Matthew Canavan (Queensland, Liberal National Party) | Hansard source

I rise to give qualified, if you like, support to the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026. We do think there is a need for action here on certain unfair behaviours in the marketplace, and I'll come to the details, but particularly things like subscription traps and drip feed pricing. These things are potentially covered by these changes. On the Liberal and National side, we do support strong consumer protections and have always had a proud history of doing so. However, as I said, there are some qualifiers here that I'll go through this morning, because we think it's very important that changes like this are clearly made so that, of course, the courts can interpret them clearly but more importantly, perhaps, so that businesses know the environment they're operating in, especially small businesses, who don't have and shouldn't have to seek expensive legal advice every time they just want to go about their business.

As I said, there is an issue here that we are willing to work with the government on to see some change. As I indicated, the Liberal and National parties have long supported strong consumer protections in our law. We were strong advocates for somewhat of a predecessor to this, the unfair contract terms legislation that passed around 15 years ago in this place. Then, when we were in government, we moved to extend that to protect small businesses as well from the imposition of unfair contract terms. They were things like long-form contracts that hid terms and conditions in it and 'take it or leave it' type contract arrangements—things that would provide some protection for small businesses.

This bill here seeks to move further, quite substantial amendments, which would effectively see the prohibition of unfair conduct more fully—that is, unfair trading, not just unfair contract terms per se. The issue here that should be properly discussed and responded to, hopefully, by the government is exactly what is meant by 'unfair'. In a simple term, of course, we could all be against unfair practices. It would be hard to find someone who says they are for unfair practices. The issue, though, will always be that unfairness can at times be in the eye of the beholder. What is unfair to some person might not be unfair to someone else.

There are also a variety of different economic relationships in the marketplace involving people with different levels of power and authority, responsibility and accountability, and those things should be factored in as well. In particular, we need to keep in mind that imposing such new obligations is not free. Every new law or regulation that passes this place does impose a compliance cost on the businesses that are subject to it—and the consumers too, for that matter. They ultimately pay these prices. The estimates here are that these changes will impose a significant cost. We cannot avoid that or not factor that into our decisions here.

The estimates are that this will cost an extra $123 million per year in annual regulatory costs, and perhaps what's most important to us on this side is that $103 million, a good 80-odd per cent of that amount, will be imposed on small businesses alone. They'll pay the lion's share of these costs. I imagine the way these estimates have been worked out is that there's probably a fixed cost, an overhead cost, associated with complying with these laws, and there are many more small businesses than there are large businesses, so they disproportionately pay the cost of this. That's because small businesses themselves do not have their own in-house legal teams. They already have to deal with higher costs right now and a weakening economy, it would appear, thanks to the government's mismanagement there. Imposing another cost like this needs to be very carefully considered. That's why we will be arguing for, here, some relief for small businesses, given those costs, and also some greater clarity in and tightening of the definitions in this bill that deal with what is an unfair matter.

I have the reasonable hope that other senators will consider this amendment we will move, which is that we should delay the start date of these laws for small businesses—and we would define those, in terms of this act, as those with under $10 million in aggregated annual turnover. That is any business that is below that level—and, keep in mind, that's similar to the level the government has extended the capital gains tax concessions to, from $2 million to 10 million; it's something that government has used as well recently. We would delay the start date of these laws until 1 July 2030 to give small businesses a chance to become familiar with this law and to, hopefully, have some of this law explained further through our judicial system, the courts and the ACCC's interpretation, so that small businesses will come into the scheme at that point, after that four-year period, much better educated about what exactly they have to do to comply—and, therefore, that will, hopefully, lower that $100 million cost being estimated now. It would be a lower amount because all that law would be, hopefully, somewhat settled or at least a lot more clear to everybody. I think that's very reasonable.

The other point to make here is that, clearly, you would think what we're trying to deal here with is unfair conduct from larger businesses; that would be the typical issue people would have in the marketplace. As I highlighted earlier, and as the government has highlighted, one of the reasons the government is seeking to do this is to deal with issues like subscription traps, where you sign up for something—often online these days but it could be anything, like a gym—and you're locked into renewed payments with little or no knowledge, and it is often a very difficult process to extract yourself from such payments. It's becoming an increasing problem with a move to a subscription economy for everything like software to streaming. This has become a favourite tactic, but one that's really used by large businesses. It's not something you typically would see going into a coffee shop—getting locked into a coffee every morning or a haircut at a hairdresser's; it's really a problem for big business.

Likewise, there is drip price feeding, which is the general tactic of getting you to buy something upfront, but—again, usually online—it is not until you click through to the end that you notice you've got admin fees, shipping and postage and some other fees added on top, and the price is a good 50 per cent more than, or even double, what you thought it was when you first clicked through. Again, that tactic typically would be used by larger businesses. They're the harms, the mischief, that the government has identified for why we're doing this now. Given those harms are associated primarily with larger businesses, in our view it makes sense to start these new arrangements with a focus on those larger businesses, get the law bedded down, see if there are any teething issues—we can always come back and fix things if there are—and then see the scheme more widely apply across the economy, through this amendment we will move.

Even if that were not supported, we still, even for those larger businesses, have some issues with the exact definitions that have been used here to define 'unfair conduct'. The bill sets a number of tests to define what 'unfair' is, which is pretty typical in these types of laws. To determine that something is unfair or a breach of these new provisions, a good or service must be supplied in a way that 'manipulates a consumer or unreasonably distorts how a consumer makes a decision, and causes or is likely to cause detriment'. I just want to make a couple of points about these things. 'Manipulates a consumer' is a fairly broad term. I would think the ordinary use of the word 'manipulate' would include a level of deception or deviousness associated with the act. However, another meaning of the word 'manipulate' is simply to control, such as when you use it to say 'manipulate a car'—you're not necessarily doing it in a devious way; you're just influencing the direction of a car by turning the steering wheel or some such. So we just think that language needs to be tightened. I think the government means it in that former sense—that it's something that is manipulative and that is seeking to mislead or deceive people in an undue way—but we are proposing that, just to make it clear, we add the word 'unfairly' before 'manipulate'. Then the prohibition would only apply when a business unfairly manipulates a consumer. That way—drawing back to the actual title of this bill and the reason we're doing this, which is to stop unfair practices—what we're targeting in this case would be very clear.

Keep in mind that the second arm of that particular dot point says 'or unreasonably distort'—it's an 'or', not an 'and'—and 'unreasonable' is not attached to the word 'manipulate'. But, if we add 'unfairly' there, I think we will have a reasonable test here to make what we're actually trying to do in these laws clear.

The second leg of that test says that the good or service has to also—there's an 'and' there. In this part, there's an 'and'—'and causes or is likely to cause detriment'. Again, I just think that's a little bit broad. 'Detriment' there is obviously unrestricted, so it potentially means any detriment. We believe that, to engage and trigger laws of this nature, it would typically have to reach a threshold of pain, of difficulty, to merit the ACCC's or a court's being involved. So we are suggesting that the word 'material' be added before 'detriment' so that it would then read that the act 'causes or is likely to cause material detriment'. Again, I think this is fairly reasonable, and it is also standard practice in the Competition and Consumer Act.

Typically, where the Competition and Consumer Act prohibits certain behaviours, there is a qualifier, an adverb—it would be an adjective in this case—before the description of the harm. In section 46 of the act, which deals with the misuse of market power, the test is that the conduct has to 'substantially' lessen competition. So we don't ban any conduct that just lessens competition; some other thresholds have to be met before it falls foul of section 46. The key point I'm highlighting here is that the conduct has to substantially lessen competition.

Again, we just think—to be consistent with other parts of the act and with other parts of the law that have had longer standing and that, perhaps, have a greater basis in broader competition and consumer laws, like misuse-of-market-power provisions—there should be a qualifier, a threshold, a bar, that has to be jumped over before regulatory or legal action is required. I think it's very reasonable to say 'material' as well.

We think we've made some reasonable clarifications here, because we have to stay focused on what we're trying to do—that is, protect consumers. It's certainly not to benefit lawyers. If we make the language unclear and don't describe exactly what we mean, we create the risk of making a lawyers' picnic that will see this law bogged down in action, time and time again. It's not only that; it would come at a greater compliance cost, as I mentioned. In such a case, it would be greater than the $120 million estimate—a cost to our economy and a cost to our productivity. It would mean, almost necessarily, that you wouldn't get the consumer protections either. You won't actually get the benefits of what we're trying to do if it ends up in a morass of legal dispute because we haven't been clear with the language we've used here.

So we will move these amendments later in this debate, but, as I highlighted at the start, we do support the overall approach here. We will support this bill's going through, but we respectfully ask that we play our role, as we should in this chamber, of considering issues like this in a deliberative fashion. If other senators see merit in our amendments, I think it will strengthen this bill and give it a greater chance of succeeding.