Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I seek leave to put a brief statement on the record.

Glenn Sterle (WA, Australian Labor Party, Shadow Minister for Infrastructure, Transport, Cities and Regional Development (Senate)) Share this | Link to this | Hansard source

Leave is granted.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Regrettably I wanted to participate in the committee stage of the previous debate, on the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018, but I was in the chair. I had some questions surrounding Senator Storer's amendment. I wasn't able to pursue them, but I just wanted to get it on the record that that was the reason for my lack of participation.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. Labor has always been on the side of consumers. It was Labor that introduced the Trade Practices Act in 1974 and Labor that created the new Australian Consumer Law in 2010. It was a Labor federal government which, in negotiating the 2009 intergovernmental agreement on Australia's consumer protection arrangements—which preceded the Australian Consumer Law—built in a requirement that the new laws be reviewed within seven years. The Australian Consumer Law review was commissioned in 2015 and issued an interim report in December 2016, with its final report to federal, state and territory consumer affairs ministers submitted in March 2017. When these ministers met for their annual meeting in August 2017, they agreed on 15 recommendations for implementation, while referring a number of the other recommendations for further review, consultation or policy work.

Labor supports this bill because it clarifies, corrects and strengthens Australia's consumer protection and product safety regime. The measures in this bill have been agreed by state and territory consumer affairs ministers, consulted on extensively both through the review process and in an exposure draft, and are so uncontroversial as to be almost boring. But these measures do not fully implement all the provisions agreed by the government with the states. Of the 15 recommendations agreed to, 10½ are in this bill, one has been legislated in a previous bill, and two will presumably be enacted through regulations.

The measures in the bill are important, sensible and measured. They include provisions easing evidentiary requirements for private litigants through an expanded follow-on provision, enabling them to rely on admitted facts from earlier proceedings; amending the ACL and the ASIC Act to extend unconscionable conduct protections to publicly listed companies; amending the definition of 'unsolicited services' to allow the false billing provisions to apply to false bills for services not rendered; clarifying that the unsolicited selling provisions can apply to public places; enhancing price transparency in online shopping by requiring that any additional fees or charges associated with preselected options are included in the headline price; strengthening the Australian Competition and Consumer Commission powers to obtain information about product safety by broadening the power to apply to any person, including a consumer likely to have relevant information rather than just the supplier; enabling regulators to use existing investigate powers to better assess whether or not a term in a standard form contract may be unfair; and amending the ASIC Act to clarify that all ACL-related consumer protections that already apply to financial services also apply to financial products.

Three other proposals agreed by the federal, state and territory consumer affairs ministers have been or are expected to be implemented through other legislative vehicles. These include ACLR proposal 18, to increase maximum financial penalties available under the ACL. Labor took this policy, a tenfold increase in maximum penalties for anticonsumer conduct, to the last election, and we have been calling on the Turnbull and now Morrison government to implement it as a matter of urgency. We were pleased when the government announced that it would adopt Labor's policy in the 2017 budget. Legislation to implement the increased penalties was introduced into this house on 15 February this year.

While we welcome this progress, 1½ proposals agreed by federal, state and territory ministers remain outstanding. The second half of one proposal, relating to unsolicited selling, is nowhere to be seen, while another recommendation to strengthen product safety recalls was featured in the exposure draft but removed from this bill for reasons known only to the assistant minister. This includes an important reform contained in ACLR proposal 7 to clarify and strengthen voluntary recall requirements by introducing a statutory definition of 'voluntary recall' and increasing penalties for failure or refusal to notify a voluntary recall, proportionate with other ACL penalties. These proposals were included in the exposure draft of this bill; however, they have been excluded from the bill as presented to the parliament. The government has not told us why or what happened to it. We don't know if the government has abandoned the change, contrary to the agreement it struck with states and territories last year, or if, like so many other consumer reforms, it has just kicked it off into the long grass.

This is not unusual behaviour from this government. The coalition is yet to explain why it took six months for a compulsory recall of deadly Takata airbags, leaving millions of ticking timebombs on our roads. The potentially lethal airbags have been found to have misfiring inflators capable of firing shrapnel through a vehicle's cabin, risking life and limb of the driver and passengers. They can turn a minor accident into a fatal crash. Missing Takata airbags are believed to have killed over 20 people worldwide, including at least one Australian. The alpha airbags have been identified as particularly dangerous, with a failure rate of one in two compared to a failure rate of one in 400 for other Takata airbag models. As early as August 2017, the Australian Competition and Consumer Commission told the House Standing Committee on Economics that the risks associated with Takata alpha airbags were such that they must be replaced immediately. ACCC chairman Rod Sims also revealed that, as the Takata recall was voluntary at the time, there was little enforcement action they could take to ensure everything possible was being done to replace the airbags. The following day, Labor called for the then minister responsible for product safety, the current Deputy Prime Minister, to use his emergency powers under section 132J of the Competition and Consumer Act 2010 to issue an immediate, compulsory recall for Takata airbags. This was done amid growing concerns about the inadequacy of the voluntary recall process and the renewed urgency around the alpha-type airbags. Then what happened? It took another six months, until February 2018, for a compulsory recall to be issued. What was the then Minister McCormack waiting for?

Maybe those opposite don't want to change the law around recalls, because they would prefer to bury their heads in the sand when it comes to product safety for Australian consumers. This is emblematic of the government's half-hearted approach to improving Australia's consumer protections and its constant duckshoving of the portfolio between different frontbenchers. Those opposite make the right noises, rolling around consumer reforms that are already in train through reviews that Labor started, but in the end they always squib it. We have seen the government drag its feet with the payday lending reforms, we have seen it try to flummox consumers around measurement labelling and we have seen nothing but talk in relation to improving consumer protections for retirement home residents. Labor, on the other hand, will always work to improve outcomes for Australian consumers, with or without the government.

Rex Patrick (SA, Centre Alliance) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. I wasn't planning to speak on this bill. However, I observed some quite thoughtful and considered filibustering, particularly from those in the coalition, on other bills this week, so I'm sure the public will be pleased to see such considered debate on legislation that has bipartisan support.

Centre Alliance supports this legislation, which makes a number of amendments to the law to clarify and strengthen consumer protections. I won't be going into any further details about the provisions of the bill, as that's been fairly well covered, but I do want to take the opportunity to speak about an issue that relates to consumer protection, specifically protection for consumers from monopolies.

Many of you would be aware that the ACCC recently approved CKI's takeover of the APA Group. Senator Molan stood up in the chamber the other night and made a considered and measured statement in a speech on the adjournment debate which represented some people within the coalition and sent a signal to others within his party—although I'm not in any way suggesting that is the position of the party. Senator Molan's contribution—unsurprisingly, noting that he's a former general—focused on the national security concerns with the project. I share his concerns, but noting he's already traversed that topic and it's not relevant to consumer law, I'll steer clear of this aspect and focus on competition.

I have to put it on the record that on 3 July this year I wrote to the then Treasurer, Mr Scott Morrison, requesting that he exercise his powers under the Foreign Acquisitions and Takeovers Act to prevent this takeover from occurring. On 12 September, I wrote to the current Treasurer, Mr Josh Frydenberg, setting out the same concerns and suggesting that on balance the takeover should not be allowed to proceed. APA Group own 15,000 kilometres of gas pipelines across Australia that keep gas-fired power stations running, keep large gas-energy users in operation and provide domestic customers with gas. In the 2016 ACCC east coast gas market report, the ACCC indicated that there was 'evidence that a large number of existing pipelines have been engaging in monopoly pricing'. The ACCC did not name APA Group, but it is clear that they are the dominant gas player in the east coast market.

Switching to a recent electricity report, we note that in the ACCC's 2018 retail electricity pricing inquiry report the ACCC made a recommendation on the need for constraints on some further consolidation on generation ownership, given the existing levels of concentration in the market. They went so far as to recommend constriction on further concentrations beyond certain levels and mechanisms to force divestiture of assets or market share in particular circumstances.

There's a considerable economic concern for consumers in respect of APA's current east coast gas pipeline monopoly status. East coast businesses and consumers have only just finished experiencing the tops of gas prices, but they are still way too high. We certainly don't need any sort of reversal in our gas price fortunes. If this deal went ahead, particularly giving it reference to my constituents back in South Australia, we would see CKI in charge of 95 per cent of SA's electricity transmission arrangements—its wires, because they also own SA's power networks—and 85 per cent of its gas transmission infrastructure. The Grattan Institute's energy expert, Tony Wood, was quoted in the Australian Financial Review on 15 June as saying, 'You add APA to CKI and you get the mother of all gas monopolies; it will sit like a gorilla across the Australian landscape.' I note that he did go on to say, 'That doesn't necessarily mean that it shouldn't be approved, but it will be the ultimate test of our regulatory model.'

As we 're adjusting these laws, I want to suggest that the current regulatory framework also needs strengthening in other areas. Unfortunately, because of the way the law is defined, the ACCC was not able to recommend against the takeover because it was not creating a monopoly, simply preserving one. In my view, that's not good enough. Australia has many concentrated markets that are dominated by a few very big businesses, and our current competition law exists to prevent anticompetitive behaviour and misuse of market power. However, the ACCC is powerless to act if the transaction doesn't change the composition landscape.

We need to concentrate on the end state here. The consumer laws are designed to protect us against monopoly situations. We do not let companies merge to get to a monopoly situation. Once again, that is recognition that the end state is a bad place. So we shouldn't also let a circumstance develop where, in this case, a foreign entity, but perhaps even a domestic entity, is permitted to buy into a monopoly where the end state already exists. Perhaps there's a way of, in some sense, regulating against monopoly status by making sure boards understand that if they get to a point where they do have that monopoly status, there is a risk that when they sell the company the ACCC will order it to be broken up in some way. In some sense the CKI model does that, because the ACCC said to them, 'You simply cannot conduct this takeover if you retain existing pipelines in Western Australia,' because that would have increased the monopoly status. I would like to bring that to the attention of the chamber. When we're considering consumer laws, we act to protect consumers—that's the responsible thing to do. We need to think about how we protect from the end state of a monopoly supplier.

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I'm delighted to rise to assist the Senate in its careful consideration of the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. I was listening carefully to the contribution made earlier by Senator Cameron. He said that this bill was so uncontroversial as to almost make it boring. I have two observations to share about that. Firstly, I would say that, clearly, Senator Cameron is his own harshest critic, because I didn't find his contribution to be boring at all. In fact, I thought it was a very good contribution. I would encourage him to be less harsh on himself in the future. Secondly, I say to Senator Cameron: challenge accepted. I hope in my contribution to this debate I'm able to maintain his and other senators' interest in this important piece of legislation.

One thing which I thought might be helpful in the consideration of this bill is to go through the key schedules in the bill. Schedule 1 is the admissions of fact, which relates to proposal No. 17 in the ACL review. This measure amends the Australian Consumer Law to ease evidentiary requirements for litigants through expanded follow-on provisions, enabling litigants to rely on admitted facts from earlier proceedings. This change addresses some of the difficulties that consumers and small businesses face when taking court action against traders under the Australian Consumer Law after the ACCC has already established a breach of law through the courts. Currently, what happens is that findings of fact made by a court in certain proceedings against a person may be used in certain other proceedings against that person under the ACL. This measure extends these existing follow-on provisions so that private litigants will now also be able to rely on admissions of fact made by the respondent in earlier proceedings as well as findings of fact.

An admission of fact brought across using this mechanism is not treated as conclusive proof in the new proceedings. It is prima facie evidence, which means that the respondent still has the opportunity to present evidence to rebut it. The measure will give consumers a better chance at successfully pursuing their rights against traders in court. The change will promote consistency with similar follow-on provisions in the competition law.

Turning now to schedule 2 of the bill, it's the listed public companies section of the bill, which relates to proposal No. 9 from the ACL review. The measure extends the unconscionable conduct provisions in the ACL and in the Australian Securities and Investments Commission Act 2001 to include publicly listed companies. The existing exclusion of publicly listed companies sought to confine the unconscionable conduct protections to those traders likely to lack the size and bargaining power to protect their interests. Public listing was seen as a reasonable indicator of a trader's size and ability to protect its own interests. However, public listing is not necessarily a reflection of a trader's size, level of resourcing or its ability to withstand unconscionable conduct. Where there is a significant imbalance in bargaining power, a publicly listed company could find itself subjected to conduct that is unconscionable. The unconscionable conduct provisions already protect some privately operated companies that may be, in fact, larger or better resourced than some publicly listed companies. Whether conduct is considered unconscionable will continue to be influenced by the relationship between the parties and the complainant's ability to protect their interests. The amendments improve both the clarity and the generic application of the unconscionable conduct protections by ensuring that they apply equally to all traders and support the ACL's objective of fostering effective competition and fair trading.

Schedule 3 of the bill is the unsolicited supplies part of the bill. This relates to the technical amendment A as proposed in the ACL review. This measure is a technical amendment to ensure a trader cannot demand payment for an unsolicited service that a consumer never asked for and never received. The ACL prohibits a trader from demanding payment for a service that the consumer never asked for. This is known as the false billing provision. However, the current interpretation of the false billing provision has made it difficult to enforce against suppliers of unrequested and unsupplied services, even where the supplier has falsely claimed they did actually supply the service. This measure helps to directly remedy this issue. For example, this has been a problem in the context of internet domain name services. Notices have been issued by resellers of registered domain names to traders with registered domain names asking for payment of a fee for renewal of that domain name when, in fact, it was for a variation on that domain name.

Schedule 4 of the bill relates to the unsolicited consumer agreements. That's relevant to proposal 12 in the ACL review. The ACL gives consumers certain rights when they enter an unsolicited consumer agreement. A typical example of this is door-to-door selling. This measure clarifies that those rights also apply where such an agreement is made in a public place. An unsolicited consumer agreement is an agreement which is the result of negotiations between a consumer and a dealer at a place other than the supplier's place of business. Certain other conditions need to be met, including that the consumer did not invite the dealer to come to that place. This is important because a consumer who enters an unsolicited consumer agreement gets certain rights, including a cooling off period of 10 business days, within which they can cancel their agreement. The original intention behind the unsolicited consumer agreement provisions was that public places would be covered. Nevertheless, there still has been some confusion about whether this is the case. This measure will stop that confusion. A consumer can be just as vulnerable in a public place as they are in their home or their workplace. They face the same risk of being subjected to high-pressure sales tactics and the transaction can be just as unexpected.

I now turn to schedule 5, the pricing schedule, which is proposal No. 13 from the ACL review. This measure amends the ACL to enhance price transparency by requiring that any additional fees or charges associated with preselected options are included in the headline price. This ensures that consumers are made aware from the start of the online payment process of the total possible amount they would pay if they do not opt out of the preselected options. Especially online, many traders preselect options attached to a consumer's purchase and it is up to the consumer to then deselect them before the end of the transaction if they do not want to take up these options. This has the potential to mislead consumers when they are unaware of the preselected options and do not have an adequate opportunity to opt out before proceeding to the payment. However, preselected options can be a legitimate business practice when they are not presented in a misleading manner, and this measure does not propose to interfere with that. For example, some businesses specifically offer and advertise bundled goods or services that include preselected options for the buyer's convenience. What this measure does is ensure that prices are transparent so that consumers are not tricked or surprised by hidden charges where traders preselect options on a transaction.

The next schedule, schedule 6, which is the disclosure notices relating to the safety of goods and services, relates to proposal 8 from the ACL review. This measure amends the ACL to strengthen the Australian Competition and Consumer Commission's powers to obtain product safety information by broadening the power to apply to any person, including consumers, likely to have relevant information, rather than only to the supplier. Currently, the Commonwealth minister, or an ACCC-appointed inspector, has the power to issue disclosure notices to obtain information about the safety of goods or services. However, these notices can only be issued to suppliers. Under current arrangements, the ACCC can only receive this information from third parties voluntarily. This may not always be possible or, indeed, appropriate, particularly where the third party may be subject to legal or confidentiality restrictions.

This measure broadens this power so that the minister or inspector may give disclosure notice to a third party if the minister or inspector has reason to believe that the third party is capable of giving information, producing documents or giving evidence in relation to the safety of the consumer good or product related service in question. The kinds of third parties from which the minister or inspector might require information include other traders; test laboratories; safety consultants; consumers who have purchased or have been injured by a hazardous product; or another person injured by a hazardous product. This amendment will help regulators respond to product safety issues in a more timely manner. It will also promote consistency with existing information-gathering powers for other ACL provisions.

Schedule 7 is the power to obtain information documents and evidence section, and it relates to proposal 11 from the ACL review. This measure amends the ACL and the ASIC Act to enable regulators to use their existing investigative powers to better assess whether or not a contract term is unfair. This will give the ACCC and ASIC the power they need to address the repeated or widespread use of unfair contract terms. Currently, the ACCC and ASIC are restricted in their ability to investigate compliance and take enforcement action with respect to unfair contract terms. This is because their investigative powers are triggered by contraventions, or possible contraventions, of the law. While the ACL provides a mechanism to void unfair contract terms in standard formal contracts, their use is not prohibited by the law. Therefore there are no contraventions or possible contraventions in relation to unfair contract terms.

Schedule 8 of the bill is the non-punitive orders schedule, and this relates to proposal 19 in the ACL review. This measure clarifies that a court may issue a community service order requiring a person in breach of the ACL to engage a third party at that person's expense to perform the service required in the order. A court may consider using the option when the person is in breach, is not qualified or trusted to carry out the community service itself. For example, a court could use this arrangement where a trader's conduct shows blatant disregard for the law, a trader has a history of mistreating consumers or it is evident that a trader clearly does not understand their legal obligations. An example of the type of community service order that might be made is the provision of financial counselling to consumers. Where a trader has used financial harm to low-income or vulnerable consumers, it may not be appropriate for that trader to provide such counselling. But it may be a very good outcome for the trader to engage a third party to provide the counselling. This is the kind of arrangement that this measure facilitates. This amendment will allow regulators to seek community services orders as a remedy to a breach in more circumstances because they no longer will have to rely on that trader to carry out the order but instead can now rely on a qualified third party.

Schedule 9 of the bill guarantees the supply of services, and this relates to proposal 5 in the ACL review. This measure amends the ACL to clarify the scope of an existing exemption from the consumer guarantees regime for the transport or storage of goods where those goods are damaged or lost in transit. The measure clarifies that the exemption only applies where both the consigner and the consignee are a business. The rationale behind the exemption is that, if the buyer or intended recipient of the good being transported or stored is a business, an exemption for the shipper or transporter is appropriate because the commercial buyer should have insurance or other contractual protections. This rationale does not generally hold true when the recipient is a consumer. This measure will ensure that consumers do not bear the full risk in circumstances where they have no control over the shipper or transporter. It will also ensure that consumers are clearly able to seek remedy directly from the shipper rather than relying on traders to raise issues with the shipper.

Schedule 10 is the consumer protection schedule of the bill, and relates to technical amendment B in the ACL review. The ASIC Act contains consumer protections for financial services which mirror a number of provisions in the ACL. These mirror provisions largely use imported language from the ACL. This means that, at times, the language is inconsistent with that used more generally in the ASIC Act, and may also unintentionally limit the application of certain provisions. This measure is a technical amendment to correct inconsistent terminology in the ASIC Act for financial products that involve interests in land that could unintentionally limit their application.

Schedule 11 of the bill is the consumer protections schedule in relation to financial products, and relates to proposal 16 in the ACL review. Senators will be pleased to know that it's the final schedule. This measure amends the ASIC Act to clarify that consumer protections that already apply to financial services also apply to financial products. This measure is designed to address a source of unnecessary uncertainty. The current provisions explicitly cover financial services and indirectly apply to conduct related to financial products. This is because 'financial services' has a broad definition. However, the absence of an express reference to financial products creates uncertainty. Explicitly covering financial products is also consistent with ASIC's existing approach to compliance and enforcement.

I'd like to take the opportunity to thank the opposition for their indication that they will be supporting these important measures in this bill, and to also thank Senator Patrick, who spoke on behalf of Centre Alliance, for indicating his support for the bill. I commend the bill to the Senate.

Amanda Stoker (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. This bill is a measure to clarify and strengthen consumer protections relating to consumer guarantees, unsolicited consumer agreements, product safety, false billing, unconscionable conduct, pricing and unfair contract terms.

The protection of consumers is a critical role for government. The recently debated legislation to protect the strawberry industry—I'm sure we'll see more of that today—and the safety of consumers is another demonstration of how important consumer protection is. The fact that the government has moved so quickly on that issue is demonstration of the high value it places on consumers being able to trust that which they buy in the market.

The Australian Consumer Law commenced operation as Australia's first nationwide consumer protection law in 2011, replacing provisions in 20 Commonwealth, state and territory laws on consumer protection and fair trading with a single national law. This means that, for the first time, consumers will have the same rights no matter where they live in Australia. The Australian Consumer Law, which we already have some familiarity with, includes: a national unfair contract terms law, covering standard form consumer and small business contracts; a national law guaranteeing consumer rights when buying consumer goods and services; a national product safety law and enforcement system; a national law for unsolicited consumer agreements, covering door-to-door sales and telephone sales; simple national rules for lay-by agreements; and penalties, enforcement powers and consumer redress options for when things go wrong.

This has been an important micro-economic reform that has provided quite substantial benefits to all Australians. A national and consistent approach to consumer law and policy enables all Australian consumers to enjoy the benefits of consistent rights wherever they may be, and allows all Australian businesses to obtain some efficiencies through a single and simplified national law. This makes things easier for all Australians, whether they be consumers or in business.

Well-informed, confident consumers are a vital element of a strong and vibrant economy. The introduction of the Australian Consumer Law has been good for both consumers and businesses. Consumers are more empowered, business compliance costs have reduced and there are fewer disputes. This is because having one national Australian Consumer Law means that we have cut down on red tape. For example, before the Australian Consumer Law, businesses operating in more than one state or territory had to comply with different laws, wasting time and money and creating confusion.

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Stoker, you will be in continuation upon resumption of debate. It being two o'clock we will move to questions without notice.