Consumer Action has commented on proposed amendments to the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2012 (Cth).
Precedent of exemptions without analysis of the costs and burdens
The Federal Government is creating a precedent in exempting cafes and restaurants from single pricing, which in future may pave the way for other businesses to seek to exempt themselves from the single pricing requirements. Through providing in the Act that a category of business can be exempted from single pricing if a regulation is made through the Competition and Consumer Regulations 2010 (Cth), the government is creating a mechanism to allow further exemptions to be created in future.
Consumer Action’s are concerned that before making the decision to recommend an exemption for cafes and restaurants in its report, the Productivity Commission did not engage in an assessment of the costs and benefits of such an exemption. No evidence was produced in support of industry’s claim that single pricing would be an unnecessary burden on cafes and restaurants, and no investigation was made by the Productivity Commission. This was also the case for industry’s claim that there was consumer benefit in the exemption.
Consumer Action would be greatly concerned if an exemption for another industry was inserted into the regulations without an effective cost-benefit analysis being undertaken.
Support of Intergovernmental Agreement before further exemptions
Consumer Action also note that the proposed section 48(4A) of the ACL empowers the Commonwealth Minister to exempt certain representations from the single pricing requirements by regulation. It is their understanding, pursuant to the definition of “regulations” in section 2 of the ACL as well as section 139G of the C&CA, that the Commonwealth Minister can direct the making of regulations without the support of state and territory ministers. While the Intergovernmental Agreement for the ACL outlines a process for amending the ACL, including for an amendment to receive support from the Commonwealth and at least four other members (at least three states), it does not appear that this requirement extends to regulations being made under the ACL. They do not believe that this is the intent of the Commonwealth and States and Territories. Consumer Action strongly argues that the proposed provisions should be redrafted to ensure that agreement with the states and territories is required before any further representations or industries are exempted by regulations.
To read the full submission, click here: Single pricing requirements – proposal to exempt restaurants and cafes.