Explanatory Memorandum
(Circulated by authority of the Minister for Financial Services and Regulation, the Honourable Joe Hockey, MP)Outline
Prohibition on misrepresentations as to the effect of the New Tax System changes
1. A New Tax System (Trade Practices Amendment) Bill 2000 inserted Part VB into the Trade Practices Act 1974 to provide the Australian Competition and Consumer Commission (ACCC) with powers to monitor prices. The purpose of these powers was to prevent the possibility of consumer exploitation and excessive profit taking in the transition to the New Tax System. The States have adopted the Schedule version of Part VB to establish the National Price Exploitation Code.
2. The Bill will amend Part VB of the Trade Practices Act 1974 (TPA) by inserting a new provision to prohibit conduct, in connection with the supply of goods or services, that falsely represents, or misleads or deceives a person about, the effect of the New Tax System changes. Consistent with the rest of Part VB, such conduct is subject to penalties of up to $10 million for a body corporate, and up to $500 000 for a person other than a body corporate. Actions to have these penalties imposed will be taken by the ACCC in the Federal Court.
3. The ACCC will also be able to seek injunctions to restrain conduct that is, or may be, in breach of the prohibition. The ACCC will be able to accept voluntary undertakings in line with its existing powers in section 87B of the TPA.
4. This provision will apply from when the Bill commences until two years after the introduction of the GST.
5. To achieve Australia-wide coverage, the Bill also inserts a version of the new provision into the Schedule to the TPA, which can be applied by the States and Territories. This Schedule version essentially replicates the new provision with certain modifications, such as referring to a person rather than a corporation.
6. By virtue of the Price Exploitation Code (Name of State) Act 1999 in each State (except WA) and the Northern Territory, the proposed amendment to the Schedule will be adopted as part of the price exploitation legislation in each jurisdiction, effective 2 months from when the Bill commences. Each jurisdiction retains the discretion to issue a regulation declaring that the amendment takes effect at an earlier date, or does not take effect at all. Under the New Tax System Price Exploitation Code (Western Australia) Act 1999 , a modification of the Schedule does not apply as a law of WA unless the modification is declared by an order to be such a law. The ACT did not pass a Price Exploitation Code Act.
7. The Bill makes a number of consequential amendments to the TPA to apply various enforcement and remedy provisions of the TPA to the new provision.
Clarifying the operation of Part IIIA of the Trade Practices Act 1974
8. The Bill will also clarify the operation of the access undertaking provisions in Part IIIA of the TPA, which enable a service provider to provide an access undertaking to the ACCC that sets out terms and conditions for providing third parties with access to a service. The Bill contains amendments to make certain that the provisions in section 44ZZA of the TPA regarding access undertakings fall within the Commonwealths legislative power, and to clarify that the ACCC has the ability to perform functions and exercise powers in relation to access undertakings. The Bill also makes a consequential amendment to repeal subsection 44ZZJ(3), which sets out the Constitutional basis for enforcement of access undertakings.