Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to speak for 20 minutes.

Leave granted.

This evening I rise to speak about the importance of the Australian government’s landmark reforms to Australian Consumer Law. These reforms are part of the Rudd government’s commitment to what I think are landmark microeconomic reforms that are going to boost Australia’s productivity by reducing business compliance costs while at the same time strengthening consumer protections. Our reforms to consumer laws are emblematic of the Rudd government’s approach to microeconomic reform because they embody our belief that stronger markets are fairer markets. Our conviction is that a stronger economy and a fairer economy go hand in hand.

The Hawke-Keating government took the same approach, and its reforms, which increased Australia’s exposure to international trade and liberalised our product markets, contributed to an impressive surge in productivity that lasted until the late nineties. These reforms, according to the Productivity Commission, added at least 2.5 per cent or $20 billion to our GDP. The Hawke-Keating government’s move to a decentralised wage bargaining system ensured that both employment and labour market flexibility also increased during this period. According to leading economic authorities, including the OECD, increased productivity was achieved without increased underemployment. That is the Labor way—a stronger economy through meaningful reforms that benefit everyone through increased employment.

In contrast, what did we see during the Howard-Costello years? What we saw on the coalition’s watch was a productivity slowdown. The coalition was content to ride the commodities boom associated with the rise of India and China and to indulge their ideological obsession with Work Choices. They were not prepared to do the heavy lifting needed over the long term to increase productivity and competition. So it has now fallen to the Rudd government to return Australia to a long-term growth path, the path it once enjoyed as a result of the Hawke-Keating microeconomic reform agenda, the path that the coalition failed to pursue even though the global context made their task much easier.

An important part of rising to the challenge of increasing competition and boosting productivity is driving continuous improvement in regulatory quality. So our national partnership agreement with the states and territories to deliver a seamless national economy is designed to drive continuous improvement. The agreement entered into in 2008 commits both the Commonwealth and the states to 36 reforms to move Australia towards a seamless national economy. These include 27 priority reforms to reduce the regulatory burden on businesses and eight competition reforms. The agreement is designed to boost productivity and enable stronger medium-term economic growth and it does this by reducing the costs incurred by business from unnecessary or inconsistent regulation, improving workforce participation and labour market mobility, and driving competition reform.

This reform agenda forms part of the Rudd government’s new agenda for Commonwealth-state relations. The Rudd government believes a partnership approach with the states works best to harmonise key regulations right across the nation. However, cooperative arrangements should have at their core a commitment to making real progress on issues of common concern. They should never be a cover for inaction, unnecessary delay or buck passing. Innovative structures have therefore been established at the COAG level to facilitate these reforms and others, and these are underpinned by new federal fiscal arrangements. The new Intergovernmental Agreement on Federal Financial Relations requires states to pursue jointly approved regulatory reforms. The national partnership agreement to deliver a seamless national economy provides incentive payments to the states that are contingent on performance, to ensure real progress on regulatory reform.

An Australian consumer law is one of the most important of the 27 regulation reforms needed to move Australia towards a seamless national economy. The Productivity Commission estimates the national benefits of consumer law reform at up to $4.5 billion a year. The Australian Consumer Law will rationalise the many national, state and territory consumer laws by replacing the myriad consumer legislation now in force across the nation. This will minimise compliance costs for business by dramatically reducing inconsistency and duplication in consumer law.

The legislation that has recently been debated in this place represents stage 1 of this process and delivers on the major elements of Australian consumer law reform. These include establishing a single national consumer law under which 13 different consumer protection laws become one; making provision for the application, administration and amendment of the Australian Consumer Law; introducing a national provision regulating unfair contract terms; and introducing new penalties, enforcement powers and consumer redress options. Very shortly, we will get the next wave of this reform in which we will see reforms based on best practice in state and territory consumer laws. We will also see the remainder of the Australian Consumer Law from the existing consumer protection provisions of the TPA; amendments to the TPA to clarify the scope of its unconscionable conduct provisions; a new national product safety system; and a new national consumer guarantees law. The states and territories are to apply the Australian Consumer Law by the end of 2010 so that it will be fully implemented by January 2011, thereby delivering, on time, one of the most important business regulatory reforms for a seamless national economy.

This legislation is part of one of the most significant overhauls of Australian consumer law in the last 25 years. A single national consumer law has been a long time coming in Australia, despite the longstanding support for the proposition from both consumers and businesses. Once again, it is a Labor government that has the courage, the initiative and the tenacity to grapple with a century-old problem and to bring historic reforms to fruition.

Finally, all businesses, whether they operate in both Broome and Darwin or right around the nation, will have only one set of consumer laws to comply with and consumers will have the security of knowing that their transactions with business are covered by the same safeguards, wherever they live and wherever they shop. Having one national consumer law will make for a better and stronger market for consumer products and services, while the new unfair contract terms law will make contracts fairer and consumers more confident. Consumers are currently frustrated by high penalty and exit fees in contracts for financial services and essential utilities. They are particularly going to welcome the opportunity to seek redress through these provisions. At last, too, all the regulators—the ACCC, ASIC and the state and territory bodies—will have common enforcement powers so they can take effective action at the local and national level to safeguard consumers.

Improvements to the ACCC’s enforcement powers are long overdue. For many years, the state and territory consumer protection agencies have had powers the ACCC has lacked. As the Minister for Competition Policy and Consumer Affairs said when these reforms were announced, for too long the ACCC has struggled to protect consumers with one arm tied behind its back. Provisions for public warning powers and substantiation and infringement notices will finally give regulators the teeth to enforce consumer protection safeguards and inform consumers about unfair business practices. These reforms build on other steps that Rudd Labor has already taken to protect consumers and promote competition in our retail sector, including clarity and pricing reforms that give consumers confidence that the price advertised is the price they will pay. There are also a raft of pro-competition reforms in the supermarket sector including the relaxation of foreign investment rules for overseas owned supermarkets, the removal from tenancy agreements of restrictive clauses that inhibit the entry of rival supermarkets, COAG agreement to reform unwarranted anticompetitive provisions in planning laws, the announcement of legislative amendments to address creeping acquisitions, and the introduction of compulsory unit pricing to enable consumers to best value their shopping. These reforms are designed to put downward pressure on grocery prices as well as empowering consumers to readily choose products that offer good value for money.

In competition reform, as in consumer affairs, there has been a catalogue of unfinished business. Many of the long called for reforms were left languishing while our coalition predecessors focused on ideological obsessions that were of negligible importance to boosting productivity. Here too we have finally given the ACCC the powers it needs to do its job properly, allowing it to effectively regulate for robust competition through amendments to predatory pricing rules and cartel criminalisation. The task of driving improvements in competition policy and consumer protection is complex, demanding and ongoing. The Rudd government’s activism on these issues is founded on our belief that robust national competition is crucial to the nation’s productivity growth, which will help build a stronger and fairer economy over the long run for the benefit of all Australians. For Rudd Labor, more-open markets and fairer markets are not competing priorities; they are two sides of the same coin. Our reforms to Australian consumer law embody this belief. They also exemplify the government’s capacity to deliver on its commitments.