Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister for Women) | Link to this | Hansard source

The committee is considering amendments (1) and (2) on sheet 3912, moved by Senator Canavan.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

The question is that amendments (1) and (2) on sheet 3912 be agreed to.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

I've got a couple of questions for the minister. Minister, is the government aware that the ACCC, ASIC and a number of organisations in Australia representing consumers, including the Consumer Policy Research Centre and the Consumer Action Law Centre, have all advocated for the government to extend the ban on unfair trading—

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

Senator McKim, I might get you to pause. Could senators please leave the chamber quietly if they're not participating in debate.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

Thanks very much for your protection there, Chair.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

I couldn't hear what you were saying.

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

I think it's more in my interest.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

I'll start again, will I? Minister, is the government aware that the ACCC wants to extend the ban on unfair trading practices to the financial services sector? Is the government aware that ASIC wants to extend the ban on unfair trading practices to the financial services sector? Is the government aware that peak consumer groups, including the Consumer Policy Research Centre and the Consumer Action Law Centre, want to extend the ban on unfair practices to the financial services sector? If you are aware of those things, why haven't you done it?

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

The government is aware—both from our engagement with the agencies that you've outlined and with those peak councils and more broadly—of that question. It is the government's approach to legislate this tranche of reforms. There will be future reform.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

Minister, are you saying that future reforms from the government will extend the ban on unfair trading practices to the financial services sector? And, if you are saying that, when will that happen?

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

I think the best way of describing it is that, while the government will make decisions about that in the normal way, we are examining precisely those issues.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

What I'm hearing from that is that government is currently considering those issues, but you don't wish to either put a timeframe on any decision point or flag what you think the decision might be. Would that be an accurate categorisation?

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

Yes. I'm mindful of our cabinet decision-making process. I am happy to confirm that we are examining those issues. We're working them through carefully. Our focus now is on delivering this tranche of reforms through the legislation, but we're working carefully through the issues you've described.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

I appreciate that, Minister. This is probably my final question, depending on your response, of course, on this issue: are you able to indicate whether there is a process underway? I'm not asking about cabinet, by the way. I'm asking whether, inside any agencies, there is a process underway. Is there consultation between, for example, Treasury, the ACCC and ASIC on these matters? Are conversations happening? If there is any kind of a process underway, could you just outline that, please, and confirm where you are currently at in that process, if there is a process underway.

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

Yes, the government is engaged across all of the agencies and organisations external to government that you describe. I can't put a timeframe on that, but we're, as I said, working diligently through those questions.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

I won't reprise my second reading contribution here today, which I'm sure is a relief to the entire chamber. But what I will say is that, on behalf of the Australian Greens, I express our significant disappointment in the fact that the government has not chosen to extend the ban on unfair trading practices to the financial services sector.

These have been long held and long expressed views from the ACCC, from ASIC and from peak consumer groups in the country, as well as from the Australian Greens. The government has given no adequate reason for failing to extend the ban on unfair trading practices to the financial services sector, particularly given the view of at least one ACCC commissioner that the harm from unfair trading practices in the financial services sector is likely to be greater than any other sector in the economy. It is time that the government divorced itself from the interests of the big banks and the other financial behemoths in this country that run so much of government policy, and it is time that the government extended the ban on unfair trading practices to the financial services sector.

I'll move my amendments in a moment. I want to quickly respond to Senator Scarr's response to my second reading speech yesterday. I say this to Senator Scarr: I acknowledge the matters that he spoke about in regard to the potential to extend the ban on unfair trading practices to the financial services sector, and I look forward to further engagement across this chamber with a view to ensuring that we protect consumers of financial services in Australia by extending the ban on unfair trading practices to the financial services sector. We'll give everyone a chance to ensure that that happens now. I doubt that it will, but we are going to keep going on this. We will not be silenced on this. We will keep fighting until consumers of financial services in Australia are protected in the same way that consumers of a range of other products and services will be protected under the provisions of this bill.

I seek leave to move Australian Greens amendments circulated in my name, amendments (1) and (2) on sheet 3841, together.

Leave granted.

I move those amendments:

(1) Schedule 1, item 7, page 5 (line 16), at the end of subsection 28B(6), add:

; (e) lead generation.

(2) Schedule 1, item 7, page 5 (before line 17), before subsection 28B(7), insert:

(6A) In this section:

lead generation includes the following:

(a) collecting the consumer's personal information for a sales purpose in an obscure, complex or misleading way;

(b) failing to clearly disclose to the consumer the primary purpose for collecting, using or sharing the consumer's personal information.

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

The government will be opposing the amendments, but on the basis that Senator McKim and I just discussed, and I look forward to the senator's support for those reforms when they arrive here.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

The question is that amendments (1) and (2) on sheet 3841 be agreed to.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

Can I just clarify that the amendments that were just negatived by the chamber were about extending unfair trading practices to include lead generation. I want to make a couple of comments about that. We'll come to our amendments to extend the requirements to the financial services sector shortly, and I will move those shortly.

Firstly, on lead generation, as I said in my second reading speech, we have just lived through the collapse of First Guardian and Shield. These matters have been explored and examined at length in this chamber and in Senate estimates not just by the Greens but by a range of other senators right across the political spectrum—and so they should have been examined very closely in those contexts, because the collapse of Shield and First Guardian cost about 12,000 Australian people over $1 billion in lost retirement savings. As I said in my second reading speech, the chair of ASIC, Ms Sarah Court, indicated in estimates in October last year that a ban on unfair trading practices in the financial services sector may have assisted ASIC in their investigation and prosecution of the complex web of actors that were involved in the collapse of First Guardian and Shield.

The reason that lead generation should be included and explicitly caught in the provisions of this legislation is, if we did so, firstly, it would send an unambiguous signal to the 12,000-odd Australians who were ripped off so egregiously during the collapse of First Guardian and Shield that the Senate has got their backs, that the Senate understands what happened and that the parliament understands what happened. It's an opportunity for the government to show that the government understands how absolutely destructive that experience was for a significant number of Australians. Although it wouldn't necessarily get them their money back or provide the full recourse that they deserve and that justice demands, it would at least show that the Senate, the parliament and the government are taking steps to try to ensure that other Australians are protected from those kinds of situations in the future.

As we all know, the bill implements a general prohibition of businesses engaging in unfair trading practices, which is defined as behaviour that manipulates or unreasonably distorts the environment in which the consumer makes a decision. Subsection 28b 6 includes a non-exhaustive list of examples of behaviour that would constitute an unfair trading practice. The amendment, which was just negatived by the Senate, would have added lead generation to that list of examples. Lead generation was defined in our amendment, which the Senate just negatived, as 'collecting the consumer's personal information for a sales purpose in an obscure, complex or misleading way' and 'failing to clearly disclose to the consumer the primary purpose for collecting, using or sharing the consumer's personal information'. There is absolutely nothing objectionable in the way that amendment was drafted and the way it would have operated if it had been included in the bill, as the Greens were proposing.

What we've just witnessed is a missed opportunity. Like the government's and the opposition's stated position of not currently being able to support extending the ban on unfair trading practices to the financial services sector—another missed opportunity—this was a missed opportunity to protect consumers in Australia. Let me remind you that consumers are people. They are people—and they are people who are being price gouged everywhere they turn because of the concentration in market power in sectors like our supermarket sector, our airline sector, our insurance sector, our telecommunications sector and a range of others; the list goes on. There's health insurance—the list really does go on. They are being price gouged everywhere they turn because corporations are misusing their market power, and we all know, because of report after report, that over time the Australian economy is becoming more concentrated. The market power in more sectors of the Australian economy is becoming more concentrated, which gives the corporations more power to do things like price gouge, because the competitive element is being reduced and eroded over time.

The people that are being price gouged—the people that the corporations don't care about except for their capacity to generate profit for the corporations—will now look at what the Senate has done today and form the very reasonable view that, when the Senate had the opportunity to ensure that lead generation was added to the list of examples of behaviour that would constitute an unfair trading practice, the Senate decided not to do that. The Labor Party, the Liberal Party, the Nationals and One Nation—none of them supported adding lead generation to the list of examples of behaviour that would constitute an unfair trading practice. And none of them are going to support extending the ban on unfair trading practices to the financial services sector.

We've heard from the minister that the government is considering that matter. But, honestly, sometimes you've got to line this government up with a tree or any other kind of vertical object you can find just to see if they're actually moving at all. It is glacial, although actually perhaps that's an adjective we shouldn't use anymore, because the glaciers are actually melting and flowing a lot more quickly than they used to be, thanks in part because of the political coalition in this place that supports destroying our native forests and opening up new coal and gas mines hand over fist. So I withdraw 'glacial' and insert 'snail-like'.

Honestly, this has been an active discussion for years. The ACCC has for a long period of time called for the ban on unfair trading practices to be extended to the financial services sector. ASIC has called for a long period of time for the ban on unfair trading practices to be extended to the financial services sector. So, Minister, I want to ask you to explain, in the context of the collapse of First Guardian and Shield, why it is that the government took a position of not adding lead generation to the non-exhaustive list of examples of behaviour that would constitute an unfair trading practice.

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

As I indicated in response to previous questions and around the amendment that was just dealt with, the government's approach in terms of financial services more broadly is as I described. In relation to lead generation, it is the government's approach here, informed by advice, including from the ACCC, that, where conduct breaches the general prohibition, that is capable of capturing the key harms that, Senator McKim, your amendment seeks to address. That will ultimately be a matter for the courts and the regulators to determine. The framework is supported by the grey list, which already includes conduct such as disclosing material information in a complex, unclear or untimely way, which directly addresses the problematic practices that can occur in some lead generation models.

It's our view that a prohibition on lead generation would include prohibiting some practices that are not inherently harmful. That is, there is lead generation behaviour of the sorts that you are describing that are harmful and are constructed in a complex way that misleads consumers, but not all of that behaviour that's captured by lead generation does that work. It is our view, informed by advice, that the general prohibition that's outlined deals effectively with that kind of behaviour. It will, as I say, ultimately be a matter for the courts, and we'll be watching those developments closely.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

Minister, while you are accurate in as far as your statements go that some elements of the collapse of First Guardian and Shield will be a matter for the courts, I want to say very clearly that the Australian Greens have a view that the government's response to the collapse of Shield and First Guardian has not yet met the threshold that would satisfy us. I know that some matters are being considered by government, and we can discuss those things in another forum, but I want to be very clear that justice has not been done for a large number of Australians who had some or all of their retirement savings stolen from them by unscrupulous behaviour. Not only has justice not been done but an adequate response from the government to the collapse of First Guardian and Shield has not yet manifested.

I want to be very clear about that, and I say to you, Minister, that the Greens do not intend to allow this to be the end of the matter. We will keep fighting for justice and adequate reparation for the significant number of Australians who were smashed and had their retirement savings smashed by the collapse of First Guardian and Shield. As there are no other folks wishing to discuss those matters, I will now seek leave to move the Australian Greens amendments together.

Leave granted.

I move amendments (1) to (3) on sheet 3774 together:

(1) Title, page 1 (line 2), after "2010", insert "and the Australian Securities and Investments Commission Act 2001".

(2) Schedule 1, heading, page 3 (line 1), omit "Amendments", substitute "Competition and Consumer Act 2010 amendments".

(3) Page 22 (after line 13), at the end of the Bill, add:

Schedule 2 — Australian Securities and Investments Commission Act 2001 amendments

Part 1 — Unfair trading practices

Australian Securities and Investments Commission Act 2001

1 Subsection 5(1)

Insert:

unfair trading practices: see subsection 12BN(2).

2 After Subdivision BA of Division 2 of Part 2

Insert:

Subdivision BB — Unfair trading practices

12BN Unfair trading practices towards consumers

(1) A person must not, in trade or commerce, engage in unfair trading practices.

(2) A person engages in unfair trading practices if, and only if, in connection with supply of, or an offer to supply, a financial product or services that are financial services to a consumer, the person engages in conduct that:

(a) does or is likely to do either or both of the following:

(i) manipulate the consumer;

(ii) unreasonably distort the environment in which the consumer makes, or is likely to make, a decision; and

(b) causes or is likely to cause detriment (whether financial or otherwise) to the consumer.

(3) Subsection (1) does not apply if the consumer is a body corporate.

(4) Subsection (1) does not apply if the supply is in the course of the consumer carrying on a business.

Note: A person who wishes to rely on subsection (3) or (4) in proceedings bears an evidential burden in relation to that matter (see section 12GBCP).

(5) Without limiting subsection (2), the following are examples of conduct that may be unfair trading practices:

(a) impeding the consumer's ability to exercise legal rights, or seek legal remedies;

(b) failing to disclose material information to the consumer;

(c) disclosing material information to the consumer in a complex, ineffective, unclear, unintelligible, ambiguous, untimely or overwhelming way;

(d) creating an environment (including by using design elements in digital interfaces) which places the consumer under unreasonable pressure in relation to, or obstructs the consumer from, making or fulfilling the consumer's decision;

(e) lead generation.

(6) In this section:

lead generation includes the following:

(a) collecting the consumer's personal information for a sales purpose in an obscure, complex or misleading way;

(b) failing to clearly disclose to the consumer the primary purpose for collecting, using or sharing the consumer's personal information.

3 After paragraph 12GBA( 6)( aa)

Insert:

(ab) a provision of Subdivision BB;

4 After subsection 12 GI( 4)

Insert:

(4A) In a proceeding against a person for a contravention of a provision of Subdivision BB it is a defence if the person establishes that he or she is a person whose business it is to publish or arrange for the publication of advertisements and that he or she received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to a contravention of a provision of Subdivision BB.

5 Paragraph 12GLD(1)(a)

After "Subdivision BA,", insert "BB,".

6 Before paragraph 12GXA(a)

Insert:

(aa) a provision of Subdivision BB;

7 Subsection 12 GXB( 2) (table item 1, column headed "If the infringement notice is for an alleged contravention of ...")

After "Subdivision", insert " BB,".

Part 2 — Drip pricing

Australian Securities and Investments Commission Act 2001

8 Subsection 5(1)

Insert:

base price: see subsection 12CD(5).

transaction based charge: see subsections 12CD(6) and (7).

9 After Subdivision C of Division 2 of Part 2

Insert:

Subdivision CA — Drip pricing

12CD Transaction based charges to be displayed in certain circumstances

Requirement to display

(1) This section applies in relation to financial products or financial services of a kind ordinarily acquired for personal, domestic or household use or consumption.

(2) A person who, in trade or commerce, in offering to supply a financial product or services that are financial services to another person, displays a base price for any of the products or services must display in accordance with subsection (3) the following information for any transaction based charge for the supply:

(a) either:

(i) if the amount of the transaction based charge can be calculated—the amount of the transaction based charge; or

(ii) in any other case—the method for calculating the transaction based charge;

(b) that it is a per transaction charge;

(c) whether the transaction based charge is or may be payable;

(d) whether or not the base price displayed includes the transaction based charge.

Note: This subsection applies each time a base price is displayed. The base price, and the information required to be displayed, could be different at different stages of the purchase process.

(3) For the purposes of subsection (2), the information must be displayed:

(a) while the base price is displayed; and

(b) in a legible, prominent and unambiguous way; and

(c) in close proximity to the base price.

(4) Subsection (2) does not apply if the offer is made exclusively to a body corporate.

Note: A person who wishes to rely on subsection (4) in proceedings bears an evidential burden in relation to that matter (see section 12GBCP).

Base price

(5) An amount payable by a purchaser for a supply of financial products or financial services is a base price for the products or services if it includes an amount payable for the products or services themselves.

Example: An amount that is merely a tax, duty, fee or levy payable in relation to a supply is not a base price.

Transaction based charge

(6) A charge (or part of a charge) of any description is a transaction based charge for a supply of financial products or financial services if:

(a) it is or may be payable by the purchaser for the supply of the products or services; and

(b) it is not an amount payable for the products or services themselves; and

(c) it is, or would be, payable at the same time as an amount payable for the products or services themselves.

(7) However, the following are not transaction based charges:

(a) a charge (or part of a charge) that is payable at the option of the purchaser;

(b) a payment surcharge (within the meaning of Part IVC of the Competition and Consumer Act 2010);

(c) any tax, duty, fee, levy or charge imposed on the supplier;

(d) any amount paid or payable by the supplier with respect to any tax, fee, levy or charge if:

(i) the amount is paid or payable under an agreement or arrangement made under a law of the Commonwealth, a State or a Territory; and

(ii) the tax, duty, fee, levy or charge would have otherwise been payable by another person in relation to the supply;

(e) a charge (or part of a charge) prescribed for the purposes of this paragraph.

(8) Without limiting subsection 33(3A) of the Acts Interpretation Act 1901 or paragraph (7)(e) of this section, regulations made for the purposes of that paragraph may prescribe the following:

(a) that a charge (or part of a charge) is prescribed only in specified circumstances;

(b) different circumstances for different charges (or parts of charges).

10 After paragraph 12GBA(6)(a)

Insert:

(ab) a provision of Subdivision CA;

11 Paragraph 12GLD(1)(a)

After "C", insert ", CA".

12 Subparagraph 12GNB(1)(a)( i )

After "C", insert ", CA".

13 After paragraph 12GXA(a)

Insert:

(aa) a provision of Subdivision CA;

14 Subsection 12 GXB( 2) (table item 1, column headed "If the infringement notice is for an alleged contravention of ...")

After "Subdivision C,", insert "CA, ".

Part 3 — Subscription contracts

Australian Securities and Investments Commission Act 2001

15 Subsection 5(1)

Insert:

excluded subscription contract: see subsection 12FA(1).

meets the consumer requirement: see subsection 12FE(1).

meets the small business requirement: see subsection 12FE(2).

standard form contract:

(a) in Subdivision BA of Division 2 of Part 2 and sections 12GND and 12GNF—has a meaning affected by section 12BK; and

(b) in Subdivision F of Division 2 of Part 2 —has a meaning affected by section 12FF.

subscriber, in relation to a contract for supply of financial products or financial services, means a person who incurs, or may incur, liability to pay for a supply under the contract.

subscription contract: see subsection 12F(1).

16 Section 12BA (definition of standard form contract )

Repeal the definition.

17 At the end of section 12BK

Add:

(4) This section does not apply for the purposes of Subdivision F.

Note: Section 12FF deals with standard form contracts for the purposes of Subdivision F.

18 Subsection 12 DA( 2)

After "12DN", insert "or Subdivision F".

19 After paragraph 12GBA( 6)( ba )

Insert:

(bb) a provision of Subdivision F;

20 Paragraph 12GLD(1)(a)

Omit "or D (other than section 12DA)", substitute ", D (other than section 12DA) or F".

21 Subparagraph 12GNB(1)(a)( i )

Omit "or D", substitute ", D or F".

22 After paragraph 12 GXA( ba )

Insert:

(bb) a provision of Subdivision F;

23 Subsection 12 GXB( 2) (table item 1, column headed "If the infringement notice is for an alleged contravention of ...")

Omit "or DA", insert ", DA or F".

24 After Subdivision E of Division 2 of Part 2

Insert:

Subdivision F — Subscription contracts

12F Subscription contracts

(1) A contract is a subscription contract if it:

(a) meets the requirement in subsection (2), (3), (5) or (6); and

(b) is not an excluded subscription contract.

Note: A contract may meet the requirement in more than one of subsections (2), (3), (5) and (6).

Indefinite period

(2) For the purposes of paragraph (1)(a), the requirement is that the contract contains terms that have the effect of providing:

(a) for recurring or continuing supply of financial products or financial services for an indefinite period; and

(b) for a person to automatically incur liability to pay for the supplies or continuing supply; and

(c) a right for that person to end the contract.

Fixed period

(3) For the purposes of paragraph (1)(a), the requirement is that the contract contains terms that have the effect of providing:

(a) for supply of financial products or financial services in, or recurring or continuing supply of financial products or financial services for, a fixed period; and

(b) for supply, or continuing financial products or financial services to continue after the end of the fixed period unless a party to the contract stops the supply or continuing supply or the contract is terminated; and

(c) for a person to automatically incur liability to pay for the supplies or continuing supply; and

(d) a right for that person to end the contract.

(4) For the purposes of paragraphs (2)(b) and (3)(c), disregard any supply or continuing supply that is free of charge.

Initial free period

(5) For the purposes of paragraph (1)(a), the requirement is that the contract contains terms that have the effect of providing:

(a) for supply of financial products or financial services in, or recurring or continuing supply of financial products or financial services for, an initial period free of charge; and

(b) for a person to automatically incur liability to pay for supply of financial products or financial services after the initial period; and

(c) a right for that person to end the contract before the liability is incurred.

Initial discount period

(6) For the purposes of paragraph (1)(a), the requirement is that the contract contains terms that have the effect of providing:

(a) for supply of financial products or financial services in, or recurring or continuing supply of financial products or financial services for, an initial period; and

(b) for a person to incur liability to pay for supply of financial products or financial services in or for the initial period at a rate; and

(c) for that person to automatically incur liability to pay for supply of financial products or financial services after the initial period at a higher rate; and

(d) a right for that person to end the contract before the liability to pay at the higher rate is incurred.

12FA Excluded subscription contracts

(1) The following contracts are excluded subscription contracts:

(a) a lease;

(b) a licence in respect of real property;

(c) a contract of hire-purchase;

(d) a contract for payment in instalments;

(e) a contract for supply of childcare;

(f) a contract for supply by a pre-school or school of tuition at a pre-school, pre-primary, primary or secondary level;

(g) a contract of a kind prescribed for the purposes of this paragraph.

(2) Without limiting subsection 33(3A) of the Acts Interpretation Act 1901 or paragraph (1)(g) of this section, regulations made for the purposes of that paragraph may prescribe the following:

(a) that a kind of contract is a prescribed kind of contract only in specified circumstances;

(b) different circumstances for different kinds of contract.

12FB Statement and information that must be disclosed when offering financial products or financial services under a subscription contract

Scope

(1) This section applies if:

(a) a person (the supplier), in trade or commerce, offers to supply, under a contract, financial products or financial services; and

(b) if the contract were entered, the contract would be a subscription contract.

Requirement to disclose

(2) The supplier must, when making the offer, disclose, in accordance with subsection (3):

(a) a statement that, if entered, the contract would be a subscription contract; and

(b) information about the matters mentioned in subsection (4).

Manner of disclosure

(3) The statement and information must be disclosed:

(a) if the financial products or financial services are of a kind (if any) prescribed for the purposes of this paragraph—in the manner prescribed for financial products or financial services of that kind; or

(b) in circumstances (if any) prescribed for the purposes of this paragraph—in the manner prescribed for those circumstances; or

(c) in any other case—either:

(i) in a comprehensible, audible and unambiguous way within a reasonable time before a person could agree to enter the contract; or

(ii) in a legible, prominent and unambiguous way in close proximity to where a person (other than the supplier) can agree to enter the contract.

Information to be disclosed

(4) Information about the following matters must be disclosed:

(a) liabilities to pay that a party to the contract (other than the supplier) would or may incur under the contract;

(b) period of the contract;

(c) renewal, extension or other continuation of the contract;

(d) any notice required before a party to the contract (other than the supplier) can end the contract;

(e) how a party to the contract (other than the supplier) can end the contract;

(f) any matter prescribed for the purposes of this paragraph.

Exception

(5) Subsection (2) does not apply in the circumstances (if any) prescribed for the purposes of this subsection.

12FC Information to be given in relation to subscription contracts in effect

Requirement to give information

(1) If:

(a) a person, in trade or commerce, supplies financial products or financial services under a subscription contract prescribed for the purposes of this subsection; and

(b) the contract meets the consumer requirement or meets the small business requirement;

the person must, while the contract is in effect, give the subscriber, in accordance with subsection (2), the information prescribed for the purposes of this subsection at each time prescribed for the purposes of this subsection.

Manner of giving information

(2) The information must be given:

(a) in a legible, prominent and unambiguous way; and

(b) if a manner is prescribed for the purposes of this paragraph—in that manner.

Regulations

(3) Without limiting subsection 33(3A) of the Acts Interpretation Act 1901, subsection 13(3) of the Legislation Act 2003 or subsections (1) or (2) of this section, regulations made for the purposes of subsection (1) or (2) of this section may prescribe the following:

(a) all subscription contracts or a class of subscription contract;

(b) different information, times or manners for different classes of subscription contract;

(c) different information, times or manners for subscription contracts in different circumstances;

(d) different times or manners for different information.

Exception

(4) Subsection (1) does not apply in the circumstances (if any) prescribed for the purposes of this subsection.

12FD Exit method

Requirement to provide a way to end the contract

(1) A person (the supplier) who, in trade or commerce, supplies financial products or financial services under a subscription contract that meets the consumer requirement or meets the small business requirement must:

(a) provide a way for the subscriber to end the contract; and

(b) ensure that each way the supplier provides for the subscriber to end the contract:

(i) is easy to find; and

(ii) is straightforward; and

(iii) requires the subscriber to take only steps that are reasonably necessary to end the contract and protect the subscriber's interests; and

(c) if subsection (2) applies—ensure that one of the ways the supplier provides for the subscriber to end the contract is online.

(2) This subsection applies if:

(a) the subscriber enters the contract online; or

(b) the supplier provides an online way of entering into a contract that, if entered, would be a subscription contract for the same kind of financial products or financial services.

Exception

(3) Subsection (1) does not apply in the circumstances (if any) prescribed for the purposes of this subsection.

12FE Meeting the consumer requirement or the small business requirement

Meeting the consumer requirement

(1) A contract meets the consumer requirement if it is a contract for supply of financial products or financial services under which an individual acquires the products or services wholly or predominantly for personal, domestic or household use or consumption.

Meeting the small business requirement

(2) A contract meets the small business requirement if:

(a) it is a standard form contract for supply of financial products or financial services; and

(b) the subscriber satisfies either or both of the following conditions:

(i) the subscriber makes the contract in the course of carrying on a business and at a time when the subscriber employs fewer than 100 persons;

(ii) the subscriber's turnover, worked out under subsection (4) for the subscriber's last income year (within the meaning of the Income Tax Assessment Act 1997) that ended at or before the time when the contract is made, is less than $10,000,000.

Counting the number of persons employed

(3) In counting for the purposes of subparagraph (2)(b)(i) the number of persons that a person employs:

(a) a casual employee is not to be counted unless employed on a regular and systematic basis; and

(b) a part-time employee (including a part-time casual employee counted under paragraph (a) of this subsection) is to be counted as an appropriate fraction of a full-time equivalent.

Working out a subscriber's turnover

(4) For the purposes of subparagraph (2)(b)(ii), a subscriber's turnover for a period is the sum of the values of all supplies the subscriber made during the period, other than the following:

(a) supplies that are input taxed;

(b) supplies that are not for consideration (and are not taxable supplies under section 72-5 of the A New Tax System (Goods and Services Tax) Act 1999);

(c) supplies that are not made in connection with an enterprise that the subscriber carries on;

(d) supplies that are not connected with the indirect tax zone.

(5) Expressions used in subsection (4) that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.

12FF Standard form contracts for the purposes of this Subdivision

(1) For the purposes of this Subdivision, if a party to a proceeding alleges that a contract is a standard form contract, it is presumed to be a standard form contract unless another party to the proceeding proves otherwise.

(2) For the purposes of this Subdivision, in determining whether a contract for supply of financial products or financial services is a standard form contract, a court may take into account such matters as it thinks relevant, but must take into account the following:

(a) whether the supplier has all or most of the bargaining power relating to the transaction;

(b) whether the supplier has made another contract, in the same or substantially similar terms, prepared by the supplier, and, if so, how many such contracts the supplier has made;

(c) whether the contract was prepared by the supplier before any discussion relating to the transaction occurred between the parties;

(d) whether the subscriber was, in effect, required either to accept or reject the terms of the contract (other than the terms referred to in subsection (4)) in the form in which they were presented;

(e) whether the subscriber was given an effective opportunity to negotiate the terms of the contract that were not the terms referred to in subsection (4);

(f) whether the terms of the contract (other than the terms referred to in subsection (4)) take into account the specific characteristics of the subscriber or the particular transaction;

(g) any other matter prescribed by the regulations.

(3) For the purposes of this Subdivision, a contract may be determined to be a standard form contract despite the existence of one or more of the following:

(a) an opportunity for the subscriber to negotiate changes, to terms of the contract, that are minor or insubstantial in effect;

(b) an opportunity for the subscriber to select a term from a range of options determined by the supplier;

(c) an opportunity for a party to another contract or proposed contract to negotiate terms of the other contract or proposed contract.

(4) For the purposes of paragraphs (2)(d), (e) and (f), the terms are:

(a) a term required, or expressly permitted, by a law of the Commonwealth or of a State or Territory; or

(b) a term included in the contract, or taken to be so included, by operation of a law of the Commonwealth, or of a State or Territory, that regulates the contract.

25 Review of operation of amendments made by this Part

(1) The Minister must cause a review to be conducted of the operation, during the 2 years from the commencement of this Part, of the following:

(a) the amendments made by this Part;

(b) any legislative instruments made for the purposes of Subdivision F of Division 2 of Part 2 of the Australian Securities and Investments Commission Act 2001.

(2) The review must be completed, and a written report on the review must be given to the Minister, within 6 months after the end of those 2 years.

(3) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 15 sitting days of that House after the Minister receives the report.

Part 4 — Application provisions

Australian Securities and Investments Commission Act 2001

26 At the end of the Act

Add:

Part 43 — Application provisions relating to Schedule 2 to the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026

348 Application — unfair trading practices

Section 12BN, inserted by the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026, applies in relation to conduct that occurs on or after commencement of Part 1 of Schedule 2 to that Act, whether in connection with a supply or an offer to supply made before, on or after that commencement.

349 Application — subscription contracts

(1) Sections 12F, 12FC and 12FD, inserted by the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026, apply in relation to a contract entered into on or after the commencement of Part 3 of Schedule 2 to that Act.

(2) Sections 12F, 12FC and 12FD do not apply to a contract entered into before that commencement. However:

(a) if the contract is renewed, extended or otherwise continued on or after that commencement—sections 12F, 12FC and 12FD apply to the contract as renewed, extended or otherwise continued, on and from the day on which the renewal, extension or other continuation takes effect; or

(b) if the contract is varied on or after that commencement and paragraph (a) has not already applied in relation to the contract—sections 12F, 12FC and 12FD apply to the contract as varied, on and from the day on which the variation takes effect.

350 Acquisition of property

(1) Sections 12BN, 12FC and 12FD, inserted by the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026, do not apply to the extent that:

(a) the operation of the sections would result in an acquisition of property from a person otherwise than on just terms; and

(b) the acquisition of property would be invalid because of paragraph 51(xxxi) of the Constitution.

(2) In this section:

acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution.

just terms has the same meaning as in paragraph 51(xxxi) of the Constitution.

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

I know this is going back to the former amendment moved, but there was some confusion, as Senator McKim said, about which was being moved. I just want to put on record the issues around First Guardian and Shield and lead generation that the Liberal and National parties share. It's the concern about practices that led to this terrible fallout on people's lives and their savings. Obviously, there was some conduct that was reprehensible and there needs to be a response to it.

We did oppose that amendment, and I just wanted to put on the record the reasons for that, because we view that the response to these issues should be in laws that principally deal with investor protection, not consumer protection or consumer law. The laws we have here today are ones to protect consumers. There are different issues when it comes to people making investments which potentially put at risk their life savings et cetera compared to some of the other issues we're talking about today—say, signing up to a subscription service. They are two very different consumer activities. That's why we have traditionally had separate laws in regard to those. We recognise and support the efforts the government is doing—there's the, I think, consultation draft they have out on the response to First Guardian and Shield. We will wait to see that legislation to support change.

I'd also like to echo the comments put by the minister that we have to be very careful here that we don't outlaw sales practices—that we don't outlaw people doing basic selling and following up leads and the like as many real estate agents and the like do. It's just a common part of business. There's nothing nefarious per se about that. But, obviously, particularly when it comes to the provision of advice and application of large sums of money for an investment context, there should be a higher bar and obligations placed on salespeople in those environments.

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

I will indicate that the government will be opposing this amendment and the last one. I think we've traversed the rationale for the government's position. I won't take any additional time.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

The question is that amendments (1) to (3) on sheet 3774 be agreed to.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

I would ask all senators to remain in the chamber. More divisions are imminent. However, I will allow a four-minute bell if there is a change of voting positions. I'm in the hands of the chamber.

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

I'll be brief so we can get to those divisions. I seek leave to move the opposition amendments on sheet 3913 together.

Leave granted.

I move opposition amendments (1), (2) and (3) on sheet 3913 together:

(1) Schedule 1, item 22, page 21 (line 10), before "Section 28B", insert "(1)".

(2) Schedule 1, item 22, page 21 (line 11), after "conduct", insert "(other than conduct of a small business operator)".

(3) Schedule 1, item 22, page 21 (after line 14), at the end of section 311, add:

(2) Section 28B, inserted by the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026, applies in relation to conduct of a small business operator that occurs on or after 1 July 2030, whether in connection with a supply or an offer to supply made before, on or after that day.

(3) In this section:

annual turnover has the same meaning as in the Corporations Act 2001.

related body corporate has the same meaning as in the Corporations Act 2001.

small business operator has the same meaning as in section 58AH.

I'll just briefly explain to the chamber that these amendments would seek to defer the application of these new laws till 2030 for small businesses. I explained in my speech on the second reading that, to me and to us in the Liberal Party and the National Party, it seems logical that, given the significant change here, it would be better to see any teething issues be worked out with those larger entities that have the resources to do so, and that small businesses should be given time to adjust.

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

I indicate that, as outlined, the government will be opposing the amendment. Of course, almost all small businesses are doing absolutely the right thing and treating customers fairly. The government's view is that a blanket exemption for small businesses until 2030 would create loopholes and undermine a consistent approach across the economy, and that would leave consumers exposed to harmful conduct for years and risk giving some small businesses using unfair practices an advantage over the majority who are competing fairly.

Small businesses will have time and support to adjust, with a 12-month transition period before the obligations commence. And the ACCC will take an education-first approach, providing guidance and practical assistance to help businesses understand and meet their obligations.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

The question is that amendments (1) to (3) sheet 3913 be agreed to.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

I will be moving the amendments on sheets 3771 and 3772, circulated in the name of Senator Payman, on her behalf. Very quickly, the amendment on 3772 adds:

(e) requiring the consumer to provide information not directly relevant to a transaction (including requiring the creation of an account).

to the list of examples of conduct which subclause 28B(6) identifies as possibly constituting an unfair trading practice. The aim of that amendment is to prevent companies from requiring consumers to provide all their personal details to buy a single item from an online store—a very meritorious amendment from Senator Payman. The bill allows the government to set, through regulations, what information companies must provide to people with subscription contracts. The amendments on sheet 3771 would ensure that the regulations would require a subscription provider who offers an initial free period that eventually becomes paid to, three days prior to the end of the free trial, notify the consumer that the trial is ending, what the amount is that will be charged if they don't cancel and how they may cancel before being charged. Again, it's a very straightforward amendment that would protect consumers. These amendments are supported by the Australian Greens, and I seek leave to move the amendments together for Senator Payman.

Leave granted.

At the request of Senator Payman, I move Australia's Voice amendments (1) and (2) on sheet 3771 and amendment (1) on sheet 3772 together:

(1) Schedule 1, item 16, page 10 (after line 5), after the definition of excluded subscription contract, insert:

initial free period subscription contract means a subscription contract that meets the requirement in subsection 48B(5).

(2) Schedule 1, item 20, page 15 (after line 25), after subsection 48E(3), insert:

(3A) Without limiting subsection 33(3A) of the Acts Interpretation Act 1901, subsection 13(3) of the Legislation Act 2003 or subsections (1), (2) or (3) of this section, regulations made for the purposes of subsection (1) or (2) of this section must prescribe a requirement that 3 days prior to the expiry of the initial free period, a supplier that is a party to an initial free period subscription contract must notify the subscriber of the following:

(a) that the initial period will expire in 3 days;

(b) that the party will automatically incur liability to pay for the supply of goods or services under the contract after the expiration of the initial period;

(c) the amount of the liability;

(d) the party's right to end the contract before the liability is incurred;

(e) how the contract may be ended.

(1) Schedule 1, item 7, page 5 (line 16), at the end of subsection 28B(6), add:

; (e) requiring the consumer to provide information not directly relevant to a transaction (including requiring the creation of an account).

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

I thank Senator McKim for moving those amendments together on behalf of Senator Payman. The government will be opposing the amendments on sheet 3771. We understand and agree with the intent of the amendments. This bill ends subscription traps. Consumers should be notified before a free trial ends, and we're actively developing those requirements, but we believe these amendments are overly prescriptive and remove important and necessary flexibilities.

We will be opposing the amendment on sheet 3772 also. Requiring a consumer to create an account or provide information can often serve legitimate purposes, including improving security, facilitating legitimate transactions and enabling ongoing services. Those practices in and of themselves are not unfair.

On that basis, we urge the Senate to reject these amendments.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

The question is that amendments on sheet 3772 and 3771 be agreed to.