The Ministerial Council on Consumer Affairs (MCCA) met in Hobart today to progress important reforms that will see an Australian Consumer Law in place by the end of 2010.

“The Ministerial Council has made impressive progress today on the road to achieving national consumer and product safety laws by the end of 2010,” Chris Bowen, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, said.

“We have met our first major milestone — to develop an Intergovernmental Agreement on the new national consumer policy framework by 30 June 2009.”

The Ministerial Council also noted progress of the National Consumer Credit and Australian Consumer Law reforms by the Commonwealth Government.

Substantial progress was made on a number of important consumer issues, including:

• The Australian Consumer Law

• A National Product Safety System

• Travel Compensation Fund

• Home Builders Warranty Insurance

Australian Consumer Law - Intergovernmental Agreement

The Ministerial Council on Consumer Affairs (MCCA) endorsed the text for an Intergovernmental Agreement (IGA) to underpin the new Australian consumer law and policy framework.

“MCCA’s endorsement of this important agreement sends a clear signal to all stakeholders that our reform process is well on track and that we are serious about achieving all our commitments in the agreed timeframe.

“This agreement provides a solid basis on which the Australian Consumer Law can now be built.”

The intergovernmental agreement will now be considered by the Council of Australian Governments (COAG).

Some of the key features of the Intergovernmental Agreement include:

• how the ACL will be implemented and its contents;

• the process for amending the ACL;

• arrangements for the administration and enforcement of the law generally and product safety specifically;

• the need for inter-agency memoranda of understanding and the need to issue national guidance on a number of issues; and

• relations with New Zealand.

A National Product Safety System

As part of the move towards a single national consumer product safety system, Minister Bowen today launched the new Product Safety Recalls website – www.recalls.gov.au.

“The new Product Safety Recalls website will make it easier for consumers to get information on unsafe goods, and importantly, allow suppliers to more easily inform the ACCC and consumers about recalled goods through an e-lodgement notification,” Mr Bowen said.

The enhanced features come as the ACCC undertook an overhaul of the consumer product safety recalls website.

Minister Bowen also confirmed that significant steps have been taken towards creating a single national consumer product safety system for Australia by the end of 2010.

“A national product safety system will improve and streamline product safety regulation in Australia,” Mr Bowen said.

“Currently, there are different regulations in place for product safety in the different jurisdictions, creating uncertainty for businesses and consumers.”

“While the reforms will not be fully implemented until the end of 2010, the spirit of these reforms — for all regulators to work collaboratively, is already showing through. This is demonstrated by regulators working together to coordinate national recalls and bans, like with the recent recalls of Kensington Cots.”

In addition, the Commonwealth is working with the States and Territories to implement significant operational reforms to product safety, which will be rolled out progressively between now and the end of 2010.

This will include:

• an internet based ‘one-stop shop’ to provide a single access point for consumer information on product safety;

• an information ‘clearing house’ to assist regulators to identify hazards, and;

• an improved recall system.

MCCA is also examining the impacts of including a number of new powers in the new national product safety law, including a new mandatory reporting requirement where suppliers are aware of their products being associated with serious injury or death, extending product safety regulation to certain unsafe services, and allowing a product to be banned or recalled if its reasonably foreseeable use will or may cause injury to a consumer.

Travel Compensation Fund

The Ministerial Council on Consumer Affairs (MCCA) agreed to examine the effectiveness of consumer protection measures in the travel and travel related services market.

Since the late 1980s, the State and Territory Governments have provided specific protections for consumers, via the Cooperative Scheme for the Regulation of Travel Agents, to ensure that consumers are not left out of pocket and unable to travel in the event of the insolvency of a licensed travel agency business.

“While the Cooperative scheme is an effective model for nationally harmonised regulation, significant changes in the travel services industry since the 1980s mean that the time is right to review key aspects of that regime,” Mr Bowen said.

“This is long overdue.”

A key aspect of Cooperative Scheme is the Travel Compensation Fund (TCF), which is able to provide compensation to consumers who suffer loss as a result of the failure of a travel agency. The TCF is funded through compulsory industry contributions.

MCCA has directed the Standing Committee of Officials of Consumer Affairs to undertake the review, in consultation with industry and consumer stakeholders.

MCCA has also suggested that the Council of Australian Government (COAG) may wish to add to travel licensing arrangements to the National Trade Licensing System when the opportunity arises.

Home Builders Warranty Insurance (HBWI)

The Ministerial Council on Consumer Affairs (MCCA) agreed to review consumer protection measures in the building industry following the Commonwealth placing it on the meeting agenda.

“Home Builders Warranty Insurance has been a source of consumer frustration and underperformance, particularly when compared to other classes of insurance,” Mr Bowen said.

A recent Senate Economics Report on HBWI made recommendations for reform based on a more harmonised approach to consumer protection – a useful starting point for MCCA’s review.

Mr Bowen said “It is also important to note that some jurisdictions have in recent times made some positive regulatory changes that will benefit consumers.”

The Ministerial Council noted the findings of the Senate Economics Committee report into Australia’s mandatory last resort home builders warranty insurance scheme, and agreed to carry out a review to identify measures to improve consumer protection in the building industry.