Stephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

I'm pleased to be speaking on this important piece of legislation, and I also move this second reading amendment:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes the needs of Australian consumers to be satisfied that their data is secure and that they have control over its use, modification and storage before, during and after an authorised transfer, in particular:

(1) the right for customers to request the deletion of their personal data held by companies;

(2) the need to prevent the use of technologies which may operate outside the regime, such as screen-scraping technology; and

(3) the impact of this bill on vulnerable consumers".

The Treasury Laws Amendment (Consumer Data Right) Bill 2019 amends the Competition and Consumer Act 2010, the Privacy Act 1998 and the Australian Information Commissioner Act 2010, to introduce a new framework for a consumer data right. The framework will allow individuals and businesses to more conveniently access data held on them by certain organisations within the private sector. They will then be able to share that data with accredited and trusted third parties. The bill allows for that framework to be progressively extended across different sectors of the economy—initially the banking sector, with the energy and telecommunications sectors to follow later. Sectors will only be designed following extensive consultation and assessment by the ACCC and the Office of the Australian Information Commissioner.

Under the framework, the ACCC will be empowered to set rules, accredit participants, oversee data standards and take enforcement action when consumers' rights are being seriously or systematically breached. Technical standards will be set by a data standards chair, advised by a data standards body. This body, initially CSIRO's Data61, will be responsible for working with businesses and consumers to ensure that the framework is implemented efficiently and effectively.

Individual privacy will continue to be the remit of the Australian Information Commissioner, who will have responsibility for enforcing privacy safeguards around the framework and providing complaints handling for the breaches of the privacy safeguards. The bill will also extend the protections under the Privacy Act 1998 to cover data held by small businesses if those small businesses are accredited data recipients under the consumer data rights framework.

I will now address some of the benefits of a consumer data right, because the benefits to competition accrue directly to consumers. Done properly, the bill will make swapping between banks as easy as swapping a SIM card in your mobile phone. Australia has an incredibly concentrated financial system, dominated by the large players. Reforms that give consumers greater powers, such as the consumer data right, offer a chance to shift that equation.

Today, one in every two Australians are still customers of the very first bank that they opened an account with. This isn't really surprising. There are enormous barriers to switching banks in our current system. As it stands, most consumers don't consider switching their bank accounts or their home loans. A survey by the Customer Owned Banking Association found that 65 per cent of all respondents were not likely to consider changing their home loan or investment loan provider in the next 12 months. The ABA found in another survey that only 17 per cent of respondents had switched banks in the last three years, leaving 83 per cent with the same bank. When you interrogate those results, what you'll find is all of the associated administrative arrangements that come with switching a banking product or a loan product, whether they're complicated offset arrangements or a whole range of direct debit arrangements with third party merchants and providers. It's the administrative burden that comes with switching a bank product, which is often the obstacle that keeps people with their existing provider, often against their own financial interests.

Improved access to banking data for the people who ostensibly own it, the customers, will enable the development of new tools to help understand the dizzying array of choices on offer in our financial system. Breaking down barriers that stop people from getting the best possible deal on their credit card, their mortgage, their business loan or their bank account has to be in the public interest. It will also allow for the development of new financial services and applications that help Australians budget better and manage their financial lives. These benefits aren't limited to individual consumers. For small businesses, the open banking reforms will unlock a range of new products and services to manage their accounts and cash flows more efficiently than they do today. These benefits are likely to be replicated across sectors as the consumer data right expands.

This important reform has been supported by a long series of inquiries. Back in 2015, the Harper Competition Policy Review was the first national review to recommend that data access and portability rights be implemented across the economy. In 2017 the Productivity Commission released its inquiry into the availability and use of data. This inquiry recommended that a new comprehensive data right be created that would, amongst other things, allow consumers to: share joint access to and use of their consumer data with the data holder; receive a copy of their consumer data; request edits or corrections to it for the reasons of accuracy; be informed of the trade or other disclosure of consumer data to third parties; and direct data holders to transfer data in machine readable form either to an individual or to a nominated third party. The Productivity Commission found that the benefits from greater access to data would be widespread. Competition in many markets would be invigorated by greater availability and transferability of data.

This inquiry was followed by the open banking review, which set out a detailed program to implement a consumer data right in the banking sector. The open banking review noted such a framework would break down barriers to competition and market entry in the financial sector and help address pervasive information asymmetry issues in financial markets. It also supported a joint regulatory model where the ACCC would be primarily responsible for standards setting and competition issues, while the OAIC would remain primarily responsible for privacy protections.

Mechanisms to allow consumers to access and transfer data easily have been supported by many other inquiries, including: the Northern Australia Insurance Premiums Taskforce: final report; the Review of the four major banks: first report in 2016; the Independent Review into the Future Security of the National Electricity Market; and the Productivity Commission's report on competition in Australian financial systems, together with the Council of Australian Governments' report Facilitating access to consumer energy data, the Australian Small Business and Family Enterprise Ombudsman's report Affordable capital for SME growth and the ACCC's electricity supply and prices inquiry.

Other activity has been happening in parallel to the development of this legislation. The ACCC has consulted extensively on its consumer data right rules framework. The CSIRO's Data61 has worked to develop a clear data standard for the banking industry, with draft documents released for comment in November and December 2018. For all of these reasons, we are supporting the government's legislation and moving an amendment that says:

"whilst not declining to give the bill a second reading, the House notes the needs of Australian consumers to be satisfied that their data is secure and that they have control over its use, modification and storage before, during and after an authorised transfer, in particular:

(1) the right for customers to request the deletion of their personal data held by companies;

(2) the need to prevent the use of technologies which may operate outside the regime, such as screen-scraping technology; and

(3) the impact of this bill on vulnerable consumers".

I understand that the motion will be seconded by the member for Eden-Monaro.

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