SUBJECTS: Australian Consumer Law Review ‘lemon laws’ recommendation; Newspoll; Multinational Tax Avoidance; Federal Budget.

GARETH PARKER: Tim Hammond, the Labor Federal Member for Perth. Tim, thanks for coming in.

TIM HAMMOND, SHADOW MINISTER FOR CONSUMER AFFAIRS: Good morning Gareth, great to be with you again.

PARKER: Just to put people in the picture you’re not just the Member for Perth you’re also the Shadow Minister for Consumer Affairs, and there is a bit of consumer affairs news kicking around today. For anyone who’s picked up the West this morning they would’ve seen the report on page three; this idea of a “lemon law”. It’s something that happens in Singapore. It’s a law that would protect consumers if a product that they buy, and it doesn’t work in the first 30 days or it breaks, then there’s a cover-all warranty that says you can go back to the retailer and you can get a replacement. It’s something that’s under consideration by the Government, it looks as though they’re not going to do it. Where do you stand on this?

HAMMOND: The background to what’s appeared in the paper today is that most of your listeners will be aware that there’s an overarching piece of legislation federally that helps protect vulnerable consumers. It used to be called the Trade Practices Act. What is not commonly known is that these days it is called the Australian Consumer Law. And that really sets in place a minimum standard upon which companies and businesses can operate in terms of making sure they supply goods and services into the community that do what they’re supposed to do. What happened recently is that Consumer Affairs Australia and New Zealand undertook a year-long review as to whether it was working in the way that it’s supposed to. That review was provided to the Minister at the end of March and it’s now been published. Very broadly the review basically recommends 19 different ways in which they think the Australian Consumer Law can be improved. The ideas or recommendations are designed to help balance the playing field between vulnerable consumers and businesses that put goods and services into the marketplace. What we’re seeing here…

PARKER: And this proposal is one of those ideas?

HAMMOND: Correct. There’s a couple of others as well that also make a lot of sense. For instance there’s this weird anomaly at the moment – and I’ll come to the lemon laws in a sec, but it helps to provide some context – there’s this weird anomaly at the moment where, say, a Nurofen of this word advertises painkilling medication that is specifically designed to protect your back or help improve back pain, but at the end of the day contains nothing different in it than the same product that they’ve put on the shelves that’s supposed to help a migraine the maximum that a company like Nurofen can be penalised for that misleading and deceptive conduct is about $1.1 million, which is crazy when you look at the fact that, say, Nurofen made over $45 million from marketing this product.

PARKER: So you’re saying those penalties are too light on?

HAMMOND: The penalties are too light on and it’s always been our position as a Federal Labor Party to increase those penalties to $10 million per breach. And that way it brings them into line with what’s happening under the ASIC act and it provides a bit more of a stick to large companies, rather than them just knowing that a $1.1 million breach is just the prices of doing business. So that was one of them.

What page three of the West talks about today is what is commonly known as a “lemon law” which is aimed towards motor vehicles but really can be used to describe any product which sort of has a litany of faults in it – where you buy it and just think, “Oh my God this is broken again!”

PARKER: Just doesn’t do what you’d expect it to do or perform as you’d expect it to perform.

HAMMOND: That’s right, but isn’t so broken or isn’t so fundamentally unusable that it cannot be fixed and put back on the road. What this is talking about is that the current state of affairs is that unless you can prove it’s a major failure then a consumer cannot be entitled to a refund as well as a repair or a replacement. At the moment the law really only requires the manufacturer to repair the fault.

PARKER: So it might be a whitegood like a fridge or something where, you know, the door seal starts coming off of the auto sensor starts beeping; they come and repair it and they say, “Alright we’ve fixed it under the warranty,” then six weeks later it happens again, and you think, “Oh I’ve got to get the repair man out again.” And this might happen three or four times.

HAMMOND: Exactly

PARKER: And as a consumer you think, “You know what, get rid of this fridge, I don’t want it anymore, send me a new one”. But at the moment the law says they don’t have to do that.

HAMMOND: That’s exactly right. What this talks about is giving the consumer the freedom of choice that if you’ve got a couple of things that keep breaking along the way, particularly within the first 30 days, the consumer gets the right to say, “I’m happy for it to be repaired,” or, “I’d like a replacement, thanks”.

PARKER: The government appears reluctant to do this. And if I read the story carefully you’re reported as saying that you wouldn’t say whether you would support it or not. Why not?

HAMMOND: The question that I’m keen to get the answer to from businesses as well as consumers all around the country is whether we think that such a recommendation strikes a fair balance. Again it’s important for your listeners to understand that this is not about placing an unreasonable impost upon business. What we don’t want to do is create another burden on business in terms of the price of doing business. We just want to make sure it’s a level playing field. It’s a new recommendation in Australia, we’ve just got to consult widely to get a sense as to where we should land on it. I think there’s a lot about that report that makes a lot of sense.

PARKER: If you’d like to put a question to the Labor Member for Perth and the Shadow Minister for Consumer Affairs Tim Hammond; he’s also the Shadow Minister Assisting for Resources, 9 22 11 882.

There was a Newspoll earlier this week, and I’m not going to ask you about the horserace about who’s in front and who’s not. It does show that Bill Shorten is leading Malcolm Turnbull, or that the Labor Party is leading the Liberals in the Two Party Preferred stakes. What I want to talk about is some of the other polling they did which is about attitudes of the Australian people towards the Budget. And to summarise what the Newspoll said is that Australians believe that the Government should cut spending to repair the Budget. They agree with that proposition. However, they also don’t want to give up any conditions or welfare. This is a problem, not just for Malcolm Turnbull and Scott Morrison; it’s a problem for the Australian political system. What do we do about it?

HAMMOND: I think there are a couple of things that the findings in the Newspoll demonstrate. Firstly, what I actually think it represents is that the community is crying out for some bravery and some leadership in terms of a mature conversation about what it might take to repair our Budget situation. I think one of the great disappointments, quite frankly, of the last couple of years is that a lot of those in the community were expecting to see that from Malcolm Turnbull, and it’s just never arrived. That white horse upon which he charged across to grab the prime ministership sort of just stopped. We’re not seeing any bravery of leadership in the conversation about what it’s going to take to repair the budget.

What we’re also not seeing, that I think the community quite rightly expects, are lateral or unusual or creative ideas about how it actually might be able to be achieved, that we can try and maintain to the extent we can our current standard of living but at the same time look at finding alternative revenue streams.

A good example is multinational tax avoidance. For instance, it’s been pleasing to see the ATO stay on the hammer of an organisation like Chevron in which the recent finding of the Full Federal Court is that the workings of the loan arrangements within Chevron have now resulted in the ATO being entitled to an amount of about $300 million.

PARKER: So this is the idea that Chevron and its parent company have related loans and things and they tax deduct one from the other and they reduce their profits. Now ATO has had a look at this, and they’ve said “we think you owe us more money”, and they’ve taken it to court and had a win.

HAMMOND: Precisely right. What this really goes to is the fact that we need to be prepared as leaders in the community, in terms of the public and parliamentary debate, to have mature and brave discussions about ways in which we can bring the Budget back into surplus.

PARKER: Everyone wants big multinationals to pay more tax. That’s all good. But doesn’t the conversation need to happen with individual mums and dads, to say “you know what? We can’t afford to continue providing the benefits we provide at the current taxes you pay”? That’s the challenging conversation.

HAMMOND: It absolutely is, and we’re up for it. We’re up for it and we’ve demonstrated, I think, a track record of being up for it. It was an unusual step that Labor took into the last election to actually put these big reform discussions on the table. No one was talking about reforming negative gearing before Bill Shorten and Chris Bowen put it on the table. No one was talking about changing the Capital Gains Tax assessment before these guys put it on the table. That’s where we need to take the conversation; a position of leadership.

PARKER: Yet at the last Federal Election what Labor also did was mount the mother of all scare campaigns on the basis of creating the idea that Medicare would be cut, when in fact it was an attempt to streamline some back office functions. That morphed into something much bigger, which would rather undermine the leadership proposition that you’re putting to me today.

HAMMOND: Look I don’t agree with that, because what was proposed in relation to the changes to Medicare were very real. What was proposed in the cuts to pathology was very real in terms of affecting those very vulnerable in the community. What we have got to stop doing is focusing on the low hanging fruit which sees us taking away rights and entitlements from those who are vulnerable in the community, and instead have a conversation about how we can actually change that dynamic in terms of actually creating revenue streams where there aren’t any. I think there’s a middle ground to be struck here, we’ve just got to take the conversation to that level. And none of us must think for a second that the community aren’t up for it, because they clearly are.

PARKER: Alright. Tim Hammond, thanks again for your time. Really appreciate you coming in. We’ll do it again in a couple of weeks.

HAMMOND: Great to see you.

PARKER: Tim Hammond, the Member for Perth.