Companies and individuals that are found to have breached Australian Consumer Law could face tougher penalties from July 2018 under a plan announced by the federal government in Tuesday night’s budget.
The government will seek to increase the maximum penalties under the Australian Consumer Law by bringing the penalties into line with those already available under the competition provisions of the Competition and Consumer Act 2010.
For companies, the penalties for breaches of consumer law would increase to $10 million, or three times the value of the benefit the company received, or in the case that cannot be determined, 10% of the company’s annual turnover in the preceding 12 months. The penalty would be set at whichever is greater of the three options.
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For individuals, the maximum penalties would be up to $500,000.
The move to increase penalties follows a review of Australian Consumer Law conducted by the Commonwealth, state and territory governments over the past 12 months.
However, the change, which the government proposes would come into effect on July 1, 2018, will be contingent on agreement from the state and territory governments.
Small Business Minister Michael McCormack said in a statement accompanying the budget papers that the proposed change follows consultation with consumer advocacy groups and the Australian Competition and Consumer Commission.
“I strong encourage the state and territory consumer affairs ministers, when we meet in August this year, to agree to this positive change for consumers and I look forward to their support,” McCormack said.
According to the budget papers, the revenue gain to the government from the change is “unquantifiable” over the forward estimates.