Or is it a recipe for more economy hardship for the battlers of this country. The notion that easier credit puts more cash into the economy, and thus by stimulating spending the economy improves. This sounds well and good on the surface, but who foots the bill? The answer to that is those who can least afford it. This move is fraught with disaster, for workers and small business operators alike, already under economic stress from the Morisson/Frydenburg imposed recession. Who should benefit from the easing of credit restrictions, the Coalition friendly big banks that's who! The changes will also remove some of the burden on banks to ensure people do not enter into loans they cannot afford to pay back, Frydenberg said the changes would significantly cut red tape, for whom the banks of course. Just as a used car salesman is in the business of selling dodge old cars, the banks are in the business of selling dodgy old credit. The track record of the big banks acting dishonestly has been well and truly exposed by the Royal Commission. Should this "easing of credit" come into law, then the foreclosures, bad debts, bankruptcies etc, plus a host of social problems, family breakup, suicides etc will all increase.

BTW; Household debt in Australia is the second highest in the world, as a percentage of GDP, second only to Switzerland.

There's only one recession buster but the bureaudroids don't like to implement it. A reduction in Public Service high-end Bureaucrat salaries !

Paul1405,

Soot Morrison and his sidekick Frydenberg are going to allow companies to trade while insolvent as a way of keeping taxpayers in a job.

I wonder if nobodies like me will be allowed to ask a company if it is operating while insolvent before I sign a contract for it to supply any goods and services to me.

Or is that the risk taxpayers will have to run so that Soot and his sidekick can tell Australia "Look, people are still working and unemployment is under control. We're on your side. Look how we took control of the situation in Cobargo."

Misopionated,

I presume you're talking about the bush-fires last year. Morrison is in charge of the federal government. Bushfire control is a state government responsibility, over which Morrison has no control.

Pity you've never studied sociology, or public policy or politics.

Joe

FOULmouth,

I thought Homer Simpson was a cartoon character until I met you.

You're so ignorant you cannot make out when someone is being sarcastic. Come to think of it that is actually a Simpsonism.

Westpac has been fined $1.3 billion for doing business with paedophiles and other criminals. All while pocketing big profits for such activity, which they knew about for years. Disgusting that the recession kids, ScumO' and Friedbrain, want to give these shonks open slather to rip off the unsuspecting!

Paul1405,

Doesn't surprise me in the least.

After all, birds of a feather flock together.

birds of a feather flock together.
Mr Opinion,
Yep, like you & Paul, the last of the 'oooh, me doodle birds'.

Easy credit is a sure way to inflation, which is probably why they are considering it.

There are going to be a lot of people in trouble after the holiday of house repayments stops. A rash of distressed sales could see a quite large drop in house prices. This would lead to a lot of negative equity for people who were recent purchases.

Under such circumstances the banks will not want to foreclose, but may be forced to. Easy lending, or refinancing would be expensive, but could save many, & would probably prop up house prices, saving the situation for many in the short time.

It is impossible to know if this would help many, or simply extend the pain for longer for even more.

One thing I am very glad about, my now single mother daughter has sold her house since the divorce. The pressure of funding a newly built house is something she can do without & the uncertainty of future value would be a real worry.

Paul1405,

Have you noticed how quick witted individual is?

Mr O,

You have to be quick to keep up with the repartee of good old Indy.

Still, it may well be interesting for a quick boost in economic activity. For example, I translate news articles as a side job, and get lots of demand for real estate news, and can confirm (nothing's secret, it all comes from newspapers) that easy credits will result in more people buying houses, or in a rekindled interest in things like this Munich investment property https://tranio.com/commercial/germany/bavaria/munich/investment/ .

Easy credit far too easily & invariably changes into unmanageable debt for those who don't get to enjoy the benefits !
Easy is always far too easy a word in matters finance. It'd be much wiser to focus on general affordability & balancing money earned by way of value for effort.

Hi Indy, I agree "easy" credit is a trap that many fall into. There is a multitude of credit options on offer to the unsuspecting, such as cards, store credit, after pay, personal loans and even the notorious payday loans. If not with very high interest to begin with, there is a sting in the form of high fees and charges, like with so called no interest terms, generally one default will see high interest cut in immediately. Its surprising how those on low incomes can obtain credit so easily.

How is this; I could not believe it; A relative a while back, not too smart, wanted a $500 loan, from a pawnbroker/loan shark. First dumb thing, he puts up his motor bike worth say $5 grand as security for $500, leaving it with the pawnbroker. He has 2 months to pay back $1500, or the bike is defaulted. He paid the $1500. This guy has no idea about finance, just ignorant when it comes to that kind of thing.

Talk about recession,

Today is Wednesday, September 30, 2020

If you're having a bad day, remember that today
in 1976 Ronald Wayne sold his 10% stake in Apple
for $800. Now it's worth $58,065,210,000

Paul1405,
I have a friend who is paying off old credit cards with new ones. I recall when he was in Credit card debt to the tune of $40,000.- & they still gave him a new card with a limit of $25,000.- ??
I had to wait till I was 58 before the Bank loaned me 50 grand to buy a 90 grand block of land while I had 50 Grand in savings.
As I had always paid for what I wanted I had no credit history & it was way more difficult to to get a Bank loan for me than it was for people to buy a new car who owed more than what I asked for to buy property.
Something's definitely gone wrong in the financial sector.

Paul,

I remember a TV program once when credit card repayments were being discussed - some financial wizard had advised CC companies NOT to ask for substantial monthly repayments, only for monthly payments just above the accruing interest for that month. That way, the sucker would stay in hock to the company and never get out of debt to it.

And of course, so many bright sparks think, "I know ! I'll get another credit card." And then clock that one up to the limit as well, to get it on the minimal repayment treadmill, along with the others.

Do that with, say, four credit cards, with a combined limit of, say, sixty thousand, and you could be paying substantial monthly amounts of a thousand dollars, i.e. paying nothing but interest (and 'charges'), with nothing extra to show for it. A bit like a hamster on a treadmill, except that the hamster gets fed occasionally.

Joe

I tried to find my credit score a while back, & it appears I don't have one either individual.

I last borrowed money 29 years ago, bridging finance to buy this place, while I sold some other stuff. I converted the last of it to a mortgage, & hung onto a 20 acre block on 3 titles. It was a good decision as just 2 years later I was offered twice what I had been asking for it. Good result, but it could have gone the other way just as easily. I kept it as a fall back option, in case I didn't like the new job, not as an investment. That more than cleared the debt.

Credit is fine, & obviously necessary when setting your self up, but to my mind, only a fool borrows money for anything but a profit making business venture, once into middle age. If you want to upgrade your lounge, car or house after that, do it with money you have, not with money you must borrow.

I only did this because I had been head hunted, with an offer just too good to refuse, to come down from Wide Bay to run a group of companies on the Gold Coast. Without some very good reason you have to be a fool to take on debt, particularly depreciating assets, when you don't have at least a quarter of a century to pay it off.

The insidious 'buy now pay later' for frivolous or luxury items, started by a certain Dept Store seems to have now become the model for Govts all around the place.
Paying utterly incompetent bureaucrats hundreds of thousands of Dollars per annum is one of the worst investments by our Fed & State Govts.
They should invest in infrastructure projects not in worthless educated experts !
Flooding Lake Eyre & reducing City river flooding should be the Nr 1 priority for Govt.
Don't waste money on experts, just consult some of us here on OLO ! We're not experts, we're better. We Know !