Wednesday, 23 June 2010
Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010
I rise to speak in favour of the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. This is a bill which aims to streamline and unify existing consumer law for the benefit of consumers and business. This is an important area of reform that affects how market participants behave and interact and ensures that Australians are able to conduct business, purchase and trade with confidence in the knowledge that there are strong provisions that prosecute unjust conduct.
It is important to note that the coalition has a strong record of reform when it comes to the Trade Practices Act. During our time in government we proceeded with a number of areas of significant reform. We increased penalties for breaches of the competition law; we introduced new merger processes; we allowed for the notification of collective bargaining for small businesses; we ensured that there was an extension of the application of prohibitions regarding the misuse of market power for unconscionable conduct in business; we provided guidance for predatory pricing; and, finally, we also introduced reform of component pricing.
The coalition began the process of unifying Australia’s consumer laws and creating a clearer and simpler framework for protecting consumers. In 1997 it was the coalition government that commissioned the Productivity Commission inquiry into Australia’s consumer policy framework to investigate the ways in which the law could better empower consumers and harmonise state and federal provisions. This was the first substantial review of Australia’s consumer laws since 1984. Our main priority was to reduce as much as possible the burden on consumers and businesses created by unnecessary duplication, uncertainty and complexity. At the same time we recognised the need for an evolving body of law that accounted for new consumer products, new technologies and changing business practices.
We wanted the process to be driven by evidence and by an analysis of business and consumer behaviour. We wanted to create a flexible set of laws that allowed business to operate freely while prosecuting those firms that engaged in unjust conduct through deception, unfair pricing or unsafe products. We were conscious of the need to ensure that consumers were effectively protected without creating extra burdens and compromising the facilitation of trade. We knew that complex regulations like those that currently existed required a significant amount of centralised knowledge and expertise on behalf of businesses which gives a competitive advantage to larger firms with greater economies of scale. To prevent the conglomeration of firm activity and to ensure the optimal level of competition in the marketplace it is important that harmonisation of consumer law take place to provide the best benefits to consumers and business, especially small business.
Currently, the complex framework of different and disparate laws and regulations requires improvement. The coalition is delighted that the government has taken the opportunity to carry on our work and take the necessary steps towards a more unified set of consumer laws. The coordination of policy across jurisdictions remains an unfinished business in Australia. The current division of responsibility between federal and state governments is something that requires direct attention. The inconsistencies and duplications that currently exist create confusion for business and consumers. It is often difficult for market participants to know how the different state and federal provisions interact, and the subtle differences that may exist between two sets of laws mean that businesses have difficulty in ascertaining which laws apply to them and how, and individuals are likewise uncertain of their rights as consumers.
This bill will address a number of serious breaches in conduct, from misleading and deceptive conduct to a failure to render services with due care and skill. Misleading and deceptive conduct is an opportunistic attempt to cheat consumers whose expectations of a product have been falsely and deliberately formed by the seller. Misinformation about a product not only erodes confidence in the marketplace but is an unjust act that requires strict penalties. Similarly, unconscionable conduct requires penalties commensurate with the serious breach of faith it creates with consumers. The strengthening of civil penalties in relation to these protections is something the coalition supports.
Consumer protections have also been strengthened with the general prohibition on the making of false or misleading representations. The broadening of the definition of ‘misconduct’ is something the coalition again supports. In government the coalition also commissioned an inquiry into Australia’s product safety laws to identify areas of reform. The purpose of this inquiry was to establish how the law could best deal with potential product safety hazards with a focus on prevention as opposed to retrospective action after consumer safety had been affected. Again, we were conscious of the need to unify product safety legislation to promote more efficient outcomes in trade and to ensure that consumer choice, diversity of product range and innovation were not unnecessarily affected.
We are happy to see the government continue in the coalition’s footsteps by addressing the fragmentation in legislation in this area. The coalition began the process of establishing a national approach to consumer laws through the cooperation of the state governments. It is good to see that this process is well underway with the states agreeing that the Commonwealth will assume responsibility for issuing permanent product bans and standards.
The coalition had a number of concerns about this bill and subsequently submitted recommendations to the government that would improve the objectives of the law and create a fairer and more equitable arrangement for consumers and business. A number of these recommendations have already been detailed by my colleagues and I do not propose to detail them again. We commend the government for accepting the majority of our recommendations. The only recommendation that the government failed to incorporate into its policy was the implementation of a risk based reporting system rather than an incident based system. This is something we will continue to monitor as the law takes effect. I endorse this bill and thank the government for proceeding with the good work that we the coalition commenced.