A BUSINESS backlash against the country's first national consumer law is pressuring the Rudd government to water down another key reform in time for the election.
Retailers, consumer groups, and legal and professional lobby groups have combined in their criticism of the sweeping 1000-page consumer law bill and explanatory memorandum now before the Senate Economics Committee.
The greatest consumer reform in a generation, signed off by the Council of Australian Governments in mid-2008, would give the federal government's consumer watchdog new powers to slap hefty on-the-spot fines on businesses and employees who mislead their customers.
The new law would limit door-to-door and telephone sales on weekends and after-hours, and give consumers the right to a 10-business-day cooling-off period on contracts. Government consumer agencies would be given new powers to recall defective or dangerous products.
Businesses that provide misleading information could be fined up to $1.1 million.
If retailers become aware that a product they have sold has been associated with a death, serious injury or illness, they must report the matter to the Consumer Affairs Minister within two days or face a $16,650 fine.
Retailers Coles, Target and Kmart have told the Economics Committee they are concerned by the planned use of infringement notices -- equivalent to on-the-spot fines -- for allegations of misleading conduct.
"The bill allows for amounts of up to $66,000 to be levied against a listed corporation," their submission notes..
Telstra is lobbying for a reduction in the cooling-off period of 10 business days, claiming the new law would ban telcos and utilities from supplying essential services to customers for up to 15 days.
The consumer lobby group Choice wants the bill redrafted to remove "new complexities or gaps in coverage" to existing consumer laws.
The legal firm Freehills claimed that small businesses would not be covered by the new law because the new definition of "consumer" was someone who had bought goods or services "of a kind ordinarily acquired for personal, domestic or household use".
"Our fundamental difficulty with the regime is that it will not be easy for consumers to understand," Freehills said.
The federal Minister for Small Business and Consumer Affairs, Craig Emerson, yesterday said he awaited the Economics Committee's report, due late this month, "with interest".
"I am always open to sound, constructive suggestions," he said.
"That said, I am not going to kowtow to self-interested, unsubstantiated claims, remembering that this law will replace 13 existing commonwealth, state and territory laws which have many of the same provisions."
