New consumer law to ensure nationwide consistency

Posted by Daniel Palmer on 18th August 2008

New Legislation

The Ministerial Council on Consumer Affairs (MCCA) has agreed that all Australian governments should adopt a new national consumer law, which will operate in all Australian jurisdictions and remains consistent.

“Today the Commonwealth, State and Territory Governments have placed the Australian consumer front and centre, as we took an important step on the road to achieving a single, national consumer law,” Consumer Affairs Minister, Chris Bowen, said. “These reforms will bring Australia’s consumer protection laws into the twenty-first century and reflect the Rudd Government’s commitment to a seamless, national economy.”

“Business is also set to benefit from a reduction in compliance costs as nine sets of consumer laws are folded into a new single, national consumer law,” Mr Bowen advised.

The Productivity Commission estimated that taking these steps could result in benefits to Australian consumers and businesses of up to $4.5 billion a year.

“This agreement is another clear example of the fresh approach that the Rudd Government is taking to cooperative federalism,” Minister Bowen claimed. “The Ministerial Council has agreed to propose to the Business Regulation and Competition Working Group (BRCWG) that all Australian jurisdictions agree to adopt a national consumer law based on the consumer protection provisions of the Trade Practices Act.”

The Council of Australian Governments (COAG) will consider an enhanced consumer policy framework at its October meeting.

Key features of the new national consumer law:

* It will be based on the current consumer protection provisions of the Trade Practices Act 1974 (TPA) and also incorporate appropriate amendments reflecting best practice in state and territory legislation;
* The new law should be developed by the agreement of all Australian governments and made law through an application legislation scheme with the Commonwealth as the lead legislator;
* The new generic consumer provisions should apply to all sectors of the economy, with the exception of the financial services sector that will need to retain a distinct legislative framework, however, to the extent that it is practicable, the Australian Government is committed to maintaining consistency between the two laws;
* It will include a provision that addresses unfair contract terms, based on the model outlined by the Productivity Commission;
* Amendments to the national consumer law must be agreed by governments according to an Inter-Governmental Agreement, which will provide, among other things, for the amendments to be agreed by the Commonwealth plus four other state and territory governments, of which three must be states;
* Joint enforcement of the national consumer law between the ACCC and the State and Territory offices of fair trading, with ASIC retaining responsibility for administering the consumer law that applies to financial services.

“Today’s agreement builds on MCCA’s earlier agreement to introduce a new national product safety regulation and enforcement system, as well as the agreement of the State and Territories to transfer their responsibilities for the regulation of consumer credit to the Commonwealth,” Mr Bowen said.

It is anticipated that the national consumer law will be fully implemented by 2011.

Copies of MCCA’s communiqué from its meeting are available at: