Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

I rise to speak about putting data ownership where it belongs: with consumers. It's tempting to sit in this House and pass legislation based on the written word. Customer data rights remind us that we are really here to do is benefit our communities and help all Australians get a better deal. The Treasury Laws Amendment (Consumer Data Right) Bill 2022 follows in the footsteps of the Treasury Laws Amendment (Consumer Data Right) Act 2019, which inserted a new part IV(D) into the Competition and Consumer Act 2010 and allows consumers to share their data with trusted parties.

Over the last few months, we've had a lot of scandals and headlines about the retention of data by certain companies and how secure that has been, so it's quite at odds to know that, whilst companies are holding it, consumers themselves do not have that right to their consumer data. At its core, the intention of the CDR initiative is to hand back to consumers ownership of their own data. It is a truly transformational initiative. So far, it's been rolled out in banking, energy was initiated at the end of last year and telecommunications is currently being considered.

The bill being considered by the parliament now takes it to the next logical step. It enables consumers to use their data to take actions which are designed to, amongst other things, get them a better deal. To achieve this, the minister must declare by legislative instrument the types of actions that can be initiated under the CDR. Certain parties must also be assessed and accredited. Importantly, consultation with Treasury, the ACCC and the Information Commissioner is mandatory. In the current and evolving environment, the CDR initiative is becoming increasingly important. Many consumers are already under stress, and this will only increase. CDR can help consumers to alleviate that stress.

CDR creates an opportunity not just the individual consumers but also for small businesses. Small businesses can either use CDR to get better deals or be participants in the provision of CDR services. Small business has an added layer of complexity, and this needs to be incorporated in implementation. To make this real for consumers, we need to focus on what's important to them. Consumers want to get a better deal, so they need to understand how they go about it. The implementation of this bill will be critical. Consumers must have knowledge of how it operates; must have trust in the participants, processes and outcomes; and must have the confidence to use it.

It's critical at this stage of the development of CDR that consumers be involved and how it is going to be rolled out. To maximise the benefits, this will require a flexible, collaborative and innovative process than may otherwise be the case. Consumers and what is most important to them must be an integral part of the rollout. What we do in this next stage will dictate the success or otherwise of CDR as an initiative. We need to put consumers squarely at the centre of the outcomes of this bill, and I urge the government to really put that at the forefront of their mind. We do this actively by engaging and educating them now.

I welcome the measures proposed in this bill, as would all consumers, because it gives control back to consumers and enables them to reap the benefits of their own data. I encourage the government and the minister to adopt innovative approaches to expeditiously designate the types of actions that can be initiated under the CDR. Such approaches must not compromise consumer protection, rigorous data management or risk minimisation for all participants. Last year, we saw what could happen, and we must avoid any repeats.

I implore the minister to exhaustively address the need for extensive engagement and education so consumers can take advantage of this excellent initiative. And I urge the government to do a review, nevertheless, of a number of legislative instruments to ensure that we are up to date with data protection, because we have seen the cost, the damage and the impact when there are insufficient protections in place. I commend the bill to the House.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

With each and every transaction that all Australians make, whether it be online shopping, scanning rewards cards or liking posts on social media, we produce data for companies. And, whether we realise it or not, these companies are collecting data on our behaviours and spending habits in order to monetise that data. The reality is our data has become a product that can be packed up and sold to those looking to target us and make a profit. Data is used to target ads towards individuals with certain interests or towards a certain demographic. It's used by retailers to target their regular shoppers and by banks to manage risk. Data collection is the reason that we all get emails about our favourite snacks that are on sale at Woolworths or Coles and why the banks call us about their latest products. While there are some benefits to this, there are clearly some risks as well.

Prior to my time in parliament, I spent 15 years in business and worked in small business. I had the opportunity to work at Mars Australia, a large multinational, and we used a lot of data. In many ways it was a great asset to us. It allowed us to make sure that we could target the products that consumers were looking for and ultimately make it easier for consumers to find what they were looking for. I also spent time at a tech company called Ritual, and at the business we had access to a significant amount of people's data: their personal data, their spending habits and even their movements through their iPhone.

There are significant benefits to us as consumers and to society by being able to maximise that data. But it does bring risks, and there is no doubt that businesses profit from that. So it's only fair, if we're going allow businesses to use that data for their own means, that consumers have the right to protect and own their data. That's why there is so much power in the data, but until the Consumer Data Right was introduced, the power sat primarily or solely with corporations. Consumers themselves had no power or opportunity to access that data. The Consumer Data Right was a significant economic and consumer-centric reform. It was the previous coalition government that spearheaded the rollout of the Consumer Data Right. We did this to protect consumers, reduce red tape, improve cyber-resilience and support digital innovation in the delivery of core business functions. It was first launched in the banking sector in 2020 to give consumers and small businesses more power over their own data and to compare and switch banking products. I would note that, at that time, the lead minister for introducing the Consumer Data Right was the then minister for the digital economy, Senator the Hon. Jane Hume. I have called before in this House and will continue to call in this House for the government to appoint a minister for the digital economy, to oversee and implement a national digital strategy.

The former coalition government formulated the Australian Digital Economy Strategy 2030, which set the foundation and frameworks for how we as lawmakers could make sure that society and the economy benefited from data but also that rights were protected. It's something you need an overall minister for because it impacts so many different portfolios. So I'll continue to urge the Albanese government to give the digital economy the respect it deserves and the leadership it needs and to appoint a minister for the digital economy.

The Treasury Laws Amendment (Consumer Data Right) Bill 2022 would further expand the rights of consumers to access their data, and it is a bill the coalition is supporting. The bill will introduce action initiation reforms which will enable consumers to direct accredited persons to take actions on their behalf using the Consumer Data Right framework. Consumers may direct an accredited person to make a payment, open an account, switch their provider or update their personal details across a range of providers. At its core, this bill is all about improving consumer outcomes, while driving digital innovation and productivity across our economy. The Productivity Commission says that digitisation is a doorway to greater economic growth and a boost to our productivity. We all know, with the significant economic challenges we face at the moment and the high inflation, productivity is a key driver to bringing prices down and continuing our economic success.

Reforms like this are necessary because of the impact that red tape is having on the economy and on consumer outcomes. Independent research has estimated that the annual cost of red tape to our economy is $175 billion each year. In the financial sector alone, there are 140 prudential standards and practice guides covering the five APRA regulated industries. The Australian Law Reform Commission's legislative framework for the financial services sector sits at over 43,300 pages. The burden of compliance is significant, particularly for small businesses in my community who do not have the luxury of in-house legal teams or the ability to appoint administrators to cover paperwork. That's why it is so important that we get this reform right. It has got to make life easier, not harder, for consumers and for small business owners.

This bill will allow consumers to go to one of their service providers and say, 'Please update my address on all my accounts.' No longer will we have to let every service provider know, or get those ones that are missing, and suddenly the bill never comes through. So it is going to improve the lives of many Australians. Do it once and transform it all the way through. It's such an important initiative. By expanding the Consumer Data Right to include action initiations, consumers will be empowered to authorise and manage their data securely in the digital economy. It will further allow them to share the data that Australian businesses hold about them, but, importantly, for their own benefit.

I have spoken previously in this place about the importance of the digital economy. It has the potential to contribute $315 billion to our economy, but one of the greatest setbacks to growing our digital economy is consumer reluctance. Consumers often misunderstand how their data is harvested and used. We know there are significant concerns that consumers rightly have in the current environment about whether their data is safe and secure, and we must always make sure that we are setting frameworks that ensure cybersecurity and consumer data protection is at the front of everything we do.

Through giving consumers expanded control over their data being shared, we are increasing their faith and confidence in the future of our digital economy. The Consumer Data Right was always designed to grow over time. While in government, the coalition pursued expansion into the banking sector through open banking. We also pursued expansion into open finance, the energy sector and telecommunications. Not only is the Consumer Data Right enabling consumers to benefit from their data, it is spurring the creation of new tech companies and encouraging more innovative products and services. The Consumer Data Right is underpinned by stringent privacy and security protections, which are so important, as I mentioned. It prioritises consent, meaning consumers can choose whether to use the data right, and providers must receive explicit and informed consent to use their data. And, really importantly, it gives consumers full visibility over who their data is being shared with.

This bill expands a consumer data right from a data-sharing scheme to a scheme that allows consumers to act on the information that they receive. For example: this could allow consumers to change energy providers following receipt of information about other providers offering lower prices or more suitable circumstances. And, in this current environment, the ability to switch easily and to take advantage of lower prices is so important. This is all about making it easier for consumers to compare products and services, and to access better value for money—something that is so important with the energy and cost-of-living crises that we have. We all know that many Australians are doing it tough, and anything we can do in this House and in this place to make their lives easier is such important legislation. It's one of the many reasons why I'm supporting this legislation.

However, this legislation, on its own, will not be enough. We need to acknowledge that. The government must do more to support business and our economy, because Australian businesses and families are struggling. They need a government that listens to them, not one that tells them the government is the centre of the economy. Businesses in Casey, and across the nation—and I've spoken to many of them—have identified the issues and offered the solutions to Australia's economic challenges, but they feel that they're not being listened to. The challenges they face are significant and not just on the expenses side. I was talking to a small business just last night whose revenue has dropped by over 30 per cent since Christmas as consumers are starting to pull back. So small business has significant challenges, whether from increasing costs or lower revenue. We need to make sure that we are doing everything we can to support them.

The legislation that the government plans to pass in the next year calls for a huge $45 billion in extra borrowing for extra spending. This spending is off-budget spending; it's not going to be shown in the budget. But the IMF has already warned how this will drive inflation and make the cost of living worse for Australians. These are things that we have to avoid. So while we're supportive of this bill for its benefits to consumers, the digital economy and productivity, Labor must start listening to businesses and address the issues that we are facing today.

With this government's priorities, Australians will always pay more under Labor. It's essential that the government brings small business with them on this reform. The consumer data right has been carefully designed from the beginning to ensure that strong privacy and security mechanisms are built into the design. The government must get this right to maintain the integrity of the scheme and to strengthen consumer faith in our digital economy. I will finish by again urging the Albanese government to appoint a minister for the digital economy, because if we do not have one person overseeing our strategy, we will miss significant growth opportunities. And we will also leave Australians exposed to some of the cybersecurity risks that we saw last year. If we don't have a plan, how can we implement anything to make sure that we are maximising the opportunities available to the Australian people when they need help so often?

Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

R (—) (): I rise to speak on the Treasury capitals Amendment (Consumer Data Right) Bill 2022. The coalition understands that our digital economy matters. It is crucial to our success as a nation that our businesses are innovating and adopting digital technology. Not only does digital adoption enable entirely new businesses and sectors to grow and flourish, creating jobs and prosperity, but it also delivers efficiency gains for businesses in sectors like mining and retail because it creates efficiencies, lifts productivity, generates more profits and raises incomes for workers.

In government, we developed a digital economy strategy with a view to driving the digital advancement of small businesses, our workforce, start-ups and infrastructure. Under the current government there is no such focus. There is no minister for the digital economy and there should be. There is no clear digital economy goal committed to by the Australian government and there should be. The Digital Transformation Agency has been relegated to the bowels of the finance department. The Albanese government should make our digital economy a national priority. There needs to be a serious drive towards digitisation in sectors where such take-up is falling behind.

The government should be getting on with the work the coalition started on a digital identity scheme. Australians should have access to better and more efficient government services, meaning more of how we interact with government should be digital. And, in the increasingly challenging security environment in which we live, cybersecurity should be prioritised—for example, incentivising businesses to take practical steps to reduce their risk of hacking.

I've spoken of the coalition's digital economy strategy, and the consumer data right was a key part of that. Established through legislation introduced in 2019, the consumer data right represented a bold step in increasing the level of digitisation in Australia's economy. A consumer data right gives Australians the ability to have their data shared with businesses when they want that to happen—for example, when comparing and switching providers for an energy plan or a bank loan. This is particularly relevant in 2023, as the Albanese Labor government presides over a worsening cost-of-living crisis, having wholly failed to implement its promises of cheaper mortgages and a promised $275 cut to household and business power bills.

In July 2020 the consumer data right became active for financial products and services, referred to as open banking, with the big four banks able to meet customer requests for banks to share their data for home loans, investment loans, personal loans and joint accounts. In the 2021 budget the coalition invested $111.3 million to speed up the rollout of the consumer data right in banking, energy and telecommunications. The coalition's detailed work to bring the energy sector within the net of the consumer data right meant that this was able to occur in November last year. Following advice from government agencies as well as thorough consultation with the sector and with experts, strong privacy and information security provisions were built into the legislation. The privacy protections under the regime have been developed on the advice of the Australian Information Commissioner, and the Office of the Australian Information Commissioner will have the job of enforcement.

The reality is that Australia faces an environment in which our national productivity growth, according to the Productivity Commission, is at its lowest rate in 60 years. This is where digitisation holds great promise as a doorway to greater economic growth and efficiency. In the case of the consumer data right, the capacity for a consumer to have his or her data shared or passed from one competitor in a sector to another means that businesses that are competing in those sectors will have to work harder to keep existing customers or to acquire new ones. They will have to evolve to become more productive.

In 2021 the Treasury undertook a strategic assessment of the economy-wide rollout of the consumer data right. The then coalition government's response to that report summarised key factors to support future prioritisation and sequencing of the expansion of the consumer data right. These included the benefit for consumers: that inclusion of data search should enable improved decisions to be made by or for consumers which are beneficial to them. The second factor was the value for data recipients: Inclusion of datasets should create value through enabling innovation by data recipients, which improves productivity. The third was the transformation of sectors: Inclusion of datasets should align with the need for the sector to be digitally active. A fourth consideration was the cost for data holders: Inclusion of datasets should not cause an unjustifiable net cost to data holders. And a fifth policy driver was inclusion—that datasets should align with or support the achievement of other policy goals.

The bill before the House today, the Treasury Laws Amendment (Consumer Data Right) Bill 2022, amends the Competition and Consumer Act to enable consumers to 'authorise, manage and facilitate actions securely in a digital environment' under the data rights framework. The coalition supports this bill and, as we have made clear, we will seek to refer it to the Senate Economics Legislation Committee to report back by the end of the financial year. The bill further implements the rollout of the consumer data right by introducing a new channel within the legislation that enables consumers to instruct a business to initiate actions such as making a payment, opening or closing an account, switching providers and updating personal details across providers on a consumer's behalf with the consent of that consumer. It therefore provides consumers with the ability to initiate actions under the data right, rather than simply having their data shared.

As an example, under this legislation, the consumer can instruct a single service provider to update his or her personal details. There are clear benefits, in terms of a stronger set of cybersecurity arrangements, from making this possible, as well as the more obvious benefit of giving consumers access to a simplified, streamlined and less onerous process. This particular measure implements a recommendation from the report of the 2020 inquiry into the Future directions for the consumer data right. That recommendation was that the consumer data right's functionality should be strengthened and deepened. That recommendation was accepted by the previous coalition government.

That being said, the opposition notes that, in consultations, we have detected some concerns about the capacity and ability of businesses to implement these reforms effectively and in compliance with the rules. Small business operators and businesses that primarily service small business and rely on high levels of data have concerns about their obligations under the consumer data right and their ability to implement reforms on the time lines proposed by the government. Datasets that fall within the net of the consumer data right can be large and complex. It is therefore critical that these consumer data right reforms are implemented properly and tested, so consumers can have confidence that their data is safe and so that public faith in the scheme, more broadly, is preserved. This is a key reason why the opposition is seeking to have this bill referred to a committee in the Senate so that that committee can more closely examine the way that businesses are envisaged by Treasury to implement these reforms, in line with the time line that's been laid out.

The consumer data right has the potential to deliver significant benefit to our economy, in driving both better consumer outcomes and innovation by businesses, as they compete to provide the best products and services for their customers and as they compete to win customers.

However, we do know, regrettably, that, when it comes to the task of implementing policy, Labor governments often go woefully, disastrously and spectacularly wrong. There is a litany of public policy disasters that Labor governments have presided over in the past 20 years, and, if we're to go back earlier than that, we'd find an even longer litany. Therefore, we, in opposition, take very seriously our role in scrutinising the work of the government, composed, as it largely is, of a ramshackle collection of former union secretaries. We do think it's appropriate to bring to bear some expertise in implementation, which I'm pleased to say that those of us on this side of the chamber—many of us who have significant private sector backgrounds—are able to deliver.

We don't deny the skills that, for example, the minister who's presently in the chamber learnt by standing in front of demonstrations with a megaphone, yelling out: 'What do we want? X. And when do we want it? Now!' I could acknowledge the Deputy Speaker's own expertise in that critical function as well. All of these are important skills; I don't doubt that. But the question that I simply ask is: to what extent do they equip those people who are presently ministers in this government with the capacity to actually implement complex reforms? And, if we look at the record that the minister present in the chamber has racked up in about eight months, that's a very obvious question.

I'm pleased to tell the chamber that we're here to help. We're here to offer the benefit of our extensive private sector expertise, and we'll be doing that conscientiously when it comes to the consumer data right bill.

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

I rise to speak on the Treasury Laws Amendment (Consumer Data Right) Bill 2022, and it's always a pleasure to follow the member for Bradfield. I want to pick up on a point he made, when he observed that the closure of nine years of the Morrison-Turnbull-Abbott government left Australia with the lowest productivity growth in 60 years. At the end of the day, as Professor Paul Krugman, a famous US economist, said:

Productivity isn't everything, but, in the long run, it's almost everything.

And nothing sums up the legacy that the coalition government have left the country than the worst productivity growth in 60 years. I do agree with him that the Consumer Data Right has the capacity to provide productivity enhancements, particularly in the delivery of services. But, I've got to say, it takes a lot of gall from the member for Bradfield, who as minister was responsible for flogging off a $3 million block of land for nearly $30 million. With somebody like that in charge of money, you'd be very worried indeed.

These were the mob—and the idea that they're lecturing us on a digital strategy and the infrastructure necessary for a modern economy is the stuff befitting of comedy. The man who was single-handedly responsible for campaigning against the establishment and building of an NBN when they were last in opposition promised us that we were going to have an NBN that would be faster, cheaper and quicker. Yet they delivered an NBN that was slower and more expensive—not just by a little bit. It cost us twice as much as it otherwise would have cost us and has taken much longer to complete.

The modern business registry, a critical piece of IT infrastructure, they promised would be delivered for somewhere in the vicinity of $460 million. We now know that project will cost somewhere in the vicinity of $1.5 billion. So their track record on delivering IT projects is woeful. The digital IT project was handed, under the previous government, from minister to minister to minister, and each and every one of them has failed to deliver on the promise. They talk about cybersecurity and scams. Scams are costing Australians $2 billion a year. On their watch, there was no strategy to deal with it.

They advised us that they are going to refer this bill—and, indeed, the future of the project—to a Senate committee so it can be scrutinised. We welcome that. I think that would be good. As they're scrutinising the project they're sending to the Senate committee to investigate, I might ask them questions about the funding that was allocated under the previous government for this project. We are told by them it was critical to the productivity-driving future of our economy. If it was so important, why did they cease funding for it in June this year? It's a project, we've just heard from the member for Bradfield, that was central to their economic reform yet they left it unfunded. So I think we can take with a pinch of salt the claims that have been made by the member for Bradfield.

There are some things we do agree on though: the Consumer Data Right has the capacity to significantly enhance productivity, particularly in the services sector. Once this bill is passed into law, it will set the basis for expanding, to combine the power of data sharing with the ability for consumers to safely and securely instruct third parties to initiate actions on their behalf. In future, this could include things such as opening and closing accounts, making payments and applying for services. The reform will give individuals and businesses more control over their data and empower them to make informed choices as well as many other things. This will reduce the time pressures, cost and complexity experienced by individuals and small businesses when carrying out everyday tasks.

These changes to the CDR are underpinned by strong privacy and information security provisions that are at the core of the CDR, and security and other checks outside the CDR will continue to apply. It's important expansion, empowering consumers to authorise, manage and securely make informed choices in a digital economy. I thank members for their contributions to the debate and I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.