The Parliamentary Secretary to the Treasurer, The Honourable Chris Pearce, today asked the Productivity Commission to undertake a research study into Australia’s consumer product safety system.
The study, endorsed by the Ministerial Council of Consumer Affairs (MCCA), will examine the impacts of various reform options of the Australian consumer product safety system as set out in the MCCA discussion paper, Review of the Australian Consumer Product Safety System.
While all the reform measures in the discussion paper seek to improve the product safety system, they can have different impacts on injury prevention, consumers, business, governments, and the market. The net benefit or cost of a measure to the community can be difficult to judge. The Productivity Commission study will allow governments better to assess reform options for possible implementation.
Agreeing to the establishment of the Productivity Commission study signals the high priority the Australian Government places on developing safer and more efficient consumer product markets. It also demonstrates the active and comprehensive nature of the current examination of Australia’s consumer product safety system.
The final report of the Productivity Commission will not be available until the end of the year. In the meantime the Government will continue to work with state and territory governments as well as business and consumer groups, to fine tune reform options towards the objective of achieving a world’s best practice product safety framework.
The terms of reference for the study are attached.
Further information on the study can be obtained from the Productivity Commission’s
website at:
www.pc.gov.au or by contacting
the Commission directly on
(02) 6240 3239.
CANBERRA
16 March 2005
Contact: Gillian Harvey 03 9887 3890 or 0411 567 060
REVIEW OF THE AUSTRALIAN CONSUMER PRODUCT SAFETY SYSTEM – IMPACT OF REFORM OPTIONS
PRODUCTIVITY COMMISSION ACT 1998
The Productivity Commission is requested to undertake a research study to examine the impacts of options for reforming Australia’s general consumer product safety system. The system consists of the product safety provisions contained in the Trade Practices Act 1974 (the TPA) and equivalent provisions in state and territory Fair Trading Acts, along with the administration and enforcement of these provisions and other non-regulatory activities conducted by governments to achieve consumer product safety objectives.
The primary purpose of the study is to inform the Review of the Australian Consumer Product Safety System currently being undertaken by the Ministerial Council on Consumer Affairs (MCCA). The reform options to be examined in the study include those set out in the public discussion paper for the review, released by MCCA on 27 August 2004. The MCCA options include:
- a general legal obligation for businesses to market only safe consumer products;
- a revised definition of unsafe goods;
- revisions to the regulatory coverage of services and second-hand goods;
- the provision of improved product safety information to businesses and consumers;
- new requirements for businesses to monitor and report on the safety of their products;
- the establishment of product hazard early warning information systems;
- the linking of product safety information systems;
- increased government and industry funding of product safety research;
- a requirement for businesses to recall unsafe products;
- a government power to audit product recalls;
- measures to harmonise product safety legislation, administration and enforcement; and
- measures to enhance the making of product safety regulation decisions by the Australian Government.
In undertaking the study the Commission is to:
- assess the extent to which Australia’s consumer product safety system is able to achieve its objectives, as outlined in the public discussion paper. This includes assessing the system’s ability to address market failures which affect the safety of consumer products in Australia
- examine the direct and indirect economic and social costs and benefits of each reform option, in addition to the costs and benefits of retaining the current consumer product safety system. This work is to include: examining the distribution of costs and benefits amongst businesses, consumers and governments; assessing the impacts on small businesses and families; and evaluating the net community impact of each option. The examination of costs and benefits is to include the impact on competition and international trade of each option, as well as their impact on economic integration between Australia and New Zealand
- have regard to the submissions made in response to the MCCA discussion paper and consult as necessary with those who made submissions and other interested parties, including state and territory product safety administrators.
The Commission is requested to produce a report within 10 months of commencing the study and to provide a draft report by July 2005.
CHRIS PEARCE