The Consumers’ Federation of Australia (CFA) is the peak body for Australian consumer organisations. The 40 organisational members and associated members represent the commitment to assist and provide services to Australian consumers. Members of CFA believe that Australian consumers are entitled to:
› fair, effective and sustainable markets
› affordable and equitable access to essential services
› protection from unsafe, unfit or harmful products and services
› fairness in transactions and conduct
› information and education to assist them in making choices in an increasingly complex marketplace
› information about the environmental and social impact of products
› accessible and effective remedies for failures and breaches of the law
› active monitoring and enforcement of consumer protection laws, and
› input through representative bodies to policy-making that affects their interests.
However, Australian consumers are faced with challenges and face risk of harm. Scandals in the finance sector demonstrate that banks and other finance companies are putting their interests ahead of consumers. When public services like vocational training are deregulated without appropriate standards, exploitative and unfair business practices take hold. While consumers have the opportunity to benefit from disruptive business models like peer-to-peer and ‘new energy’, we need to ensure our consumer protection framework remains adaptable and appropriate.
CFA, in light of the upcoming election calls upon the Federal Government to strengthen the governance and institutional arrangements underpinning the Australian economy:
1. Appoint a Minister for Consumer Affairs with cabinet status.
Australians consumers need a Minister for Consumer Affairs within Federal Cabinet, to send a strong message about the priority of consumer policy initiatives, and ensure that impacts on consumers are addressed in decisions in other policy areas (energy, health, education, etc) at the highest level.
2. Ensure regulators have the resources, power and culture to be effective.
Industry regulators have a very important job: to ensure consumers benefit in markets that they regulate.
Regulators include the Australian Competition & Consumer Commission, the Australian Securities & Investments Commission, the Australian Communications & Media Authority, the Australian Energy Regulatory, the Australian Skills Quality Authority, the Therapeutic Goods Administration, Food Standards Australia New Zealand and others.
Where regulators do not have the appropriate resources, power and culture, they can be limited their effectiveness. Regulators needs to be able to prevent consumer harm, not just deal with misconduct after it occurs. Scandals in the finance sector and in vocational education may have been prevented by better resourced and empowered regulators.
CFA members have undertaken some analysis about the appropriate powers and enforcement activity for consumer regulators,1 however we need an incoming Federal Government to reform our regulator performance framework.2 This framework needs to ensure that all regulators with a mandate to promote consumer outcomes have the resources, power and culture to effectively protect consumers, and that the regulators report publicly on their impact for consumers.
3. Fund strong and independent consumer voices.
Consumer voices must be heard as part of major inquiries or policy development processes that impact on consumers.
In 2008, the Productivity Commission recommended that the Federal Government should provide public funding to help support the basic operating costs of a representative national consumer peak body; assist the networking and policy functions of general consumer groups; and enable an expansion in policy-related consumer research.3 Despite this recommendation being again made in subsequent inquiries, it has not been acted upon by successive Federal Governments.
A funded peak body with capacity to both coordinate diverse consumer organisations as well as undertake or commission consumer research will facilitate better consumer policy outcomes, because the consumer interest will be strongly articulated in policy debates. Other consumer organisations should not be restricted from engaging in policy processes where they are funded by government.
1 Consumer Action Law Centre, Regulator Watch: the enforcement performance of Australia’s consumer protection regulators, 2013, http://consumeraction.org.au/new-report-regulator-watch/; CHOICE, Good Practice in Consumer Protection Enforcement: A Review of 12 Consumer Protection Regulators, 2008.
2 The existing regulator performance framework, a ‘cutting red tape’ initiative, has no focus on consumers or consumer outcomes, see https://cuttingredtape.gov.au/resources/rpf/kpis.
Productivity Commission, Review of Australia’s Consumer Policy Framework, 2008, recommendation 11.3.