Fair Trading (Gift Cards) Amendment Bill

Mr PEDERICK (Hammond) (11:01): I rise to speak to the Fair Trading (Gift Cards) Amendment Bill 2018. This is another bill that fulfils one of the Marshall Liberal government's excellent election commitments to protect consumers by ensuring that gift cards have a three-year expiry date. The reason we are doing this is because across Australia we lose approximately $200 million annually on expired gift cards.

The terms and conditions of gift cards may differ greatly, with typical redeeming periods between three and 12 months. Some larger companies, such as Bunnings and Apple, just to name a couple, do not have expiry dates on their gift cards. By putting into legislation a three-year expiry date, we are protecting consumers from unjustifiable and unfair expiry dates and balancing this appropriately with the needs of business.

The bill forms part of a series of amendments that we are putting through the parliament to the Fair Trading Act designed to increase consumer rights and protections. It also is part of the broader government agenda of modernising regulations and reducing red tape. What we are doing with this legislation is protecting consumers by ensuring that gift cards have a minimum three-year expiry date. It is intended that this would not apply to reward or loyalty programs or a voucher donated for charitable purposes; however, these exemptions would form part of the regulations to be drafted in consultation with business, subject to the bill's passing.

This legislation is modelled on New South Wales legislation, which commenced earlier this year and legislated for a three-year expiry date. Consumer and Business Services will be responsible for enforcement and compliance. In regard to the education program around this, funding for a public education program in respect of these changes is being sought in a subsequent bill to address ticket scalping, which we will address later this sitting week. The effect on business is expected to be negligible.

With regard to some further commentary around this bill, given federal constitutional guarantees, the bill does not apply to online or over-the-phone purchases where the gift card is delivered to an address outside of South Australian borders or the consumer is not ordinarily a resident of South Australia. Minimum expiry dates for gift cards is listed on the agenda for the national Consumer Affairs Australia and New Zealand meeting and, in addition, the federal government is considering adopting uniform laws to bring the country in line with the New South Wales legislation.

I do not think there would be anyone or any family who has not been involved in purchasing gift cards. I can remember several years ago I was driving around in my ute and I thought, 'What's that in the side tray of the door?' Sure enough, it was a gift card that was five years out of date. That would have been over the three-year limit, but it just goes to show how much money can be lost. As I said, hundreds of millions of dollars can be lost with gift cards that are not redeemed. Obviously, suppliers get paid for these so there is no loss to their budget. I guess there is a win to their budget if they do not have a redeemed gift card, for whatever gift it is, but it has been paid for so people should have more than enough opportunity to use that gift card regarding their purchasing at the time.

There are many things that can be put on gift cards. We heard an honourable member's address last week about his wife's purchases. That was a memorable contribution to this place. He also talked about how it would be handy to have a gift card for a tractor, but I have not heard of one of those yet. I think that was a suggestion from another member in this place. However, it is quite serious because sometimes you just do not know what to get for a niece or a nephew, a distant relation, a close relation or even your partner.

You just cannot think of the ideal thing so the easiest thing is to go down to a store—you might even get the store wrong—where you think they will be able to redeem something, whether it is a clothing item or something to do with music. Mind you, a lot of music now is just downloaded immediately, and sometimes not legally. That is another challenge in the world of purchasing but not something we are dealing with today.

It is a challenge and the sad thing is that people buy these gift cards in good faith because they certainly believe it is a good option for what they want to do and to make sure that someone can get an item that they desire. It can expand into wedding gifts as well. If you just do not know what to give a gift card can be produced. Talking about wedding gifts, the wedding registry program is something that my wife and myself went through.

I think I did one visit to the appropriate store—it might have been Myers, but I might be wrong—for potential items that we had put on the registry list. I met another person, an upcoming groom, and we had a conversation where we both agreed that we did not need to be back in Myers discussing this ever again. So I just left it up to my future wife to have a look at what we needed. I said, 'It's all yours. I don't need to trawl the shelves to see what we need to put on the list.'

That exemplifies why gift cards are such a necessity in this modern day and age. People just do not know what to get, so it is an easy thing to give. Sadly, because it is not a physical gift, apart from being something in an envelope or a card, it can too easily be put down. We live in a society where everything seems to be running at about 100 miles an hour, in the old language, and people do put things down. The gift card does not get redeemed and, sadly, the full benefit of it does not get used.

Some people may think this is something that is not worth the time to be debated in parliament, but I challenge that because, obviously, it is a big issue. It is worth $200 million across Australia, so it is something that needs to be fixed. Noting that there are discussions across the Tasman with New Zealand about having uniform legislation shows me that this is something that needs to be addressed. As we get older, people find it harder to work out what gift to give. I have a friend's 50th coming up, and I am trying to think of what they might require. It is probably a bit harder than—

The Hon. V.A. Chapman: A tractor.

Mr PEDERICK: Well, it will not be a tractor, Deputy Premier, or it might be a very small model one. I am sure he would appreciate that, being a farmer. It can even be a difficulty in your younger years. I have young boys who are already attending 18th birthday parties and there will be 21st birthdays coming up. You just do not know what the appropriate gift is to give to someone.

Good on the broad range of stores that give the option of buying a gift card because it means that, hopefully, someone will redeem it and buy the appropriate thing that they need. It is a win-win for everybody. You do not end up with a gift that may end up in the regifting cupboard, which some people may utilise. If you get two or three of something, or if it is something that might be a really nice gift that you do not need, you do not want to waste it, so it lands in a cupboard. It can sit there for decades if you are not careful, and it can be used at a later date when you find the appropriate person to give it to.

If we get this legislation right, we can cut down on the storage of not so much unwanted gifts but gifts that can be regifted because that does happen in real life. If anyone tells you they have never regifted something, I would question them severely. People can buy something they require. Obviously, it requires the person who receives the gift card to redeem it and acknowledge its worth. In the celebration of whatever they are celebrating at the time—whether it is a birthday, engagement, wedding or anniversary, or a significant event—they may not in the first instance think that it is great compared to what the parents have bought them: 'The parents have bought me a second-hand Yaris so I can drive to school.' Some get a new Yaris. Gift cards can be misplaced, but in the main many people appreciate them.

I note, as I said before, that bigger companies like Bunnings and Apple have no expiry limit on their gift cards, and perhaps that is what they can manage at that bigger store level. In saying that, the gift card has been purchased, so in my mind it should almost be like legal tender. A $10 note does not go off just because you have had it in your pocket for three years. It may have changed design or turned into a plastic note, with the new notes coming out. Essentially, a gift card is almost like legal tender. It has been purchased appropriately and should be able to be used to redeem goods to the value of whatever is on that gift card.

I do not know whether stores do this, but I am sure they would have a calculation on the percentage of gift cards that do not come back. I do not think they would be banking on that because, as I said, they already have the money and are more than happy to redeem goods for the value of that gift card. That can be a broad range of things, such as music items, hardware items or clothing items.

This legislation does not attract an impact on online orders that happen outside the state. There have been some interesting discussions at the federal level about Amazon.com. I agree with the federal Treasurer's stance that goods brought into this country should have a GST requirement put on them, because do not expect for one minute that Amazon does not have to deal with what happens with value-added tax in other countries. I am sure they do.

I think there is a bit of chest beating going on about that conversation at the moment. We will see how that pans out, with Amazon threatening to switch off Australian customers because, rightly or wrongly, people want goods that are not available in Australia. I think Australia has a great choice of goods that can be purchased either in person or with gift cards that can be produced for someone who is the receiver of the gift card to get those goods. We live in a dynamic world and there are opportunities for buying stuff overseas.

When I had the opportunity to go with the family to Canada and the United States, part of that was with work but we took the opportunity to buy a few pairs of cheap Levi jeans for the boys. When you get home and try to buy the same jeans online, Levi Strauss has a block on importing those jeans, so you either have to go back or organise someone to go shopping for you. That is just the difference in what goods may be priced at overseas.

I was intrigued with the different prices of things. I was discussing tractors earlier on in this contribution. When I was in North America, in Canada and in the United States, in 2011, the dollars were around equal value, whether it was US dollars or Australian dollars, and farm machinery was about half the value of what it is here. I know this is a bigger issue than gift cards, but I have been led into it a bit. The reason why some farmers will buy good second-hand equipment from North America—it does not please the Australian dealers, obviously—and import it themselves is the value for money. Whether or not they have issues around getting that equipment serviced is a matter they would have to deal with.

I struggle when something like a $140,000 eight-wheeled tractor from Canada suddenly turns into $280,000 in Australia and all it has done is had a ride on a ship for about a month to get it set up here. It is the same machine—they are all manufactured out of virtually the same place—but some people have different manufacturing plants across the world. In regard to this, I think this is going to be a great thing for consumers right across South Australia. Certainly a fair share of that $200 million that is lost annually across Australia would come out of the South Australian economy. If people are good enough to spend the money, we want the people who receive those gift cards to have the appropriate time.

As I indicated earlier, you can put them away, if you are at a function or whatever—let's say it is a birthday—and you put all your presents away. There might be some refreshments you have been given and you store them away in the bar or whatever. There might be some other useful items that you put somewhere in your house, and then somewhere in the chaos and the rush of life, the gift cards just get put down somewhere, they get moved, and after they get moved once, they disappear. I think this is sensible legislation. I appreciate the debate that has gone on so far in this place. I look forward to the ongoing debate and the bill's speedy passage through the house.