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Wednesday, 18 June 2008
Page: 5221

Mr BOWEN (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer) (4:00 PM) —by leave—I wish report to the House on the important agreement reached between the Commonwealth and the states on 23 May 2008 in Auckland on a single national product safety regime across the country.

This is an area in which reform has been debated for years. In 2002 the Consumer Products Advisory Committee (CPAC) received a report from an officials meeting which examined the existing administrative arrangements and practice amongst jurisdictions in relation to product safety. Despite being an agenda item on the Ministerial Council on Consumer Affairs (MCCA) since August 2003 and all of the six ministerial council meetings since then, up until last year, there was no progress and no move to a national product safety law.

There are not too many things as important and vital to consumers as product safety. Consumers look to our product safety laws for effective and swift protection, enforcement and remedies against unsafe products. It is also important that we look, where possible, to reduce the compliance and red tape burden on business. These reforms address one of the 27 regulatory hot spots outlined by COAG and the Business, Regulation and Competition Working Group.

When it comes to product safety, currently, there are approximately 117 product ban orders and approximately 60 mandatory standards adopted by the federal, state and territory governments. Furthermore, only nine per cent of bans and standards currently apply in a majority (five or more) of jurisdictions. None of these bans or standards applies across all jurisdictions.

While our economic and competition laws have become increasingly national in nature in response to growing national consumer product markets, our product safety laws have failed to keep up. This is an unacceptable state of affairs in an Australian economy with sophisticated businesses and consumers in the 21st century. On 23 May, at the Ministerial Council on Consumer Affairs the Commonwealth, state and territory governments reached a landmark agreement that will see the creation of a single, national product safety law and framework.

Once the new national product safety framework is in place, finally, consumers and business will look to the national law and be covered by national permanent safety standards and bans. These reforms will provide significant cost savings for business and provide greater protection for consumers by streamlining the responsibilities of the Commonwealth and the states and territories.

Apart from a single, national product safety law, other features of the new framework will include:

  • giving the Commonwealth sole responsibility for making permanent product bans and safety standards;
  • joint Commonwealth-state enforcement of the national law, and;
  • an interim ban power for state and territory consumer affairs ministers in the event of a localised product safety hazard.

The revised arrangements will be in place during 2010. Between now and 2010, MCCA, in conjunction with COAG, will develop the legislative and administrative changes necessary to implement the system. The revised regulatory arrangements will be underpinned by an intergovernmental agreement between all Australian jurisdictions. The IGA will set out the processes by which the product safety law can be changed and will facilitate communication between jurisdictions. The IGA will ensure that product safety regulation remains harmonised into the future.

Prior to 2010, MCCA is also making improvements within the existing regulatory arrangements, to ease the regulatory burdens on business and provide clarity to consumers. MCCA is undertaking a thorough review of existing product bans and mandatory standards, to align, to the extent possible, the bans and mandatory product safety standards that apply across jurisdictions.

Under the project, each jurisdiction, respectively, and after a thorough risk assessment, will revoke all ban orders that:

  • apply in one or two jurisdictions;
  • were made more than 10 years ago (and have not been reviewed in the last 10 years); and
  • where a breach of that ban order has not been detected for more than 10 years.

In addition, in January 2008, the states and territories agreed, through MCCA, to mirror existing Commonwealth mandatory safety standards, as quickly as possible.

Australian consumers expect swift action to be taken to remove dangerous products from the Australian community, as soon as possible and regardless of which state or territory those hazards are first identified in. To this end, I recently announced that Ms Ruth MacKay would head up the ACCC’s new Product Safety Branch. The new product safety branch continues the consumer watchdog’s strong focus on product safety at the national level.

In the past 18 months, the ACCC enforcement of product safety standards and bans has led to approximately:

  • 16 enforceable undertakings;
  • four cases taken to litigation; and
  • in late 2006, a prosecution resulting in record penalties of more than $800,000.

Mr Speaker, when it comes to product safety I note the comments of the shadow minister for consumer affairs. On 8 May this year he made the following comments:

Rudd is caving in to the states who will retain the existing fair trading offices. The states are protecting their own vested interests instead of helping to deliver lower prices to consumers and less red tape for business.

These comments force me to confirm to the House that the states and territories would continue to have fair trading offices under the Productivity Commission’s report into Australia’s consumer policy framework and its recommendation for a single law, multiple regulator model under a new single, generic consumer law.

The suggestion that you would just abolish state and territory fair trading offices and take over all of their functions is quite absurd. It also carries a price tag of approximately $526 million a year.

I also note that it proved impossible for the previous government to deliver this type of reform, partly because they did not have a minister for consumer affairs, which signals to consumers, businesses, as well as the states and territories, that the Commonwealth had no real concern about consumer policy. This state of affairs saw a parliamentary secretary represent the Commonwealth at MCCA and, therefore, no-one at a senior level in the government to argue for the necessary pro-consumer reforms.

The ministerial council that convened in Auckland on 23 May was indeed historic, not just because of the landmark agreement that was reached between the federal government and the states and territories on product safety, as important as that was. What was just as important was the renewed sense of optimism in taking the reform agenda forward.

I am also pleased to report that following the handing down of the Productivity Commission’s report into Australia’s consumer policy framework, the Ministerial Council on Consumer Affairs agreed on a road map towards COAG in October where Australian governments will reach an agreement on consumer policy issues ranging from consumer credit and unfair contract terms, to simplifying alternative dispute resolution arrangements, and removing business compliance costs through reforms to industry-specific consumer legislation.

The Productivity Commission estimates that its consumer policy package would provide a net gain to the community of between $1.5 billion and $4.5 billion a year in today’s dollars. The federal government does not underestimate the difficulties in reaching the goal of a single, generic consumer law; however, it is a major reform and a worthwhile one.

I would like to thank all of the state and territory ministers for their cooperation on national product safety reform. This is an agreement that will benefit both consumers and businesses alike. This is a significant breakthrough in reforming consumer protection laws in Australia and will be to the benefit of both consumers and business. I commend the national product safety reform to the House.

I ask leave of the House to move a motion to enable the member for Cowper to speak for seven minutes.

Leave granted.

Mr BOWEN —I move:

That so much of standing orders be suspended as would prevent  Mr Hartsuyker speaking for a period not exceeding 7 minutes.

Question agreed to.