Revised Explanatory Memorandum
Circulated by the authority of the Minister for Financial Services and Superannuation, the Hon Bill Shorten MPChapter 8 - Lay-by agreements etc
Context of amendments
8.1 The Australian Consumer Law (ACL) is Schedule 2 to the Competition and Consumer Act 2010 (CCA). Sections 96 to 99 of the ACL provide for certain requirements that apply to lay-by agreements. Section 103 of the ACL provides for notices to be prescribed that relate to the repair of goods. Sections 188 to 191 of the ACL mirror provisions 96 to 99 of the ACL, to provide for penalties that apply to contraventions of lay-by provisions.
8.2 Sections 96 to 99, 103 and 188 to 191 of the ACL include an erroneous reference to 'consumer goods'. This term was incorrectly applied to these provisions when the ACL was enacted. The term consumer goods is defined in section 2 of the ACL as:
... goods that are intended to be used, or are of a kind likely to be used, for personal, domestic or household use or consumption, and included any such goods that have become fixtures since the time that they were supplied if (a) a recall notice for the goods has been issued; or (b) a person has voluntarily taken action to recall the goods.
8.3 The ACL replaced Part V of the Trade Practices Act 1974 (TPA) as the principal consumer protection law in Australia. The term consumer goods was applied within the product safety provisions of the TPA. Provisions of the TPA other than those dealing with product safety used the formulation 'supply of goods to a consumer' (or similar). This formulation relies on the definition of 'consumer', which was section 4B of the TPA and is now section 3 of the ACL.
8.4 The definition of consumer in section 3 of the ACL differs from the definition of consumer goods. In particular, it applies to all transaction with a value of less than $40,000, irrespective of the nature of the goods or services and applies to goods or services that are ordinarily acquired for personal, domestic or household use or consumption.
Detailed explanation of new law
8.5 Schedule 7 is inserted to correct an error in the ACL by removing references to 'consumer goods', wherever those references occur in sections 96 to 99, 103 and 188 to 191, and replacing them with 'goods' or 'goods supplied to a consumer', as appropriate. [Schedule 7, items 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15, subsections 96(1), 96(2), 96(3), 96(4), 97(1), 97(2), 97(3), 103(1), 188(1), 189(1), 189(3), 190(1), 191(1), section 98 and paragraph 190(2)(c)].
Application and transitional provisions
8.6 The ACL amendments in Schedule 7 to the Enhancements Bill are to commence upon proclamation.
8.7 The ACL is applied as a law of each State and Territory of Australia and amendments are automatically applied in each State and Territory with the exception of Western Australia. The Western Australian Parliament will consider whether to make amendments that mirror these amendments in order to preserve consistency of consumer law across Australia.
8.8 The Commonwealth is likely to delay proclamation until any amendments are ready to also commence in Western Australia. This delayed commencement will also allow businesses time to adjust to the new requirements.
8.9 A new chapter is inserted to Schedule 2 of the CCA to deal with transitional issues that arise from the amendment of sections 96 to 99, 103 and 188 to 191 of the ACL.
8.10 The new section 288 of the ACL would provide that the amendment to the lay-by provisions of the ACL (sections 96 to 99 and 188 to 191) would apply to lay-by agreements entered into on or after the commencement of those items of the Enhancements Bill. [Schedule 7, item 16, section 288].
8.11 The new section 289 of the ACL would provide that the amendment to the repair notices provision of the ACL (section 103) would apply to repair of goods that are accepted for repair on or after the commencement of that item of the Enhancements Bill. [Schedule 7, item 16, section 289].
8.12 The new section 290 of the ACL would save regulations made for the purposes of subsection 103(1) of the ACL so that they continue to apply after the subsection is amended. [Schedule 7, item 16, section 290].