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Address to the Evatt Foundation



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ADDRESS BY MS JEANNETTE MCHUGH, MINISTER FOR CONSUMER AFFAIRS, TO THE EVATT FOUNDATION, LEVEL 6, 377-383 SUSSEX STREET, SYDNEY, WEDNESDAY, 15 JUNE, 1994 (7.30 am)

My argument today is a simple one, because I hate to speak in sentences that circle the runway. The traditional preoccupations that come under the heading of Consumer Affairs have been overtaken by developments. This means that we have to rethink the problem of making the machinery of consumer protection relevant as well as effective. The Hilmer Report on competition policy adds to the weight and urgency of this challenge.

How do we go about this? This morning, I want to suggest ways in which this should be done. They conform to — and derive their effectiveness from - the moral and intellectual set of objectives which should inform the actions of all Labor Governments.

An important point needs to be made at the outset. The issues that we list under the , heading of Consumer Affairs have broadened enormously. For years, consumer protection has been a series of rituals: Christmas and its display of dangerous toys, for example, or winter and warnings about inflammable clothes or summer and warnings about inferior sunglasses; indignation attacks when the oil companies play their . cynical games with prices; haggling with recalcitrant traders over redress for the people they have harmed.

Some observers and even some activists behave as if this is all there is to consumer affairs nowadays. This is depressing. I’m not arguing for a moment that prices, safety and the other well-worn issues don’t have their own importance. They do. As a matter of fact, I shall be in Melbourne tomorrow in support of programs which — of course — are still necessary. One is the Federal Bureau of Consumer Affairs’ latest initiative on the safety of children’s clothing and the other is Kidsafe’s program on children’s safety more generally.

But new kinds of issues are appearing and they demand new ways of dealing with them. They need strategies of interdiction as well as protection. I think it’s old- fashioned and stupid to continue to base consumer protection systems on the notion that consumers are what a social observer once described as that very special kind of human who has no eyes, no brain, no senses but a great capacity to gulp. So what’s so different these days?

COMMONWEALTH

PARLIAMENTARY LIBRARY MIC AH

What’s different is that the issues are changing and the boundaries expanding as fast as the technology will allow. Look at the range of government activities at the national level, each now recognised as having its own consumer interest and consumer focus.

The environment, the law, transport, communications, health, business and industry, science and technology, economic management, business regulation, natural resources, education - there are almost as many distinct consumer issues as there are Ministers and portfolios.

What does this mean for consumer protection? It means that, to be effective, a Federal Minister for Consumer Affairs must be prepared to be involved in the responsibilities of a great many of her colleagues. This is a novel development and not everybody has

come to understand it yet.

The Hilmer Report has introduced a whole new area of consumer interest to all this. The view is heard from time to time that Hilmer should be opposed as antisocial and antidemocratic. I have my reservations about Hilmer but I don’t hold with this. The report was long overdue. Many of its recommendations will shake the dust out of our

stodgiest and most protected institutions. Many of the practices of these institutions were working to the disadvantage of consumers as well as to the economy at large, and it’s a waste of time being unduly sentimental about them. They need reform.

But to believe that the reforms proposed by Hilmer need to be carefully evaluated insofar as they affect individuals in an ever-more liberated market is not evasion of reality, as the free marketeers would claim.

It would be quite wrong to assume that market transactions between individuals and enterprises affect only buyer and seller. The market should be like the law where public interest is weighed against individual freedom. Rules are needed, to protect the individual consumer if not for public policy reasons. Hilmer doesn’t change this particularly. But it does propose to extend the range of issues facing consumers — especially those who are less well-off for a number of reasons - even if only because it proposes that public policy should accommodate the market rather than vice versa.

What does all this mean for the consumer? The answer to the question describes my immediate agenda as Minister for Consumer Affairs.

First, I believe strongly that consumer policy can only be effective if the structure of protection is right and strong. The consumer movement has its hero figures and its

champions. But personalities and governments come and go. Even Trade Practices Commissions come and go. The structures of consumer protection should be strong enough to survive changes of government or battle fatigue by our heroes or withdrawal of public support and goodwill. It’s this view that led me to the reform of

the Bureau and other activities which I shall describe in a moment. They have only this aim: to establish a structure which will withstand exigent circumstances.

Second, I believe that consumer policy can only be effective when the goals and objectives are clear. My goals and objectives are simple. Consumers should be active influences on — even determinants of — the policies and practices that affect them.

The traditional tendency in consumer protection is to react to market breakdown by regulation or whatever, to chase down anti-consumer habits and practices. In effect, this has meant at times shutting the stable door after the horse has bolted. My aim is

to put consumers in positions to influence market behaviour, not just to ameliorate its misbehaviour.

It’s my intention to move at National Conference this year that consumer impact statements should be made a formal part of the Government’s decision-making process. We measure the impact of our decisions on the environment, on women, on Aboriginal people and on people with non-English speaking backgrounds. We have mechanisms to evaluate the impact of decisions on business regulation. We should have the same kind of mechanism to measure the impact of decisions on consumers.

The Platform of my Party already mandates that we provide for direct consumer representation on government business enterprises, boards, committees and inquiries, in order to provide effective representation for consumer concerns and rights in government decision­ making.

My intention is to put this pledge into practice. The Bureau is at the moment conducting a survey of consumer representation at meaningful levels in government authorities. The information turned up in the process will go to the Ministers concerned as well as to the community generally. The idea — to repeat — is to make consumers the agents rather than the targets of policy and practice.

The survey is being published as part of a series known as Consumer Audits which will examine the effectiveness of current consumer protection mechanisms. Is the consumer interest properly represented in the operations of GBEs and public sector

organisation? Do the Media Council of Australia, or the Banking Code of Practice effectively protect consumers against discrimination or bad practice? Do the insurance tribunals or the Telecommunications Industry Ombudsman provide fair, accessible and effective means of redress for consumers? These are seminal questions for consumers. They will be thoroughly examined in our Consumer Audit series.

The Bureau has been given another significant, related activity. In a series to be called Consumer Issues it will examine the possibilities and dangers for consumers in developments which are ahead of us. Let me give some examples. Will pay TV help or harm consumers? Do consumers want it? What’s the future of the phone and what

does it portend for consumers? What are the possibilities of interactive TV and other forms of marketing and are consumers keeping up with them? What limits — if any — are there to the diversification and sophistication of financial products? Who will supply these products? What are the implications for people, especially now that the role of the state in retirement policy is under question? What exactly is roaring at us

down the information superhighway?

Hilmer adds enormously to the need for this questioning. What is the social effect likely to be? How do we evaluate the effects of full market exposure for utilities on individuals, specific areas in the community or even the community at large? Would examination of all these issues be better done inside a Competition Commission which is itself inside Treasury, or outside?

My point about all this is actually the point of my agenda as Minister for Consumer Affairs. It is that consumers should be placed at the absolute core of the process by which all these questions will be determined. As I’ve argued, the ground is changing for consumers. So should the way their interests are defended. This imperative is all the greater as the market is made freer. Consumers should be helping to shape these developments, not just be passive objects of events. My aim therefore is to give consumers the capacity to do so. Consumers are not just those with the money to spare for the goodies that the market wants to sell. They are individual people. The way the society treats these individuals as consumers says everything about the kind of society it really is and the attitude it really has to individual members of it. This is why consumer affairs has such significance for me: its central place both as a signal and as an influence on our sense of social awareness and responsibility.