Centrelink payments made up almost half of white goods leasing market leader Radio Rentals’ revenue last year, the ABC can reveal.
Last financial year the company’s total revenue was $197 million, and $90 million of that came from the federal Department of Human Services through the direct debit Centrepay system.
The Centrepay system was originally designed to help Centrelink customers budget, with money for bills directly debited from bank accounts as soon as benefits are paid.
However, in recent years payments for more discretionary spending — such as leasing flat screen televisions and sounds systems — have increased.
In 2011/12, 11 per cent of all Centrepay payments went towards the rental of household goods, with consumers often paying a high premium throughout the course of the rental agreements.
Related content: It’s time to stop paying the childcare rebate to anti-vaxxers.
A report released this month by finance company Credit Suisse found that half of the Centrepay revenue received by Radio Rentals, or about $45 million, was for entertainment items like televisions or smart phones.
The report warns investors that any change to the “light handed” regulation of the consumer leasing industry would have a significant impact on Radio Rentals’ business.
Consumer Action Law Centre chief executive officer Gerard Brody said it was scandalous that Radio Rentals enjoyed such business security from the welfare system.
Related content: Child welfare payments should be dependent on vaccinations.
“We have had long-held concerns about Radio Rentals and the consumer lease industry’s use of the Centrepay system,” Mr Brody said.
“But to see in this report that such a high proportion of their revenue being paid from people who are Centrelink recipients, they are people on welfare payments and this business is sustaining itself on that, is astounding.”
This article originally appeared on ABC and has been republished here with full permission.
Top Comments
People on benefits should use the good Shepard buying service. They generally get goods at a twenty per cent discount, and the loans are interest free up to $1200. Can be used for white goods, tv, even car repairs.
Don't forget the selling of such mobile on the buy and sell websites and them claiming it was lost or Stolen . crying and arguing to get a new one.
I know several people that often joke about this flaw at parties.