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Wednesday, 14 August 1974
Page: 882


Senator MISSEN (Victoria) - When the Senate adjourned last evening I had discussed the main aspects of the Trade Practices Bill, the second reading of which is being supported by the Opposition. I had gone on to mention that particular Part of this Bill that was discussed also by Senator Guilfoyle last evening, namely, the consumer protection provisions set out in Part V and in respect of which the Opposition will be moving amendments to delete those provisions from the Bill. I said then and I say again that undoubtedly in the minds of the Opposition and certainly in my mind is the fact that this deletion is intended to show a constructive attitude and to be a constructive action. It is desired by the Opposition that there should be effective consumer protective legislation in Australia and not the creation of legislation which may appear to be comprehensive but which may, in its result, be not very successful.

I refer again to the statement made on 29 July this year by Mr R. J. Ellicott, the Opposition spokesman on consumer affairs. In regard to this Part of the measure he then said:

The Opposition is strongly in favour of consumer protection provisions and of substantial penalties for their breach. However, the Government's present proposals will leave consumer protection legislation in a complete state of confusion and will not be in the best interests of the consumer.

He went on to detail the constitutional difficulties and the absence in the Bill of a provision for the establishment of consumer claim tribunals. He then said:

There is, however, a great deal to be said for federal laws fixing standards in relation to consumer products. What the Opposition wants the Government to do is to withdraw its consumer protection provision and hold discussions with the States with a view to producing an effective code which will cover all traders, ensure substantial penalties and give consumers the benefit of consumer claim tribunals.

Of course, there is a great deal of feeling in the community on the subject of consumer protection and this has risen in recent years. It has been observed by all parties and been encouraged by many active groups in the community. We have left the position we had previously where the consumer took just what he got, where manufacturers and agents and other people, with staff and ability, were sometimes able to trick the consumer and to give him something which was by no means what he expected to get. As evidenced considerably in recent years by State legislation, there is no doubt that there is a great desire for effective consumer protection. I emphasise the word 'effective'.

In this Bill we are dealing with a Commonwealth power which is basically only jurisdiction in respect of the corporate power of the Commonwealth. It does not relate to individual dealings. Therefore the legislation, with one exception, deals exclusively with the relationship of the consumer to the corporation or the company and not the individual. It is beyond the power of the Commonwealth, of course, to deal with the whole wide ambit of this area of consumer protection. In fact there is a need for State initiatives and there will continue to be a need for State initiatives. It has been continuing; it will be continuing, and one would expect that irrespective of this Bill there will be a constant need for States to update their legislation as they find circumstances changing in their particular State and, of course, in Australia generally.

I refer to the fact that in many other fields we have seen the value of these State operations over many years. To take the case of the voting systems in the early days of Australia, the pioneering work carried out by individual States was copied by other states. It led to great improvements and, of course, these systems were ultimately adopted by the Commonwealth.

The appointment of an ombudsman started in one State, was tried in other States and developed and changed. It is the result of this interrelation between the States and the Commonwealth that the best legislation can come about. To try to impose, even if we could, a set of legislation on a Commonwealth basis may make it even more difficult to change when new circumstances arise in one part of Australia or another.

There is, as Senator Guilfoyle said last night, State legislation applying to various fields that are covered by the consumer protection provisions of this Bill. In some other fields there is very little legislation and a different situation might arise. For example clause S3 of the Bill relates to false representations- it was mentioned last night. It will be seen that from State to State there are already detailed provisions covering this area. One must be careful about wiping out or destroying the effectiveness of those existing provisions by some comprehensive but general and vague legislation. Senator Coleman said last night that there was a hotch potch of existing legislation- as though that was necessarily a bad thing. I would consider, on the other hand, that a variety of legislation and a variety of initiatives are in fact a good idea in this country, particularly as the areas of complaint are developing and changing from day to day. As I have said, in other areas- for example, home industries and the allegations made by people to encourage others to undertake home industries, which are dealt with in clause 59- there is little or no legislation on this subject in the States. The States deal more with the supply of goods used in the home. This may be an area where there is call for general Commonwealth legislation.

To give one more example of this, the pyramid selling legislation, which m this Bill is set out in detail, may not necessarily provide the best scheme available. The States have different legislation. There has been a lot of criticism and dispute about this subject. It is suggested in many quarters that the pyramid selling legislation in New South Wales does provide a greater flexibility for the ministry there to deal with particular schemes that may be developed and which may not come within the scope of the Commonwealth legislation. I summarise generally in this area by referring, if I may, to the recent draft 'Federal Platform' of the Liberal Party on consumer affairs. After pointing out the very great necessity for the free exercise of choice by consumers it said:

Liberal policy therefore affirms that the Federal Government must co-operate with the States to-

1   . Ensure that the law maintains a proper balance between supplier and consumer, and, in particular, offers protection against unfair or dishonest business practices which militate against equality of bargaining power.

2.   Ensure the following fundamental rights:

(   a ) The right to be informed . . .

(b)   the right to be in a position of equal bargaining power . . .

(   c) the right to choose . . .

(d)   the right to safety .. .

(   e ) the right to be heard . . .

These are all matters in which the consumer must exercise his ability and enjoy his rights. The document states further that the Federal Government must co-operate with the States to:

3.   Promote the establishment and maintenance of high standards of goods and services, supported where necessary by Federal and State government agencies empowered to supervise these standards and take corrective action where they are not met.

I put it to honourable senators that the cooperation of State and Federal bodies will continue to be necessary for the proper implementation of legislation. I briefly detail 3 basic objections to the continuance of Part V of this Bill. It has been said and I agree with it- that there will be confusion between State and Federal legislation in many fields. There will also be doubt as to its constitutional operation. Senator Coleman said last night by way of an interjection that this Bill will mean the strengthening of State laws. I put it to her that unfortunately this Bill may not have that effect at all but may mean a weakening, particularly for an individual who wants to decide what he is going to do in a certain set of circumstances. There has been an endeavour, certainly in clause 75 of the Bill, to overcome the constitutional difficulty that may arise whereby all the effectiveness of the State laws may be wiped out by the overriding effect of the Commonwealth provisions. Clause 75 ( 1 ) of the Bill states:

Except as provided by sub-section (2) - which relates to offences and convictions- this Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory.

As Mr Ellicott pointed out in the other place, that clause may well not have the effect which the Government intends. It is all right to say that an effect is not intended, but if the law has a certain meaning and effect that is how it will be judged by the Courts. Section 109 of the Constitution states:

When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.

So it is a question of fact as to whether Commonwealth legislation in these fields is inconsistent with State laws. In my opinion, the Bill will wipe out the State laws in many of these fields, whether or not it is the intention of this Parliament to achieve that result. This clause may make it impossible for an individual in a State to have recourse to the consumer claims tribunalsthe Small Claims Courts in Victoria, Queensland and, I think, New South Wales- which are intended to enable persons to pursue, without legal cost, their claims against other persons.

The Commonwealth seeks to take away the right of an individual under existing State laws to execute his claim against a corporation. An individual who has a claim against another individual can continue his claim, but an individual who has a just claim against a corporation must go to a court under the Commonwealth Act, thereby incurring expense and difficulty. I suggest that this anomaly be ironed out before the legislation comes before this Parliament again. The Commission which is set up under the Bill has not the function of receiving and dealing with complaints from individuals. It has plenty of powers to advise people about their rights, but as I read the Bill the Commission has not the function of receiving and dealing with individual complaints. Therefore, I maintain that the very useful set of claims tribunals in the States should not be greatly weakened by legislation of the Commonwealth.

It has been said that there is need for uniform legislation. Apparently it is presumed that it must be legislation which we impose on the States, not necessarily the type of uniform legislation which, in the past, in a number of fields has been created by co-operation between the States and the Commonwealth. The Commonwealth, which has its Territories to administer and the States, which have their problems in their own jurisdictions, have got together in regard to other jurisdictions such as company law and have arranged uniform legislation which all parliaments have passed and which has had effective operation. It does not necessarily mean that the Senate must pass legislation to cover the whole field.

I deal now with a matter which Senator Everett raised yesterday. He said that there ought to be a reference of powers by the States. This may be so. But the Commonwealth does not appear to have approached the States for such a reference. It may well be that the results of further discussions between the Commonwealth and the States will lead to some useful reference of powers where such a course is obviously necessary because of the complexity of schemes which cover more than one State. So I suggest that uniform legislation does not necessarily mean that the Commonwealth should impose its legislation on the States.

The third matter which I say is good reason for reconsideration of the problem is the confusion of enforcement which is contemplated under this scheme and under the existing powers and existing organisations of the Commonwealth. In an interesting article in the 'National Times' of 12 August Mr Andrew Clark referred to the number of organisations which were already involved in the consumer protection area in the Commonwealth. The article stated:

Along with the proposed Customer Protection Bureau, and the Commissioner for Consumer Standards, the Purchasing Commission will be able to act as a major referral authority- in testing , usage and launching prosecutions.

Cabinet has still not decided on the position of the Customer Protection Bureau and the replacement for the interim Commission on Consumer Standards, which itself replaced a task force on consumer standards, appointed by Mr Morrison in May last year.

It now seems likely that the bureau will become part of the Trade Practices Commission. This would divide Government responsibility in the consumer area between Mr Morrison and the Attorney-General, Senator Lionel Murphy, with the former looking after Consumer Standards and the latter being responsible for their inclusion into the Trade Practices Commission, and prosecutions.

He pointed out also that a Commission of Consumer Standards was to be set up within the Department of Science. It seems to me that the whole area has not been sufficiently thought out, that there will be a need for reconciliation between the various areas of authority and that time is therefore needed for the Government to determine what its proposals are in this field. For these various reasons I maintain that it is desirable that these provisions of the Bill be deleted at the present time.

I entered this Senate having campaigned for many months on the basis, which I continue to maintain, that there is a great need to pursue the politics of construction rather than the politics of fear in this country. We must be vigilant in all kinds of things but I believe that overwhelmingly it is the duty of honourable senators and members of Parliament to be looking constructively at legislation. Although it may appear that this part of the legislation sought to be taken out is based upon the fact that there is to be a reduction of some Commonwealth power, I would suggest instead that it gives the opportunity for the Australian Government to consider a Bill where this matter could be dealt with alone. Consumer protection sits unnaturally in this Bill. It needs a rethinking by the Australian Government, discussion by the States and an attempt to take up those parts of Commonwealth power which are necessary for it to have. This may include the creation of standards which are Commonwealth wide and in respect of which one State cannot operate satisfactorily. There are a number of areas in which clearly the Commonwealth should act. It has gone beyond those powers and desirable objectives in this Bill. Therefore I think that those parts of this Bill should be removed for the moment and I hope that the Government will consider these proposals and will deal with them constructively as, I suggest, we as an Opposition have dealt with them.







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