Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

I take this opportunity to speak on this bill, even if it is earlier than planned on the Notice Paper. I am always glad to assist the House and to speak at any time. I am particularly pleased to speak on the Trade Practices Amendment (Australian Consumer Law) Bill 2009 bill because I think it forms part of any decent government’s progressive way forward in dealing with consumer protection, with industry policy and with a range of business matters, all in concert and in a proper manner, and delivering to the Australian economy. That should always form the basis of these types of bills. For the Rudd government, since coming to government, this is not new. This bill, along with a number of bills, forms part of the first step in bringing Australia forward into the future in implementing much-needed reforms on consumer protection and ensuring that, while ordinary Australians enjoy the benefits of an open and free economy, the worst of market abuse or abuse by individuals is measured in a proper way through law and through legislation. For this to be achievable, there must be cooperation at a number of levels—it is not something which can just be dictated by governments at the Commonwealth level. There needs to be cooperation right across and filtering through the economy. None is more important than the cooperation of the state and territories. Of course, I am speaking of the Council of Australian Governments process.

Quite importantly, the government is implementing a new national consumer policy framework and it is doing that in partnership with the states and territories, regardless of their political colour or persuasion. I believe and I know that this government believes it is important to have uniform, consistent and fair laws and frameworks which apply right across this country of ours. This was agreed by COAG in October last year. I think it is fair to say that these reforms will mark what will be heralded in the future as a generational change in the approach that governments take to consumer law and to consumer protection and policy, and also in the way that large corporations and businesses act towards their customers and clients. I think this is particularly important.

I acknowledge that the work I am currently undertaking through the Joint Committee on Corporations and Financial Services looking at the financial services sector is particularly relevant in the case of this legislation because many of the issues are similar. They are issues of consumer protection—how it should work, how it should be implemented. I am always conscious in mentioning the fine balance which needs to be struck between providing a regulatory framework protection consumers and their rights and the regulation placed on business. There is an appropriate level at which the two meet and an efficient point where you can say that a balance exists—somewhere between enough regulation, the appropriate regulation and the correct regulation, all of which provide that consumer protection, and enough freedom, flexibility and openness of our economic system, our markets and the ability for people to trade and do business, so that everybody enjoys the fruits of their labour and feels there is a fair system in place that operates for everyone concerned. That is the approach that I take not only in the inquiry which my committee is undertaking but also, very importantly, in the type of legislation we are debating tonight.

Providing a program which delivers a seamless national economy, which is being coordinated by business, regulation and competition working groups, all part of COAG, is a key part of the success of any type of new program that any government would want to implement. I am pretty happy to say that we have that balance as close as possible to right as you would want to hope. I am confident of that because I know that we have had an open process. I know that we have consulted with the community and with business. I know that we have dealt with a range of people across different sectors. The states and territories all have separate regulations and laws for consumer protection or fair trading which offer a level of bureaucracy and complexity to business. I know they want them to become uniform and consistent across the country. This will provide a great reduction in regulation for a lot of businesses in Australia. If nothing else, the mere fact of having these changes at the Commonwealth level will reduce the regulatory burden on business in this country.

This bill marks the first step in implementing these vital reforms. It has been developed in close consultation with the states and territories and our national consumer regulators, the twin peaks system which we enjoy in this country—the Australian Competition and Consumer Commission and the Australian Securities and Investment Commission. They are part of the success of this country’s economy. Australia’s having been able to minimise the impacts of the global financial crisis better than any other country in the world is a reflection of the good regulatory system existing in this country.

Credit must go to past governments—the reform years of the Hawke-Keating governments and the good sense of the previous government—for not going too far in allowing unmeasured or unfettered competition or allowing regulatory constraints to be removed. You hear plenty of loud voices in the boom years and the good economic times, when people say that we no longer need those regulatory restrictions or those competition measures in place because the market is able to be the regulator; the market is able to deal with issues of competition and it is best left to the market. In good economic times it is hard to resist those voices but I am very cautious when it comes to reducing those barriers because when the economic tide turns, as we saw in 2007-08, those measures become vital. They become critical to our economy to ensure that we can sustain the global forces that are dealt to us. There would not be too many voices today that would speak against many of Australia’s regulatory processes, against its competition policy, against its restrictions to unfettered competition or, in fact, against the view that our twin peaks regulatory system of the ACCC and ASIC is vital to the way in which we have managed our economy.

Credit must go to those governments for all those reasons and for all the good work that has been done over 20 years of progressive reform in a range of areas. I cast my mind back to those early days of vital reform in this country and some of the basic principles of our competition and regulatory policy: the four pillars policy in the banking sector; the creation of ASIC, and the many challenges it faces in dealing with a very large consumer base; and the ACCC and the very difficult circumstances it faces in trying always to provide equal justice in a competitive environment where everyone is always trying to take full advantage of their own circumstances, as they are entitled to do within the rules and regulations.

This bill will introduce a national unfair contract terms law and new penalties. It will introduce enforcement powers and consumer redress options for both of our regulatory bodies, the ACCC and ASIC. It will make provision for an application of law scheme to give effect to the Australian Consumer Law and will allow the states and territories to apply the new unfair contract terms provisions from its commencement. I would say that every member of parliament receives in their electorate offices weekly, if not daily, complaints of somebody being robbed in a particular manner through some unscrupulous operator or some unfair clause in a contract, whether it be a mobile phone contract or a banking term contract for a loan, which they did not quite understand because it was so complex; or perhaps a franchise agreement that had some unfair clause that tied them into an event or set of circumstances that they could not fully appreciate and which was completely unfair both at the time and when a situation arose. I think there is no better way of dealing with it than by regulating so that when those situations arise we can do something about it in law and give clarity to people, so they know when they are entering into a contract that just because it is a complex, detailed, lengthy contract that involves lots of legal terms and lots of clauses that they may not be able to appreciate fully at the time they sign—they might do it in good faith but might not be able to appreciate the impact of that contract until they discover how unfair a particular clause is—their interests will be at least to some extent protected. I do not think that it is right or fair for any country or system to allow this sort of unfair action to take place.

What takes place is that one person, who has full knowledge, takes advantage of another person, who does not have full knowledge. That should not be the basis of doing business. People should be able to make a profit and they should be able to take advantage of their own knowledge but they should not do it at the expense of another person in an unfair or abusive manner. This is particularly so in relation to contracts because they are so complicated and so costly to redress. One of the key areas in which this legislation will make a big difference is that it provides for upfront redress for people rather than their having to seek some compensation or redress through the court system, which is very expensive to do.

When we talk about unfair contract terms we are not breaking new ground. This is not some sort of innovative program that we have just dreamt of. What we are doing is following the suit of other great democracies such as the United Kingdom. Similar legislation currently exists in Victoria, for example, and in the European Union, South Africa, Japan, the United States, Canada and a range of other countries around the world. This is not new. This is something that is much needed and has been proven to work, and I think will form the basis of a new culture. It will form a new approach to how people do business: you may not simply take advantage of someone through a complex legal contract just because you can. You need to approach contracts with fairness. These laws will cover business-to-consumer transactions and will protect consumers by making contracts clearer. It will remove terms that are not needed to protect legitimate business interests. It will enhance competition by letting consumers make real choices based on clear information. In a way, it will redress the power imbalance that exists. This is often an information imbalance between the people who offer a particular service or product that is very complex or that is contained in a particular contract that the consumer has no possible way of understanding unless it is specifically explained to them or written in a way that they can understand.

These reforms will introduce new enforcement powers, which are necessary. There is no point in having regulations if there is no means of enforcing them or there are no penalties attached or there is no mechanism to make it clear that these are not just regulations for the sake of regulations but carry some weight of law. I think that is exceptionally important. Regulators, in having these new powers and by implementing them, will be able to issue infringement notices for minor breaches and will also be able to issue substantiation notices requiring businesses to substantiate claims, putting the onus back on a business: if your contracts contain a clause which is disputed as unfair you will need to substantiate it; you will need to prove that it needs to be there. I think that is an important part of dealing with this. It will keep the regulatory burden to an absolute bare minimum while having a clear focus on consumer protection.

There will be a new power for redress for consumers who are not party to proceedings, so where there is a contract to which they are not a party. It will allow the courts to order refunds in situations where many consumers are affected. There are many examples right across the community of where this is vitally needed, whether it is to do with young people or older, more vulnerable people who might be harassed into entering particular contracts or handing over money, in cash or cheques. There is specific protection for those members of the community. The bill will also enhance consumer protection to allow for more effective enforcement. It will reduce regulatory complexity by making clear what is acceptable and what is not. At the same time it will reduce business costs. Business will be able to get on with doing what it does—making products and selling them to consumers or providing services to consumers—in a clearly understood way.

It will also encourage the development of a seamless national economy. I cannot emphasise enough how important this is in a regulatory sense, given the efficiencies that are created, the savings to the economy and the savings to consumers and to businesses. Also there are the productivity gains or increases that can be achieved. I think one of the great pillars of this government, the Rudd government, and something that will be seen as a great achievement in many years to come, is its ability to work in partnership and cooperation with the states and territories, through the Council of Australian Governments, to deliver uniform consumer protection laws. This applies to other areas, working in the regulatory environment and being able to provide, for example, a uniform consumer credit code and being able to provide uniform licensing regimes across the country, transport systems and rail networks. It is about looking at where we as an economy and as a country are able to provide better services, better assistance and better consumer protection and a whole range of other systems in a cooperative manner. While it is important to acknowledge the role the states play, I know and understand that the states are more than willing to participate and play their role in having a more effective, efficient and productive national economy. So tonight this government is putting forward, as part of the Trade Practices Amendment (Australian Consumer Law) Bill 2009, much more than just simple consumer protection, as vital as that is and as important as that is and as critical as that is to a body of work that has been taken very seriously in this parliament. A greater good will come out of this, which will be different to measure immediately but I know that such work is done by a range of organisations which will be able to measure the national impact or effect of these types of uniform regulatory changes.

As I said at the outset, this is a new national consumer policy framework in cooperation with the states and territories. It really will be a generational change. I think it will mark for the first time in Australian history a significant progression towards having a seamless economy, with all the benefits that can be derived from that. It will cover the most basic of services and products that are provided to people—what we take as very simple today as perhaps being mobile phone contracts or simple services that may be provided to consumers in the home or agreements that are struck between consumers and tradespeople providing particular services—right through to more complex matters such as mortgages, particular loans or other dealings with lending institutions and banks. These are often the subject of complex contracts and agreements where normally either the only remedy ordinary consumers might have is through an ombudsman’s office—or, more often than not, no remedy exists and the consumers find themselves in a difficult legal predicament of either not following through their complaint as to a particular unfair clause that affects them directly or having to take very expensive legal proceedings. I do not think that is an effective mechanism by which an economy should operate.

In summing up, I congratulate the government and the minister responsible for implementing this much-needed reform. I wish well all those who will now take a different cultural approach and look at this regulation in a positive sense, the sense in which its benefits are meant to be delivered, which is, most important and foremost, to protect ordinary people and consumers and also to provide for a seamless national economy.

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