Mr  Pallas (Tarneit)  — It gives  me great  pleasure to  speak on  the Travel Agents Repeal  Bill 2013  and to support the comments of the member for Preston. On behalf of the opposition I indicate that we will be opposing this bill.

While  the bill seeks to  do a number of things,  it ultimately fails to address the mischief that most fundamentally affects  people who travel, and that is the assurance that  when you travel, the  financial arrangements you enter  into are assured by an adequate system of compensation in the event  that travel agencies fail to provide the goods or service.

The repeal of  the Travel Agents Act 1986 effectively is about the ending of the appropriate regulation of travel  agents. For a limited  period it provides  for the continued operation  of the compensation scheme, which will end in 2015. But more importantly it goes essentially to the quality and the effectiveness of the compensation protections that are  available to consumers.  In many cases  these consumers will be some of the most exposed, and given the nature of the transfer actions that they enter into, particularly  the cash transfer actions, they will be the most exposed because of their inability  to  be adequately compensated in the event that the scheme ceases to apply.

From 1 July 2014 Victorian travel agents will no longer have to be licensed. The movement towards a deregulated scheme ultimately could  give rise to disquiet in the community about the  nature, the expertise and the professionalism of  those they deal with in the community at large. The bill applies an agreement that was reached in December 2012 amongst a majority of  state and commonwealth ministers for consumer affairs agencies around consumer affairs and the implementation  of the national travel industry transition plan, which is aimed at making sure that the cooperative  scheme  for the  uniform  regulation of travel  agents  will be abolished.

The agreement to  abolish  that scheme comes  with  consequences which  will  be profound when felt  at the pointy end by those who are  most exposed in terms of their capacity to not bear the burden and the risk of entering into arrangements with travel  agents that will not or may not  be  able to be honoured because of the particular circumstances of those travel agents, the increasing move towards a deregulated environment of travel agencies and the failure ultimately of those agencies to be registered, all of which are matters of concern.

We are told that  the  national  reform  is partway through a four-step process. Firstly, since 1 July last year travel agents have  not been  required to  lodge annual financial returns to the Travel Compensation Fund (TCF). Secondly, we are told that travel agent legislation will be  repealed by 30 June 2014. Thirdly, a voluntary accreditation scheme will be put in place. Finally, there will be  the closure of the TCF by the middle of 2015. Final payments of any consumer claims, we are told, will be concluded by 30 June 2015.

We know that two  states do not support the abolition of  the TCF, but both have signed the variation to the trust deeds of the TCF. Western Australia  and South Australia, as I understand it, fall into this category.

 Ms Victoria — No, South Australia has just come on board.

Mr Pallas– I am reliably informed by the Minister  for Consumer Affairs, who is at  the table,  that South  Australia is  on board. Nonetheless we are moving into  a   situation  where  increasingly   we  are  seeing  a  movement  towards deregulation that in itself and without  adequate  safeguards  could  ultimately mean  that  consumers  are  worse off as a consequence of that deregulation. The winding up of those consumer protection schemes will ultimately not augur well for the public at large.

The  national  scheme  commenced  in  1986  and  it  regulates  agents  who make travel-related  arrangements   as  intermediaries.   The  scheme  required   all jurisdictions to  enact  uniform legislation  —  effectively a code  of  common legislative  compliance  — requiring  travel  agents to  be  licensed  and also ensuring that those agents  become and remain members of the Travel Compensation Fund.

However, the decision to abolish the move towards a  national scheme is a matter of  concern  because it is  effectively underpinned by three  key arguments. The first argument is that, essentially, fewer  consumers are eligible to access the TCF. The rise of online commerce has reduced consumer reliance on travel agents, and I am  advised that something like  two-thirds of travel  and  travel-related expenditure is now made without relying on travel agents.

There  has  been  decreasing  reliance  on  travel  agents,  and  that  trend is apparently expected to continue. The second argument against the national scheme is that the travel agent market is dominated by a small group of large companies that are subject to  financial controls under laws  of general application.  The third  argument is that the  Australian Consumer Law (ACL), existing company law and  remedies  relating  to  credit  card  chargebacks  and voluntary insolvency insurance products provide sufficient regulation in respect of travel agents and consumer protections, but the  bill contains a variety of saving provisions over the limited duration of its operation.

Labor  holds  a number of concerns with regard to these arrangements. They  have been  expressed by a variety  of speakers, and I  simply  add my voice to  their concerns. The obvious  one  we will throw out  there is that it is  a regulatory scheme  that is essentially putting consumer protections at risk even when those protections are seen to be working adequately.

The government has failed to  explain why a mandatory accreditation scheme would not provide  better protection for consumers.  The current mandatory  scheme has provided and continues to provide value.

The  government  has  failed  to  explain  where  it  will  direct   people  for compensation the  next time a travel agent fails, and  that is  a great  concern because the nature of  this  industry is that there  will be people who in  many cases are  looking  to enter into  travel arrangements, sometimes for  the first time. People who do not travel often  may not be aware of their entitlements and may not  have credit cards in terms of the transactions they  enter into.  Their exposure  becomes  increasingly  profound,  particularly when we are looking  at those within  the community who are probably least able to bear the consequences of the  failure  of a travel agent  or  scheme and ensure that  their  funds and arrangements are adequately protected.

The  government  has  failed  to explain how small consumers would  be  able  to finance  complex insolvency  actions against  professional  indemnity  insurance under the ACL,  and  it has also failed to explain why  the TCF should be closed down ahead of the industry accreditation scheme, given its worth to consumers.

CHOICE of course is opposed  to the abolition of the TCF, advocating instead for its reform. When a consumer advocacy organisation expresses these concerns it is increasingly a  matter  that  should be of concern to us all, because ultimately such organisations seek  to advocate for people and enhance consumer protection. This bill will do  exactly the opposite; in the interest and under the  guise of deregulation it will expose those who can least  bear  exposure to a deregulated environment. On that basis I oppose this bill.