddenly got to to replace all your tyres or the washing machine breaks down and you've got to pay the rent, life can be tough. I don't want the sharks ripping vulnerable people off."
Senator Jenny McAllister, Shadow Assistant Minister for Families, recently chaired a Senate Inquiry into payday lenders and other financial services targeting vulnerable Australians.
"These loans are very expensive, sometimes they can be as much as a 400 percent effective annual interest rate," she said.
"We want to make sure low income people can access low interest loans on terms that are fair."
Good Shepherd CEO Christine Nixon said Australians with very low incomes could access no-interest loans of up to $1500, for items such as fridges, washing machines, school supplies and car repairs.
"The majority of loans are no interest but there are some low interest loans for a larger amount of money, up to $3000," she said.
Melbourne woman Trish Patterson, who is a carer for her disabled husband, took out a low-interest loan to buy a car, after her previous vehicle was written off in an accident.
"We can't afford to get loans from a bank and if you go to a payday lender you're paying twice or three times the amount," she said.
"It was an incredible burden lifted off me."
Mrs Patterson has relied on no-interest or low-interest loans through Good Shepherd on multiple occasions over the past 22 years.
Labor says its plan would cost $15 million a year for four years, and would be funded by its Banking Fairness Fund.
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