Senate debates

Thursday, 18 October 2018

Bills

Treasury Laws Amendment (Gift Cards) Bill 2018; Second Reading

12:51 pm

Photo of Jenny McAllisterJenny McAllister (NSW, Australian Labor Party, Shadow Assistant Minister for Families and Communities) Share this | | Hansard source

Labor will support the Treasury Laws Amendment (Gift Cards) Bill 2018. This bill seeks to enfranchise gift card recipients who have been adversely affected by a previously disjointed, state-by-state approach to Australian gift card regulation. In Australia, 34 million gift cards are estimated to be sold each year by national retailers and small businesses, with an estimated value of $2.5 billion. One of the commonly used terms and conditions of gift cards are expiry dates. Many consumers' gift cards expire before they get the chance to use them, resulting in financial loss and disappointment for gift card recipients. Currently, the length of an expiry date on a gift card may vary considerably depending on the preferences of the trader. Losses from Australian gift card expiry are estimated to be $70 million annually.

This bill implements a minimum three-year expiry period for Australian gift cards, improving fairness for consumers and ensuring that they have an appropriate period of time to redeem the balance of a gift card, leading to a reduction in breakage. There is no prohibition on providing a longer expiry period. In addition, this bill includes increased disclosure requirements, including expiry information being prominently displayed on the card to ensure that consumers are aware of the expiry date of the card. This is largely consistent with industry practice and a majority of gift cards already display this information.

This bill will prohibit gift card suppliers from charging certain post-supply fees which can erode the balance on a gift card over time and operate as a de facto expiry date. This bill also voids existing terms and conditions on cards already in supply if they breach the above changes. The proposed three-year minimum expiry period does not change consumers' rights in the event that the supplier of the gift card becomes insolvent or bankrupt. They will continue to be treated as unsecured creditors.

Labor is pleased that the government has finally brought forward new legislation in the consumer affairs space. This government, with its sixth minister responsible for consumer affairs in five years, has let consumers down by deferring the Legislative and Governance Forum on Consumer Affairs, which was scheduled for August, due to leadership woes. Though Labor is pleased with the introduction of this bill, it is mind-boggling that it had to be approved by a circular resolution instead of at the cancelled national COAG consumer affairs forum. This is a government that is far more interested in its own party than in Australian consumers.

12:54 pm

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | | Hansard source

Firstly, I would like to thank those senators who have contributed to this debate. The Treasury Laws Amendment (Gift Cards) Bill 2018 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 date information to be disclosed prominently 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 the wideranging variations in terms and conditions. This makes it difficult for consumers to understand their rights and obligations. It's equally important that businesses are supported in meeting their obligations and do not face an unnecessary compliance burden in complying with differing 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 the 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.

This bill proposes 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. 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 is needed and on the card itself. The disclosure requirements in this bill provide clarity for consumers while providing businesses the needed flexibility in the way the date is displayed. Further, under the national regime, the charging of post-supply fees, such as inactivity and balance checking fees, will be prohibited. Consumers will have the full benefit of the gift cards they receive.

To ensure flexibility and provide support to industry, a regulation-making power is contained in the bill, allowing for certain gift cards, persons and gift cards supplied in particular circumstances to be exempt from all or some of the requirements imposed by this reform. This will allow the law to adapt to changes in technology 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 that the business's gift card activities are not curtailed.

It is 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 reforms are consistent with similar consumer protections in the Australian Consumer Law. Compliance with these reforms will be monitored and enforced by the Australian Competition and Consumer Commission. The government has consulted widely on the reforms. Consumers and businesses support this reform as it improves consumer outcomes, provides consistency and is workable for businesses.

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 under the Intergovernmental Agreement for the Australian Consumer Law. The reforms will take effect on 1 November 2019, after providing industry around a 12-month transitional 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 Senate.

Question agreed to.

Bill read a second time.