Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that this bill be read a second time. To this the honourable member for Brand has moved that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.

Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Link to this | Hansard source

In continuing my remarks on the Treasury Laws Amendment (Gift Cards) Bill 2018 I'll pick up where I left off last night. I was making the point that gift cards are not always redeemed. Perhaps it's because there is not, at the time, an appropriate gift in the store that the holder of the gift card wants to purchase. On other occasions it may be that the time elapses unintentionally and the gift card is never used. There are also occasions whereby the gift card is redeemed but not to its full value; there might be a small amount left over. Again, time elapses and that small amount is never taken up by the holder of the card. Whatever the case, we know there are gift cards that are never cashed in and that the value of those cards, ultimately, is lost.

I raised this concern only a couple of months ago, in this place, when I spoke of lost gift cards that were issued by Toys R Us. Toys R Us went into liquidation, and the stores closed. The holders of those cards lost their gift cards because the stores closed. Holders of gift cards, in the weeks leading up to the closure of those stores, were even told by the administrator that if they wanted to cash in their gift cards they could only do so if they purchased an equivalent amount of new product from the store. This was adding a condition that was not part of what would have been the understanding of the person who purchased the gift card. That was of serious concern to me because it effectively said to people who had a gift card, 'You have a gift card, but from now on the terms and conditions under which you can use it have changed dramatically.'

I made the point at the time that I also believed that, given that that was the case, it was not good enough to simply say to those people who had lost the value of those gift cards because the store went into liquidation that they were unsecured creditors to an entity that might not have any credit when all the financials had been sorted out. It might have been also appropriate that, in the issuing of gift cards, the funds that the stores take in from those gift cards should be put into a separate account perhaps a trust account or something similar that was therefore secured and always available for those people who had purchased gift cards. I make that suggestion on the basis that I still have concerns about the holders of gift cards losing the value when a business closes down or, even worse, goes into bankruptcy, because under those circumstances the value is lost, and there is no product ever issued. I believe that we could perhaps do a little better.

The other matter relating to the gift cards is this. As other speakers have noted—and I made the comments myself earlier in this discussion—both New South Wales and South Australia have now enacted legislation to ensure that there is a three-year time limit on gift cards. I think that that's appropriate and sensible. However, we now have legislation in South Australia and New South Wales, and we're about to have legislation in the federal parliament. That means we will have national legislation and state legislation. That immediately begs the question: which legislation supersedes the other when a breach of the conditions and perhaps the three-year time limit occurs? I don't know. I'd hate to think that, because there might be two sets of legislation, one at national and one at state level, there'll also be buck-passing between the two as to who is responsible for ensuring that the intent of this legislation is carried through at the time. It would seem to me that, from a consumer's point of view, they wouldn't necessarily know where to go.

Indeed, if we have national legislation, will that supersede and make obsolete the state legislation? I really don't know. My understanding of the legislation that went through in New South Wales and South Australia is that it is very, very similar to what is being proposed under this bill. Given that, it would seem to me that we might reach a point where there is duplication. Indeed, that even begs the question: can a person be prosecuted for a breach under both state and national legislation and therefore incur two sets of penalties? Again, those are matters on which I would be interested in getting a response from the minister.

Lastly, I make this point. As a result of the issuing of gift cards and the community concerns that have been raised, and now the legislation in New South Wales and South Australia, I note that many of the stores, particularly in the retail sector, and others, have already moved to a three-year time limit on their cards. Indeed, there's no restriction on the limit extending further than three years, and some stores in fact leave their gift cards open ended, which I think is a good thing to do. But I notice that many of the stores are already moving in that direction and many of the businesses across Australia are already moving in that direction, clearly in anticipation that, if they didn't, they would be forced to anyway. Nevertheless, I think that that is a good thing.

I think this legislation is very much a step in the right direction. It will close off many of the loopholes relating to the issuing of gift cards. Of course, it doesn't close all of them off, because, as we know, there are some types of cards—for example, a gift voucher that might be issued by a local business to a community organisation as part of a raffle or something like that—that I understand are not covered by this legislation, and nor should they be. There will be exemptions to the general term of gift cards when it comes to being protected by this legislation. It is a step in the right direction. I guess time will tell just how effective it will be.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Like many Australians at Christmas or on birthdays, Father's Day or Mother's Day, I have received and given gift cards as presents. A gift card is one of the simplest and easiest gifts for loved ones or for an office Kris Kringle. There is nothing worse than going to David Jones, JB Hi-Fi or Bunnings, picking the thing you want or need and, once at the counter, realising the gift card has expired. It is essentially lost money. After all, there is no expiration date on money. That is why I'm happy to see the Treasury Laws Amendment (Gift Cards) Bill 2018 before the parliament. It will make things fairer for consumers and give the certainty that consumers and businesses need. No longer will people wake up on Christmas Day, unwrap a gift from their loved ones, perhaps an uncle, see a gift card and worry about onerous terms and conditions, which can be viewed only through a microscope or with the aid of a magnifying glass, and worry about the expiry time frame.

When we talk in this place about economic reform, we normally talk about the importance of creating greater wealth for our community and the people who live in Australia, whether that's more job opportunities or whether that's lower taxes, more innovation or whatever. But this too is economic reform, because it's going to benefit the lives of so many Australians, providing them with opportunities to use gift cards that previously they couldn't use because the expiry date had passed. This is major economic reform. This is what a government that governs for the many, not the few, looks like. We Liberals in the past have taken on big oil and big tobacco and today we will take on the big gift card industry.

The previous speaker said that he was worried about the difference between state laws and the federal law. Well, the reason this law is so important is that the government has become aware there are some people, in places like Tasmania, who have been considering setting up what are effectively call centres to sell gift cards into New South Wales and South Australia, where unsuspecting consumers don't realise they're not covered by the laws introduced by the excellent state minister Matt Kean, the Minister for Innovation and Better Regulation. As Mr Kean has pointed out, sometimes better regulation is more regulation, but today we are here to praise smarter regulation, because under this law the gift card boiler rooms that we feared might be established in places like Tasmania, selling to the unsuspecting consumers of New South Wales, will not be possible. Under this law, nowhere now will you be able to take advantage of Australian consumers.

When this government talks about putting people before profit, it knows that you can't have profit without people. That is why Minister Robert, who has introduced this excellent piece of legislation, says that as he walks past stores and shopping malls in Brisbane and the Gold Coast people come up and hug him. It is no longer just because of his rugged good looks; it's because he's introduced a piece of legislation that the people of Australia love. And he is a beloved minister of this government. It's an example of how we are responding to the needs of consumers, not just in New South Wales and in Australia but right around Australia.

Therefore, it is disappointing to see that the Labor Party felt it necessary to move amendments to this incredibly good piece of legislation. What is Minister Robert to say to people when they come and hug him in the street, unsuspecting as they may be? Is he to say, 'Well, we're trying to get this done but the Labor Party has moved amendments to it?' Hopefully, they will see that this piece of legislation is critical economic reform. It is critical to advancing the needs of and, indeed, the importance of, what all consumers need in this country, because when we make the lives of one consumer better we make the lives of all Australians better. Thank you.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

It wasn't quite 'fight them on the beaches', member for Mackellar, but anyway! Labor is happy to support this Treasury Laws Amendment (Gift Cards) Bill 2018. It is in the interests of consumers, and Labor will always be on the side of consumers. But I must point out that we do have the second reading amendment that the member for Brand moved, which I do support—mainly that we note the government's lack of support for and failure to protect Australian consumers to date. That is partly because this legislation has been so long in coming, and I'll come to that. And it calls on the government to reinvigorate the national consumer affairs forum process to enable the much-needed reform of Australian Consumer Law. That's a very important process that the current minister has allowed to languish, which is a great shame for consumers. That's a very important protection measure, and we very much look forward to seeing that consumer affairs forum re-established.

This principle behind this bill is that, essentially, it contains a schedule which will allow gift cards to have an expiry date of three years, which is a great improvement on the current system. But I know that the cry across Australia will be: 'Why have any expiry date at all? Obviously, you pay cash—$50 or $100—for a gift card. Why doesn't the card have the same expiry date as cash, which is none?' That's a very good question, and the answer is, of course, that small business can't carry liabilities forever. Small business has to balance the books, so this is a good compromise, I think, between having no expiry date on a gift card and meeting the needs of small business—three years.

If you get a gift card for Christmas or your birthday—and I would counsel any husband in this place not to buy their wife a gift card for their anniversary; I think that is a recipe for disaster! I'll just say that—

An opposition member: Shame!

Shame indeed, for those who are foolish enough to try! So I think that three years is a good compromise between those competing needs.

I'm pleased to say that there are a number of retailers—the big retailers—who can afford to carry the liability of gift cards with no expiry date on them into perpetuity, and that's good to see. The big retailers can do that, so, hopefully, you can use your gift card; you can dig it out of the bottom drawer, dust off the grunge and spend it five, six or seven years down the track.

The schedule in this bill also increases transparency requirements for gift cards to be fully legible. The member for Makin made reference to the unintended consequences when the conditions of gift cards are not entirely clear. It's unacceptable that somebody can pay cash for a gift card and think that they're giving this lovely gift to somebody but that when they try to spend that gift card at a shop, the shop says, 'Well, yes, you can use the gift card, but only if you spend some money with us as well.' That is unacceptable, and this legislation will make it clear that conditions like that will have to be spelt out very clearly.

It's sad to say that this legislation has been far too long in coming. This bill had to be approved by the Commonwealth, state and territory consumer affairs ministers by a tortuous circular process, not helped by the fact the forum scheduled for 31 August was cancelled and later deferred to 31 October due to the well-known machinations within the government and the problems they had with their leadership over the last few months.

I'd like to come briefly to the issue of small-amount credit contracts, which are part of the consumer affairs portfolio and go to the second reading amendment—about the failures of the government in relation to consumer affairs. I'm pleased to see that the assistant minister has joined us, because this goes directly to his failures as minister. The country is plagued by payday lending: loan sharks. There is a crisis underway. I must say that, led by the shadow consumer affairs minister, and particularly by the member for Oxley, we have shone a light on this disgraceful state of affairs with payday loan sharks and the number of people they affect.

There's been legislation on the books in this place for a long time which the government has failed to enact. The government has refused to bring forward its own legislation to a vote. Labor brought forward a private member's bill using exactly the same words as the government's bill, and the government voted it down. The government effectively voted down its own bill which would protect people from the effects of payday loan sharks. That's a disgrace.

The legislation would reform small-amount credit contracts; impose a ceiling on the total payments that can be made under a rent-to-buy scheme; require payday loans to have equal repayments at equal payment intervals; remove the ability for small-amount credit contract providers to charge monthly fees on residual terms of a loan where a consumer fully repays the loan early; ban unsolicited sales of the schemes; and introduce broad anti-avoidance protections to prevent payday lenders and rent-to-buy companies from circumventing the rules. These are all very good reforms. They should happen. But under this assistant minister they're sitting in a bottom drawer somewhere not happening, because the parliamentary friends of payday lending have control of the government. Those opposite are in the pockets of the loan sharks. They're refusing to bring on their own bill. They've voted down Labor's bill, which is identical to their own—a bill that will protect consumers. It's a disgrace.

Here are some payday lending facts and figures. These figures are from a recent report from the Consumer Action Law Centre and they go directly to the second reading amendment about this government's failure to protect Australian consumers. The rate of vulnerable Australian families being taken advantage of by payday lenders has almost doubled over the past decade, with 650,000 financially stressed households now holding a payday loan. The number of borrowers taking out more than one payday loan in the preceding 12 months has grown from 17.2 per cent in 2005 to 38 per cent in 2015. That means the average number of payday loans per borrower is 3.64. Forty per cent of people who entered into a small-amount credit contract loan are unemployed, so they're not in the best position to repay these high-interest loans. A quarter of those who took out payday loans received more than half their income from Centrelink. We're talking about interest rates as high as 884 per cent on these loans. Can you imagine an interest rate of 884 per cent? And this government does nothing about addressing this issue, despite having legislation ready to go that this side will support. We're talking about payday loans that affect 1.8 million financially distressed Australians, who are also struggling with all sorts of other cost-of-living increases. It's an absolute failure of this government to look after the interests of Australian consumers.

Recent data shows there are now 800,000 Australian households which have fallen victim to payday lending. It's more than doubled in the past decade. In the last 18 months alone, 150,000 new households have signed up for payday loans. There is a crisis out there. What this signals is that people can't afford to get credit by the usual means; they're already stretched, so in desperation they're going to these loan sharks—150,000 households in the past 18 months alone. That's a staggering number. And this government is doing nothing to address this consumer crisis across Australia. It's now been 1,168 days since the government itself started a review into payday loans, and it has done nothing. Those opposite have been so obsessed by their own internal machinations, their own problems inside their own party, that they're not looking after Australian consumers. Stop looking after yourselves and start looking after Australian consumers. What has been going on is a disgrace.

I'd like to come briefly to the issue which goes to the second reading amendment about honey laundering. It's a great term, invented, I think, by the shadow minister. Well done, Shadow Minister! Honey laundering is a funny term for a serious subject. As the member for Lyons in Tasmania, I do have honey producers in my electorate, quite a number of them. They are aghast to learn that Tasmania has been caught up in this adulteration of Australian honey. It's a serious issue because Tasmania, as anybody who went to the fantastic event last night—the Flavours of Tasmania—knows, Tasmania trades on its well-deserved reputation as a place of exceptional quality and exceptional integrity when it comes to produce. So, for Tasmania to be caught up in this honey-laundering scandal, where honey has been adulterated with sugars that are not pure honey, it is very distressing for a number of quality honey producers across my electorate.

This is right in the assistant minister's remit. He could be and should be doing something about this. I mean, he's using plenty of internet. There is the $38,000 worth of internet he's using at home. There's plenty that the assistant minister could be doing. He could get on to Google, at least, to check out what is happening. He could be phoning people and finding out what's going on. He's using plenty of data. I'm not sure what data he's using to rack up $38,000 worth of bills to the taxpayer but he's certainly not doing it to look after the honey producers of Tasmania or the honey producers across Australia or those many hundreds of thousands of Australians affected by payday loan sharks.

We on this side are happy to support this bill but we do move these very important second reading amendments. We hope those opposite can see themselves fit to support the second reading amendments because they are important amendments in the interests of Australian consumers. It is in the interests of Australian consumers to extend the life of gift cards. It is an important bill and I commend it to the House.

Stuart Robert (Fadden, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

Firstly, can I thank all those members who have contributed to the debate. The bill introduces reforms to ensure a nationally consistent and uniform regime for gift cards in Australia. It introduces a minimum three-year expiry period, requires expiry data information to be displayed predominantly on the card and bans the charging of post-supply fees. The reforms put to the parliament will provide consumers with greater confidence and make gift cards fairer for all consumers.

Well-informed and confident consumers are essential to the functioning of an efficient economy. However, many consumers experience loss and disappointment from expired gift cards due to a wide variance in terms and conditions. This makes it difficult for consumers to understand their rights and obligations. It is equally important that businesses are supported in meeting their obligations and do not face any unnecessary compliance burden in complying with different laws.

The implementation of nationally consistent gift card reforms will provide greater clarity for Australian businesses. New South Wales and South Australia have moved to address the detriment consumers experience from expired gift cards, with reforms to introduce a minimum three-year expiry period for gift cards sold in their respective states. Still, there is currently no uniform regulation for minimum expiry periods and post-supply fees, with different rules applying across jurisdictions. The inconsistencies have created uncertainty for consumers and a regulatory burden for businesses.

The bill imposes a three-year minimum expiry period nationally, balancing consumer rights and business compliance. The reforms will also require the expiry date information to be prominently displayed on the card itself. Enhanced disclosure of the expiry date on gift cards will ensure consumers are able to make informed purchasing decisions by having clear access to expiry date information at the time it's needed and on the card itself. The disclosure requirements in this bill provide clarity for consumers, whilst providing businesses with the needed flexibility in the way the date is displayed.

Further, under the national regime, the charging of post-supply fees—that is, inactivity and balance-checking fees—will be prohibited. Consumers will have the full benefit of the gift cards they receive. To ensure flexibility and to provide support to industry, regulatory-making powers contained in the bill allow for certain gift cards supplied in particular circumstances to be exempt from all or some of the requirements imposed by the reform. This will allow the law to adapt to changes in tech and business activities, to ensure that essential activities involving gift cards are not unnecessarily curtailed to the detriment of businesses and consumers. The government is comprehensively considering feedback from stakeholders on the nature and scope of the exemptions and post-supply fees to ensure the business gift card activities are not curtailed.

It's an offence to contravene the reforms contained in the bill. This will act as a strong deterrent against misconduct that can have serious detriment for consumers, thereby enhancing the integrity of the regulatory regime. The penalties that can be imposed for contravening the regime are similar or consistent with the consumer protections in the ACL—the Australian Consumer Law. Compliance with these reforms will be monitored and enforced by the ACCC.

The government has consulted widely on the reforms. Consumers and business support the reforms as they improve consumer outcomes, provide consistency and are workable for business. The states and territories have also shown their support for a national regime. In August this year, Commonwealth, state and territory consumer affairs ministers formally agreed to amend the Australian Consumer Law, as required by the Intergovernmental Agreement for the Australian Consumer Law. The reform will take effect from 1 November next year, after providing industry with around a 12-month transition period to adapt to the new regime. This will ensure that these important protections for consumers are in place for the 2019 Christmas period. I commend the bill to the House.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Brand has moved as an amendment that all words after 'That' be omitted with a view to substituting other words, so the immediate question is that the amendment moved by the member for Brand be agreed to.