CP I agree – TGA will, IMO, not be able to duplicate CCPs...

CP

I agree – TGA will, IMO, not be able to duplicate CCPs stellar recovery, and for five or so years it should focus on repairing its two leasing arms. What happens in the long term is another matter, but as I will soon be 77, the words of Maynard Keynes, “In the long terms, we are all dead.” resonates with me.

I do not know why you bothered mentioning the platitude that one could buy a Kelvinator fridge cheaply by shopping around, and then compare that to renting from TGA (or any competitor). There are always circumstances (including stupidity) when people will rent, even though it is expensive. Its not very different to the fact that people will pay $50 for a bottle of wine in a restaurant that Vinomofo sells for $10, or they pay $7 for a cup of coffee that they could make at home for 20c, or they pay 75c for a bottle of non-carbonated water that costs near-nothing if obtained from the kitchen tap.

In respect to legalities, TGA does not have to match discount prices – it does not even have to match RRPs, and it could justify exceeding them by adding delivery and on-site warranty services. A quick Internet search informed me that a Kelvinator top-mount fridge (KTM4602WARH) sells for between $700 and $800, but its RRP is $1,099, according to (https://www.winningappliances.com.au/p/kelvinator-460l-top-mount-fridge-ktm4602warh). Using the $1,099 RRP, TGA could, under the proposed 40% per year interest rate cap, charge $15.50 per week for a 3-year term, and $13.74 for a 4-year term. TGA charges $14.99 and $9.99 respectively, which indicates TGA has set these charges to encourage 4-year terms, because competing rental companies tend not to offer them.

If you work backwards to derive TGA's retail price, assuming the maximum 40% per year interest recommended to Treasury, then based on the 3-year rental per week, the retail price would be $1,063. For a 4-year lease, it works out to be $800. I imagine if anybody were foolish enough to want to buy the fridge from TGA for cash, they would be proffered a price of circa $1,063. One would have to ask to be sure, because if TGA deducted delivery and on-site warranty, they could get close to $900.

In summary, the caps proposed to Treasury are not a problem for TGA. The proposed interest-rate caps are not a problem. I think the class action will be a fizzer. On the last point, I have covered the case in dribs and drabs over the past year, covering in essence two lines of argument – namely: a) were these transactions actually sales by instalments; and b) does TGA routinely welch on the $1-Buy representation? This thread is not very suitable for a discussion on the class action, so I'll not elaborate further.