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Legislative Assembly for the ACT: 2001 Week 9 Hansard (23 August) . . Page.. 3255 ..

MR STEFANIAK (Minister for Education and Attorney-General) (12.05): I thank the two gentlemen who spoke. I do not think you need to be too concerned because the government does not oppose the deletion of these clauses.

Let me state at the outset that by including clauses 4 and 5 in the bill it was not the government's intention to reduce in any way the ambit of consumer protection in the ACT. The proposed amendment was an attempt to reconcile Commonwealth and ACT law to avoid consumer confusion.

The government originally supported the inclusion of these clauses as a result of concerns about the constitutional reach of the territory's powers to make laws. Unlike the states, the territory's law-making power is circumscribed by the provisions of the Australian Capital Territory (Self-Government) Act of 1988, a creation of the Hawke Labor government. Subsection 23 (1) (h) of that act specifically prohibits this Assembly from making laws with respect to: "the matters that are the subject of the laws enforced in the territory relating to (i) companies". Section 28 of the act provides that a law in the territory will have no effect to the extent that it is inconsistent with the law defined under subsection 28 (2).

The Commonwealth Australian Securities and Investments Corporation Act of 2001, the ASIC Act, forms an integral part of the Commonwealth's corporation law. Division 2 of the ASIC Act replicates most of the consumer protection provisions in part 5 of the Trade Practices Act, which also exist in fair trading laws in the territories and states. Section 12AE of the ASIC Act recognises this overlap between jurisdictions, and provides that the consumer protection provisions in division 2 of the ASIC Act operate concurrently with other similar state an territory law.

This probably has the effect of displacing section 28 of the self-government act, otherwise dealing with inconsistency. However, section 12AE does not save the operation of the ACT laws because the Commonwealth has relied on the corporation's power to enact the ASIC Act. In doing so, the Commonwealth has triggered the operation of a self-government prohibition on ACT law-making power with respect to Commonwealth laws enforced in the territory concerning companies, section 23 (1) (h).

The Commonwealth is making further amendments to the ASIC Act through the Financial Sector Reform Bill which will come into operation soon. This will significantly change the definitions of financial services and products. In particular, the Commonwealth proposes to include in the definition of financial product "credit facilities within the meaning of proposed ASIC regulations".

The Commonwealth has confirmed that the proposed regulations will adopt a broad definition of credit facility. As the Commonwealth increases the scope of corporations law, any certainty about the capacity of the ACT to legislate about these matters, particularly consumer credit matters, begins to diminish. If the Commonwealth proceeds as planned the ACT may lose its power to legislate with respect to consumer credit, and on one view existing ACT legislation dealing with credit may fail.

The ACT government continues to negotiate with the Commonwealth for the making of a Commonwealth regulation under subsection 23 (2) of the self-government act to permit the continued operation of ACT laws that would otherwise be able to operate pursuant to

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