Brett Raguse (Forde, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the Trade Practices Amendment (Australian Consumer Law) Bill 2009, a historic reform to consumer laws across Australia. This bill combines into one system the 13 different sets of consumer laws that are in place across Australia. As members would be aware, this national consumer law is to be called the Australian Consumer Law. This is important on the basis that it is a historic reform. It is about having one national system. There has been broad consultation with stakeholders, in collaboration with the state and territory governments. This is about balancing effective provisions and business concerns and it is part of the generational overhaul of Australian consumer laws.

A national consumer law system is not a new concept. Incredibly, the last attempt was back in 1983. It took seven years to implement, before each jurisdiction began to make changes and diverge. Clearly, it is no easy task to combine all of the different priorities, issues and concerns that can be found across the country. For this reason, these reforms have been on the way for some time. An inquiry into Australia’s consumer policy framework began back in December 2006. The Productivity Commission presented its final report, ‘Review of Australia’s Consumer Policy Framework’, in April 2008. This report was tabled in parliament in May 2008 by the then Minister for Competition Policy and Consumer Affairs. The Council of Australian Governments became involved from March 2008, and detailed recommendations for a new consumer law and enforcement mechanisms were ratified in October 2008.

After all this work, the bill before us today is only the first of two substantial reform bills. The second bill is expected to be debated in the parliament in early 2010. The goal, as described in the COAG National Partnership Agreement to Deliver a Seamless National Economy, is for the national system to be in place by the end of 2010. For this to occur, the states and territories will also put in place legislation and repeal relevant existing provisions in their jurisdictions.

In his second reading speech, the Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs noted that a single national law is a means to achieve better results for both consumers and business. This is about drawing a line in the sand and putting in place a clear set of national standards that all consumers and businesses can operate by, irrespective of where in the country they reside.

My electorate of Forde, in Queensland, is one of 10 electorates that share the Queensland to New South Wales border. The other electorates are Farrer, Calare, Parkes, New England, Page and Richmond, in New South Wales, and Maranoa, Blair and McPherson in Queensland. With its close proximity to New South Wales, many Forde residents often do business in New South Wales. For residents of areas like Running Creek, travelling to a town could just as well mean Beaudesert, in Queensland, as Casino in New South Wales. Many Forde residents are originally from interstate, particularly Melbourne and Sydney. As a result, many residents retain interstate business relationships and/or travel interstate regularly to catch up with friends and family. Technology has changed how people do business in this country, certainly in my electorate. The internet and related technologies have brought us all closer together and, to a large extent, have overcome the vast distances.

Consumer affairs issues within Queensland are simple enough. The Queensland Office of Fair Trading provides helpful advice and assistance. Yet interstate consumer law issues can be complicated, certainly if you are used to one particular state’s system. Since laws and arrangements differ between states, it is not easy for people to know where they can go and what rules apply to their situation. It gets even more difficult to explain when individuals are aggrieved by laws which are under the jurisdiction of a minister in another state.

It is not just consumers that will gain from having one national set of rules. Businesses that operate throughout the country, or in cross-border situations like the Gold and Tweed coasts, currently have to tango with multiple different consumer law arrangements. Having just one set of consumer law arrangements to comply with will save time and money for businesses. Businesses will face lower levels of complexity, resulting in lower compliance costs. Growing businesses will also face fewer barriers to growth beyond their state or territory borders. Cross-border issues are a nightmare for business efficiency, and this reform is a firm step in the right direction.

The Productivity Commission believes that a national consumer law could benefit consumers to the tune of $1.5 billion to $4.5 billion per year. The benefits would accrue through a number of important mechanisms, including increased consumer confidence through consistent consumer laws and clearer contracts, and businesses passing on to consumers part of the savings from lower consumer law compliance costs. And on many other occasions in this chamber the Rudd government has looked at how we can break down the barriers in terms of cross-border arrangements. We remember well the debates in this chamber about national measurements and other processes and effects of trade.

To implement the Australian Consumer Law, the bill seeks amendments to the Trade Practices Act 1974 and the Australian Securities and Investments Commission Act 2001. The ACL is proposed to be a schedule to the Trade Practices Act. Provision is made for the application and amendment of the ACL. Within the ACL, provisions are made to address unfair contract terms. New penalties, enforcement powers and consumer redress options are built into the revised Trade Practices Act.

The Australian Securities and Investments Commission Act modifications are similar but they are for financial services. These provisions also cover unfair contract terms, penalties, enforcement powers and consumer redress options. The formation of one national law has allowed extensive consultation and the positive cherry-picking of the best consumer law practices around Australia. It is a credit to the Victorian government that the reforms are heavily influenced by those implemented in Victoria.

While I am aware of the debate surrounding business-to-business contracts, the laws currently apply only to consumer contracts. A consumer contract is defined as ‘a contract for the supply of goods or services or a sale or grant of an interest in land to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption’. A consumer contract is to be considered void if ‘the term is unfair and the contract is in a standard form and, in the context of the ASIC Act, the contract is a financial product or a contract for the supply, or possible supply, of services that are financial services’.

The references to contract terms being ‘unfair’ make it important to define and understand what constitutes ‘unfair’. An unfair contract term is therefore defined as one that causes a significant imbalance in the parties’ rights and obligations under the standard-form contract and is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term. When a court is considering whether a contract term is unfair or not there are three specific issues that must be considered. Firstly, detriment: the court must consider the existence of any detriment, or substantial likelihood of a detriment, on the claimant. Secondly, transparency: the level of transparency of the term, which is reflected by characteristics such as its prominence in the contract. Thirdly, contract context: terms must be viewed in the context of the overall contract, given the diversity of contract types in existence. These measures strike an important balance between effective provisions and business concerns by giving business clarity in how the ACL will operate.

In conclusion, this bill represents 13 sets of consumer laws that are being combined into one national system—the first of two parts of a substantial and important overhaul of Australia’s complex consumer law system. It provides certainty, efficiency and lower costs for businesses, and it provides certainty, lower costs and simpler resolution of issues for consumers. I therefore commend the bill to the House.

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