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

by leave—I move amendments (3), (4) and (8) standing in my name on sheet 5898 together:

(3)    Schedule 1, item 1, page 6 (after line 18), at the end of section 3, add:

        (5)    A term of a consumer contract is presumed not to be unfair if it has been authorised by the Commission in accordance with section 3A.

(4)    Schedule 1, item 1, page 6 (after line 18), after section 3, insert:

3A  Commission may authorise model terms in consumer contracts

        (1)    The Commission may authorise:

             (a)    model industry contracts; and

             (b)    model contract terms; and

             (c)    specific variations of a standard form contract; and

             (d)    specific contract terms of a standard form contract.

        (2)    An authorisation under subsection (1) may be made:

             (a)    on application by a party to a potential consumer contract; or

             (b)    on application by an industry association; or

             (c)    on application by or on behalf of persons or classes of persons prescribed by the regulations.

        (3)    An application under subsection (2) must:

             (a)    identify the person making the application; and

             (b)    include any other information prescribed by the regulations; and

             (c)    be in the form prescribed by the regulations.

        (4)    In considering whether to make an authorisation under subsection (1) the Commission must have regard to:

             (a)    whether the proposed contract terms reflect a reasonable balance between the rights and obligations of the parties of the contract; and

             (b)    where the contract term or terms relate to the imposition of a fee or charge for the provision of a service—whether the fee or charge is reasonably proportional to the justifiable costs or costs of providing the service; and

             (c)    whether the contract term or terms are reasonably necessary to protect the legitimate interests of the larger party; and

             (d)    any other matter prescribed by the regulations.

        (5)    Prior to making an authorisation under subsection (1), the Commission must:

             (a)    publish the application on its website for the purposes of public consultation for a minimum of 30 days; and

             (b)    accept and consider submissions in relation to the proposed authorisation; and

             (c)    do anything else prescribed by the regulations.

        (6)    The Commission must notify an applicant under subsection (2), in writing, of a decision to make, or not to make, an authorisation, within 42 days of the end of the consultation period.

        (7)    The Commission must keep a register of authorisations which are made in accordance with subsection (1) and publish the register on its website.

        (8)    An authorisation made under subsection (1) is not a legislative instrument.

(8)    Schedule 3, item 7, page 53 (after line 15), at the end of section 12BG, add:

        (5)    A term of a consumer contract is presumed not to be unfair if it has been authorised by the Australian Competition and Consumer Commission in accordance with section 3A of Schedule 2 of the Trade Practices Act 1974.

These amendments—and I am grateful for the advice of Associate Professor Frank Zumbo in relation to these amendments—are designed to include a provision in this bill for safe harbours, thereby providing greater business certainty. Under these safe harbours, businesses and business associations can choose to approach the ACCC to seek approval or authorisation of particular contracts or contract terms. The ACCC would review the contract or contract term against the legislative set of criteria for the granting of the safe harbour, and these approvals or authorisations would be an exemption to the unfair contract terms provisions of the legislation. The legislative criteria to be applied by the ACCC in granting an authorisation would include the following requirements: that the contract term or terms reflect a reasonable balance between the rights and obligations of the parties to the contract; further, where the contract term or terms relate to the imposition of a fee or charge for the provision of a service, that the fee or charge is reasonably proportional to the justifiable cost or costs of providing the service; and that the contract term or terms are reasonably necessary to protect the legitimate interests of the larger party. Under this mechanism, the ACCC can authorise model contracts or model contract terms and, as a result, facilitate the development of fairer contracts or contract terms which can apply to whole industries in contract groups.

I am grateful to Senator Bushby for his comments in his contribution to this. I think it is fair to say that Senator Bushby found the concept interesting and was attracted to the concept in terms of it being a way forward. I know that is not the coalition’s position at this stage, but I would urge honourable senators to consider this as a sensible way forward. It would actually work. If the government are not going to support it now, which I suspect they will not, will the government at least consider this, have this on the agenda, as a way forward in terms of a practical implementation of consumer laws?