Nick Xenophon (SA, Independent) Share this | Hansard source

I rise to indicate my support for the second reading of the Trade Practices Amendment (Clarity in Pricing) Bill 2008. Borrowing from the title of the bill, brevity is clarity; I do not intend to take too much of the Senate’s time in relation to this bill. I note that a version of this bill was introduced by the previous government and that the coalition supported this bill in its successful passage through the House of Representatives. I think it is important to put on the record a few brief marks about this bill, given my ongoing interest in protecting the rights of small businesses and consumers.

This bill amends section 53C of the Trade Practices Act to require advertisers to present a single-figure price so that consumers know the full amount they will have to pay when purchasing items. Currently, some companies participate in practices which, while not technically illegal, are at best confusing and at worst misleading. Such practices do not contribute to a fair and transparent market where consumers should have maximum choice and small businesses should have every chance to compete fairly. An example that would be familiar to many Australians is that of so-called ‘cheap’ air fares. In what seem like increasingly frequent airfare price wars, we see ridiculously cheap airfares advertised without indication of the associated fees and taxes until after the ticket has been purchased or is about to be purchased. This leaves the consumer in the dark about the true cost of the ticket, which may be far more than those provided by other companies that want to do the right thing by being more transparent in their pricing. Other examples of hidden costs can include on-road and dealer delivery costs for new vehicles and compulsory delivery costs for internet order items such as computers.

This bill will ensure that, when a company makes a statement about the partial price of a good or service, it will also provide the details of the full price. It will do so by making it clear in section 53C of the Trade Practices Act that companies have a responsibility to show component costs in prominent and clear ways. That is good news for consumers, and I commend the government and Minister for Competition Policy and Consumer Affairs, Minister Chris Bowen, for addressing what are clearly deficiencies with the current act. However, there are three matters for which I request clarification from the minister in the committee stage.

Firstly, the bill states that the ‘single total price’—namely, the price paid by the consumer to walk away with the product—must be ‘quantifiable’ for it to be presented. I appreciate that in some cases there will be some fees, charges or costs and that a company will not be able to project all the costs and hence will not be able to provide a single total price. In these cases, will the advertiser be required to state prominently that there is a further charge payable and what the nature of the charge will be even if a specific price cannot be stated—in other words, how will consumers be informed in those cases where it is clearly not practicable and what thresholds are there for the practicability of that being enforced? Where are there reasonable exemptions for businesses in relation to this?

Secondly, while the ‘single total price’ is not required in business-to-business transactions, should the business that bought the product then sell it on to an individual consumer, what requirements will be on the secondary business to present all component costs? For instance, if a company bought an airfare from an airline and then sought to advertise it online, would it be required to disclose all component costs to enable transparency and greater choice for the consumer? Thirdly, I ask the minister what research the department has devoted to the possible compliance costs of these changes, especially for small businesses. What were the findings of this research? That said, I support the broad intention of this bill and will be supporting its second reading.