Clark DavidFAIR TRADING AMENDMENT BILLThird ReadingHon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I present a legislative statement on the Fair Trading Amendment Bill.DEPUTY SPEAKER: That statement is published under the authority of the House and can be found on the Parliament website.Hon Dr DAVID CLARK: I move That the Fair Trading Amendment Bill be now read a third time.This is an important piece of legislation that will introduce new protections for business and consumers against unfair commercial practices. If someone is operating a fair and honest business they have absolutely nothing to fear from this legislation. The bill—in passing it what we're doing is firstly introducing a prohibition against unconscionable conduct in trade. The second thing we are doing in passing this bill is extending protections against unfair contract terms in consumer contracts to small business contracts. And the third thing we're doing is legally empowering consumers and businesses to tell uninvited sellers to leave a property including through the use of do not knock" stickers. These protections are long overdue. Stakeholders have argued for them for a very long time.I want to cover each of those three things in turn. I'll start with the unconscionable conduct changes the prohibition. So that new prohibition has had a lot of talk around it both in this House and amongst submitters. "What does unconscionable conduct really mean?" has been the question that has been asked and "Why not prohibit unfair conduct or oppressive conduct or at least perhaps find a word that's easier to say?" Unconscionable conduct covers behaviour that's both unfair and oppressive. We're talking about serious misconduct here that goes beyond what's commercially necessary or appropriate and that might involve a large business taking advantage of a small business's lack of bargaining power to pressure it into accepting certain contract terms. It could involve unreasonable tactics to pressure someone to buy something they don't want to and can't use. That could in many cases be a vulnerable person.Some submitters and other members of the House have asked why we haven't introduced a definition of unconscionable conduct. I haven't gone with a definition because that could limit the circumstances in which the protections could be used. I personally wouldn't want to predict the types of situations that could be defined as unconscionable conduct and so I think it's really important that we don't define those terms in that way. The bill instead provides a list of factors that a court will consider when deciding whether someone's actions meet that test and that includes things like whether an imbalance exists in bargaining power and whether that's a contributing factor.Our neighbours across the Ditch have had a similar prohibition and their courts I note have been successful at weeding out processes and practices which are truly unconscionable from those that might simply involve unequal bargaining power but no real misconduct and I'm confident that the prohibition will have the same effect over here. The bill makes it clear that we're targeting business practices which involve a high threshold of misconduct and let me say again just to be really clear: if people are operating a business in a fair way they have nothing to fear from this change in the legislation.The other key change made by this bill is of course the extension of the prohibition against unfair contract terms protecting businesses as well as consumers. As the Minister responsible for commerce and consumer affairs I hear stories from small businesses opposing unfair contract terms with larger businesses and I'm sure the Minister for Small Business hears similar stories. Currently these small businesses can't really do much about unfair terms unless they want to walk away from that business from a contract altogether and of course they then lose that opportunity. Once the bill passes I'll be able to assure those businesses who have come to me seeking help that they have new protections here in this provision that's in the bill.There's been some concern that the protections go too far and will interfere with large contracts that might be negotiated between parties who are quite capable of doing their own due diligence. I want to emphasise again that the protections only apply to standard form contracts. Those are ones where one party has no real power over the other in the negotiation and if they don't like any of the terms well they can walk away.So we're talking about fairer contract terms overall. They only apply to contracts worth less than $250000 a year and that limits the protections to smaller or more vulnerable businesses who don't have bargaining power and who aren't negotiating terms in larger more strategic contracts. So we're just talking about situations where there isn't that power imbalance. The third thing which I mentioned in my introduction is the "do not knock" provisions. The bill builds on protections for consumers approached by door-to-door salespeople. Those changes mean that an uninvited seller must leave a residential property if they're asked to directly or if those stickers are there the "do not knock" stickers send a clear message.The bill itself was considered in the previous parliamentary term by the Economic Development Science and Innovation Committee and I want to thank the members of that committee last term for their consideration of the bill and for the public who submitted their ideas to make this bill better. Unique circumstances meant that that committee didn't report back to the House and although therefore the committee didn't recommend any changes we had taken into account the views of submitters and made a few changes to improve the bill through a Supplementary Order Paper (SOP). During the committee stage of this bill the House considered these small amendments through the SOP that I introduced. I have heard some excitable comments from members across the House about how we'd need to fix a vast number of things gaping holes in the bill and so forth. Actually the amendments needed to the bill were indeed only minor tweaks but they're important tweaks and we have made them through the committee stages and they'll carry through in the bill as it's passed this evening. They will then give businesses more certainty.I'm confident that the bulk of the framework is sound and that it will work well. The changes though introduced through the SOP the first of them is to slightly adjust the threshold for businesses covered by the unfair contract terms protections to allow more businesses to benefit. The bill prohibits unfair terms in small trade contracts where the contracts are worth less than $250000 in a year. Previously in the bill as it was originally drafted contracts with related parties were captured which meant that a firm that had contracts with both a parent and a subsidiary company which added up to $250000 wouldn't be covered by the protections. Now that was changed through the SOP. It had a change so that contracts with related parties don't count towards the threshold. That means there'll be more certainty for firms on whether the protections apply; it gives that clarity to everyone involved. It also means that more businesses will benefit from the protections.There were also some comments from members in the House during the second reading of the bill about uncertainty for insurance contract and I'm very pleased to be able to inform members that we've engaged with the insurance industry to make minor tweaks to the bill and provide them with more certainty and a reduction of costs. That change aligns the bill with the Government's work on the insurance contract law review. That'll mean insurers won't need to review their contracts twice following two sets of law changes. So that's some more good news about how this bill has progressed and changed—and been made better along the way. So again I want to thank the submitters on the bill. As I said before these are relatively minor tweaks but ultimately they will reduce costs and increase certainty for businesses which is no small thing. So in closing this Government's goal is to create a productive sustainable and inclusive economy where the interests of businesses and consumers are protected. This piece of legislation is one of the many things this Government is doing which contributes towards this aim by providing better protections for businesses and consumers. I commend this bill to the House."