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MINISTERIAL COUNCIL ON CONSUMER AFFAIRS

STRATEGIC AGENDA

SEPTEMBER 2007

MCCA was established to advance fair trading and the protection of consumers in the marketplace. Its key objective is to provide the best and most consistent protection for consumers.

Its principal strategies to achieve this objective are to facilitate and encourage:

1. Nationally co-ordinated and consistent policy development and implementation by all jurisdictions, including legislative consistency of major elements of consumer protection law and emerging policy issues. (Policy and Legislative Harmonisation);
2. Consistency of policy and enforcement decisions for the suppliers of goods and services within a national marketplace (Consistent enforcement);
3. Access to education and information for consumers and suppliers (Education);
4. Co-operation and consultation on consumer policy between Australia and New Zealand (Australia/NZ Co-operation).
5. Research into consumer concerns and trade practices (Research).

Contents

Strategy 1 - Policy and Legislative Harmonisation

Strategy 2 - Consistent Enforcement

Strategy 3 - Education

Strategy 4 - Australia/NZ Co-operation

Strategy 5 - Research Into Consumer Concerns and Trade Practices

KEY INITIATIVES

2005

Strategy 1 — Policy and Legislative Harmonisation

1.1     Review of Australia’s Product Safety Framework

Sponsor: Queensland

 

Objective:    

To progress national reform of product safety law and administration.

At the 18 May 2007 meeting, Ministers noted the April 2007 decision by the Council of Australian Governments (COAG) that a uniform approach to product safety should be developed by the States and Territories within 12 months. Queensland will now lead the development of the principles of the new regime. 

To implement the COAG decision, Ministers agreed that:

• the draft RIS be completed incorporating the effects of the COAG decision comparing the harmonised model with the status quo and released by 30 June 2007;

• the States and Territories in consultation with the Commonwealth agree the principles of the new regime and report to MCCA later in 2007;

• concurrently an intergovernmental agreement underpinning the legislation be negotiated and agreed;

• drafting instructions be agreed in time to report to COAG in April 2008; and

• a review commence immediately of all existing product safety bans and standards with the aim of achieving greater harmonisation across the Commonwealth, States and Territories. A project team jointly led by Victoria and Queensland will be established to carry this work forward; and

• Queensland will continue to lead this project and the contracted project officer role will be extended until 30 April 2008.

Completion: 2008

1.2 National Trade Measurement System

Sponsor: Commonwealth (National Measurement Institute)

Objective:

Milestones:

1.3 National Credit Policy and Legislation

1.3.1 Uniform Consumer Credit Code

Sponsor: Victoria (as Chair of the Uniform Consumer Credit Code Management Committee)

Objective:

1. Develop legislation to amend the Code consequent upon NCP Review.

2. Explore the feasibility of requiring lenders to offer access to EDR.

3. Develop legislation to amend the Code to address fringe lending, including promissory notes.

4. Manage independent review of comparison rates.

5. Process exemption applications. (Nil – 2007)

Milestones: See below.

Completion: See below.

Vendor terms Bill - Submitted to MCCA out of session in August 2007 for authority to introduce. Due for completion in December 2007.

Pre-contractual disclosure - SCOCA has authorised funding to enable the proposed new disclosure scheme to be tested by simulation, survey etc and for options arising from same to be considered. Research to be completed in September 2008. Negotiation with contractor in final stages. Completion of project due in 2009.

Promissory Notes – Awaiting making of regulation to bring promissory notes within the Code..

Comparison rates - Decision making RIS was completed September 2006. ‘Sunset’ of comparison rates extended to 30 June 2009. The SCOCA Working Group is developing options by September 2007.

The fringe lending - Decision making RIS was finalised in early 2006. It has cleared Queensland Cabinet and is awaiting submission to MCCA.

1.3.2 National Regulation of Finance Brokers

Sponsor: New South Wales.

Objective: Develop a model for consistent national regulation of finance and mortgage brokers incorporating the following features:

• Coverage extended beyond consumer credit to small business and investment credit, with capacity for exclusion from certain legislative requirements where appropriate;

• Requirements for brokers to be licensed or registered, and as a condition of licensing or registration to meet minimum competency or probity standards and to belong to an alternative dispute resolution scheme approved by ASIC or other nominated agency;

• A contractual relationship with the broker based on refinements to the NSW Consumer Credit Administration Amendment (Finance Brokers) Act;

• Broking clients being provided with appropriate remedies including a capacity to stay proceedings for the forced sale of their home where action is being taken against the broker that could result in the home being saved;

• Brokers being required to hold professional indemnity insurance and/or contribute to a fidelity fund

Milestones: Ministers approved a Bill being drafted for consultation in November 2006. The Bill is being drafted in consultation with industry and consumer representatives.

Completion: November 2007

1.3.3 Fringe Credit Providers

Sponsor: Queensland

Objective: Amending the uniform Consumer Credit Code (the Code) to provide additional protections to clients of fringe credit providers, including payday lenders. A draft Bill was released on 25 August 2007 for community consultation containing the following proposed amendments. :

• introduce a prohibition on taking security over household goods;

• require credit providers to provide information about direct debit authorities;

• clarify disclosure of an annual percentage rate is required for all credit contracts;

• prevent avoidance of the code by amending exemptions including the pawnbrokers exemption, broker/credit provider arrangements, misusing business purposes declarations and the bill facilities exemption – due to the urgent need to address exploitation of the bill facilities exemption, this aspect of the amendments will be progressed ahead of the other amendments and is likely to be made before the end of 2007;

• enabling review under s.72 (Court may review unconscionable fees and charges) of the Code of unconscionable interest rates as set, all unconscionable fees and charges and interest, fees and charges which in combination are unconscionable;

• permitting government consumer agencies to make applications under both ss.70 (Court may reopen unjust transactions) and 72 (Court may review unconscionable fees and charges).

1.3.4 Responsible lending by credit card issuers

Sponsor: New South Wales.

Objective: To report to MCCA on increasing levels of credit card over commitment and make recommendations to improve responsible lending practices. New South Wales is developing a Consultation Regulatory Impact Statement setting out options for dealing with the perceived problems.

Milestones: When the Consultation Regulatory Impact Statement satisfies the requirements of the Office of Regulation Review, it will be circulated for public comment. Final recommendations in the form of a Decision Making Regulatory Impact Statement will be developed in consultation with the Office of Best Practice Regulation and submitted to MCCA.

Completion: 2008

Milestones: Consultation RIS to be circulated for public comment December 2007.

1.4 National Regulation of Property Investment Advice (to be removed following MCCA out of session paper)

Sponsor: Queensland

Objective: Examination of the national regulation of property investment advice.

Milestones: Final RIS to MCCA - 2006.

Completion: 2006

1.5 Unfair Contracts (to be removed following MCCA out of session paper. Victoria has prepared an out of session paper which is currently being reviewed by the Victorian Minister))

Sponsor: Queensland and Victoria

Objective: To investigate policy options to address unfair terms in consumer contracts and the merits of adopting a more nationally consistent and effective regulatory regime.

Milestones: Final RIS to MCCA – December 2005

Implementation of regulatory regime - June 2006

Pre-determined project timeframes have not been met due to the difficulties experienced in obtaining the ORR's approval of the RIS. Depending on the outcome of the RIS process, States and Territories should be able to decide whether to implement unfair contact terms legislation in the form proposed in the national model in mid to late 2006.

1.6 Residential Tenancy Databases

Sponsor: Queensland

Objective: Investigate and report on the role and operation of Residential Tenancy Databases (RTD) and the extent of the RTD use in Australia;

Examine the existing framework for regulating the use of RTDs, highlighting key issues relevant to tenants and other market participants such as RTD operators, real estate agents and landlords; and

Develop, where necessary, options for a nationally consistent framework.

An officer has now been appointed in the Queensland Department of Justice and Attorney-General to commence work on this by early September 2007. That officer will develop a plan with an aim that this work be completed within 12 months.

Completion: September 2008

1.7 National Consistency for Co-operatives Legislation

Sponsor: New South Wales.

Objective: To facilitate co-operatives operating on an interstate basis through nationally consistent co-operatives legislation.

Status: A proposed Australian Uniform Co-operative Laws Agreement and status report is being considered by SCOCA.

Milestones:
End 2007: Australian Uniform Co-operative Laws Agreement
End 2008: Template legislation enacted in host jurisdiction

1.8 Pecuniary Penalties

Sponsor: Commonwealth (Treasury).

Objective: Investigate and report on the desirability of adopting pecuniary penalties, or some other more flexible enforcement strategy, in substitution for, or as an alternative to, criminal penalties for breaches of Part V of the Trade Practices Act 1974 and the equivalent State and Territory legislation.

Milestones:
September 2007: Final Report to SCOCA
October 2007: Final Report circulated to MCCA (out-of-session)

Completion: November 2007

Strategy 2 — Consistent Enforcement

2.1 Personal Property Securities project (formerly National Register of Encumbered Vehicles)

Sponsor: New South Wales.

Objective: To examine the development of a National Register of Encumbered Vehicles.

Completion: National REVS has been an agenda item for MCCA since 2002. A consultant’s report was completed for SCOCA in December 2005, and submitted to SCOCA and MCCA in early 2006.

The project has now been overtaken by the Commonwealth’s Personal Property Securities (PPS) project. PPS will include registration of financial interests over boats and motor vehicles and will take over existing State-based encumbrance registers.

In April 2007, COAG gave approval in principle to implementation of a national PPS system. The project is being managed via the Standing Committee of Attorneys General (SCAG).

Formal consultation arrangements have been established between SCAG and MCCA/SCOCA. MCCA has two representatives on the Commonwealth Attorney General’s Consultative Committee.

The proposed PPS implementation date is July 2009, subject to sign-off on an inter-governmental agreement and appropriate Commonwealth/State financial arrangements.

Strategy 3 — Education

3.1 Financial and Consumer Education for Young People

Sponsor: New South Wales.

Objective: To improve the consumer and financial literacy of young people through a multi-faceted education and communication strategy that embraces a national focus and partnership with the Ministerial Council on Education, Employment, Training and Youth Affairs.

Milestones:

The first milestone has been completed. This was the establishment of a Working Party with membership from education departments and fair trading offices from each jurisdiction. The first meeting of the Working party was in Feb 2005.

The second milestone was completed in August 2005. This was the development of a nationally agreed educational framework for consumer and financial literacy to improve consistency among curriculum resources (Pillar 2).

The framework has been approved by the Australian Education Systems Officials Committee (AESOC) and the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) and will be added to the MCEETYA website in April 2006.

The table below outlines the completion dates for the remaining milestones.

PHASE	PILLAR	DESCRIPTION	COMPLETION DATE
One	1	Undertake a national research study which provides sufficient causal and empirical evidence to inform the marketing and education program. The Commonwealth’s Financial Literacy Foundation has indicated it will conduct nationwide research on financial literacy during April 2006, with results to be tabled in July 2006. In order to reduce possible duplication, the working party has suspended activity on this part of its plan for six months in order to review the outcomes of the research.	June 2008
	2	Completed	August 2005
Two	3	Develop and implement a national communication strategy to highlight the problems and consequences of escalating youth debt.	June 2008
	4	Expand the range of existing high-school education resources addressing consumer and financial literacy and develop additional resources especially for students in the early and middle phases of learning. The aim is to focus those aspects of consumer and financial literacy that are essential and not to crowd an already crowded curriculum.	June 2006 and ongoing

3.2 National Indigenous Consumer Strategy

Sponsor: Western Australia

Objective: To prepare, in consultation with stakeholders, a five year National Indigenous Consumer Strategy, covering the Terms of Reference approved by MCCA/SCOCA.

Completion: Strategy launch 1 September 2005, then ongoing for five years.

3.3 Consumer Education and Information

Sponsor: SCOCA

Objective: Through the Education and Information Taskforce:

1. Identify and develop major national behaviour change programs and formalise information sharing.

2. Liaise with other Advisory Committees to identify the need for and coordinate the development and implementation of national education and information campaigns.

3. Provide advice to MCCA and SCOCA on the development and implementation of such national programs, once they are agreed to.

4. Establish and maintain an accessible bank of research, evaluations, strategies, campaign creative concepts, publications and other resources that can assist other own education and information activities.

Completion: Ongoing

Strategy 4 — Australia/NZ Co-operation

Cooperation between New Zealand and Australia is becoming more important with the development of a single trans-Tasman economic market. Australia and New Zealand are co-operating on a number of key Trans Tasman issues, including the Review of MCCA, the Review of Australia’s Product Safety System and the Review of Australia’s Trade Measurement System.

Strategy 5 — Research Into Consumer Concerns and Trade Practices

5.1 Consumer Policy Research

Sponsor:        Commonwealth (Treasury)

Objective:      To provide information to improve the ability of policymakers to make appropriate, timely and effective policy decisions.

Completion:  Ongoing

Milestones:
May 2006:Ministers agreed that two items be included on the research agenda: a baseline study for consumer product safety and a scams research project.
September 2006:MCCA agreed to progress the baseline study for consumer product safety as a matter of priority. MCCA delegated the project to SCOCA.
October 2006: SCOCA finalised the Terms of Reference for the baseline study.
November 2006: Treasury (on behalf of SCOCA) published the Request for Tender for the baseline study on Austender.
December 2006: Close of tenders.
January 2007: Treasury (on behalf of SCOCA) evaluated tenders, and selected a tenderer to conduct the baseline study (Access Economics).
February 2007: SCOCA approved the preferred tenderer, and tenderer was engaged.
August 2007: Access Economics submitted the draft report of the baseline study. The draft report was circulated with an agenda paper for the September SCOCA meeting
September 2007: Discussion of draft report at SCOCA.
October 2007: Deadline for comments on draft report. Necessary adjustments made.
November 2007: Final report due.