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Wednesday, 28 February 2001
Page: 24724

Mr TANNER (11:43 AM) —The Treasury Legislation Amendment (Application of Criminal Code) Bill 2000 amends a variety of legislation to create a consistent position on the application of strict liability in criminal offences. I want to concentrate on part of one piece of legislation which is involved with this amending legislation for which I have responsibility, which is part V of the Trade Practices Act. Part V of the act, of course, contains the consumer protection provisions that were put in place many years ago by the former Labor government and for which these amendments apply with respect to the criminal penalty provisions.

The amendments endeavour to identify the fault elements in each offence specified and to ensure that there is a clear definition of what defences are available. In particular, it is important to note it is implied that, for the various offences to which strict liability applies, there is no requirement to demonstrate deliberate intention on the part of the accused to defraud, or whatever the case might be. However, mistake of fact is a defence to the charges involved. I certainly support the strengthening and the introduction of some degree of uniformity of treatment of these kinds of provisions in various pieces of legislation.

The federal opposition does accept the need to amend the Trade Practices Act to insert some degree of uniformity and certainty with respect to these kinds of offences. But I would like to mention some related matters associated with the application of consumer protection at the federal level that apply to both the content and administration of the legislation.

Firstly, there is an inadequacy in part V of the Trade Practices Act that certainly any future Labor government will be examining closely. It is the inability to pursue civil penalties for breaches of part 5 of the Trade Practices Act. This can be done under part IV of the Trade Practices Act, which deals with anticompetitive behaviour—retail price maintenance, mergers, monopolies and the like—but it is not available under part V. One of the issues that should be kept in reserve for potential future consideration, should we some day have a Labor government, is the question of whether indeed there is a need for a civil penalty regime to be inserted into part V. That would have knock-on consequences for the amendments that are being introduced today. The question of strict liability in fact may be appropriately moved to a civil penalty regime, leaving a criminal penalty regime based on the traditional intention test that applies to most criminal acts. I am simply raising that for consideration. It is something that I have not formed a complete view on as yet, but I think it is a weakness in the current legislation. Currently, if the ACCC wishes to pursue a matter under part V, it has to engage the services of the DPP, who of course have a variety of other pieces of legislation and responsibilities to deal with, many of them of much greater moment than relatively small and limited prosecutions with respect to consumer protection matters. It would potentially streamline the execution of consumer protection prosecutions and the pursuit of malefactors if the ACCC had the potential to pursue some form of civil prosecution.

It is pleasing to see that the government and the minister are doing something to improve our consumer protection provisions, albeit with a fairly limited change and one that is being done for the purposes of getting some uniformity and consistency into the way that these matters are dealt with. It is perhaps appropriate to contrast this with other aspects of the government's record in the consumer affairs area, which include abolishing the position of the Minister for Consumer Affairs, downgrading the Federal Bureau of Consumer Affairs to a very small division of the Treasury and cutting its staff to a very tiny number, and slashing funding to consumer affairs organisations—which of course play a vitally important role in the community of pursuing consumer affairs issues and ensuring that there is a capacity for an independent public voice to put pressure on companies and organisations that provide goods and services to the community.

There is no doubt that there are number of areas where reform of consumer affairs legislation and reform of the actions of government are required in this country. Unfortunately, the government's track record in dealing with these matters has been largely regressive. I will quickly cite a couple of examples by way of illustration. The government has tried to remove the composition requirements for a variety of popular foodstuffs, such as meat pies, jam and ice cream. These products are ones that traditionally, in order to use their names, had to have a minimum composition requirement. To use meat pie, for example, you had to have at least 25 per cent meat in the pie. If you wanted to call something jam, it had to consist of at least 40 per cent fruit. The government tried to get rid of these composition requirements but fortunately the states—and not only the Labor states but some then conservative government states—jacked up and prevented that change from occurring.

The government tried to water down the position adopted by the states at the council of health ministers with respect to the labelling of products containing genetically modified organisms. The government tried to weaken the position being adopted by the council of health ministers with respect to compulsory nutritional labelling panels on products. Again, thankfully, the states—not only the Labor states—forced the government to back down.

In spite of the bravado shown in press releases and answers to questions by the Minister for Financial Services and Regulation, who is present in the chamber, the government has failed to tackle the banks about issues such as disclosure of fees on ATMs. When the banks finally started to move, it then tried to claim the credit for having initiated this move, which was entirely inappropriate. The government has failed to do anything at all about new consumer rip-offs that are emerging in the Australian economy in areas that have been dubbed the new economy—contracts associated with Internet service provision, mobile phones and various other information economy services, where we are seeing new kinds of rip-offs emerging which are not necessarily susceptible to being dealt with by existing legislation.

We are seeing unconscionable contracts and ultra hard selling techniques being imposed in some cases on vulnerable people. I have had one example drawn to my attention of an intellectually disabled man who was sitting at an outdoor café in my electorate, who had somebody approach him and ask him if he would like a mobile phone. He then signed something and had committed himself to spending $400 on a contract to get a mobile phone, when clearly he was not fully aware of the nature of the undertakings to which he was signing up. Numerous other examples have been drawn to my attention of people entering mobile phone contracts with hidden fees that are not disclosed until after the contracts have been signed. There is a variety of—

Mr Hockey —Refer them to the ACCC. It is unconscionable conduct.

Mr TANNER —These matters have been referred to the ACCC, so you can rest assured that the ACCC is concerned about these things as well. There are a variety of abuses emerging and, because of the complexity of contracts which we are now seeing emerge in areas like mobile phone and Internet provision, it means that people in some instances are more vulnerable to being ripped off than they are with the provision of traditional goods and services which will not necessarily be provided in respect of such complex contracts.

We are also seeing an emergence of fairly unscrupulous behaviour by telephone companies that is designed to maximise their market position. For example, if you wish to change your telephone company, then things can occur such as happened to a constituent of mine when he was arbitrarily disconnected almost instantaneously as a result of indicating that he wished to change his provider. Because he ran a small business, that had a devastating impact upon him for a number of days. It was only because of my office's intervention that the phone company rectified what it had done. There was no reason for the disconnection; it was purely an action associated with his desire to switch from one provider to another.

There are some good reasons why we need to contemplate amending part 5 of the Trade Practices Act to outlaw unfair contracts. The existing unconscionable contracts provision may not go far enough in dealing with particular kinds of grossly unfair and unequal contracts which, for example, give a provider of a particular service—for example, a mobile phone—the capacity to cancel the contract at any time and to retain any fees that are payable without any indication of any mitigation of the damage to the other party involved in the contract. That is just one illustration of some of the extremely unfair contracts that are out there.

We have also seen a substantial delay in the introduction of portability of mobile phone numbers in this country, in contrast to the situation in a number of other OECD countries, where portability of numbers from phone provider to phone provider is now an established fact. We still do not have it in Australia. That, of course, inhibits competition, choice and the ability of individual consumers to move from one provider to another in order to get a better deal.

There have been a number of instances where this government, because it is basically not consumer friendly and it is aligned with some of the shonkier business interests around the place, has appointed so-called consumer representatives to boards when these people are entirely inappropriate to the position. We have seen a substantial public outcry about the appointment of a pharmaceutical industry lobbyist to the Pharmaceutical Benefits Advisory Committee, but there are numerous other examples of similar behaviour. For example, a Mr Frank Hoffman was appointed to the Claims Review Panel of the Insurance Complaints Service. His sole credentials for being in this position were that he was a former insurance broker and a former president of the National Insurance Brokers Association—somebody clearly from the industry side of the fence who has been appointed to this organisation to represent consumers. Yes, he knew, and presumably still knows, a great deal about the industry, but he is hardly an appropriate person to represent the interests of consumers.

It is also noteworthy that the government very ostentatiously declined to reappoint Alan Asher, the former deputy president of the ACCC, who was in charge of consumer affairs responsibilities. He is an internationally renowned consumer advocate, internationally renowned person in the area of implementation of consumer affairs laws, and now has taken up a prestigious international position.

The government has taken no action on the emerging issue of people encountering enormous phone bills, often through no fault of their own, because there are no limits on the high cost phone accounts as there should be, as there are on credit cards. A number of examples have been brought to my attention. For example, a younger brother had got hold of his brother's phone and run up $10,000 worth of fees on sex lines. In another example, people have run up $20,000 worth of fees on chat lines. In some instances, people do not even know what sort of fees they are incurring. The phone might be used without the person's knowledge and they are liable for these fees. There is no mechanism to ensure that, at the very least, there is some sort of warning light that flashes up and says, `Hey, you are spending an awful lot of money. You should think about it.' There is nothing like the limit that we have on credit cards which is designed to prevent people from spending way beyond their means.

These sorts of examples are starting to become quite widespread. I was at a meeting in Sydney of ordinary ALP members only a few weeks ago and somebody asked me a question about this—I was not talking about consumer affairs issues; I was talking about general issues. Somebody who works in the Campbelltown area stood up and asked me a question about this very problem. He said that he knew of a number of instances of people who had been caught with huge bills, which were simply impossible for them to pay because there was no mechanism for establishing a limit on their phone use for these purposes. This is clearly a growing issue that needs some action from the government, but as yet we have not seen any indication of an acknowledgment that the issue actually exists.

Finally, the government has been pretty weak on the question of e-commerce and the prevention of spamming, which is electronic junk mail—

Mr Hockey —What? What about the best practice act?

Mr TANNER —What that suggests is that, if that is best practice, we have got some very serious problems around the rest of the world. Essentially, it has caved in to the interests of major businesses who want to be able to spam people, who want to be able to send electronic junk mail, and it has got a very weak position. It does not ensure that consumers have access to the actual costs that they are incurring as a result of the volume of spamming that they are receiving.

Mr Hockey —I took a tough approach on spamming.

Mr TANNER —From your philosophical standpoint, yes, it is a tough approach, because it is some intervention at all. From my philosophical standpoint, it is a weak approach because you are not interested in protecting consumers. Madam Deputy Speaker, hello; you are supposed to be chairing this.

Madam DEPUTY SPEAKER (Mrs De-Anne Kelly)—I am aware of my responsibilities, member for Melbourne. I thought you were enjoying a robust debate, but the minister will have to contain his remarks.

Mr TANNER —Thank you, Madam Deputy Speaker, I do enjoy a robust debate but I have got a few other things to say.

Mr Hockey —Get on with your remarks.

Mr TANNER —You should go and speak to some of those international meetings of investment bankers more often, Joe. Finally, all of these issues are matters—

Madam DEPUTY SPEAKER (Mrs De-Anne Kelly)—Member for Melbourne, you must use the appropriate title in the House, not personal names. You addressed the minister, so please use the minister's title.

Mr TANNER —Sorry: Minister for Financial Services and Regulation. Thank you, Madam Deputy Speaker. All of these issues that I have raised today are classic examples of the government's failure to deal with consumer issues. It is quite interesting that I have run through about eight or 10 of them and the minister has actually got fired up in response to say, `No, it's not true' once. Presumably, we can assume from his silence on all the other matters that he actually concedes that all the other charges are accurate. He finally disagrees with me on one point, so perhaps we can have a debate on that, and all the other points have been proven. All of these things are matters on which the federal government needs to act, needs to take some sort of action on and which a Labor government will take action on—

Mr Hockey —What's your policy?

Mr TANNER —and which a Labor government will take action on, as we did, contrary to the minister's statements, on the question of ATMs. It is there in black and white. The policy was adopted at our Hobart national conference in July 2000 requiring disclosure of ATM fees. The minister accused us of having no position on that. It is simply untrue.

The issues that are raised by this legislation raise broader questions of the appropriateness of the enforcement mechanisms with respect to consumer affairs issues in this country. I have adverted to the fact that a Labor government will examine the question of civil penalties as a possibility for part 5 of the Trade Practices Act. I think it is very important that we examine that particular issue and endeavour to correct that problem.

The Labor Party has a very long and honourable history on consumer protection in contrast to the conservative parties. The Trade Practices Act is a monument to the late Senator Lionel Murphy, former Attorney-General, who put strong consumer affairs provisions in place in the 1970s. But the world has moved on. We now have a very different economy. We have a whole variety of new contractual arrangements, new goods and new services, which are not necessarily similar in content to the typical kinds of goods and services and contracts of the 1970s. So there is a case for improving and updating the regulatory regime, ensuring that people cannot be ripped off, ensuring that we do have proper consumer protection in our society and ensuring that, where there are problems that ordinary people are suffering as a result of the shonky behaviour of some businesses, they do have some form of redress.

This government has abolished the ministry of consumer affairs and got rid of the Bureau of Consumer Affairs and shifted it into a tiny little cubby hole in Treasury, radically downgrading its resources. It has failed to act on a whole variety of significant consumer affairs problems, particularly emerging problems that are a consequence of changes in our economy and the introduction of the information economy—the Internet, mobile phones and a variety of other services. It is not interested in acting because, ultimately, it is beholden to interests that are out there trying to rip consumers off. For that reason, it will require a Labor government to take action for consumers. A Labor government will not be appointing a former head of the insurance brokers' organisation to represent consumers in the industry. A Labor government will not be appointing a former industry lobbyist from the pharmaceutical industry to represent consumers on the Pharmaceutical Benefits Scheme. A Labor government will have genuine representatives of consumers and it will ensure that consumer organisations have the capacity to put their point of view and to expose the rorts that are gradually emerging under this government.