Member for Isaacs

Commerce (Trade Descriptions) Amendment Bill 2018 - Mark Dreyfus QC MP

19 June 2018

Parliament House, Canberra.

Mr DREYFUS (IsaacsDeputy Manager of Opposition Business) (17:12): The Commerce (Trade Descriptions) Amendment Bill 2018 amends the Commerce (Trade Descriptions) Amendment Act 1905. The amendment means that the exceptions under section 255 of schedule 2 to the Competition and Consumer Act 2010 will now apply to offences in the Commerce (Trade Descriptions) Act 1905. The result of this extended application of the exceptions will be that an effective defence exists to a prosecution under the Commerce (Trade Descriptions) Act in a range of circumstances where the goods have substantially come from or have been made or manufactured in the country of origin which they purported to come from. This is an uncontroversial reform which essentially harmonises the laws relating to consumer protection and trade descriptions.

There is an important principle which is supported by this reform. The bill has at its core the purpose of ensuring that businesses and people who sell goods which originated overseas provide consumers with the information they want and need in order to make informed purchasing decisions. A consumer has a right to know a range of matters which will allow them to make an informed choice about whether or not to purchase particular goods. A consumer has a right to know where their goods come from; a consumer has a right to know where the produce that was used to make the goods come from; a consumer has a right to know where the produce was grown; and a consumer has a right to know whether or not a substantial amount of the work that was undertaken to make the goods actually took place in the country where the goods are described as having come from. It is this information which is fundamental to a consumer, who should not be misled into spending money on something that is not the genuine article or for which they cannot obtain sufficient information to be assured that the provenance of the goods is what it is said to be.

Importantly, providing a consumer with accurate and correct information not only assists informed choice but also supports business longevity and prosperity. It's obvious that a part of getting a consumer to trust the business practices of the people and companies that they buy goods from is the availability by the business of an honest and good-faith disclosure of the country of origin for the goods the consumer is purchasing. If this good faith exists, it's likely that the consumer will trust the business or person, not only for the first transaction but for subsequent transactions. This is as important for business as it is for the consumer. If a business goes about the sale of goods in good faith, always seeking to let the consumer know what they're buying, then the business will gain a good reputation over time, becoming a trusted source for the trade they are conducting and potentially expanding the number of consumers who come to them knowing that they are buying the genuine article. It is in this light that Labor views business disclosure. It's the necessary respect cementing the relationship between businesses and consumers, who need to be informed of the provenance of the goods they're buying.

However, Labor accepts the need to balance the extent of the disclosure against the information that is reasonably available for businesses. An Australian business may not be able to certify to their satisfaction that all parts of a product or all the processes needed to manufacture the goods were undertaken in the represented country of origin. Given this reality, it's necessary to protect Australian businesses from unwittingly committing offences under the Commerce (Trade Descriptions) Act 1905 where there is no attempt to mislead or to otherwise falsify the information being provided to an Australian consumer. Under the Commerce (Trade Descriptions) Act 1905 and the associated regulations, a trade description is required to be applied to goods proposed to be imported into Australia. A trade description is also required to be placed on imported goods found in Australia.

Section 255 of the Australian Consumer Law is a safe-harbour provision. Its inclusion in the Australian Consumer Law was supported by Labor when the government enacted the Competition and Consumer Amendment. (Country of Origin) Act 2017. The effect of section 255 is that a person will not have committed an offence of false and misleading conduct if the facts of their conduct fall within one of the exceptions. This bill extends the exceptions so that they apply to offences in the Commerce (Trade Descriptions) Act 1905. As a consequence of this bill, a person can rely on an exception in section 255 of schedule 2 of the Australian Consumer Law as a defence to a prosecution of an offence contained in the Commerce (Trade Descriptions) Act 1905.

The circumstances in which these exceptions can be applied are as follows. First, where a business or person has made a representation that goods were grown in a particular country, it is a requirement, if the business is to rely on the exception, that each significant ingredient or significant component of the goods was grown in that country; further, that all or virtually all processes involved in the production or manufacture of the goods happened in that country. Second, where there's been a representation by the business or person that goods are the produce of a particular country, the bill requires, sensibly, that the country was actually the country of origin for each significant ingredient or a significant component of the goods. Similarly, the bill requires that virtually all processes involved in the production or manufacture of the goods happened in that country. Third, the bill applies to representations that the goods were made or manufactured in a particular country and that the goods were substantially transformed in that country. These are appropriate exceptions that balance the need to provide consumers with sufficient information with the need to ensure that businesses do not unwittingly commit criminal offences which have long been on the statute books.

On a related note, I suggest to the House that measures which protect consumers will only work where consumers have enough disposable income to buy properly marked goods. Under the Turnbull government, we've seen more insecure work and cuts to penalty rates, and the government commit, time and time again, to a tax cut for the top end of town. As my colleague the shadow Treasurer has said before, the Labor Party supports tax cuts coming into force on 1 July 2018. Indeed, we'd go further and have tax cuts almost twice as big in 2019. These would give Australian consumers more money to spend on the essentials they need.

If the government decided to proceed with Labor's tax cuts rather than their handout to big business, then small businesses who sell the goods that are the subject of this bill would receive the benefits. If the government wants to see these tax cuts implemented and wants to make a difference for working Australians, then they should split the bill implementing their tax cut scheme before the Senate. They should split that bill and allow the parliament to vote separately on the tranches of proposed tax cuts: the 2018 tax cuts which will sail through the parliament and the 2022 and 2024 measures.

Labour's concerns about the proposed 2024 tax cuts are well known. The Treasurer has refused to release the data relating to the year-on-year costs of the government's tax cut scheme. Labor has had to seek that information from the Parliamentary Budget Office. It shows that the 2024 proposed tax cuts grow exponentially over time and have a very, very significant cost to the budget bottom line. The Treasurer cannot tell you what the economy will be like in 2024, yet somehow he thinks he can say that the economy can afford these tax cuts. Not only is the Turnbull government unwilling to give a tax cut to those people who really need it but they are willing to lay waste to budget repair and their economic credentials in the process. They're willing to hope that in 2024, with a widening gap between the wealthiest and the poorest in this country, the economy will perform well enough under their new regressive tax plan to mean that those small- and medium-sized businesses selling goods from around the world will be able to stay trading. Labor does not believe in a regressive tax plan. Labor believes in giving relief to people doing it tough and to small- and medium-sized businesses doing it tough.

Australians rely on a compact between business and consumers, but in order for that compact to work consumers need to have enough money to spend on goods, and businesses need to be honest and act in good faith when trading. It is in light of this compact that I note this bill does nothing to shield businesses or people who are engaging in false or misleading conduct with respect to the country of origin of the goods they are making available to the public. Labor will always stand with consumers and will always ensure that those businesses and people who wilfully seek to fraudulently or falsely mislead Australian consumers are prosecuted. This is in keeping with the fact that under the Labor governments the economy prospers because we set rules that are fair, enforce rules that are broken and ensure ordinary Australians have enough to get the goods they need and help local small- and medium-sized businesses flourish.

I also note that this bill ensures coherence and harmonisation across the statute book. This is a laudable objective for our laws, and Labor supports the government's effort to ensure that there are no unintended inconsistencies in the laws governing consumer protection and trade descriptions.

Finally, on a point of indulgence, I'd like to mention that the work of the opposition on this bill was done by the former member for Perth, Mr Tim Hammond. All of us in this place were saddened by the resignation of the former member for Perth. I personally thank him for the work he did on this bill and for all the excellent work he did as a member of this House. I commend the bill to the House.