George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Hansard source

The Trade Practices Amendment (Clarity in Pricing) Bill 2008 amends section 53C of the Trade Practices Act, which requires the full cash price to be stated in advertising the price of goods and services. The policy of section 53C was originally directed at the promotion of goods and services on time payment to require suppliers to stipulate the full cost rather than merely the periodic payment and to allow consumers, especially less-sophisticated consumers, to make a meaningful comparison of prices with similar goods.

However, recent decisions in the Federal Court have thrown some doubt on the efficacy of section 53C, in its current form, to require a single price to be stated. In two cases, Australian Competition and Consumer Commission v Dell Computers Pty Ltd and Australian Competition and Consumer Commission v Signature Security Group Pty Ltd, the court held that quoting a compound price—that is, the price of the goods plus another compulsory component such as delivery costs or GST—did not contravene section 53C. Those decisions led to complaints that businesses were being permitted to engage in a form of bait advertising by promoting a cheap price which did not adequately disclose the existence of fees, charges and taxes. The former government, the Howard government, prepared amendments to address these concerns, which were ultimately not proceeded with pending a Productivity Commission report into consumer policy. That report was not released until after the change of government.

While this bill does not exactly mirror the former government’s proposed amendments, the policy underlying it is very similar. The principal differences between this bill and the former government’s proposed measures are: the removal of postage and handling charges from the scope of the amendments, exempting financial services, and confining the prohibition to consumer transactions. It is possible to quibble over these differences but, on balance, the opposition is satisfied that the bill addresses the major problems that have been identified since the decisions in the two cases I have mentioned. In relation to financial services, the former government enacted a comprehensive disclosure regime under the Corporations Act. Financial products and business-to-business transactions typically involve more detailed consideration of the costs than most consumer transactions, which are often made impulsively and are simpler.

The amendments will prohibit a corporation from making a representation as to price of goods or services without also specifying the single figure price a consumer must pay in order to obtain the goods or services, to the extent that a single figure price is quantifiable at the time the representation is made. It is not intended that corporations should be prohibited from using component pricing at all but rather that a single figure should be disclosed at least as prominently as the other components of the price. This will enable consumers to more easily compare like products or services and to make informed purchasing decisions. The opposition supports this bill. (Quorum formed)