David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

CLASSIFICATION (PUBLICATIONS, FILMS AND COMPUTER GAMES) AMENDMENT (ONLINE GAMES) BILL 2011

The National Classification Scheme (NCS) is a cooperative scheme between the Commonwealth and the States and Territories for the classification of publications, films and computer games. Procedures for the classification of publications, films, and computer games are set out in the Classification (Publications, Films and Computer Games) Act 1995 (Classification Act) and provisions regulating the sale, demonstration, and advertising of this material are in State and Territory laws.

The NCS has not had any significant changes made to it since it was created in 1996. When the NCS began, classifiable content and the way it was delivered to consumers was relatively static. There was no on-line gaming. Phones were still only phones. Mobile devices as we now understand them were not on the horizon.

Consumers now have ready access to an increasing number and range of computer games on a variety of platforms including on mobile devices and other network services. The business model for computer game design and delivery is increasingly moving to mobile and online markets.

Although the NCS was not established to cater for the classification of these types of computer games the definition of computer games under the Classification Act includes games played on mobile devices and online.

The numbers of mobile device and online games that are currently being introduced into the Australian market presents many practical challenges for regulators.

At present the significant majority of mobile device and online computer games are not classified prior to being made available to consumers. This is in breach of a range of relevant state and territory laws concerning the sale, demonstration, and advertising of computer games.

If the present legal requirements were enforced, the Classification Board in its present form would be unable to sustain the administrative burden that would be imposed. It would also result in significant compliance costs for industry, and may threaten the existence of smaller operators.

This presents a significant compliance issue for the NCS. Industry has expressed concern over this regulatory uncertainty and expressed the need for Government to clarify the present legal requirements for the classification of mobile device and online games.

The Government is committed to ensuring that our classification system maintains community confidence. That is why the Australian Law Reform Commission has been asked to conduct a review of classification in Australia in light of changes in technology, media convergence and the global availability of media content. As part of this review the Commission is considering the best way to classify computer games, however, any solution arising out of the Commission process is still some time away.

This Bill is intended to provide an interim solution to address concerns that have been raised by industry and the Director of the Classification Board about the legal requirements and obligations for the classification of computer games that are playable online and on mobile devices.

This Bill will result in mobile device and online games being treated in a similar way to other online content. It is designed to provide assurance to industry in the short term that it is complying with classification requirements for computer games and that it is not in breach of state and territory laws.

This Bill will introduce a new category of exempt online games into the Classification Act for a period of two years. Games that meet the definition of an ‘exempt online game’ will not need to be classified. This exemption will not be available for those online games that are likely to be refused classification. This includes games that would offend against the standards of decency, morality and propriety generally accepted by reasonable adults. Current safeguards relating to computer games that would be refused classification will be preserved, including offences in state and territory legislation against the sale, advertising, and demonstration of these games, as well as offences in some jurisdictions against the online transmission of material likely to be refused classification.

The term ‘exempt online game’ will be defined to include two different categories of computer game. The first type covers computer games that are only available by means of a content service and can only be played on a mobile device onto which they have been installed. This is intended to cover computer games that are downloaded via the internet and installed onto a mobile device. The term ‘mobile device’ is defined as ‘a device that is designed to run a mobile operating system’. Examples of mobile operating systems include, but are not limited to Apple iOS, Google Android, Microsoft Windows Phone 7, Nokia Symbian, Research In Motion BlackBerry OS, and embedded Linux distributions such as Maemo. However, the term ‘mobile device’ excludes personal computers. This category of online game is intended to cover games played on smart phones, personal digital assistants, and tablet computers running these types of mobile operating systems. This definition captures the Apple iPad and iPod Touch, Samsung’s Galaxy Tab models, the Motorola Xoom, the Blackberry Playbook, and the Asus Eee Pad Transformer.

The second type of ‘exempt online game’ covers computer games that are only available by means of a content service and can only be played on the internet. This is intended to cover those online games that are only available to play online and cannot be downloaded and played offline. It is useful to cover these computer games although they are often hosted offshore and are therefore not currently submitted for classification in Australia.

Consumers, the general community, the computer game industry, and Government will be able to rely on a number of existing protections to exercise suitable controls over ‘exempt online games’.

Under the Classification Act, any person may submit a computer game to the Classification Board for classification upon payment of a prescribed fee. This option will continue to apply to exempt games.

Under the Broadcasting Services Act 1992 anyone may lodge a complaint with the Australian Communications and Media Authority (ACMA) about any ‘exempt online game’ that is reasonably suspected of containing material likely to cause the computer game to be classified MA 15+ or above that is not behind a restricted access system. ACMA will investigate complaints and may refer material to the Classification Board for classification.

In addition, the Director of the Classification Board will retain the power to call-in a computer game for classification if it is reasonably suspected to contain material likely to be classified M or above, or if the Director suspects that the computer game may not be an ‘exempt online game’.

Law enforcement agencies will also continue to be able to apply for the classification of an ‘exempt online game’.

People, particularly parents, need a system of classification in Australia that allows them to make informed choices about what they wish to read, see and hear. These amendments are an interim step on the way to ensuring our classification system continues to be effective in the 21st century.

CORPORATIONS (FEES) AMENDMENT BILL 2011

Today I introduce a bill to amend the Corporations (Fees) Act 2001.

The bill amends the entities which may be charged fees for the performance by the Australian Securities and Investments Commission (ASIC) of its financial market supervision functions under the Corporations Act 2001.

The Fees Act currently only allows market operators (such as licensed entities in the ASX group, and operators of a number of smaller financial markets) to be charged. This amendment would allow fees to be levied on market participants (such as stockbrokers and derivatives traders).

By way of brief background, on 31 March 2010, the Government announced its support for competition among markets for trading in listed shares in Australia. At the same time, it also announced in-principle approval of an application for an Australian market licence by Chi-X Australia Pty Ltd (Chi-X). Chi-X is expected to commence trading in competition with the ASX equity market in November 2011 or soon after, subject to satisfying a number of regulatory conditions.

The decision of the Government to support competition is a vital step in the development of Australia as a financial services centre –and a key recommendation of the Johnson report, which encouraged competitive, efficient and innovative equity markets.

What does 'financial market competition' mean?

The ASX is by far the largest market for companies seeking to raise capital by issuing shares to investors and listing on an exchange. It is also the principal market for trading shares. While other licensed financial markets operate in Australia, these markets do not currently trade ASX-listed shares. This means that shares listed on the ASX can only be traded on the ASX. With the coming of competition, ASX-listed shares can be traded on alternative markets, depending on which market has the best price.

Competition between financial markets for trade execution services in listed equities is well-established in the US, Canada and Europe, but has not been a feature of the Australian financial landscape. International experience shows that competition is expected to deliver lower transaction charges, more innovation, and maintain or improve market quality – all to the benefit of retail and wholesale investors, as well as to corporates seeking to raise capital.

As a key step towards competition, on 1 August 2010 ASIC took over market supervision from market operators. The Government's decision to implement market supervision reform provides for a single entity – ASIC – to undertake whole-of-market supervision. This is important to safeguard market integrity, as ASIC will be able to better monitor potential misconduct or manipulative activity across multiple competing markets.

To support these reforms, additional Government expenditure has been invested to support ASIC's new role and bolster its capability to undertake this role. It was intended that Government funding would be budget neutral, and would be recovered from the financial sector via fees.

As stated, a fee is currently levied on licensed market operators only. To some extent, market operators can be expected to pass on fees to participants. However a fee arrangement based on charging both market participants and market operators is in line with the Government's cost recovery guidelines and would allow a more efficient and equitable allocation of ASIC's market supervision cost burden – especially given that a significant portion of ASIC's costs in providing market supervision functions are attributable to interactions with market participants.

The bill does not set out details of the proposed changes to the current cost recovery arrangements; these details will be prescribed in the Corporations (Fees) Regulations 2001 (the Fees Regulations). This bill simply provides the legislative basis to enable new cost recovery arrangements, which will apply to both market operators and market participants, to be made through the Fees Regulations.

In the coming months, the Government will consult closely with industry on the details of the proposed cost recovery fee model and arrangements before implementing regulations to finalise the cost recovery model. The details will be set out in a Consultation Paper: Proposed financial market supervision cost recovery model, to be released shortly.

The draft Fees Regulations will also be exposed for industry comment in the coming months. It is intended that the proposed market supervision fee model, applicable to both market operators and market participants, will apply from 1 January 2012.

In accordance with the Corporations Agreement 2002, the Legislative and Governance Forum for Corporations (meeting as the Ministerial Council for Corporations) has been consulted in relation to the bill, and will be further consulted regarding the proposed cost recovery fee model and arrangements.

Summing Up

The ability to impose fees in relation to ASIC's market supervision activities on both market operators and participants is central to the design and implementation of a fair, transparent and efficient market supervision and cost recovery framework.

Such a framework is vital to our efforts to support efficient and innovative equity markets in Australia and will ensure that Australia has the right financial market infrastructure capabilities to respond effectively to the challenges of a dynamic market place.

The Australian government has a long-standing commitment to competition in financial services. Competition in Australian equity markets can deliver benefits through innovation, efficiency and reduced costs. This bill is the next milestone along the path to competition.

PERSONAL PROPERTY SECURITIES AMENDMENT (REGISTRATION COMMENCEMENT) BILL 2011

The Personal Property Securities Amendment (Registration Commencement) Bill 2011 amends the Personal Property Securities Act (PPS Act) to ensure that the PPS Act does not commence operating before the PPS Register can be made available for public use.

The PPS Register will be the single national online register of personal property securities which underpins this significant law reform.

The PPS Act, which was passed by the Parliament in 2009, created one national law with one set of rules governing interests in property other than land that secure debts or other obligations.

The effect of the PPS Act is to simplify over 70 Commonwealth, State and Territory laws, common law and the rules of equity, which govern security interests in personal property. It will also replace the many registers of personal property security interests that complement these State and Territory Acts, with the PPS Register.

PPS reform is a significant part of COAG’s deregulation agenda. The reform will deliver major benefits for business and consumers by reducing transaction costs, making lenders more willing to accept different kinds of personal property as security for loans and facilitating the extension of credit to borrowers.

The purpose of this Bill is to amend the definitions of the migration time and the registration commencement time so that the Attorney-General can determine a time other than the default times in the PPS Act.

If the Attorney-General does not determine an earlier time, the migration time will be 1 January 2012 and the registration commencement time will be 1 February 2012.

This amendment will enable the Attorney-General to determine another time for both the migration time and registration commencement time which could be earlier or later than the default times in the PPS Act.

The ability to determine the commencement of the PPS register will assist Government to ensure that stakeholders have confidence that the online PPS register will operate effectively.

CONCLUSION

A comprehensive and consistent national PPS system will benefit many sectors in the Australian economy. These reforms will streamline the way in which lenders conduct their businesses, facilitate the extension of credit to borrowers and reduce borrowing costs. I am pleased that the Government is very close to this reform becoming a reality.

Ordered that further consideration of the second reading of these bills be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.