Barnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | Hansard source

A lot of sympathy today. We are very sympathetic to the views of many in the industry who argued that the bill’s reference to a substantial likelihood of detriment creates an unacceptable degree of risk and uncertainty for businesses and consumers. As the bill is currently drafted, there is no requirement that the term actually create detriment for it to be unfair. It will be unclear to those entering into a contract which terms will be judged to be likely to cause detriment. In addition, a party may be placed in detriment when the contractual terms remain fair to both parties when each is on equal footing. By substituting the words ‘significant disadvantage’, the bill will only find a term unfair where a party is genuinely placed at a disadvantage. The court will then need to weigh up the relative positions of each party, whether they are unequal and whether one party is at a significant disadvantage.

Likewise the provisions of transparency are superfluous. The explanatory memorandum states that:

Transparency in the terms of a consumer contract may be a strong indication of the existence of a significant imbalance in the rights and obligations of the parties under the contract ...

the extent to which a term is not transparent is not, of itself, determinative of the unfairness of a term in a consumer contract and the nature and effect of the term will continue to be relevant.

Given that the government wishes to encourage transparency in contracts and that the existence of this term will provide parties with an incentive to provide transparency, there is no strong reason to insist on its removal. On these issues we will not be supporting this amendment.