Comments from Coalition Senators
It should be noted
that the membership of this committee has changed along with the change in the
composition of the Senate on July 1, 2011. Neither of the Coalition Senators
currently members of this committee were members at the time of the public hearings
held into this exposure draft in May, 2011.
These comments are based on a consideration of the
submissions made to the Committee.
understand that the policies enacted by this legislation stand to substantially
benefit consumers and businesses operating in the credit provision market – in
terms of better pricing of credit as well as increased protections for
consumers. The move to positive credit reporting is not a particularly
Coalition Senators also concede that there has been an
extensive period of consultation regarding this legislation. However, the
consideration of exposure drafts of such substantial pieces of legislation is
made more challenging by the lack of an Explanatory Memorandum to assist with
deliberation – although this is not an uncommon challenge when dealing with
are particularly concerned about two issues arising from this inquiry:
complexity and prescriptive nature of the legislation
inclusion of de-identified data under the provisions of the Privacy Act for the
commented that the exposure draft relies on a prescriptive approach to
regulation in this area, in particular submissions from those directly involved
in the provision of credit or credit information.
These concerns are recorded at length in the Chair's report
This reflects a concern that rather than legislating
principles or desired outcomes, the proposed bill legislates actual behaviour
and business processes. Submitters argued that regulations or codes of practice
would be more suitable for detailed implementation of the new regime. This
would provide both flexibility to deal with future developments as well as room
for innovation in the market.
Submitters also expressed concern that the prescriptive
nature of the legislation would lead to unintentional breaches through the
sheer complexity of the provisions. This is a valid concern as one of the
objectives of this regime needs to be the ease of compliance, particularly as
it relates to genuine human error.
An example that illustrates this concern is the fact that
the exposure draft contains 60 new definitions , as opposed to the seven key
definitions in the current Privacy Act. The number of new definitions is
compounded by their complexity. Again, submitters expressed concern about this.
Coalition Senators concede that there are good reasons that
the bill should be progressed rather than delayed. However, we are concerned at
the response of the Department to the concerns regarding complexity.
The fact that redrafting legislation to take account of
these would be time-consuming is not a sufficient response to these legitimate
While the exposure draft may implement the policies of the
Government in this regard, the number of concerns raised indicates that
alternative approaches in some of these areas may also achieve this, although
with less complexity and a lower compliance burden.
A second issue of
concern to Coalition Senators is the issue of bringing depersonalised data into
the ambit of the Act.
By its very nature, depersonalised information does not
contain identifiable personal data. It is, however, particularly useful for
research purposes – and Coalition Senators note that the Government is
occasionally the beneficiary of such research.
While the ALRC originally recommended against such a
prescriptive approach on the use of depersonalised data, Coalition Senators
also note that there has been no case put by the Government that it should be
included in the bill.
There are clear costs to imposing restrictions on the use of
depersonalised data – some of which will counteract the intentions of this bill
(in particular the ability to use more information to more efficiently price
Coalition Senators are not convinced that depersonalised
data should be included in the provisions of this bill.
consideration of an Exposure Draft has its limitations, Coalition Senators do
not wish to delay progress and passage of this bill. However, we believe that
the Government has sufficient time to address the two concerns outlined above
and should do so as a priority. This is a significant opportunity to get this
legislation right. Where possible, all changes that simplify and streamline
reporting should be undertaken.
Ryan Senator Sean Edwards
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