Michael Sukkar (Deakin, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Today I introduce a bill to implement a series of reforms to support Australian consumers.

Schedule 1 to this bill amends the Australian Consumer Law, contained within the Competition and Consumer Act 2010, to increase the maximum civil pecuniary penalties and penalties for criminal offences resulting from breaches of the law.

This bill delivers on the 2017-18 budget commitment to strengthen the Australian Consumer Law's penalty regime.

At present, the maximum penalties in the Australian Consumer Law are $1.1 million for a body corporate and $220,000 for a person other than a body corporate.

These current maximum penalties are clearly failing to deter large corporations from breaching the Australian Consumer Law, particularly where the relevant non-compliant conduct may be highly profitable.

For example, the $10 million penalty imposed against Coles in 2014 for unconscionable conduct in its dealings with 200 of its suppliers was referred to by Justice Gordon as insufficient for a company with annual revenue in excess of $22 billion.

In some cases, the benefits gained from a breach of the Australian Consumer Law can generate profits greater than the value of the penalties imposed. When penalties are low, businesses may be prepared to factor the risk of a low penalty into their pricing structures.

This puts consumers and small businesses at risk, with some large corporations viewing penalties simply as a 'cost of doing business' rather than a deterrent to the relevant non-compliant conduct.

The Australian Consumer Law Review found that penalties must be sufficiently high that a business, acting rationally and in its own interests, would not be prepared to treat the risk of such a penalty as simply a cost of doing business.

This bill, in our view, achieves this outcome.

Schedule 1 to this bill increases those penalties for body corporates to the greater of $10 million, or three times the value of the benefit obtained from the offence, if that benefit can be determined, or 10 per cent of the annual turnover, if the value of the benefit cannot be determined in that instance. For persons other than body corporates, the maximum penalty will increase, as I said, from $220,000 to $500,000.

The offences that carry the maximum penalty include unconscionable conduct, a range of unfair practices—such as misleading and deceptive conduct—offences related to product safety and offences related to information standards.

These increases bring the maximum penalties in the Australian Consumer Law into line with the penalties in the competition provisions of the act that already exist.

By increasing these penalties the government is sending a clear and simple message to businesses: if you're considering engaging in conduct that would breach the Australian Consumer Law, think again.

This government is therefore backing all Australian consumers, and I can report to the House that these amendments have the strong support of the states and territories, who jointly enforce this law with the Commonwealth.

Schedule 2 to the bill amends the Australian Consumer Law to provide protection, through a safe harbour, for egg producers who comply with the requirements of the Free Range Egg Labelling Information Standard.

This safe harbour will provide certainty to those egg producers who choose to label their eggs as 'free range' that if they have fulfilled the requirements set out in the information standard they will not face prosecution under the misleading or deceptive conduct provisions of the Australian Consumer Law.

This certainty will increase confidence in the egg industry, will encourage further investment and will equally give consumers increased confidence that they are getting what they pay for when choosing their eggs.

This measure is the result of a decision of consumer affairs ministers from the states, territories and the Commonwealth, who decided that both producers and consumers need more clarity in the area of free range egg labelling.

The extensive consultation that was undertaken resulted in an information standard for free range egg labelling that requires the eggs to be laid by hens that had meaningful and regular access to the outdoors and were able to roam and forage. It also requires that the laying hens be subject to a stocking density of 10,000 hens or less per hectare.

For the first time, the disclosure of the producer's actual stocking density will also be compulsory on all labels of eggs that claim to be free range. This will allow consumers to easily compare free range egg brands and to make decisions according to their own preferences.

The safe harbour will provide an extra layer of protection and certainty for those complying with the relevant information standard.

Finally, schedule 3 to this bill amends the Competition and Consumer Act 2010 to support the role of the Australian Energy Regulator to monitor the wholesale electricity market.

It will do so by removing inconsistencies between the treatment of confidential supplier information in the National Electricity Law and the Competition and Consumer Act.

Relevantly, in 2016 the Australian Energy Regulator was granted new wholesale market monitoring and reporting functions via an amendment to the National Electricity Law.

These functions require the Australian Energy Regulator to monitor and report on the wholesale electricity market to determine whether there are features of the market that undermine its effective functioning.

However, parts of this amendment are inconsistent with other parts of the Competition and Consumer Act. As the Competition and Consumer Act is Commonwealth law, it takes precedence over the National Electricity Law. This means that the Australian Energy Regulator cannot fully use these functions until this inconsistency is mended.

Schedule 3 to this bill amends the Competition and Consumer Act to fix the inconsistency between it and the National Electricity Law.

Therefore, this change will fully enable the National Electricity Law amendment which granted the Australian Energy Regulator these new wholesale market monitoring functions.

Ultimately, these functions will help ensure that the Australian Energy Regulator can continue to enforce the energy laws proactively, fairly, and efficiently, therefore fulfilling the commitment of this government to always put consumers first.

Full details of all of the measures in schedules 1 to 3 are contained in the explanatory memorandum to the bill.

Debate adjourned.