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1
Consumer Credit (Queensland) and Another Act
Amendment Bill 2007
Consumer Credit (Queensland) and
Another Act Amendment Bill 2007
Explanatory Notes
General Outline
Short Title
The short title of the Bill is the Consumer Credit (Queensland) and
Another Act Amendment Bill 2007.
Policy Objectives of the Bill
Credit amendments
The uniform Consumer Credit Code (the Code) is part of a uniform
national legislative scheme which applies to most consumer credit
products. It is an appendix to the Consumer Credit (Queensland) Act 1994
and governs the provision of credit to consumers where its purpose is for
personal, domestic or household purposes. The Code sets out rules to
govern the transactional aspects of consumer credit business and provides
remedies and penalties when those rules are not followed.
The national structure of the Code utilises a template which is held by
Queensland. Under the Uniform Consumer Credit Laws Agreement 1993,
any amendments to the Code must be made to the Queensland template
legislation.
The Code is administered through the Uniform Consumer Credit Code
Management Committee (UCCC Management Committee), a national
group with representatives from all States and Territories, which reports to
the Standing Committee of Officials of Consumer Affairs (SCOCA) and
the Ministerial Council on Consumer Affairs (MCCA).
The objective of the Bill in relation to credit matters is to extend the sunset
clause in the Code that relates to the Mandatory Comparison Rate (MCR)
system by 2 years to 30 June 2009. This will provide government with
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Consumer Credit (Queensland) and Another Act
Amendment Bill 2007
sufficient time to consider the recommendations arising from a review of
the MCR system and determine the future of the MCR system.
Corporation of Tourism Queensland
The Tourism Queensland Act 1979 (the TQ Act) provides for the
establishment of Tourism Queensland, its functions and powers, for
purposes related to the tourist and travel industry in Queensland. The
policy objective of the Bill is to strengthen the leadership of the
Corporation of Tourism Queensland.
Reasons for the Bill
Credit amendments
On 1 July 2003, MCR became compulsory for all fixed term consumer
credit. Broadly, the MCR scheme requires:
· all credit advertisements that contain an annual percentage rate to
quote a comparison rate; and
· credit providers, "linked providers" and finance brokers to supply
consumers with schedules of comparison rates.
The MCCA made a commitment the MCR provisions would be subject to a
three year sunset clause, with a review prior to the sunset date. Pursuant to
section 146D of the Code, the MCR provisions were to sunset on 30 June
2006.
In October 2004, the SCOCA gave approval to the UCCC Management
Committee to proceed with a review of the MCR scheme by an
independent consultant. The MCR review was required to follow the
Council of Australian Government Principles and Guidelines for National
Standard Setting and Regulatory Action by Ministerial Councils and
Standard-setting Bodies to the satisfaction of the Office of Best Practice
Regulation the Commonwealth body which assesses the adequacy of
national regulatory impact statements and approves their release.
The MCR review comprised a two stage process, the first being the public
release of a consultation paper followed by the drafting of a Final
Regulatory Impact Statement (RIS). The projected timeframe for the
review initially scheduled completion in early 2006. However, a delay in
the consultation phase of the review meant it could not be completed in
time for the national forums of fair trading officials and Ministers to
consider the final report before the provisions were to sunset on 30 June
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Consumer Credit (Queensland) and Another Act
Amendment Bill 2007
2006. Consequently an amendment was made to the Code to extend the
sunset date for 1 year to 30 June 2007.
The one year extension period has proven to be too short, as the RIS only
recently received "clearance" from the Office of Best Practice Regulation
in October 2006.
Although the RIS concludes there is a strong case for the MCR system to
sunset, it also provides a contingent layer of recommendations for reform,
should the MCR system continue. The fate of the MCR system is a serious
issue because MCR provides a method of disclosure which can assist
consumer choice in an aggressive market with complex products. This is
particularly important for the many consumers who possess low levels of
financial literacy.
The extension of 2 years will provide MCCA with sufficient time to give
proper consideration to the RIS and determine the future of the MCR
system. If the MCCA continues with the MCR system, but with
modifications, additional regulatory impact assessment would be
necessary. An extension of 2 years builds in time for this, should it be
required. If an earlier decision is made, the sunset date can be brought
forward by regulation.
Without the extension, the MCR system will expire before conclusion of
the review and consideration of the RIS recommendations. The
amendment will preserve the status quo to enable careful consideration of
the future of the MCR system.
Corporation of Tourism Queensland
In relation to the amendments to the TQ Act, these are to strengthen the
leadership of the Corporation of Tourism Queensland to assist with the
implementation of the recently released Queensland Tourism Strategy. The
strategy lays the foundation for the coordinated and sustainable
development of tourism in Queensland and gives industry and government
the vision, goals, targets and actions to meet the challenges and
opportunities facing the industry over the next 10 years. The Department
of Tourism, Fair Trading and Wine Industry Development has the principal
responsibility for overseeing strategy implementation which will require an
unprecedented level of collaboration and joint activity between the
department and Tourism Queensland.
The amendments will increase the membership to include the chief
executive of the department administering the Act and also enable the
Governor in Council to appoint the Deputy Chairperson in a similar way to
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Consumer Credit (Queensland) and Another Act
Amendment Bill 2007
the appointment of the Chairperson. In order to ensure continuity of
membership for experienced members who make a significant contribution
to the Corporation's activities, the current limitation on membership of six
consecutive years service will be lifted. The limitation stifles the
promotion of members and means membership must end for the most
experienced appointees.
An energetic and visionary Corporation is vital to the success of the
Government's Queensland Tourism Strategy. To ensure this is achieved,
the Government needs to be confident the Corporation has the most able
and appropriate leadership.
Achieving the Objectives
The extension of the sunset clause in relation to the MCR system can only
occur by amending the Code.
Changes to the membership of the Corporation of Tourism Queensland
similarly require legislative amendment.
Administrative Costs
The MCR amendment will maintain the status quo, therefore no additional
costs will be imposed. No additional costs will be incurred through the
appointment of the chief executive of the department in which the TQ Act
is administered to the Corporation of Tourism Queensland.
Fundamental Legislative Principles
The proposed MCR amendment is consistent with Fundamental Legislative
Principles. There may be concern the TQ Act amendments to validate
certain appointments of members operates retrospectively. The
retrospective nature of these amendments does not adversely affect any
rights or liberties or impose new obligations on any persons beyond what is
already able to be done had the appointments been valid.
Consultation
Community
While no consultation has taken place on the extension of the sunset date,
both consumers and industry stakeholders were consulted during
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Consumer Credit (Queensland) and Another Act
Amendment Bill 2007
development of the RIS. Consultation in relation to the TQ Act
amendments was not considered appropriate.
Government
All Queensland Government Departments have been consulted on the
proposed MCR amendments including the Department of the Premier and
Cabinet, Queensland Treasury, and the Office of Regulatory Efficiency in
the Department of State Development. No concerns have been raised in
relation to the proposed amendment.
Queensland Treasury and the Departments of the Premier and Cabinet and
Employment and Industrial Relations have been consulted on the
amendments to the Tourism Queensland Act and have raised no issues.
Notes on Provisions
Part 1 Preliminary
Clause 1 sets out the short title of the Bill.
Clause 2 provides that part 2 of the Bill commences on 29 June 2007.
Part 2 Amendment of Consumer Credit
Code
Clause 3 provides that part 2 amends the Consumer Credit Code set out in
the appendix to the Consumer Credit (Queensland) Act 1994.
Clause 4 amends section 146D of the Consumer Credit Code to extend the
sunset provision in relation to the mandatory comparison system by two
years to 30 June 2009, or such earlier date as is prescribed by regulation.
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Consumer Credit (Queensland) and Another Act
Amendment Bill 2007
Part 3 Amendment Of Tourism
Queensland Act 1979
Clause 5 provides that part 3 amends the Tourism Queensland Act 1979.
Clause 6 amends the definitions to clarify there is a difference between
appointed members and the chief executive of the department
administering the Act, who is also a member, but not an appointed member.
Clause 7 provides that the chief executive of the department administering
the Act is to be a member of the Corporation of Tourism Queensland and
that the Corporation has a maximum of nine other members who are
appointed by the Governor in Council.
Clause 8 inserts a new section 7A which provides for the appointment of
one of the members as chairperson and another member as deputy
chairperson by the Governor in Council. The section clarifies the person
holding the office of chairperson or deputy chairperson may only continue
in that position while they are also appointed as a member. A member may
resign from the office of chairperson or deputy chairperson without
affecting their membership.
Clause 9 clarifies the appointment term relates to appointed members and
not to the chief executive's membership. Also, an appointed member is
eligible for reappointment if otherwise qualified.
Clause 10 omits the position of observer at the Corporation's meetings.
Clause 11 clarifies the provisions relating to the vacation of office relate to
appointed members.
Clause 12 clarifies that only appointed members are eligible for
remuneration under subsection (1) and that all members including the chief
executive, may be eligible for expenses necessarily incurred under
subsection (2).
Clause 13 inserts a new section which enables the chief executive to
appoint a representative to attend meetings who will have the same
standing as the chief executive at the meeting under this division of the Act
including undertaking a role as chairperson or deputy chairperson.
Clause 14 makes minor consequential amendments.
Clause 15 makes minor consequential amendments.
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Consumer Credit (Queensland) and Another Act
Amendment Bill 2007
Clause 16 inserts new section 34A which validates appointment periods
where the previous time limit on service may be relevant and validates that
an appointment period as chairperson was also an appointment period as a
member.
Clause 17 inserts a new part 5, division 3 which has transitional provisions
to confirm current member appointment periods.
© State of Queensland 2007