HOST:
For the first time ever, consumers across Australia will be protected by a national regime instead of the different State and Territory laws. David Bradbury is the Parliamentary Secretary to the Treasurer, he joins us now. Thank you for your time.
BRADBURY:
Good afternoon Warren, how are you?
HOST:
I'm well, I'm very well. I think this really makes a lot of sense, streamlining this, as do a lot of areas of policy where we probably should have more of a national approach, but let's face it, when you're talking about business, it's one country and certainly national businesses or the Internet or whatever don't know State boundaries do they?
BRADBURY:
Absolutely, and that's the primary reason why there has been momentum towards what will ultimately culminate tomorrow in the commencement of the new Australian Consumer Law. We're a seamless national economy - that's the way we should operate, and that's been the philosophy that's driven the need to try and harmonise the various State and Territory laws.
Up until midnight tonight there will be 20 separate laws around the country that deal with these consumer-related protections. As of midnight tonight, we'll move into having one national law. There are still a couple of areas that we're progressing to bring them within the new national law, but overwhelmingly, when it comes to consumer protection, matters will be dealt with under the one national law, whether you live in New South Wales, the ACT or up in Alice Springs or over in Perth.
HOST:
Yeah. The Internet is a big factor, surely, in all this? Because if I'm in Sydney and I buy something online - and I can think of a DVD company I buy a lot of stuff off, and they're based in Queensland.
BRADBURY:
Well that's right, and the compliance costs for business are enormous when you think about it. If you're a company operating across State and Territory borders, as so many companies are these days, and you can do that easily operating a small business out of your own home, you could have the capacity to reach all corners of Australia and beyond. But the compliance costs of ensuring that you are complying with all of those laws are a huge cost. The Productivity Commission has estimated that with these new changes that there could be anything up to $4.5 billion in savings nationwide as a result of productivity improvements.
HOST:
Better efficiency, better productivity as you say. What about the consumer though, is there any areas where they potentially might lose some rights in some States as everything's made the same?
BRADBURY:
Look, that's always a concern where you need to harmonise, but I think that, overwhelmingly, the system we have in place is a stronger one, not just because the laws provide the necessary protections, but also the enforcement powers that regulators have are stronger. Those areas where the laws do intervene, the regulators will have unprecedented powers, and that's in New South Wales, the Department of Fair Trading and at the national level we have the ACCC. All of the regulators across the country will be working very closely to make sure that consumers do have the back up they need.
HOST:
So we're talking about unfair contract terms as one of the areas being covered by this, as an example would this cover mobile contracts and things like that where there may have been problems with - I'm not saying anyone's had unfair contracts per se but there may have been problems with compliance across different States?
BRADBURY:
Certainly mobile phone plans would fall within these new provisions. What we need are standard consumer agreements, so the sorts of agreements you normally enter into with a mobile phone plan you don't really have the opportunity to negotiate those agreements. They're standard form agreements, you go in and they're presented to you and people sign away. Where there are conditions that are imposed as part of these contracts that are deemed to be unfair, a tribunal or court will have the power to strike them out. Now these laws have been in force in some jurisdictions for a little bit of time now, but the first of January - tomorrow - will see the commencement of a nationwide approach to unfair contract terms.
HOST:
Another one that comes to mind, and we hear the disclaimer at the end of a lot of advertisements for that matter, terms and conditions apply, see in store for details, would be when they've got those finance offers as well.
BRADBURY:
That's right, and a number of the elements of the Consumer Law do also affect finance arrangements and agreements. We saw a bit earlier this year, as a matter of fact, with the introduction of the unfair contract terms provisions, we saw ASIC release a discussion paper which gave some guidance on mortgage exit fees and the extent to which institutions were able to levy those without them becoming unfair. But there are a range of measures in this package, and unfair contract terms is one of them. The new statutory guarantees that we are writing into law will be a big step forward.
Most people are aware of warranties. If you go and buy a TV for example, you go and buy yourself a plasma TV for a couple thousand dollars and you might have an express warranty. They might tell you that you have a five year warranty, but in some cases they may not give you an express warranty. Consumers need to understand that even though no express warranty has been given, under the new Consumer Law you will have certain guarantees that you'll be able to rely upon, because goods need to be of acceptable quality. Clearly if you go and spend a couple of thousand dollars on a new television and it ceases to work within the first year of operation, then that's not reasonable and within the terms of these new provisions, consumers will have the ability to seek redress, whether it be in the form of repair, replacement or even, where there is a major defect, a full refund. This is a significant advance that will ensure that consumers have the sort of power that I think we all should have but so often we find we're on the wrong end of one of these arrangements and get left with goods that are defective.
HOST:
And just before I let you go, I guess it's important with warranties, in particular these extended warranties, if you move interstate it must make it easier that way as well?
BRADBURY:
Yeah, look and one of the issues with these extended warranties is that consumers should be very cautious about purchasing the extended warranties because in some cases they may only be providing the entitlements that people are already entitled to under the statutory guarantees.
HOST:
So you're actually buying nothing, you're only buying what you already have.
BRADBURY:
Well, and part of the new Consumer Law is to ensure that businesses are not permitted to do that, and where they are found to be doing that then the regulators can take action to ensure that they're not profiting from providing people with the protections that, by law, they already have.
HOST:
Yeah, well good move. Thanks for your time, appreciate it.
BRADBURY:
Thanks Warren, and Happy New Year to you.