Warning: may cause reform! Federalising Australia's product safety system

By Andrew Morrison and Sara Dennis.

Key Points:
The Ministerial Council on Consumer Affairs supports the development and implementation of a new harmonised, generic consumer law for all Australian jurisdictions. This represents a landmark development in national product safety reform.

The Ministerial Council on Consumer Affairs (MCCA) comprises Commonwealth, State, Territory and New Zealand Ministers for fair trading, consumer protection laws, trade measurement and credit laws. It is responsible for advancing consumer affairs and fair trading matters of strategic national significance and, where possible, for developing a consistent approach to those issues. It meets once a year to discuss these issues. This year's meeting was convened shortly after the completion of a comprehensive review of Australia's consumer product policy framework which culminated in the publication of a report by the Productivity Commission.

At its meeting on 23 May 2008, the MCCA agreed a significant agenda to reform Australia's product safety regulatory arrangements. In characterising the Productivity Commission's recommendations as "a unique opportunity to develop a new national approach to consumer policy", the MCCA declared that such reforms "would serve to overcome inefficiencies resulting from the division of responsibilities between Australian Governments."

The MCCA canvassed a number of issues which impact upon the safety of consumer products including its review of the Australian Consumer Product Safety System, the Productivity Commission's review, statutory warranties under the Trade Practices Act (TPA) and State/Territory fair trading/goods legislation and wine labelling reforms. In particular, the MCCA agreed that :

• the Commonwealth should assume responsibility for making permanent product bans and issuing standards under the TPA, but the States and Territories should retain the power to issue interim product bans for 60 days. At its meeting on 3 July 2008, the Council of Australian Governments (COAG) agreed with this proposal.
• the ACCC and jurisdictional fair trading offices should share responsibility for enforcement of the product safety law (in contrast to the Productivity Commission's recommendation).
• jurisdictions should raise awareness amongst consumers and businesses of the implied statutory warranties in the TPA and fair trading/goods legislation. This follows the Productivity Commission's recommendation. The MCCA acknowledged that these provisions are dated and that, in the longer term, a comprehensive review of warranty law is needed "with the aim of developing clear codified law that can be applied nationally."
• it is committed to meeting COAG's deadline of October 2008 for developing enhanced national processes to improve the consumer policy framework.
• it will support the development and implementation of a new harmonised, generic consumer law for all Australian jurisdictions and will work towards determining the best legislative model to create and maintain a uniform Commonwealth and State/Territory consumer law.
• the Standing Committee of Officials of Consumer Affairs (SCOCA) will prepare a response to the Productivity Commission's April 2008 report and will provide this to the MCCA. The MCCA will meet in August 2008 in order to finalise this response.

The MCCA anticipates that the revised regulatory arrangements will be fully implemented by mid 2010 and that they will be reviewed by MCCA two years after commencement. Between now and 2010, the MCCA, together with COAG, will develop the changes needed to implement this new system. Moreover, in order to alleviate regulatory burdens on business, the MCCA is aiming to undertake a review of existing product bans and mandatory standards in order to ensure that the bans and standards that apply across jurisdictions are aligned.

Thanks to Mary Sheargold and Francesco Baldo for their help in preparing this article.

For further information, please contact Sara Dennis and Andrew Morrison.