Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Hansard source

I rise to speak in support of this bill, the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. But I do so while simultaneously raising concerns that I have with respect to consumer laws in this country. It is true that we have done much over the years to protect consumers, as a result of consumer law legislation at both federal and state level. But there are still too many gaps within our laws, which allow unethical operators—some of whom are very well-known brands—to exploit consumers. It is little wonder that, today, consumer confidence in all sectors of society is diminishing. We've heard other speakers talk about some of the areas that are still not adequately covered by consumer law protection. I will list a handful of them before I get to some specific comments I wish to make in respect of this legislation.

We've heard about payday lenders: like in every industry sector, there are good and bad operators. But the bad operators are clearly taking advantage of some of Australia's most vulnerable people. When they're in the greatest need and have to go and cash in products that they own, they then get taken advantage of. I have heard of people paying, sometimes, amounts of maybe 10 times what the value of the product would have been, had they had the money to have bought the product up front.

We've heard about car manufacturers—again, I heard only in recent days about the CEO of one global car company who may be jailed as a result of the performance indicators being fabricated with respect to the brand of that vehicle. We have airlines and insurance companies using fine-print contracts to avoid meeting their obligations or to add extra charges for consumers. Telcos are doing the same.

We have the private health insurance industry—only today there was information that private health insurance complaints rose by 30 per cent in the last year alone. We have exclusions between one company and another with respect to the policies or excess co-payments being charged. These exclusions make it almost impossible for consumers to try and compare the policies of the various companies, if they decide that they want to take up private health insurance. Not surprisingly, with all of the confusion, the number of people that are now covered by private health insurance is diminishing and people are dropping out—because of the confusion and because they find that the companies are taking advantage of them.

I want to turn to the question of the energy and other utility service providers, which the previous speaker also referred to in his remarks. It has become almost a daily practice that, in my office and throughout the community, I hear complaints, or complaints are brought to me, about the activities of the energy providers in particular. Whilst there are several of them out there now, certainly, in my home state of South Australia, trying to choose which provider a consumer will go to is becoming increasingly difficult because it's becoming almost impossible to make fair comparisons between what each of them have to offer. And it was only a day or so ago that there was an article released by Bruce Mountain, Director of the Victoria Energy Policy Centre from the Victoria University, which stated:

A recent survey found that Australia’s power companies are less trusted than media companies, banks and telcos. … One feature that deserves close scrutiny is the all-pervasive discount. In electricity retailing, all but 3 of the 28 active retailers use discounts in their retail offers. … discounts give customers the impression that they are making a smart buy. This is often true, particularly in cases where it is easy to see and compare the discounted prices. But if it’s not easy to compare, customers may not realise if they’ve been duped.

With respect to discounts, Mr Mountain goes on to list the ways—and I won't read the whole list—that, quite often, the customers are duped, to use his language:

…   …   …

Those examples highlight why consumers are finding it so difficult to make choices and, in fact, how consumers are being taken advantage of.

I turn to a matter that is current right now. I refer to the case of Toys "R" Us, who went into, I think, receivership on about 21 May. I understand that all operations of Toys "R" Us will close in Australia by 5 July. The administrators are McGrathNicol. On about 21 May, the administrators issued a statement in respect of the company. For the benefit of anyone listening, I will say that the company has about 700 permanent and casual staff here in Australia. It's got 44 stores in the country, three of which are in South Australia with two of those being in my own electorate. In South Australia, there are about 70 employees, and the two stores in my electorate would cover about 40 of those employees. Firstly, I hope those employees are properly covered with respect to their worker entitlements and the pay that they are entitled to receive. The other issue that concerns me with respect to the administrators of Toys "R" Us is that they made a decision that anyone who holds a gift voucher cannot use it unless they expend an equivalent amount of additional funds on the day they go to collect their gift voucher value. I will read directly from the frequently asked questions sheet put out by McGrathNicol:

Gift cards, coupons and store credits

The terms of redemption depend on the nature of the card, coupon or store credit. Ordinarily, gift cards and store credits represent an unsecured claim against TRU Australia and would not be able to be redeemed. Until 5 July 2018, the Administrators have agreed to honour gift cards, coupons and store credits in store only, on the basis that the total transaction is at least double the value of the gift cards, coupon or store credit amount utilised in that transaction (i.e. to utilise a $100 gift card, the value of the transaction must be at least $200.)

If customers do not utilise or are unable to utilise their gift cards or store credit in accordance with these conditions, they can complete a Proof of Debt for the balance they are owed. … Westfield gift cards may be used with restriction.

So, immediately, there is a differentiation between one type of gift card and another. That, in itself, is wrong. But what is even more wrong is that the decision to have holders of gift cards required to spend an additional amount was never part of the understanding when that gift card was purchased. Therefore, whilst the administrator may well be within their rights to impose that condition, it is totally unethical and immoral to do so.

I don't know whether it is within the rights of the administrator. I would have thought that, whilst the company or the shops are trading—and they will be trading to 5 July—the holders of those gift cards should be allowed to go to the store and cash them in for the products that they want at the value of the gift card, without any additional conditions. If there are conditions, I suspect that the purchasers of those gift cards were never told about them, or that they are subject to change and that new conditions might be applied to them in the future. That is a matter of serious concern, because, I suspect, it will affect hundreds and possibly thousands of consumers around Australia.

It is an issue which also arose back in early 2016 when the Dick Smith stores around Australia also closed. The same thing happened there—in terms of the cards not being honoured because they were considered to be unsecured creditors. I don't believe that, at that time, there was an expectation that holders of the cards had to spend an equivalent value to the gift card value; they were simply not honoured. Again, I find that that is totally unfair on the purchasers and holders of those gift cards.

I don't know how we close those kinds of loopholes, but these are matters that affect thousands of people in the community and there should be ways of closing them. One of the suggestions that I would make is that, perhaps, when a gift card is purchased the money should go into a trust account of some kind where it cannot be used for normal business purposes by the owner of that business, so at least it will be there should the business go bankrupt or become unable to continue trading. That would not only secure the money for the holders of the cards but also guarantee the business some future purchase, which would enable the business to know that its sales would be there in the months ahead as people cashed those cards in. But there may be better ways of doing it. I raise this matter because I know that it is affecting people right now. Indeed, given that the operators of Toys "R" Us are still trading to 5 July, I hope that they might reconsider. Having said that, I'm not holding my breath that they will.

As other speakers have pointed out, this legislation does make improvements. I accept that and I support the improvements being made. I am, however, conscious that consumers continue to be exploited by unethical operators. In my office it's perhaps one of the most common matters that we have to deal with: we step in to try to assist residents in my electorate who have been in some way or another treated unfairly by operators. Sometimes we have success, but not always. With those comments, I commend the bill to the House

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