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Wednesday, 23 June 2010
Page: 6470


Mr HARTSUYKER (12:43 PM) —It is certainly a pleasure to speak on the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010. This bill follows the Trade Practices Amendment (Australian Consumer Law) Bill (No. 1) 2010, passed in the parliament in April. Taken together, both of these bills complete the initial text of the national consumer law regime, as approved by the Council of Australian Governments in 2008. With the passing of this legislation, the Trade Practices Act will be named the Competition and Consumer Act. The purpose of these bills is to update the Trade Practices Act to implement a national uniform consumer law. Creating a national consumer law and removing the inconsistencies across states and territories has bipartisan support in this parliament. I welcome the constructive approach taken by the government and by the minister.

The first Australian consumer law bill implemented uniform unfair contract provisions which the coalition supported in principle. The coalition was able to work with the government to amend the bill and to ensure that these provisions operated as intended and did not create legal uncertainty for businesses and consumers. We also made a number of recommendations to the bill today which have been accepted by the government and which I will detail shortly.

The provisions in this bill will implement a range of measures in areas of consumer law where there are legal overlaps between various state and Commonwealth laws. It is intended that a national system of consumer law will provide both businesses and consumers with certainty in their dealings.

The measures addressed by the bill relate to four main areas of consumer law, which I will outline in detail. The bill also makes a number of changes to minor areas, which I will also mention briefly. Firstly, the bill addresses deceptive and misleading conduct. The provisions inserted by this legislation will ensure that a person must not, in trade or commerce, engage in misleading, deceptive or otherwise unconscionable conduct or conduct that is likely to mislead or deceive. These are largely adoptions of the misleading and deceptive conduct laws currently in the Trade Practices Act, but the new laws will replace all currently operating state and territory provisions. These provisions relating to misleading or deceptive conduct do not apply to an information provider if the information provider made a publication in the course of carrying on a business of providing information, unless the publication is related directly to the business activities of that person. This prevents publishers of information from being held liable where a link cannot be drawn between that information and the providing of a service.

Secondly, the provisions implement statutory guarantees for consumer goods at a national level. The bill extends laws currently operating in the TPA and will provide a remedy where the goods are not of acceptable quality; where the goods are not fit for a purpose that the consumer made known to the supplier or manufacturer, and where goods do not match their description. Further amendments with relation to guarantees will be implemented to ensure that consumers have a statutory basis for seeking remedies where the services are not rendered with due care and skill and where the services or goods are not supplied within a reasonable time.

Thirdly, the legislation implements a national product safety scheme by clarifying and implementing various state and territory laws to provide for a national product safety system. The system will allow the responsible Commonwealth, state or territory minister to remove consumer goods or product related services from the market. These powers will be exercised where the minister believes that the goods or services in question pose a risk of injury to any person, either through their normal use or a reasonably foreseeable misuse. Included in the administrative powers provided to the responsible ministers are the power to make standards for particular consumer goods or product related services, to ban the supply of particular goods or services, to require a supplier to recall particular consumer goods, and to issue warning notices to the public about consumer goods or product related services. The legislation will require suppliers to report to the Australian Consumer and Competition Commission where the supplier is either undertaking a voluntary recall or becomes aware that consumer goods or product related services supplied have been associated with a death, serious injury or serious illness.

Fourthly, the bill will implement laws in relation to unsolicited selling. The bill clarifies unsolicited selling laws in the TPA and in the states and territories to regulate the making of unsolicited offers to supply goods and services to consumers. These laws include express supplier obligations about the way in which consumers are approached, including permitted hours of visitation and the duty to clearly advise the consumer at the outset of an approach and about the making of an agreement. A 10-day cooling off period will also apply for products and services purchased as a result of an unsolicited agreement. The intent of the laws relating to unsolicited agreements is to protect a vulnerable person from entering into contracts for the purchase of goods and services where that person would not have entered into the contract if it were not for the kind of approach made by the supplier.

As I mentioned, there are also a number of smaller provisions to be implemented by this bill. These areas broadly relate to four additional areas of consumer law, which I will detail briefly. Firstly, the bill clarifies national laws with regard to the unfair practices of making unsolicited supplies such as credit or debit cards, pyramid schemes, bait advertising and coercion into purchasing a product or service. The bill will also ensure that a supplier must not sell goods for more than the lowest of prices displayed in the instance where multiple prices are displayed for that good and ensures that suppliers will be required to provide a proof of transaction when the goods or services have a total price of $75 or more.

Secondly, new provisions will be inserted into the act to regulate lay-by agreements in terms of the characteristics to be included in these types of agreements. For instance, a lay-by agreement must be made in writing and a consumer may terminate the agreement at any stage prior to the delivery of the goods. Suppliers may only terminate a lay-by agreement in specified circumstances, and in the event of cancellation the consumer is entitled to a full refund of amounts paid.

Thirdly, the Commonwealth minister will be provided with the ability to prescribe information requirements when supplying particular goods or services by making information standards and prohibiting the supply of goods or services that do not comply with a relevant standard which is in force. Suppliers will be prohibited from supplying particular kinds of goods or services that fail to comply with information requirements in an information standard issues for that good or service.

Finally, the bill extends trade practices laws to the states and territories which provide that manufacturers are liable for goods with safety defects where an individual has suffered loss or damage because of injuries arising from that safety defect.

The coalition has supported each of these provisions that I have outlined in principle. As the legislation is considerable, it was decided to send the bill to the Senate Economics Legislation Committee for consideration and to ensure there were no unintended consequences of the provisions as drafted. Through the excellent work of my Senate colleagues Senators Eggleston and Bushby, it became evident there were a number of areas where the legislation could have been improved. Unfortunately, the Senate inquiry also highlighted that the Treasury could have undertaken a more extensive consultation process to get the legislation right before introducing it into the parliament. Many stakeholders giving evidence to the inquiry suggested that better public consultation could have taken place and pointed out that, under the COAG agreement that agreed to create a national consumer law, the Commonwealth was required to conduct a consultation period with stakeholders before introducing this legislation. As Consult Australia told the Senate committee:

Under the COAG agreements there was meant to be April to June exposure draft consultation process, and instead this bill was drafted and introduced into the parliament in March. It probably would have taken three months.

This evidence is supported by COAG documents detailing the time line for implementation of this bill. Whilst I congratulate the minister for consulting with the opposition following the Senate inquiry, the failure to properly consult on legislation and policy has become a frequent feature of the Labor government’s approach to governing this country.

Of course, we now have the government’s great big new tax on mining—the resource super profits tax—which the government is now claiming to consult on, well after the details of the tax were already announced. These details have already done considerable damage to Australia’s international reputation and this damage could have been mitigated by a proper consultative period before announcing the tax. This government has always been more interested in announcing policy rather than considering how the details will impact upon stakeholders and upon individuals.

I congratulate the approach by the minister to consult with the opposition on this bill before parliament today. The minister worked through the recommendations made by the coalition in the Senate inquiry report and will be making some responsible amendments to the bill in the Senate. These amendments improve the legislation’s intent and minimise some of the unintended consequences raised in the Senate inquiry.

There were five areas of recommendation made by the coalition which have been addressed by the government through the minister. I will go through these recommendations and amendments in detail. Firstly, the coalition recommended that the definition of consumer should allow for a class of consumers that would encompass small businesses for the purpose of statutory guarantees on purchases. The previous legislation allowed for all goods purchased under $40,000 to be considered as consumer goods, allowing small business purchases to be covered under the legislation. The coalition recommended for this threshold to be retained, and this recommendation was accepted by the minister. It was important for the coalition that small businesses continue to be protected under this legislation and I am pleased to say that this will continue to be the case.

Secondly, the bill as drafted would have removed the exemption for the architects and engineers professions against the implied fitness for purpose consumer warranty that existed in the Trade Practices Act. The coalition recommended in the inquiry report that the existing exemption for these professions be retained. It is our view that engineers and architects are already well regulated through duty of care provisions. The imposition of an implied fitness for purpose warranty would unfairly place potential liability on professional engineers and architects where those professionals are only usually responsible for the design rather than the construction of the finished product. The coalition welcomes the amendments to reinstate the exemption.

With regard to the product safety scheme and the requirements of suppliers to provide reports on incidents causing serious injury or death, the coalition recommended a risk based system rather than an incident based system. This was because the incident based system created a number of burdens for business in terms of monitoring the product after sale, and would have created the position where all suppliers in the supply chain would be forced to report on the same incident. The bill as originally drafted also created confusion amongst stakeholders, who interpreted the association test between the product and the incident as requiring competitors to make reports on the products of other suppliers.

Whilst the government did not accept the coalition’s recommendation for a risk based system, the amendments being made by the minister will ensure that the coalition’s suggestion that a more stringent test than that the incident must be either caused or may have been caused by the product be implemented. This removes the uncertainty of when a supplier will need to report. The amendments will also ensure that reports are kept confidential by the minister unless there is a public interest, and will clarify that suppliers are not required to report on competitors’ products.

Fourthly, concerns were raised with the reporting scheme by specific industries, such as the auto industry, which are already required to report incidents through state based systems and through industry regulations. The coalition recommended that the legislation provide a means for these industries to be exempt where reporting is already occurring. The amendments will allow the minister to accept a report from a body other than the supplier where the minister is satisfied that a reporting regime is already effectively in place. This amendment has been accepted by stakeholders already operating in industries with extensive reporting obligations.

Finally, the definition of an unsolicited consumer agreement will be expanded to include circumstances where consumers are contacted through indirect means. This includes the circumstance where a consumer is contacted in relation to the supply of goods or services after providing his or her name or contact details to a person, and the predominant purpose for providing those details was not to supply those goods or services. It will also include the circumstance where a consumer contacts a dealer in response to a missed call. Once again, the coalition welcomes these amendments to be moved in the Senate and the approach taken by the minister.

There are other stakeholders who have raised concerns with this legislation, and whose concerns are not addressed by these specific issues. In particular, there are a number of issues in relation to unsolicited agreements concerning the hours which salespeople must operate under and the requirement for a salesperson to gain agreement to contact the consumer outside of these hours. This agreement cannot be completed in person and must be arranged through mail or telephone. There are also some questions as to how the legislation will operate surrounding unsolicited agreements at trade parties and where computer technology is an aspect of the agreement.

The coalition believes that some of these issues can be clarified by regulations. However, the range of issues canvassed after this bill’s introduction highlight the many issues present in consumer and competition law in Australia. That is why the coalition will review the operation of the competition provisions in the act. We are committed to constantly improving consumer protection and competition in the Australian market. This bill as amended contains provisions that the coalition has been able to agree with the minister. Through these amendments, we have been able to improve the legislation whilst maintaining our broad support for uniform consumer laws. I commend the bill to the House.

Debate interrupted.