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Wednesday, 15 October 2008
Page: 9278


Mr ZAPPIA (10:00 AM) —I rise to speak in support of the Trade Practices Amendment (Clarity in Pricing) Bill 2008 because this bill will be welcomed by consumers and will provide consumers with a much clearer choice when purchasing products or services. The measures contained in this bill will clarify that when a business makes a representation to a consumer about the price of a good or service, to the extent that it is possible to do so, it must also disclose as a single figure the total price for that good or service.

In 2002 the Federal Court found that the existing section 53C of the Trade Practices Act 1974 did not require the disclosure of a single-figure price, provided that a total price could be obtained without the customer needing to perform a complex calculation. The court’s finding was inconsistent with the previous legal advice obtained by the government, as well as the ACCC’s approach to enforcing the provision. As we all know, consumers are not always familiar with the additional charges that often apply to goods or services and frequently find themselves paying more than they had expected to pay. Not surprisingly, during 2007-08 the ACCC received around 430 complaints relating to the existing section 53 of the Trade Practices Act.

The previous government undertook in 2006 two rounds of public consultation on component price amendments but never introduced legislation into the parliament. The Rudd government is now delivering on another important pro-consumer reform that the previous government never had the courage to push ahead with. No longer will consumers feel ripped off when they suddenly discover that what they thought they were paying does not take into account hidden taxes and charges. In cases that I have been made aware of, the extra taxes and charges can sometimes be more than the product or the service being paid for. Not only will this measure empower consumers to enable them to make a much better, informed choice but it will also enable them to better manage their finances.

The bill, however, does not prevent businesses from using component pricing, provided that the total price is displayed prominently as a single figure. With all businesses expected to do this, the bill will not cause any disadvantage to any business. Of course, in some cases the businesses genuinely may not be able to know the total price in advance of the purchase. The bill makes provision for this scenario, albeit that the business is still required to advise that other charges may apply and to explain the nature of those charges.

Consumers look to government for protection in relation to their purchases, and both state and federal governments have a responsibility in consumer law. As we all know, consumers do not always read or understand the fine print that often accompanies purchase agreements. These documents are usually prepared by lawyers—I notice that I have to my left my colleague Mr Ripoll, who is a lawyer, and I say this with all due respect to him and to my other lawyer colleagues—with the objective of protecting the retailer or service provider and not the consumer. It is interesting that the conditions of the transactions are always in fine print and use complicated legal jargon. It is also noticeable that many retailers or service providers never take the time to fully explain to the consumer all of the conditions and the obligations expected of the consumer that are contained in the sales agreements. The only conclusion that I can draw is that the retailers or service providers in many cases do not want the consumer to know all of the conditions attached to the sale.

This is another example of clarity in pricing where quite often those conditions may not necessarily relate to the price itself but to other conditions attached to the sale where it would be in the interests of the consumer to be fully aware of just what they are purchasing, including the conditions, when they do make a purchase. I know that that assessment does not apply to all retailers and that many of them are honest and transparent in their dealings with customers. Regrettably not all are, and that is why we need consumer protection legislation.

On Saturday a constituent brought to my attention a brochure that it appears was deliberately ambiguous with the price of the products being marketed, in this case shoes. When the constituent went to purchase the shoes at the price he thought appeared in the brochure, he was told the shoes were much dearer. On closer reading of the brochure—and I read the brochure carefully—I can understand how the retailer could claim that the price expected to be paid by the constituent did not apply to those particular shoes as they were displayed on the brochure. There are many other examples that I, and I am sure other members of this place, could refer to.

The vast majority of businesses that operate ethically will have no objection to these changes; in fact, they will welcome this bill, because it will probably weed out the rogue operators from within their industry. The consumers, however, will certainly benefit from this bill because it provides clarity and certainty in how much a good or service will actually cost them. I commend the bill to the House.