Fair Trading (Repeal of Part 6A - Gift Cards) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 3 June 2020.)

Mr PICTON (Kaurna) (16:59): I indicate that I am the lead speaker for the opposition on this important piece of legislation regarding gift cards, which, as I understand it, we probably do not need because the Constitution has taken care of this issue entirely.

We had a situation where, a couple of years ago, we as the parliament, through the Attorney, introduced some legislation covering gift cards that I believe was passed with bipartisan support. The commonwealth has now introduced its own legislation regarding gift cards with stronger penalties than we had in place here in South Australia. They have essentially covered the field in regard to gift card legislation for our country under the Constitution, so we are now repealing 6A of the Fair Trading Act regarding gift card provisions.

The Hon. V.A. Chapman interjecting:

Mr PICTON: Yes, that is exactly what we are doing. The act is very descriptive in terms of the repeal of part 6A—Gift Cards. Essentially, that is what is happening here. It deletes part 6A, which deals with the minimum requirements of the expiry of gift cards, including the maximum penalties of $5,000 for breaches.

The commonwealth passed legislation in late 2019 that provides a national approach to gift card expiry. Noting that the commonwealth legislation covers the field, it is reasonable that we would repeal any state legislation that is in conflict for the clarity of the statute book, even though this legislation is presumably no longer in operation at a state level. I think the community would agree that a national system covering this area is preferable, as many businesses operate on a national basis.

The vast majority of gift cards any South Australian might purchase are largely going to be national gift cards. You certainly cannot go into a supermarket now without seeing a massive wall of gift cards at the end of one of the aisles. They are predominantly on a national basis, so having a national system for the expiry of those and penalties relating to those is appropriate. I, however, would recommend people generally do not buy gift cards. It is a lot more powerful to give people cash than a gift card, which you might lose, or still even under the new national legislation you might run the expiry on.

I still have a horrible memory of when Borders went into liquidation. I am sure many people had a Borders gift card they were given at some stage, and I remember having one that was no longer redeemable. This was probably back in my university days, when that was a material amount of money for me. I am sure that there have been many instances and situations where businesses have gone bust or gone into liquidation, etc., and when those gift cards have no longer been redeemable. Of course, that is a risk if you want to go down the gift card path.

Both the state and commonwealth laws provide for a minimum three-year expiry, although I note that the commonwealth laws impose higher penalties, with fines of up to $6,000 for individuals and $30,000 for corporations. That does raise the question of why the state thought a $5,000 penalty would have been sufficient in its original legislation when we are seeing the commonwealth go a lot further with $30,000. I am informed that both sets of laws allow for certain exemptions when a gift card or voucher is linked to a specific or time-limited event, such as a concert, which of course makes sense in those circumstances.

We understand that despite the commonwealth legislation now prevailing, enforcement and compliance will continue to be undertaken by state-based officials, presumably through the office of consumer and business affairs and its excellent commissioner, Dini Soulio, who has done great work in that area on behalf of the government of South Australia for many years. This is a piece of legislation the opposition is happy to support. As I said, whether or not we pass it, it is likely already to have legal effect in that the commonwealth legislation has prevailed, but I think that this is an important area where consumer protection is warranted.

While some of these purchases may be small, they are important. We want to make sure that the value for the consumer prevails through each of these transactions and that when a consumer buys a gift card they are assured of the protections around it to the extent that the law can provide. With those words, this bill has the support of the opposition.

Mr PEDERICK (Hammond) (17:05): I rise to make a short contribution in regard to the Fair Trading (Repeal of Part 6A—Gift Cards) Amendment Bill. This is another way the Marshall Liberal government is reducing red tape in this state. When this legislation was passed initially, it was quite legitimate in the fact that there was a deep concern that the allowance for cashing in gift cards was too short a time frame. For that reason, it needed to be extended to make it far more practical.

It is quite easy to receive a gift card, whether it is a Christmas present, a birthday present or just out of the blue. It can be put away in a drawer or a cupboard and disappear, so I think this is very sensible legislation. The bill only became an act in 2018, and that was to ensure that gift cards had a minimum three-year expiry date and to prohibit extra charges after a gift card had been supplied. This was a commitment we took to the election, and it provided our state's consumers greater protection from unreasonable time frames, as I have just indicated, and expectations when redeeming gift cards.

As recently as November 2019, national laws under the Australian Consumer Law (ACL) came into effect that largely duplicate the state-based protections. To simplify the regulation of gift cards in South Australia, we are proposing to repeal the existing gift card provisions under part 6A of the Fair Trading Act 1987 to ensure that the regulation of gift cards is nationally consistent and clear for both consumers and retailers. It will fix up duplication and red tape at the retailer end. As in South Australia, the national protections include a minimum three-year expiry period and prohibit charging post-supply fees.

In addition, the new national regime requires the expiry date to be clearly disclosed on the gift card. The commonwealth legislation also allows for certain exemptions to be prescribed by regulation in the Competition and Consumer Regulations 2010. Whilst there are some minor differences between the commonwealth and state exemptions, these are in the main the same. Repealing the South Australian provisions will simplify the regulation of gift cards by reducing red tape for businesses, in particular those operating across jurisdictions, making the provisions easier to enforce and easier for consumers to understand their rights.

The penalties under the Australian Consumer Law (ACL) offer a strong deterrent against noncompliance. A breach of the requirements relating to the three-year expiry, display of the expiry date, and post-supply fees carry a maximum penalty of $30,000 for a body corporate and $6,000 for other persons. Compliance officers from Consumer and Business Services will continue to be responsible for enforcing these requirements under the Australian Consumer Law, as well as the Australian Competition and Consumer Commission.

Now that the national scheme has been operational for some months, it is best that these provisions are repealed, put in place and let the Australian Consumer Law regime apply consistently across Australia. As indicated earlier in my contribution, this is a realistic and excellent way to get rid of red tape duplication of regulation for businesses to operate by, especially in the COVID environment we are operating in at the minute.

Businesses are hurting, really hurting, but I will acknowledge the support that both we as a state Liberal government and the Scott Morrison federal Liberal national government are giving to businesses and individuals right across this country to make sure that we get out the other side of COVID-19, or the coronavirus as it is.

We certainly have our struggles, as we note, with our interstate friends, whether that be in Victoria or New South Wales, to make a point. I know there are a few gibes about Victoria especially but also about New South Wales, but the thing is that we must all pull together. I acknowledge the other assistance that we have given as a state to send healthcare workers and others interstate to assist these states, because the sooner that all these states can pull through the other side of COVID—and it is looking very dark days at the minute, especially for Victoria—the sooner our businesses and industries can be better off, and a lot of these businesses do manage gift cards.

I think this is an excellent repeal piece of legislation so that we just line up with the national scheme. I commend the bill to the house.