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Wednesday, 15 October 2008
Page: 9289


Mr BOWEN (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer) (10:47 AM) —in reply—I thank all honourable members who have contributed to this debate on the Trade Practices Amendment (Clarity in Pricing) Bill 2008. I note that the opposition was represented by the honourable member for Cowper and the government was represented by a very long list of speakers. This is an important piece of legislation which provides for consumers to be told exactly what they will pay when they make a purchase. I say at the outset that I agree with the member for Cowper, who in his remarks said:

Overall, I believe that these amendments will have a positive impact on consumers. Without burdening businesses with high compliance costs, this measure will provide consumers with better information about the products and services they wish to purchase. It should also close the loopholes opened by the 2002 and 2003 court cases, and make pricing more transparent.

I certainly agree with the member for Cowper and that has been the government’s intention.

Drafting this legislation has not been easy. The objectives of the legislation are clear, but unintended consequences are also clear. It has been necessary to engage in a very extensive round of consultation not only with consumer groups but also with industry groups. I think that the balance the government reached in the legislation we put to the House is the right one. Consumers by and large understand, for example, that when they buy a good which requires it to be posted to them there will be postage and handling costs. This legislation strikes the right balance on the matter of postage and handling. I received a number of representations from internet sellers in particular about the problems that would be created and the unintended consequences of requiring the compulsory disclosure in a single price of the postage and handling cost when postage and handling is an option—when it is not necessary to have the good posted to you. So we have struck the balance of requiring postage and handling cost to be disclosed where it is not an option, where it is compulsory, but allowing separate disclosure of postage and handling cost where it is optional.

Likewise we received a lot of representations that financial services were not appropriately covered by this legislation, and on balance I agreed. Where you have financial services there are issues of disclosure and they are best dealt with through specific legislation, not through the general application of component pricing to financial services.

Similarly I received strong representations from various companies involved in service provision over a long period of time, pay television being a prime example, where you pay for a contract over a period of time but there is a monthly fee. By and large, I think Australian consumers understand monthly fees. They understand that if you take out a contract for a pay TV service, for example, and you pay a certain amount per month plus an installation fee, it will equate to an amount over the total minimum period of the contract. We have struck the right balance again, and that has been welcomed by those groups.

What is important about this legislation is that it deals with those unscrupulous sellers. It deals with those who have attempted to mislead their consumers, whether they be big or small. It deals with airfares being advertised free of government taxes and charges and other compulsory costs which add significantly to the airfare. No longer should people see an airfare advertised for a certain amount and think it is a very good price and, when they purchase it, find that it costs much more. Similarly, there has been a lot of concern in the community about dealer delivery fees and hidden costs and charges that are imposed when people go to buy vehicles. It is not just those two industries, but they are clear examples.

What the government has tried to do is to protect consumers without imposing an unfair compliance burden on those businesses doing the right thing. I think we have struck the right balance. This legislation has been broadly welcomed by consumer groups. It is true that there are some consumer groups who have asked us to go somewhat further, but we have struck the right balance. By and large it has also been welcomed by business groups. It is true that there are some business groups who say we have gone too far, but again I believe that we have struck the right balance. I think that the contributions from both sides of the House—the member for Cowper, who was the only contributor from the opposition, and all the government members who spoke on this bill—indicate that the House also agrees that we have struck the right balance.

This is legislation which was flagged by the previous government back in 2002 and 2003 as a result of various court cases, but the previous government did not actually introduce the legislation. I suspect that is because those vexed issues which this government has had to work through were too difficult to be worked through. We have taken the approach that this is urgent and that it is required to protect consumers but that the issues that have arisen during the consultation have been genuine and have needed a genuine approach to find the right solution. I believe we have struck the right balance, and I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.