Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I too rise to speak in support of the Trade Practices Amendment (Australian Consumer Law) Bill 2009. This bill implements the Council of Australian Governments national consumer law reforms agreed to by all the state and territory governments in October last year. It is yet another example of the Rudd Labor government’s commitment to cutting red tape, eliminating bureaucratic duplication and waste, and bringing about uniform laws across the country. And it has been done in a spirit of cooperation with state governments, not with the sledgehammer approach of past years. In fact, if we look at the history of Federation with the evolving of colonies into states into a federation with a capital that has more and more power and more and more control with more and more cooperation, we note the Rudd Labor government has certainly taken the federation to a new level, particularly in terms of coordinating things with the states and territories, whether they be Liberal, Labor or whatever, making sure we agree and work together for a healthier country. Like so many of the laws which criss-cross state, territory and federal jurisdictions, consumer protection laws have evolved into an unholy mess in recent years. It is a little bit like the many-headed hydra that Hercules had to fight. I do not want to start my speech by comparing the Hon. Dr Craig Emerson MP to Hercules and I do not want the Minister for Competition Policy and Consumer Affairs to get too excited, but that is what he has been fighting. He pushes down somewhere and then something else pops up. Obviously, companies and consumers move between the states and territories so much more readily so it is important that we have uniformity wherever possible. It makes good business sense and it looks after consumers. The various Commonwealth, state and territory laws have a similar intent. However, there are enough differences between these jurisdictions to create confusion for consumers, unnecessary costs for business and perhaps extra work for lawyers.

This bill is based largely on the recommendations of the Productivity Commission’s review and will bring about the biggest change to consumer law and policy since moustaches were compulsory in the public service. It is the biggest change since long socks, short-sleeved shirts and ties were de rigueur, even stylish, or, to put it in more precise terms for those people that follow rugby, it is the biggest change in the 30 years since the St George Football Club won a grand final. This bill amends the Trade Practices Act 1974 to introduce a new national unfair-contract-terms law and new penalties and enforcement powers, as well as redress measures for the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission to help consumers put their situation right in the event of an unlawful contract. It applies only to business-to-consumer contracts, not business-to-business contracts. I take issue with some of the points that the previous speaker made but, rather than waste time on those, I will talk about the positive things given the fact that it is business-to-consumer contracts that we are addressing with this legislation. This bill defines a consumer contract as one entered into by an individual ‘for a supply of goods or services’ or for ‘a sale or grant of an interest in land’ in circumstances where the individual acquires the goods, services or interest ‘wholly or predominantly for personal, domestic or household use or consumption’.

Because of the level of business and consumer consultation that has gone into the drafting of this legislation, it strikes a healthy balance between protecting the rights of consumers and protecting legitimate business interests and practices. We have arrived at a very healthy balance. The major component of this bill is the introduction of unfair contract terms. Any contract that is deemed unfair will be void under this legislation. Where there is significant imbalance in the parties’ rights and obligations under the contract and it is not ‘reasonably necessary’ to protect a party’s legitimate interest, it will be deemed unfair. This is a commonsense approach to what any person in the street or any man on an omnibus would consider to be fair. The onus of proof will be on the business as to a term being not reasonably necessary. Businesses will receive infringement notices for minor breaches. However, for more serious breaches they will be required to substantiate claims. The bill before the House requires a court to consider the extent to which the terms cause detriment to a party who relies on the terms. But the unfair terms test does not apply to terms dealing with the main subject matter of the contract, the upfront price or any term expressly permitted by law.

I see that the bill also includes an indicative list of examples to help guide the courts in these matters. That will help as to the doling out of legal advice and that will also be a guide for the millions of small businesses and consumers when they are looking up what would be reasonable and appropriate in the circumstances. The bill also empowers the ACCC and ASIC to pursue civil penalties and disqualification orders for breaches of the law. A court may also award refunds to consumers as part of the redress measures in this bill. It is appropriate in 2009 that we have a range of enforcement actions. Gone are the days when if it was not criminal it was nothing. It is now much more appropriate that we accept that there will be all sorts of behaviour out there and that you do not start by bludgeoning as you can actually guide and move people towards sorting out their disagreements.

As I have said from the outset, these laws will offer greater clarity and protection to consumers and will also help reduce compliance costs for business generally but particularly for small business. This is a good Labor Party policy. It is a win-win situation that at least we on this side of the House can all be happy with. Sometimes I wonder what the spokesperson for small business on the other side of the House is doing, given the situation of those opposite at the moment: a shepherd without a flock in terms of looking for a constituency. They do not seem to be able to strike the situation of any legitimate voice for small business. When I go around my electorate and talk to a lot of small businesses covering a range from manufacturing to retail, I note they are more than happy with what the Rudd Labor government has done over the last two years, particularly in the last year, in some of the most difficult economic times that we have ever faced. In summary, I commend this piece of legislation to the House given the balance it has struck as to the protection that it will offer to consumers and also the guidance it will offer to business.

See this speech in context