Key pointsApproach to Consumer Affairs: Importance of strong Commonwealth leadership, while working closely with state and territory governments. Product safety review: Productivity Commission report recommended one single, national regulator (ACCC) and consumer product safety law (TPA). Launch of the Australian Guidelines for Electronic Commerce: will enhance consumer confidence in doing business online. Australian Consumer Fraud Taskforce: Current campaign Delete It! Hang Up! Destroy It! Encourage audience to ask public to report scams. Component pricing: Encourage audience to comment on exposure draft. Financial Literacy Foundation: New programmes offer financial literacy in schools and in vocational education. |
Good morning, and thank you for the opportunity to talk to you today.
I'd like to congratulate Consumer Affairs Victoria for providing this opportunity to discuss issues of importance to all of us.
The 2006 Commonwealth Games make this an exciting time to be in Melbourne.
Sport and consumer affairs share some common values. I'm talking about the quintessential Australian ideal of fairness... Our contempt for cheating in any form...
And the importance of working together in effective partnerships, as symbolised so aptly by the image of the relay team on the Congress programme.
So it's fitting that Consumer Affairs Victoria is working with the Office of Commonwealth Games Coordination to ensure that Games visitors, and other consumers, are treated fairly.
I'd like to commend both Consumer Affairs Victoria and the Office of Commonwealth Games Coordination on this great initiative.
Commonwealth role in consumer affairs
As you would know, I've been in the Treasury Ministry for 15 months. I'm particularly enthusiastic about my consumer affairs responsibilities.
And I'm firmly committed to strong Commonwealth leadership in consumer affairs.
To give you just two examples of Commonwealth leadership in action...
We are leading both the Consumer Product Safety Review being conducted by the Ministerial Council on Consumer Affairs or MCCA and the development of a MCCA research agenda.
As part of my commitment to Commonwealth leadership, I'm working closely with my state and territory counterparts in MCCA to achieve sound, nationally consistent results for all Australians.
In particular, I'm focusing on solutions that will boost the confidence of Australian consumers.
I can't overstate the importance of consumer confidence to our economy.
In Australia, consumer spending represents about 60 per cent of Gross Domestic Product. A small change in consumer confidence up or down can have a significant effect on our national economy.
Confident consumers encourage businesses to compete against each other to provide Australians with the widest possible range of safe, high-quality products, at the most attractive prices.
Confident consumers are more willing to participate in the marketplace. They know they are protected by the law, and have avenues for redress if things go wrong.
But at the same time, Australian consumers are being asked to make ever-more complicated choices from a rapidly growing array of products and services.
A good example of this is in the provision of financial services. As Paul Clitheroe, Chairman of the Financial Literacy Foundation Advisory Board, says:
People today know more about money than they did ten years ago, but as knowledge has improved, complexity has gone through the roof.
This is why the Australian Government is keen to help consumers become more self-reliant in their financial decision making, through improving their financial literacy.
Financial literacy offers an important way forward. It can help consumers to more fully capture the benefits offered by the modern, more complex, marketplace. And allow them to be confident about their financial decisions.
I'll talk more about financial literacy in a few minutes
Commitments
But firstly, I'd like to outline my position on consumer affairs.
I am committed to streamlining and modernising our consumer policy framework. And strengthening that framework where necessary.
Those of you who have spoken with me, or heard me speak at other venues, will know that reducing the regulatory burden, and improving regulatory efficiency, are major preoccupations of mine.
As part of my ongoing drive to simplify our regulatory system, I am also committed to working, together with my state and territory counterparts, to achieve balanced consumer regulation. And to identify and eliminate any redundant consumer regulation.
A complex regulatory system whether or not it achieves its goals will only hinder business innovation and stifle productivity growth.
And heavy-handed or inappropriate regulation can impose unnecessary compliance costs on businesses and create barriers to trade in consumer products. Costs and barriers which reduce competition and choice and raise the prices that consumers pay.
Put simply, we cannot deliver the best results for Australian consumers without a consistent national approach to consumer policy... and one that takes full account of the costs as well as the benefits of regulation.
In line with my strong belief in effective partnerships, I also believe it's the shared responsibility of consumers, businesses and governments to respond to consumer challenges.
Rather than regulating unnecessarily, I will seek self-regulatory and co-regulatory solutions to consumer challenges, where these promise to be effective.
Consumer Product Safety Review
Many of you would have been present when I gave the opening address to the Consumer Representatives' Forum here in Melbourne last June.
Since then, the Australian Government has undertaken several important initiatives in the consumer affairs field.
Perhaps most important, is our work to ensure that our consumer policy framework remains relevant to the challenges faced by Australian consumers.
While our consumer policy framework is long-established, the growing complexity of the marketplace means there's an ongoing need to ensure that it can and will stand the test of time.
The current review of Australia's consumer product safety system will help us achieve that goal. The review is being conducted by MCCA and is being led by the Australian Government.
Like Australia's overall consumer policy framework, our consumer product safety system has a long and proud history. But, like most things, it also has to adapt to meet new challenges.
The review is considering ways to harmonise consumer product safety regulation, administration and enforcement across Australia... to improve our ability to proactively prevent injury and harm... and to enhance the information and research which an effective product safety system depends on.
In seeking to achieve these goals, we are mindful of the need not to impose an undue or unnecessary regulatory burden on businesses. We also recognise that good product safety outcomes are the shared responsibility of consumers, businesses and governments.
To inform MCCA's review, in March last year I commissioned a Productivity Commission research study into options for reforming Australia's consumer product safety system.
The ten-month study, endorsed by MCCA, has examined the impacts of a range of reform options raised in MCCA's public discussion paper for the review.
The Productivity Commission's report, released on 7 February, makes a case for a new national approach to improve our consumer product safety system.
Commissioner Robert Fitzgerald, who is speaking to you later today, said:
The current consumer product safety system is delivering a reasonable level of product safety. But there are significant regulatory inconsistencies between governments that reduce the efficiency and effectiveness of the system. These should be addressed.
To remedy the problems caused by these regulatory inconsistencies, the Productivity Commission has recommended that consumer product safety be regulated under a single, national law the Trade Practices Act.
And that this law should be enforced on a consistent, national basis by a single regulator the Australian Competition and Consumer Commission.
More broadly, the Productivity Commission found that there is considerable scope to make consumer product safety regulation more efficient, effective and responsive.
In addition to recommending the introduction of a single national law and regulator, the Commission has proposed that the consumer product safety system be improved in four significant ways.
Firstly, by developing a broadly-based hazard identification system for Australia, based on a national clearinghouse for information and analysis on consumer product incidents. And by consistently making hazard identification and risk management more central to regulation and enforcement.
Secondly, by introducing a new requirement for suppliers to notify the regulator of products associated with serious injury or death.
Thirdly, by conducting a comprehensive baseline study of consumer product-related accidents.
And finally, by ensuring that bans and compulsory recalls of unsafe consumer goods can be undertaken when the goods are unsafe as a result of reasonably foreseeable use.
I look forward to working with my state and territory Ministerial colleagues to further enhance Australia's consumer product safety system. And I know that our efforts will benefit considerably from the excellent work undertaken by the Commission.
Launch of the Australian Guidelines for Electronic Commerce
I mentioned earlier that consumer confidence is a key driver of economic growth. This is particularly true in the case of electronic commerce.
Buying goods and services online is an everyday experience for many Australians. Consumers' growing confidence in shopping this way has been fundamental to the growth of electronic commerce and the flow-on benefits to consumers and businesses.
The benefits for consumers include greater choice, convenience and information. Australian businesses have the opportunity to develop new markets and stronger customer relationships.
To further enhance consumer confidence in doing business online, this morning, I'm delighted to launch the Australian Guidelines for Electronic Commerce.
The Guidelines provide guidance to businesses on how to deal with consumers when engaged in business-to-consumer electronic commerce.
The voluntary principles set out in the Guidelines focus on several important areas where the consumer experience of electronic commerce differs from the traditional retail environment.
These areas include the way information is provided to consumers, security of payments, privacy of information and access to redress.
The Guidelines update and replace the Australian E-commerce Best Practice Model, which the Australian Government released in May 2000.
They are accompanied by a ready-reference sheet for businesses, which highlights key issues addressed in the Guidelines.
The Guidelines have been developed in consultation with the Commonwealth Consumer Affairs Advisory Council. The Council's responsibilities were extended in 2005 to include matters relating to consumer use of electronic commerce.
At this point, I'd like to thank the Commonwealth Consumer Affairs Advisory Council for its assistance in developing the Guidelines.
The Guidelines and reference sheet for businesses are available on the Treasury website.
Australasian Consumer Fraud Taskforce
While online shopping and banking have opened up new markets, and save consumers time and money, unfortunately, e-commerce also has a downside for consumers.
I'm talking, of course, about those scam emails which are designed to look as though they come from your bank, and ask for your account details.
And I'm sure all of you here today are only too aware of the other scams which have been doing the rounds lately.
Like the lottery where you win, even though you never bought a ticket... The advance fee frauds, like Nigerian letters and prize merchandise offers... Not to mention cold-calling investment schemes, where the consumer receives a call or email out of the blue offering them an investment opportunity.
As those who work at the frontline of consumer affairs, I'm sure all of you have seen first-hand the devastating effects that scams like these have on people.
That's why the Australasian Consumer Fraud Taskforce was launched a year ago. Chaired by the ACCC, the Taskforce includes 18 agencies including every state and territory consumer affairs department, plus the New Zealand Ministry of Consumer Affairs.
The brief of the Taskforce is to work collaboratively to enhance the Australian and New Zealand Governments' enforcement activity against frauds and scams. And also to create a yearly co-ordinated information campaign for consumers.
The Taskforce has just completed a four-week awareness campaign with the theme Delete It! Hang Up! Destroy It. Because ultimately, the best way of combating consumer fraud is to educate people to change their behaviour before they get caught out.
In a wonderful example of a public-private sector partnership, the Australian Bankers' Association and the Credit Union Industry Association joined forces with the campaign.
They have both issued statements which provide a clear message to consumers their members will never send you an email asking for personal security details.
I applaud the ABA and the CUIA for taking yet another step to support consumer protection.
The members of the Taskforce are working closely with one another to gather information about scam operations, track them down, and hold them to account.
To help us in this task, I would ask you to encourage members of the public to report scams via the Scamwatch website or by calling the telephone hotline.
Component pricing
In another step forward for consumers, we are cutting through the confusion on component pricing.
I recently released an exposure draft amendment to the Trade Practices Act which will require businesses to specify in a prominent way and as a single-figure, the total minimum price in their advertisements.
This will put an end to the confusion consumers experience when, for example, they find the advertised price of their cheap air tickets didn't include a host of other charges.
The new rule will also allow consumers to easily compare similar products and services on the basis of total price.
I would encourage you to consider the proposed amendment, which is also on the Treasury website. Treasury officials will be engaging in formal consultation with a range of business and consumer stakeholders.
Consumer policy research
Earlier, I mentioned my ongoing commitment to developing consumer policy that remains relevant to the challenges that face both consumers and business.
That's why I'm keen to see further research carried out to ensure that Australians benefit from world's best practice consumer policy.
To help us achieve this objective, MCCA, under the leadership of the Australian Government, is developing a consumer policy research agenda.
It is not intended that such research would replace the policy-specific work currently undertaken by MCCA. Instead, the proposed independent research is intended to supplement such work and support policy decision-making.
Our end goal is to improve the operation of markets in consumer goods and services.
Financial Literacy Foundation
Turning now to the work of the Financial Literacy Foundation...
The Australian Government established the Financial Literacy Foundation to help all Australians increase their financial knowledge. And to help them better understand their options, and the choices they can make in using and managing their money.
Although most Australians see the value of better managing their money, they often don't know where to start. Financial literacy can give them the confidence and ability they need to make informed financial decisions.
2006 will be a landmark year for financial literacy in Australia.
The Foundation will take forward a national strategy to deliver the Australian Government's commitment to help Australians to make more informed financial decisions and better manage their money.
The national strategy includes an Australia-wide information and awareness-raising campaign which will be launched in April and run for six months. The national strategy also includes substantial research a key element of that is a longitudinal study to benchmark and measure financial literacy levels in Australia.
As well, the Foundation is developing a financial literacy website with information for consumers and resources for educators.
Financial literacy in schools
The Foundation will also foster the development of financial literacy programmes in schools and workplaces, as well as in vocational and higher education.
As the Assistant Treasurer, Peter Dutton said:
From school children to retirees, better financial knowledge and understanding will help all Australians to make better choices about managing money and debt.
We made an important advance in consumer education in November last year with the release of the National Consumer and Financial Literacy Framework for schools.
The framework was developed by a working party established by the Ministerial Council on Education, Employment, Training and Youth Affairs. The working party included broad representation from consumer affairs agencies and the education sector, as well as the Financial Literacy Foundation.
Through this Framework, all Australian schoolchildren will have access to financial literacy education during their compulsory years at school. This will give them a sound basis for the financial decisions they will face in adult life.
It's important that we recognise it's never too early or for that matter, too late to learn how to make more informed decisions as consumers. And to develop the skills we need to make our hard-earned money go further.
Financial Literacy in Vocational Education
The national strategy to improve financial literacy goes beyond improving the financial education of young Australians. The Financial Literacy Foundation is also working collaboratively to make inroads into the vocational education sector.
The Foundation is currently working with the Master Builders Association in the ACT. This pilot programme will see 200 apprentices and cadets receive training in financial literacy skills.
As David Dawes, Executive Director, Master Builders Association of the ACT, pointed out:
Many of our apprentices will be self-employed within three years of completing their trade qualifications. And with strong financial skills in both their personal and business lives they have a far greater chance of success.
This is the first time the Foundation has worked with an industry association to deliver financial literacy programmes tailored to the needs of new industry entrants.
The Foundation will continue to work collaboratively with industry associations, enterprises, individual employers, and other stakeholders to advance the introduction of financial literacy programmes into vocational education and Australian workplaces.
Public, community and private partnerships
As I've stated before, I'm a strong advocate of productive partnerships.
So I have been heartened to see the many contributions the public, community and private sectors have made to financial literacy over the last year.
Many high-profile financial institutions have put their money where their mouth is so to speak and are working in partnerships to foster real improvements for Australians on low incomes.
For example, last November, the ANZ Bank adopted a responsible lending code the first bank in Australia to do so. The code includes not offering credit card limit increases to vulnerable customers, or those on fixed incomes.
Through another initiative, the Saver Plus programme, the ANZ Bank and its community partners the Brotherhood of St Laurence, The Benevolent Society and The Smith Family have helped over 700 low-income families to develop a long-term savings habit, improve their financial knowledge and save for their children's education.
As part of the programme, ANZ provided funds to match over $800,000 saved by participants.
As well, through the ANZ's MoneyMinded programme, over 400 financial counsellors and community educators have been trained to deliver the Bank's financial education programme around Australia.
Other financial institutions have also stepped up to the plate.
For example, the Commonwealth Bank established the Commonwealth Bank Foundation to encourage developments in education, with a focus on improving the financial literacy skills of young Australians. The Bank also runs a Dollars and Sense website to increase financial literacy amongst Australian teenagers.
At the primary school level, Citibank developed the Finance Firs programme together with the YWCA. Finance First is the first curriculum-based financial literacy programme for primary school children in Australia, as well as the first financial literacy programme to simultaneously target children and adults.
Then there's HBSC's long-standing partnership with the children's charity Barnados to provide tutoring and mentoring for kids in need.
It's wonderful to see so many high-profile financial institutions helping out ordinary Australians.
I would like to commend these institutions for their commitment to corporate social responsibility. These projects are sterling examples of what can be achieved through effective partnerships.
Conclusion
Ladies and gentlemen, everyone in this room wants the same thing.
We all want a financially literate Australia.
We all want confident consumers who can contribute to a strong economy.
We all want a cohesive and nationally consistent consumer policy framework.
And like the sportsmen and women going for gold at the Games, we all have a role to play.
For my part, I can assure you that I will continue to work together with my state and territory counterparts towards making this vision a reality.
And I would ask everyone in this room, whether you are from the public, private or community sector, to continue working together collaboratively to get the best results for Australian consumers and for Australia.
Thank you, and I hope you all have an enjoyable and productive time at the Congress.