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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-03-08 Daily Xml
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BOOKSTORE CLOSURES

The Hon. T.A. FRANKS (15:00): I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question on Angus & Robertson and Borders gift vouchers.

Leave granted.

The Hon. T.A. FRANKS: On 17 February this year REDgroup, the company that operates Borders and Angus & Robertson bookstore chains, went into voluntary administration. Their websites and stores are continuing to trade as normal, and their customers have been encouraged to continue patronising these local outlets. As the minister is aware, currently gift vouchers are being honoured if a customer matches the face value of a gift certificate at a dollar for dollar rate; in other words, a $20 card will be redeemed if the customer outlays an additional $20 in store on top of the $20 already spent purchasing the gift voucher.

In response to this, on 22 and 23 February the minister advised the SA public in The Advertiser and on radio that consumers should not redeem their gift vouchers that they may hold and advised SA consumers that they should instead keep the vouchers in case the situation changes. Yet, if they retain the vouchers and the company goes into liquidation, and then they make a claim as an unsecured creditor, the minister has acknowledged that they may not receive the full value of their gift cards and it may take some time before payment is made. A creditors meeting is scheduled for 24 March, at which stage various options will be considered, including whether or not to liquidate the company.

A call to the OCBA inquiry line by my office this morning—a line which I understand has had hundreds of calls on this very issue—quite rightly elicits the warning that the vouchers may in fact be relatively worthless within the month (as little as 1¢ in the dollar), rendering, say, a $100 book voucher to be worth $1 to a consumer. Accordingly, my questions are:

1. On what advice did the minister announce that SA consumers should hold onto their Borders and Angus & Robertson gift vouchers?

2. Does she still stand by her advice given to South Australian consumers not to redeem their vouchers at a dollar for dollar rate offered by the administrators?

3. How will the minister ensure that all SA consumers are appropriately warned following her previous advice to hold onto their potentially almost relatively worthless vouchers?

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises) (15:02): I thank the honourable member for her question, although misinformed, but it provides me with an opportunity to correct the honourable member's mistakes. Indeed, Borders and Angus & Robertson, under liquidation law, recently went into voluntary administration and appointed Ferrier Hodgson as administrators, which meant that the gift certificate or voucher holders virtually became unsecured creditors. I was advised by the ACCC and ASIC that in fact they were by law considered to be unsecured creditors, so we confirmed that that was so.

I am advised that the administrator has the right to give priority to other creditors before those holding gift cards, as per federal law. The advice I gave to the public (we put out a number of different releases and I spoke on a number of different radio programs) was quite clear, and I think the Hon. Tammy Franks is being quite misleading and deceptive in the way she has presented those facts. I was very clear in what I said to people, namely, that people should weigh up their options and should think very carefully to choose what was best for them. I then outlined the options.

One of the options was in fact to hold onto their card, as the business might change, it might start trading again and they might be able to redeem their card. The other scenario was that they could claim as an unsecured creditor at the end of the process and seek to have their voucher redeemed through that process. I made it very clear that there was no guarantee that trying to claim as an unsecured creditor would necessarily result in them receiving back any amount, let alone the full amount, so I raised that.

I also reminded people that, in fact, Borders and Angus and Robertson were not required to offer consumers anything in terms of their vouchers. I went on air and said that they were not required by law to offer anything as unsecured creditors. I said that a number of different businesses or outlets were offering different arrangements: some were offering two-for-one, some were offering a bit more than that, some were offering less than that. What I advised people was to shop around; that in fact they might be able to get a better deal somewhere else. I also reminded consumers, 'Think about this. They are not required to offer you any redemption. This might be the best offer you get,' so consumers need to think about that.

We did warn consumers; the information we tried to give them was accurate and clear information about what the situation was. Initially, we had calls that what Borders and Angus and Robertson were doing was illegal; that they were somehow required to redeem these gift vouchers. So, we got that information out clearly: no, under federal legislation, they were not required to do that. We then put the options together and outlined what people might want to do and what options were available to them. I stipulated time and time again, and I have it here in my media release: 'People should weigh up their options and choose what is best for them.'

That was the advice we were giving, as well as outlining the sorts of options that might be available to them, so I believe that we have provided information in a timely way. We confirmed, as quickly as we could, the state of affairs and we then put out information over a number of days, seeking to clarify the concerns that were being raised at the time.

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