australian federation of travel agents- submission to ... · afta submission in response to scoca...

AFTA submission in response to SCOCA Consultation Paper Consumer protection in the travel and travel-related services market


Who is AFTA? The Australian Federation of Travel Agents Ltd (AFTA) was founded in 1957 to:

⇒ establish professional standards for travel agents;

⇒ stimulate, encourage and promote travel;

⇒ bring together those acting as intermediaries in the distribution of travel

services; and

⇒ build strong working relationships with suppliers and consumers of travel related services.

AFTA represents approximately 80 per cent of Australia’s travel intermediaries that control more than 95 per cent of travel intermediary turnover. It also has a substantial base of associate members, representing non-intermediary sectors of the travel related services industry. Members are bound by AFTA’s Code of Ethics. AFTA represents the interests of its members on many local and international bodies, including peak bodies of other national intermediary associations. AFTA also contributes significantly to the Australian domestic tourism industry by a strong involvement in the National Tourism Alliance, along with many other working parties and committees.


Endorsement

AFTA’s members and the following travel businesses endorse this submission.


Table of Contents Executive Summary 1 Background 5

A Statement of the issue 7 B Objectives and Statement of Options 8 C Competency and Conduct 9 D Compensation 21 E Implementation 28

Bibliography 32

Appendix 1: Graphic 1: AFTA endorsed consumer protection in the travel services market 33 Appendix 2: Graphic 2: Implementation of consumer protection reforms in the travel services market 34 Appendix 3: AFTA Travel Accreditation Scheme (ATAS) 35 Appendix 4: The COAG deregulation agenda 36 Appendix 5: National Tourism Accreditation Framework Factsheet 37


Executive Summary

AFTA welcomes this consultation as part of the latter stages of the process in developing a new regulatory regime for consumer protection in the travel services market. National Scheme no longer fit for purpose Through the review and consultation process that has been underway since 2009, it has become apparent that the existing regulatory regime (referred to as the National Cooperative Scheme for the Uniform Regulation of Travel Agents – ‘the National Scheme’) is no longer fit for purpose, and should be reformed to better meet the current and future needs of the sector. In fact, similar conclusions were reached through a previous review of the National Scheme in 2000, but no significant reform has been undertaken since that time. AFTA strongly supports Options 1A and 2A of SCOCA Consultation paper AFTA strongly recommends implementation of the policy options 1A and 2A as outlined in the Consultation paper released by the Standing Committee of Officials of Consumer Affairs (SCOCA) in March 2011 (the SCOCA Consultation Paper). These options are:

Option 1A: Industry-led regulation: This option involves consumers relying on the generic consumer protection mechanisms of the Australian Consumer Law (ACL), supplemented by a voluntary accreditation system for travel intermediaries under the National Tourism Accreditation Framework (NTAF) to provide a foundation for consumer protection in respect of the competency and conduct aspects of protection. Option 2A: Utilise national consumer protection framework and other safeguards: This option involves basing the compensation aspect of consumer protection on the national consumer protection framework, supplemented by a number of non-regulatory protection measures and safeguards.

AFTA has prepared a graphical representation of Option 1A and 2A – refer Graphic 1 below (refer to Appendix 1 for a larger, landscape version of this graphic). The diagram graphically depicts the Competency and Conduct and Compensation components of consumer protection and the regulatory mechanisms comprising for each.


Graphic 1: AFTA endorsed consumer protection in the travel services market The reform measures endorsed in this submission are consistent with steps already taken to streamline consumer protection in Australia through the ACL. In addition, they are also consistent with the broader reform agenda of the Council of Australian Governments (COAG) to develop a seamless national economy.

Competency and conduct AFTA fully supports adoption of a voluntary accreditation system for travel intermediaries under the NTAF to facilitate implementation of Option 1A. AFTA notes its intention and commitment to establish an accreditation scheme for travel intermediaries under the NTAF framework. NTAF was formally launched by the Federal Government on 2 April 2011 and applications for accreditation have now opened. AFTA has been fully engaged with the development of NTAF from its inception, including through the relevant National Long Term Tourism Strategy consultations, and the Department of Resources, Energy and Tourism (RET) Joint Working Group delegated to establish NTAF. AFTA therefore has been pre-committed to NTAF for a long period of time and will continue to work with the Tourism Quality Council of Australia (TQCA) to adopt a new scheme for travel agents – which it plans to call AFTA Travel Accreditation Scheme (ATAS). AFTA outlines in this submission its initial thoughts for the framework of ATAS.


Compensation Following extensive consideration of the National Scheme by Pricewaterhouse Coopers (PwC)1, PwC concluded that the current compensation scheme administered under the Travel Compensation Fund (TCF) represents a disproportionate regulatory response relative to consumer protection regulation in other industries (PwC 2010, p 3). PwC therefore recommended that the insolvency protection functions of the TCF be discontinued (PwC 2001, p 4). AFTA fully supports this conclusion and accordingly recommends the adoption of Option 2A which would involve removal of the TCF. Under Option 2A, consumers will rely on the general protection mechanisms of the ACL for consumer compensation, supplemented by a range of other ‘safeguards’ which include: (i) industry and business/franchise codes of practice and

accreditation schemes, of which ATAS will be one; (ii) regulatory requirements administered by the Australian Securities

and Investment Commission and the Australian Securities Exchange; and

(iii) travel insurance and the credit card charge-back mechanism. Transition and implementation AFTA acknowledges that implementation of the recommendations above represent a significant change in the regulatory regime for travel intermediaries. It is therefore important that careful consideration be given to appropriate transitional and implementation arrangements. In this submission, AFTA canvasses a number of implementation matters for the new regime, including timeframes for implementing ATAS, repealing relevant legislation, winding up the TCF and transitional arrangements for payment of TCF membership fees and compensation claims. AFTA submits that the target date for implementation of the new regime should be 1 July 2012 to allow for alignment with the revised implementation date for the COAG Seamless National Economy reforms (see Appendix 4).

Call to action AFTA strongly believes that the regulatory reform of consumer protection in the travel and travel-related services market is long overdue. The current review which commenced in 2009 and the previous review of 2000 highlight the need for reform. It is now time for action. AFTA is strongly supportive of Options 1A and 2A canvassed in the SCOCA Consultation Paper and is ready now to work with Government at all levels and other stakeholders to implement reform that will benefit consumers, the travel industry and the Australian economy.

The introduction of the ACL was a significant reform by the Australian Government, which has developed a regulatory framework to help realise further lasting reform to individual industry sectors.

1 PricewaterhouseCoopers, Review of consumer protection in the travel and travel related services market, November 2010.


The travel services industry calls on governments to seize this reform initiative, which is a tangible opportunity to realise lasting economic benefits consistent with the objectives of the national COAG reform agenda. Travel is one of the only true ‘global’ operating industries, in which ‘cross-border trading’ is both at a state and a global level. Governments cannot regulate businesses that are not registered in Australia and there is a demonstrated need for travel to be competitive in the global marketplace. This reform is an opportunity for Governments across Australia to provide leadership for an industry that has been unnecessarily shackled compared with its global competitors for decades.

Reform of the travel and travel-related services market is long overdue. AFTA’s preferred reform options, as outlined in the SCOCA Consultation paper, are an opportunity for robust, yet sensible and reasonable reform to help bring the regulatory environment for this global industry, into the 21st Century.


Background

In September 1986, Ministers for Consumer Affairs in Western Australia, NSW, Victoria and South Australia signed a “Participation Agreement” in which the Participating States acknowledged the need for the establishment of a co-operative scheme for the regulation of travel agents (the National Scheme).

The Participation Agreement required member States to enact legislation containing “uniform provisions”. These provisions included, inter alia, a requirement that travel agents be licensed and for those agents to become (and remain) members of the TCF.

In December 1986 the TCF was established by Deed of Trust which made provision for payment of compensation to consumers who deal with travel agents that fail to account for money they receive. History of inquiry and consultation In December 1998 the Ministerial Council on Consumer Affairs (MCCA) appointed the Centre for International Economics (CIE) to conduct a review of the National Scheme, in accordance with National Competition Policy principles. The terms of reference for the review required CIE to: ⇒ clarify the objectives of the National Scheme and legislation;

⇒ identify the nature of any restrictions on competition;

⇒ analyse the likely effect of any restrictions on competition and on the

economy in general;

⇒ assess and balance the costs and benefits of each restriction;

⇒ consider alternative means of achieving the same result including non-legislative approaches; and

⇒ consider whether the legislation giving effect to the National Scheme

contravenes the competitive conduct rules in Part IV of the Trade Practices Act 1974 (Cth) and the Competition Codes of each jurisdiction.

CIE completed its review in March 2000. Its report was presented to MCCA in July 2000. CIE saw the complete removal of prescriptive licensing and mandatory TCF requirements, as the preferred model in the long term (CIE 2000, p 3).2 The CIE recommendations were not implemented due to public interest concerns expressed by the Ministers at the time.

In May 2009, SCOCA commissioned a study from PwC of consumer protection measures in the travel and travel-related services market, including the role of the TCF. The study considered competency and conduct requirements as well as compensation under the National Scheme. The review was intended to provide analysis of the effectiveness of the National Scheme in the light of the fact that some sections of the

2 National Co-operative Scheme for the Regulation of Travel Agents, Working Party Report to Ministers on the National Competition Policy Review conducted by the Centre for International Economics, August 2002, p 3.


travel services industry have consistently argued strongly for reform of the TCF or its removal.

AFTA call to action

AFTA reiterates the importance of reform of the travel and travel-related services market after more than 13 years of inquiry and consultation. Further to AFTA’s April 2010 Submission to the Review of Consumer Protection in the Travel Industry (AFTA Submission 2010), AFTA concludes that the current regulatory scheme is outdated, inefficient, excessive, impractical, and its coverage is progressively declining over time (AFTA Submission 2010, p 31). It is now time to realise the industry’s vision that the removal of prescriptive licensing and mandatory TCF requirements is the preferred model for long-term regulatory reform.

This is particularly justifiable in the context of recent developments around consumer protection, including the commencement of the Australian Consumer Law on 1 January 2011, and the launch of the NTAF on 2 April 2011. Such forms of consumer protection will assist Governments in removing or mitigating the risks to consumers, through generic legislative provisions and by providing incentives for business to improve the quality of their products, while still allowing the travel sector to function efficiently and effectively in the global marketplace.

Structure of this submission This submission is structured in accordance with the Regulatory Impact Statement (RIS) framework outlined by the Office of Best Practice Regulation. A RIS has seven key elements, setting out:

1 the problem or issues which give rise to the need for action; 2 the desired objective(s); 3 the options (regulatory and/or non-regulatory) that may

constitute viable means for achieving the desired objective(s); 4 an assessment of the impact (costs, benefits and, where

relevant, levels of risk) on consumers, business, government and the community of each option;

5 a consultation statement; 6 a recommended option; and 7 a strategy to implement and review the preferred option.

With this in mind, this submission has adopted the following structure:

A Statement of the issue

B Objectives and Statement of Options

C Competency and Conduct Options

D Compensation Options E Implementation

Terms used in this submission have the same meaning as in the SCOCA Consultation Paper.

References to the RIS elements throughout this submission are boxed.


A Statement of the issue

The key issue at stake is that the National Scheme does not adequately serve the needs of the consumer or industry participants in the modern day travel services market. AFTA submits that the National Scheme does not comply with key Principles of Best Practice Regulation outlined in the COAG Best Practice Regulation – A guide for Ministerial Councils and national standard setting bodies (COAG 2007). As demonstrated in AFTA’s earlier submission and the PwC Study: ⇒ The National Scheme does not represent the regulatory option that

generates the greatest net benefit for the community (Principle 3);

⇒ The National Scheme has not remained relevant and effective over time (Principle 6); and

⇒ Government regulation is not effective and proportional to the

issue being addressed (Principle 8). The historical state/territory-based regulatory environment is not relevant to the travel services market, which increasingly operates in a competitive national and international market. This material evolution has been influenced by growing consolidation in the market, and the rapid development of modern online/internet-based technologies. The current regulatory framework, established in 1986, does not take these current realties into consideration. The problems that the National Scheme was designed to address do not exist as the significant problems they were in 1986. These problems concerned the carriage of monies by agents and the increased volatility in the industry that was in existence over 25 years ago. The PwC Study clearly concludes that the scope and scale of the problems that existed before the National Scheme was implemented have significantly declined or have almost effectively disappeared. It concludes that subsequent developments in the industry mean that there is no longer sufficient justification for industry-specific consumer protection regulation in the sector and that the existing regulation is no longer fit for purpose (PwC 2010, p 3).

In this section, AFTA summarises the issue that exists with the existing regulation scheme for travel intermediaries. Statement of the issue is ‘Element 1’ of the seven key elements of a Regulation Impact Statement (COAG 2007, p 9).


B Objectives & Statement of Options

AFTA welcomes the Consultation Paper process, and the opportunity that it provides for ensuring that the travel and travel-related services market is included in the broad modernisation of Australia’s existing consumer protection and business regulation modernisation programs. The PwC Study provides a sound analysis of the main objectives for developing a modern national regulatory framework for the travel and travel-related services industry. Options for reform are outlined in detail in the Study (PWC 2010, p 127-146). From the PwC Study, SCOCA distilled a series of options in the SCOCA Consultation paper. AFTA commends SCOCA on the way in which it has distilled the reform options and endorses SCOCA’s clear inclination to implement Options 1A and 2A of the Consultation Paper. AFTA welcomes the opportunity that this Consultation paper provides to support our preferred reform options, as initially proposed in the PwC Report. AFTA’s preferred recommendations are consistent with the current national regulatory reform processes outlined above.

In this section, AFTA summarises the objectives of the required manner of regulation. Statement of viable options is ‘Element 2’ of the seven key elements of a Regulation Impact Statement (COAG 2007, p 10).


C Competency and Conduct

Summary

The licensing framework provides little consumer benefit while imposing regulatory costs of business. Its state/territory basis imposes unnecessary cost and does not reflect the national nature of the market (PwC 2010, p 3).

AFTA believes that while the current mandatory licensing system for travel intermediaries has served its purpose historically, there is now an urgent need to reform the system given the dramatic changes that have occurred in the travel industry over the last 25 years. AFTA agrees with the conclusions in the PwC Study that the current licensing system provides little consumer benefit and that it imposes unreasonable conditions on travel agents. PwC concludes that “The valuable elements could be retained by a less onerous scheme.”. (PwC 2010, p 82). The introduction of the ACL and the development of the NTAF provide the appropriate mechanisms for a much more contemporary consumer protection approach.

AFTA recommendation AFTA recommends implementation of Option 1A: Cooperative Industry and Government Approach to Regulation for the competency and conduct parameters of the consumer protection framework. This approach comprises: ⇒ the generic consumer protection provisions of the ACL; and ⇒ voluntary accreditation for travel intermediaries under NTAF. AFTA April 2010 submission

AFTA acknowledges that its endorsement of Option 1A differs from the recommendation in our 2009 Discussion Paper and our April 2010 submission.

This section will consider Options 1A, 1B and 1C outlined in SCOCA’s Consultation Paper, in relation to the Competency and Conduct parameter of consumer protection. Each Option is analysed in terms of its impacts on consumers, industry and Government. This covers Elements 3 and 4 of the seven key elements of a Regulation Impact Statement (COAG 2007, p 12).


Since 2009, the regulatory environment in Australia has changed and relevant developments have occurred, including the introduction of the ACL and the evolution of the NTAF. Given these developments, AFTA has refined its recommendations to be in better alignment with the evolutionary processes of the industry over the past three years. AFTA believes that Option 1A, would guarantee service quality (through accreditation of travel agents) and protect consumers (as travel agents would observe accreditation conduct requirements and be subject to the mandated business conduct provisions of the ACL). What AFTA does not support While AFTA strongly indicates its support for Option 1A, it also wishes to clearly indicate the reform options which it does not support. In this context, AFTA strongly opposes the following options in relation to the competency and conduct parameters of consumer protection. ⇒ State-based licensing or maintaining the status quo –This

option is opposed by AFTA as it also includes a mandatory registration scheme, administered by governments.

State-based licensing or registration is onerous and represents a duplication of licensing for businesses with a physical presence in more than one state or territory.

⇒ Mandatory prudential oversight – This option, which AFTA

does not support, could include a new form of the prudential oversight that is currently performed by the TCF. PwC notes that the benefits3 of prudential oversight are not commensurate with its significant costs which include administration, compliance activities, provision of securities, preparation of financial accounts and the retention of excess capital reserves. PwC estimates these requirements cost businesses $16.5 million annually (PwC 2010, p 94).

⇒ Mandatory training requirements - This option is not

supported by AFTA as it could include consolidating the licensing regime and incorporating training requirements within it.

Enforced training is time and cost intensive and even if the costs were substantially reduced, the training requirements are likely to be poorly suited to achieving consumer protection outcomes. Additionally, PwC notes that there appears little risk of consumer detriment from removing

3 “The benefits of prudential oversight are unclear as there is little evidence that industry volatility would increase markedly in its absence.” (PWC 2010, p 94).


mandatory training (PwC 2010, p 85), thus rendering the current training requirements ineffectual.

Option 1A: Industry-led regulation

SCOCA consultation paper

SCOCA’s consultation paper outlines Option 1A as comprising the consumer protection laws in the ACL and an industry accreditation mechanism through the NTAF. The Consultation Paper characterises this as a cooperative industry and government approach to regulation (‘industry-led regulation’).

AFTA strongly supports Option 1A as it believes the synergistic relationship between the ACL’s consumer protection provisions and accreditation through the NTAF would ensure appropriate consumer protection in the travel and travel-related services market. AFTA notes and supports the following features of Option 1A:

⇒ Industry-led regulation – this includes establishing a modern

and relevant accreditation scheme which empowers industry to be proactive in upholding consumer protection.

⇒ Voluntary accreditation under the NTAF – which would

include eligibility criteria to be met in advance of accreditation of individual travel intermediaries. AFTA agrees that using NTAF as an accreditation mechanism avoids the regulatory duplication that occurs should a separate licensing or registration scheme be introduced.

⇒ Use of the broad consumer protection provisions - the ACL

features an extensive range of consumer protection provisions and has recently been significantly streamlined and now adopts a consistent national approach. The ACL prohibits activities such as accepting payment without intending or being able to supply a good or service, or making false or misleading representations to consumers. Poor service by travel intermediaries does not reflect a major consumer protection concern as indicated by complaints to consumer agencies. In most jurisdictions, travel intermediaries account for less than one per cent of complaints received (SCOCA 2011, p14). Accordingly, a separate and special, industry-specific regulatory regime is not required.

⇒ Removal of State and Territory licensing regimes – this

reform will reduce costs associated with the character, competency and prudential oversight requirements that travel agents must currently meet and which PwC note confer little consumer benefit.


PwC Study PwC’s study confirms AFTA’s long-held view that the current licensing scheme has not kept pace with developments in the travel sector and is therefore outdated and no longer fit to achieve key consumer protection objectives in the current market environment (PwC 2010, p 82). AFTA endorses PwC’s suggestion that the travel sector be supported by voluntary participation in an accreditation program consistent with the NTAF. This will include replacing the existing state and territory based licensing schemes and removing the associated training and competency requirements.

In respect of consumer protection, AFTA agrees with PwC’s finding that generic consumer protection rules are sufficient to protect consumers from travel agent misconduct. Following implementation of the ACL on 1 January 2011, Australian consumers are well protected by updated national consumer protection legislation. As PwC asserts, it is likely that the generic ACL regime provides adequate regulation of business conduct in the travel industry and there is no clear body of evidence suggesting a demonstrable need for industry-specific measures (PwC 2010, p 106).

Impacts - Consumers

In consideration of the impacts of industry-led regulation under Option 1A, AFTA feels it is important to identify current regulations which do not achieve any consumer protection objectives under the current Scheme. Accordingly, the introduction of Option 1A would achieve the required consumer protection outcomes without the costs to consumers associated with the existing regime.

Presently, costs associated with the current licensing arrangements are compounded by the requirement to be licensed in each state and territory in which the business has a physical presence, and other updating requirements. These costs provide little value in terms of consumer protection. There is also potential duplication by the requirements of the TCF, with 65 per cent of travel agents believing that licensing requirements are duplicated to some degree by the membership requirements of the TCF. (PwC 2010, p 84). All of these costs are ultimately borne by consumers since they comprise an essential fixed overhead on travel agents which business must recover to remain profitable.

PwC notes that the current training requirements are poorly suited to achieve consumer protection outcomes as the training does not properly equip travel agents and address major consumer protection risks (PwC 2010, p 86). AFTA considers there to be little value to consumers in mandating training requirements, which PwC identified as coming at a significant cost to business. (PwC 2010, p 86).


Accreditation with NTAF The NTAF aims to promote improved quality and better outcomes for consumers via an umbrella scheme that supports and empowers accreditation programs across a number of regions and industry sectors. This initiative appears sufficient to address other consumer protection concerns relating to inadequate service in the industry. (PwC 2010, p vi).

AFTA submits that an applicable accreditation for the travel agents sector under NTAF would, in conjunction with generic consumer protection provisions, adequately provide consumer protection in the travel and travel-related services sector. A detailed overview of how NTAF would be structured for travel agents can be viewed at Appendix 3. Other benefits to consumers of NTAF accreditation would include:

⇒ Encouraging good practice and conduct by travel

intermediaries by providing consumers with a clear signal of service quality;

⇒ Deterring those travel intermediaries that pose the greatest

risk to consumers from participating in a voluntary accreditation scheme due to the requirements imposed in order to obtain accreditation;

⇒ Providing a supportive mechanism for the ACL in its

capacity as a consumer feedback management system, which will be a key feature of the NTAF;

⇒ Assurance for consumers as a requirement to join an NTAF

accreditation scheme will be to have a complaints handling mechanism which must be clearly advertised to the consumer . The accreditation program must also ensure that each operator it accredits has a complaints handling process and dispute management system4; and

⇒ An ‘in-built policing’ mechanism. If the TQCA receives an

unusually high number of complaints, or a complaint of a very serious nature, about an accredited travel intermediary, the TQCA can review the accreditation program against the NTAF assessment criteria. Depending on the outcome of that review, the TQCA may ask the organisation to undertake certain actions or use its power to revoke the accreditation, thus assuring consumer protection.

AFTA notes the official launch of NTAF by the Minister for Tourism, the Hon. Martin Ferguson AM MP, on 2 April 2011. At the launch, the Minister stated that the NTAF will allow all high quality tourism businesses to be recognisable by a single national trademark – known as the TQUAL mark (Minister Ferguson Media Release, 2 April 2011). Applications for accreditation are now open.

4 Refer NTAF Guidelines for Applicants Version 1.0, Assessment Criteria 8.


AFTA reiterates its support for the development of a voluntary accreditation program for the travel services market as outlined in its April 2010 submission. AFTA has not waivered in its commitment to the introduction of a travel services provider accreditation system, which can now link to and reinforce the ACL to provide an additional mechanism to guarantee service standards for consumers (AFTA 2010, p 51). AFTA notes that the existence of an accreditation system will give consumers more confidence in dealing with accredited suppliers, in that there will be a set of minimum service level standards backed by some ‘policing’ and control mechanism to ensure minimum standards are maintained (AFTA 2010, p 51). Further, we note that the Federal Government has stated in a new NTAF Factsheet (attached at Appendix 5) that: The NTAF will benefit consumers by providing them with a recognisable symbol of quality, the TQUAL mark, allowing them to make better informed choices when selecting tourism products and services (RET 2011April 2011, p 1). Importantly, AFTA notes that “Travel agency, tour operator and tourist bureau services” (our emphasis) is an approved tourism related industry for the purposes of being eligible under NTAF (National Tourism Accreditation Framework Guidelines for Applicants Version 1.0, April 2011). AFTA looks forward to working with RET and TQCA in facilitating its application for ATAS accreditation under the newly released guidelines. Australian Consumer Law For the most part… generic consumer protection measures (eg. fair trading legislation), together with other existing measures in the industry (eg. accreditation and rating schemes), appear to be achieving good consumer protection outcomes in this sector. (PwC 2010, p 61)

AFTA acknowledges that the ACL currently applies to travel intermediaries and prohibits a range of unfair business practices. The provisions of the ACL within the Competition and Consumer Act 2010 most relevant to the tourism and travel industries include the following:

⇒ Unconscionable conduct provisions (Part 2-2). Examples of these provisions include varying key terms of an agreement without notice, and failing to disclose the key terms in a contract to consumers.

⇒ Consumer protection provisions (Parts 2-1 and 3-1). These provisions relate to misleading or deceptive conduct, false or misleading representations, ‘bait advertising’, displaying the single price of packaged goods and services, accepting payment for a good or service without intending or being able to supply as ordered, and harassment and coercion.


The ACL also incorporates a new streamlined consumer guarantee regime. Part 5-4 of the ACL provides remedies for consumers who have had guarantees relating to the supply of services breached. The new law provides a codification of more stringent guarantees and the provision of statutory remedies upon which consumers can rely for breach. These mechanisms further protect consumer rights where consumers are provided with travel or travel-related services. AFTA submits that the best available evidence suggests that generic consumer protection provisions are sufficient to protect consumers from consumer protection risks in the travel industry (PwC 2010, p 108). Removing licensing AFTA supports SCOCA’s observation that consumers would stand to benefit from reduced compliance costs for travel intermediaries if greater competition and innovation, particularly from new business models, leads to cost savings being passed on to consumers (SCOCA 2011, p13).

AFTA advocates removing training and experience obligations for travel agents as a key feature which would result in a consumer benefit. As identified by PwC:

⇒ Consumers derive little benefit from current training

requirements under the National Scheme; ⇒ Training requirements for purchasing international

airfares are either unnecessary (for those businesses who rely on ticket consolidators) or unlikely to be undertaken by businesses; and

⇒ In either case, the requirements impose a regulatory burden on business with few benefits for consumers.

Impacts - Industry In consideration of the impacts of industry-led regulation under Option 1A, AFTA acknowledges the following industry benefits which would include enhanced service standards through improving business conduct and a reduction in administrative burdens. Accreditation with NTAF Under the NTAF, a participating industry accreditation scheme will be required to have certain minimum standards… such a system, supporting the generic consumer protection roles and enforcement bodies, appears to be a sufficient and proportionate scheme to promote good business conduct in this industry (PwC 2010, p 107). In agreement with PwC, AFTA accepts that the proposed NTAF presents a sound opportunity to:

⇒ leverage the strength of existing industry associations; and


⇒ strengthen their membership system to provide voluntary

industry accreditation. AFTA recommends the introduction of a travel services provider accreditation system to link with and reinforce the ACL to provide an additional mechanism to guarantee service standards for consumers.

AFTA agrees with PwC that, conditional on the removal of the existing licensing regime, there would be a willingness among the existing industry associations, of which AFTA is one, to administer a qualifying accreditation scheme under the NTAF. AFTA already has a substantial membership base and actively enforces its code of ethics. The code contains guidelines such as:

⇒ being factual and accurate when providing information

about their services, and the services of any organisation that they represent;

⇒ treating every client confidentially;

⇒ using every effort to protect their clients against fraud,

misrepresentation or unethical practices; and

⇒ providing complete details about terms and conditions of any travel service, for example, cancellation fees, before accepting payment for a booking.

AFTA submits that it will create and implement ATAS, which is detailed at Appendix 3. The ATAS would facilitate consumer protection through: ⇒ Service standards: The ATAS would prescribe minimum

service standards to be adhered to by all members. AFTA notes that:

• Specification of minimum standards for a business is a

common feature of many industries. The standards may be specified in codes of practice, codes of conduct or ethics statements. AFTA will implement minimum service standards through ATAS.

• The Office of Best Practice Regulation (OBPR)

acknowledges such systems as effective regulatory mechanisms within the self-regulatory and co-regulatory styles of regulation (OBPR 2007). In fact, OBPR requires self-regulation to be one of the first options considered in any review of regulation (OBPR 2007, p 97).

Noting that the NTAF would be an umbrella accreditation framework designed to promote standards, industry competency and dispute/problem resolution, AFTA will develop ATAS consistent with these principles. This is significant, as presently there is no industry accreditation scheme for travel agents identified for inclusion in the NTAF. This would represent a significant step forward and benefit for the industry.


Removing licensing A key benefit of Option 1A includes a reduction in the administrative burdens of the current Scheme, leading to greater business efficiencies. Furthermore, the removal of training requirements would reduce business costs associated with training and compliance.

Removing prudential oversight

AFTA supports the PwC recommendation to remove the TCF, including its prudential oversight role. PwC concluded that the costs of prudential oversight are significant at $16.5 million and that the benefits are unclear. They further concluded that there is little evidence that industry volatility would increase markedly in its absence (PwC 2010, p 94).

Impacts - Government AFTA outlines below the benefits for Government if Option 1A were adopted, which would include increased efficiencies and a reduction in administrative burdens. Removing licensing As identified in SCOCA’s Consultation Paper, Option 1A would reduce the cost on Government due to the removal of costs associated with administration and enforcement of the licensing system. Regulatory activities in relation to ACL will be undertaken using general consumer affairs resources. Removing prudential oversight As prudential oversight is currently undertaken by the TCF, with costs recovered from industry, there would be no direct government cost savings associated with the removal of a prudential oversight function. We note that the terms of the TCF Trust Deed (Clause 27(2)) provide that the accumulated surplus residing in the TCF at the date of its winding up would be distributed to the States and Territories in proportion to the total number of participants in each jurisdiction at the date of termination. This will represent a sizeable revenue transfer for most states.

Questions Answered

1.1 What transitional arrangements, if any, would be necessary to implement Option1 A?

Implementing Option 1A would require winding down and repealing of State and Territory legislation pertaining to the current Scheme. AFTA outlines in detail the transitional arrangements associated with implementation of Option 1A in Section E of this submission.


Also, please see graphic at Appendix 2 which details AFTA’s suggested transition arrangements.

1.2 Should regulatory oversight of travel intermediaries only apply during a transition period?

Yes, regulatory oversight of travel intermediaries should only apply during the transition period and not beyond that time. Once Option 1A has been fully implemented, consumer protection would be guaranteed by other measures and specific regulatory oversight of travel intermediaries would no longer be required.

Option 1B: Mandatory Registration Scheme

Outline - SCOCA consultation paper Option 1B is a mandatory travel agents registration scheme, administered by governments. Option 1B involves the registration of all travel agent businesses for the purposes of recording the participants who are active in the sector and, if necessary, mandating participation in any ongoing compensation scheme. In addition, participants would be screened for basic character requirements, in addition to paying registration fees. The SCOCA consultation paper also notes that Option 1B would remove the disciplinary powers associated with the current licensing requirements (such as licence cancellation or suspension).

AFTA comment AFTA does not support Option 1B. This is because it would not represent a sufficient reduction in the administrative costs on businesses and regulatory costs of Government. Furthermore, consumer protections conferred by Option 1B unnecessarily duplicate those offered by voluntary accreditation for travel intermediaries and the generic consumer protection provisions of the ACL (Option 1A). In addition, as identified by PwC, such an approach may not remove any definitional issues around who is, and who is not, a travel agent (PwC Study, p 131).

Impacts - Consumers Option 1B would include a fit and proper person test which would confer the ability to exclude persons from the travel intermediaries sector who pose an unacceptable risk of mismanaging consumers’ funds. While this could go some way in ensuring protection, AFTA maintains that this would occur efficiently under Option 1A.


Impacts – Industry As SCOCA has noted, compared to the status quo, Option 1B would reduce the administrative burden of the National Scheme. In addition to the removal of training requirements, a less onerous scheme could be expected to reduce administrative compliance and licensing fees. However, with current costs of licensing totalling approximately $6 million per annum (SCOCA Paper, p 18), it is anticipated that a similar level of costs would continue to apply under Option 1B.

Impacts – Government Under Option 1B, the Government would bear the costs of administering the registration scheme. Questions Answered 1.5 Are the current character requirements imposed under the National Scheme appropriate? Should different character requirements be adopted for a registration scheme? AFTA does not believe that the current character requirements of the National Scheme remain appropriate. AFTA does not support the adoption of a new registration scheme, and believes that accreditation under ATAS will provide consumers with adequate assurances regarding the competency and character of travel intermediaries.

Option 1C: Mandatory Government Regulation

Outline – SCOCA consultation paper Option 1C contemplates maintaining the status quo (that is, the current licensing regime in the National Scheme), which can be characterised as ‘mandatory government regulation’. Option 1C involves the licensing of travel intermediaries under relevant State and Territory laws. Under the current Scheme, participating jurisdictions must enact and enforce rules, including that travel intermediaries be licensed and participate in the TCF (SCOCA 2011, p 7). AFTA comment AFTA does not support Option 1C. This is because mandatory Government regulation is no longer necessary nor fit for purpose. Impacts – Consumers As identified by SCOCA, the benefits for consumers of Option 1C are difficult to quantify.


Statistics from consumer agencies suggest that travel-related complaints make up a relatively low proportion of fair trading and consumer protection issues, relative to other industries (SCOCA 2011, p 20). The absence of a high level of dissatisfaction or travel-related complaints suggests that the perceived benefits of the current Scheme are not commensurate with its costs, thus legitimately challenging any decision to maintain the status quo. Impacts – Industry

Based on PwC’s study, there would be significant benefits in removing the National Scheme due to the costs arising from the mandatory training requirements and the onerous administrative requirements – refer analysis of costs associated with current scheme above. Impacts - Government State and territory governments currently administer the licensing regime. Removing the Scheme will result in savings for all State and Territory Governments of varying levels. Questions Answered 1.6 If it is desirable to retain a detailed competency and conduct regulatory framework for travel intermediaries, are any specific changes to the current arrangements desirable? AFTA does not consider it desirable to retain a detailed competency and conduct regulatory framework for travel intermediaries, or to make any fine-tuning changes to the current arrangements. AFTA supports Option1A as an adequate competency and conduct regulatory framework.


D Compensation

Summary The [current] compensation scheme is unduly burdensome relative to the risk of consumer detriment from travel agent collapses. It represents a disproportionate regulatory response considering the relative economic and systemic importance of the industry (PwC 2010, p 82).

AFTA Recommendation AFTA recommends implementation of Option 2A: Utilise the national consumer protection framework and other safeguards for the Compensation parameter of regulation as identified in the SCOCA Consultation Paper. The PwC Study concluded emphatically that there is insufficient justification to maintain the current compensation scheme (PwC 2010, p 109). It recommended removal of the current industry-specific regime. AFTA strongly concurs with PwC and endorses this approach. AFTA recognises that adoption of this approach is a significant change in this parameter of regulation. Accordingly, as PwC also noted (PwC 2010, p 134), careful consideration must be given to the implications of the change – particularly in relation to the transition steps involved in winding up of the TCF and the use of its accumulated reserves. Consistent with this recommendation, AFTA strongly opposes the following approaches in relation to the Compensation parameter: ⇒ Retention of the TCF - including any option that would see any

“enhancements” to the existing regulatory structure (PwC’s Option 6, PwC 2010, p 123).

⇒ An expanded compensation scheme – which could involve including a greater number of businesses in the scheme (PwC Option 2, PwC 2010, p 112) or that would involve a consumer contribution.

⇒ Continued prudential oversight – ongoing prudential oversight

by an industry-specific regulator (PwC Option 3, PwC 2010, p 116).

This section will consider Options 2A and 2B outlined in SCOCA’s Consultation Paper, in relation to the compensation parameter of consumer protection. Each option is analysed in terms of its impact on consumers, industry and Goverrment. This covers Elements 3 and 4 of the seven key elements of a Regulation Impact Statement (COAG 2007, p 12).


⇒ Industry-run compensation scheme - Implementation of an

industry-run compensation scheme (PwC Option 5, PwC 2010, p 120).

Option 2A: Utilise the national consumer protection framework and other safeguards

SCOCA consultation paper Option 2A involves basing the compensation parameter of consumer protection on the national generic consumer protection framework. This would be supplemented by a number of non-regulatory protection mechanisms (“safeguards”). The SCOCA Consultation Paper notes that Option 2A has merit and should be further considered (SCOCA 2011, p 32). The SCOCA Consultation Paper notes the following benefits of Option 2A with which AFTA agrees: ⇒ Decreased costs: As travel intermediaries would not be

required to pay TCF application and renewal fees, competition would ensure the majority of these savings would be passed on to consumers.

⇒ Equity: Removal of the compliance obligations associated

with the TCF would bring regulation of affected travel intermediaries into line with other participants in the travel industry, as well as most other industries of comparable risk.

AFTA comment AFTA strongly supports and recommends adoption of Option 2A. AFTA believes that Option 2A is an appropriate and proportionate response to the need for consumer compensation in the travel intermediary sector. AFTA refers to its April 2010 Submission for a full explanation as to why retention of the current compensation regime involving the TCF is not appropriate. These conclusions in our earlier submission have also been noted in the PwC study. A summary is outlined below. 1. The TCF is outdated The regime has not evolved to reflect current day commercial, consumer and practical realities (AFTA 2010, p 31). In relation to this, PwC observed: “Subsequent developments suggest that there is no longer sufficient justification for industry-specific consumer protection


regulation in this sector and that the existing regime is now not fit for purpose.”. (PwC 2010, p 3). 2. The TCF has limited coverage The regime does not apply equally to all providers and therefore generates an uneven ‘playing field’ (AFTA 2010, p 33). PwC observed:

“Accordingly, from a pure risk perspective, the scope of the scheme provides protection for only a small component of consumers’ risk from insolvency” (PwC 2010, p 98).

3. The TCF is inefficient The regime is costly for government, industry and consumers (AFTA 2010, p 34). In its Study, PwC noted:

“The regulatory costs are therefore around nine times the current value of consumer funds lost.” (PwC 2010, p 105).

4. The TCF represents excessive regulation The regime constitutes a high level of regulation for a stable industry, and does not represent a proportionate regulatory response (AFTA 2010, p 36). The PwC Study noted:

“On balance therefore, the scheme represents a costly and disproportionate regulatory measure. There are no parallels to industries with comparable potential for consumer detriment” (PwC 2010, p 105).

Impacts - consumers Benefits Reduced cost burden for consumers: Consumers will benefit through the removal of the high regulatory costs associated with the TCF – PwC estimates this at $19.3m per annum (PWC 2010, p 110). It is expected that these cost reductions would flow through to consumers. Increased clarity for consumers: The removal of the TCF would end consumer confusion over what payments are protected by the TCF and when they are covered. Costs

Recourse to TCF: Removal of the TCF would partially remove the consumer’s ability to seek compensation for monies paid to a travel agent who subsequently fails and has not passed funds on to the supplier. However, it is important to note that consumer awareness of the TCF has been shown to be extremely low – the PwC Study found that only 14% of consumers have some awareness of the TCF, with only 3% having a good understanding of the Fund and its functions


(our emphasis) (PwC 2010, p 91). Accordingly, any cost to consumers of the removal of the TCF compensation provision could be said to be “illusory” to the vast majority of consumers. Failure rates: It is important to note however that PwC found “little evidence” to support the proposition that failures would increase in the absence of prudential oversight (PwC 2010, p 111).

Mitigation of consumer costs

It is important to note that the potential costs mentioned above can be easily mitigated, and potentially removed altogether, through the following: 1. Generic consumer protection laws: Consumers can seek redress for any loss due to fraud or misappropriation through the general consumer protection mechanisms of the ACL. 2. Using reputable (ATAS accredited) agents: Consumers could mitigate their risks by choosing to deal with ATAS accredited agents. Other industry oversight arrangements (for example IATA and credit card merchant accreditation) would also provide a degree of assurance to consumers. 3. Travel insurance and credit card chargeback: Consumers can avail themselves of private insurance to insure against supplier insolvency and credit card chargeback in the event of loss from agent (or supplier) failure. 4. Limited coverage by TCF: As both AFTA and PwC have canvassed in their reports, the TCF provides an ever decreasing degree of protection to consumers as more travellers contract directly with suppliers who are not TCF members, and as the settlement period between agent and supplier declines over time.

Impacts - industry

Reduced cost burdens: Business would benefit with the removal of the significant compliance costs associated with the TCF – PwC estimates these at $19.3m per annum (PwC 2010, p 110). These costs include both administration costs, financial costs (in relation to the provision of securities) and “opportunity costs” associated with retention of additional capital reserves due to the prudential oversight requirements of the TCF. Market equity: Removal of the TCF would remove a competitive disadvantage suffered by those businesses who must comply with the TCF compared to those that do not. More generally, removing the TCF would bring travel agent businesses into line with the regulation of other businesses of comparable risk. Removes barrier to entry: Removal of the TCF removes a significant barrier to entry for organisations/individuals who are considering establishing a travel agent business. International competitiveness: Removal of TCF regulation of travel agents would allow Australian businesses to be more competitive in the global economy as they will be able to compete on a level


playing field with international operators who do not face the regulatory burdens imposed by the TCF. Impacts - Government

Removing administration: PwC found that the current compensation mechanism is unduly burdensome. Accordingly, there will be reduced government administration costs with removal of the scheme. Potential escalation of complaints to Government: As the SCOCA Consultation Paper notes, removal of the TCF could lead to an increase in complaints to Government consumer affairs agencies and/or calls for compensation. Given the limited knowledge and understanding of the TCF and the cost mitigation factors mentioned above, it is unlikely that there would be a significant cost increase in this area. Conclusion

AFTA’s conclusion from the foregoing analysis is that there would be an overwhelming benefit from adopting Option 2A, due primarily to the removal of the significant economic cost of the TCF and the existence of a wide range of mitigating measures that would ameliorate the potential costs of implementing Option 2A.

Questions Answered 2.1 Should transitional arrangements be provided if the current compensation arrangements were removed? AFTA outlines in Section E below a transition plan to facilitate an efficient transition from the current regime to Option 1A, which includes the removal of the TCF. In particular, AFTA proposes a phased removal of compensation arrangements with the TCF having until 30 June 2013 to make all outstanding claim payments. Claims can be lodged by consumers up until 31 December 2012. 2.2 Should new travel intermediaries be requested to contribute to compensation arrangements during the transition? To provide equity between all entities who are required to be members of the TCF, AFTA proposes that any newly established travel intermediary should be required to pay the required TCF application, renewal and other fees for all years up to and including the 2011-12 financial year. This is the rule that AFTA proposes would apply to all existing industry participants who are members of the TCF.


Option 2B: Maintain the current compensation arrangements

Outline - SCOCA consultation paper Option 2B involves maintaining the status quo – that is, maintaining the current prudential and compensation regime provided under the National Scheme. The current licensing rules in the National Scheme require that all travel agents (as defined) must be members of the TCF. Option 2B - AFTA comment As noted above, AFTA does not support the retention of the existing regime and calls for its urgent removal. We have outlined above the serious flaws and competitive drawbacks of the current scheme which have been supported by the PwC Study. AFTA also notes that the last major review of the TCF by the CIE in 2000 also highlighted its inefficiency and called for its removal. In particular, it noted:

The estimated costs of the TCF substantially exceed the estimated benefits. The requirements for TCF membership should be dropped (CIE 2000, p xxiv).

It is clear on the basis of a series of reviews and economic analysis that Option 2B is not the preferred regulatory outcome. Impact analysis AFTA has not sought to provide a detailed impact analysis of Option 2B in this submission as it believes that the positive attributes of Option 2A and the outline of costs associated with retaining the status quo have been more than adequately summarised above, with further detail in the PwC Study as noted. Questions Answered 2.3 Does the potential inability of the TCF to be able to compensate consumers in the event of a major travel intermediary collapse pose a significant concern? AFTA noted in its 2010 submission that previous reviews of the TCF concluded that the TCF continues to be potentially undercapitalised (AFTA 2010, p 38). Accordingly, given the precedent of Government stepping in to assist compensate consumers with the Ansett-Traveland collapse in 2001, AFTA concluded that it represents an unreasonable and unnecessary financial risk for Government to essentially act as “an underwriter of last resort” to cover all traveller risk.


2.4 Are there additional benetits or costs of maintaining the current compensation arrangements, which have not been considered here? Please provide evidence. Please refer to AFTA’s comment under “Impact analysis” above.


E Implementation

Introduction It is important to note that given the existing ACL legislative framework that is already in place, together with the recent launch of the NTAF, significant steps required to implement Options 1A + 2A are already in place. Relatively speaking, the process in moving to the new regime should not be that onerous. To assist policy makers and regulators, AFTA has prepared a list of milestones and a timeline to facilitate implementation of a consolidated Option 1A + 2A reform package. Implementation date AFTA recommends 1 July 2012 as the key commencement date for the new regulatory regime, with a special 6 month transitional period for TCF compensation claims through to 31 December 2012 (refer below). While AFTA acknowledges that MCCA has identified implementation of a new policy response by July 2013 (MCCA 2009, p 15), we believe it is eminently feasible to bring forward this implementation date by 1 year. This accelerated implementation is consistent with the Government’s stated intention to bring forward completion of Seamless National Economy reforms by six months to December 2012 (COAG 2011, Appendix 3). To achieve this commencement date, it is critical that MCCA makes a decision regarding reform before 30 June 2011. The milestones and timeline outlined below commence on 1 July 2011 and assume that MCCA has agreed to implement Option 1A + 2A.

In this Section, AFTA outlines a timeframe for the implementation of a proposed new regulatory regime for consumer protection in the travel and travel-related services market which embraces the adoption of Options 1A and 2A of the SCOCA Consultation Paper. This addresses Element 7 of the seven key elements of a Regulation Impact Statement (COAG 2007).


Implementation timeline graphic Graphic 2 below provides an implementation timeline for Option 1A + 2A (note that a full, landscape version of Graphic 2 is provided at Appendix 2). In the two sections of the graphic, AFTA outlines the key milestones for implementation of each component.

Graphic 2: Implementation of consumer protection reforms in the travel services market


Option 1A: Implementation of Industry Accreditation Implementation issues for consideration The key implementation issues for consideration for the adoption of Option 1A are as follows: • Terms and requirements of ATAS system to facilitate a master

licence to be issued to ATAS by the TQCA. • Terms and requirements for provision of ATAS accreditation to

individual entities by ATAS. • Repeal of relevant State/Territory travel agents Acts, or

provisions of relevant Acts. as appropriate.

Terms/requirements of ATAS master licence

• The NTAF framework is now in place, following its official launch on 2 April 2011.

• Establishment of entity and governance arrangements for administration of ATAS will need to be in place as soon as possible after 1 July 2011.

• There will be an accelerated ATAS master licence accreditation phase for ATAS from 1 July 2011 to 31 December 2011 to facilitate issuing of the master NTAF licence. ATAS to work closely with TQCA and RET to achieve NTAF/TQCA compliance for the master licence by 31 December 2011.

Terms/requirements for issuing of licences to individual entities

• Travel intermediaries will be able to apply for ATAS

accreditation from ATAS from 1 January 2012. • As part of obtaining the ATAS master licence from TQCA, ATAS

will have developed an accreditation system for individual travel intermediary businesses so as to allow adoption of the system by individual businesses as from 1 January 2012.

• The industry will work to ensure that as many intermediaries who wish to receive voluntary ATAS accreditation by 1 July 2012 will be able to do so.

Repeal of state/territory legislation

• From 1 July 2012, travel intermediaries will no longer be

required to be licensed under state/territory legislation. • Accordingly, relevant state/territory legislation will need to be

repealed/amended to remove all relevant licensing rules.

Linking with Option 2A The key date of 30 June 2012 under Option 1A for the introduction of ATAS accreditation and removal of state based licensing links in with the same key date under Option 2A for the removal of prudential oversight requirements by the TCF.


Option 2A: Removing the TCF Implementation issues for consideration The key implementation issues for consideration in the adoption of Option 2A are as follows: • Cessation of TCF compensation payments. • Cessation of TCF prudential requirements. • Cessation of collection of TCF fees. • Winding up the TCF and payment of surplus funds.

Cessation of TCF compensation payments

• AFTA proposes that the last date on which claims can be

made on the TCF should be 31 December 2012 in relation to agent failure that has occurred up to and including 30 June 2012.

• A six month window of opportunity to 31 December 2012 will be allowed for lodgement of claims with the TCF against intermediaries who were members of TCF as at 30 June 2012.

• All claims to be paid to claimants by 30 June 2013. • The TCF settles all outstanding legal disputes for counter claims

by 30 June 2013.

Cessation of TCF prudential requirements

• TCF prudential requirements cease on 30 June 2012 – that is, prudential oversight ceases on 30 June 2012 and TCF members are no longer required to comply with TCF oversight rules.

• TCF members lodge their last annual return with the TCF by 30 September 2012 (irrespective of their financial year end) – in respect of the FY11-12 TCF year.

Cessation of TCF prudential requirements • TCF members pay their last membership fee by 30 June 2011

for the 2011-12 financial year.

Winding up of TCF

• The TCF is wound up (ie the Trust Deed is terminated) on or before 31 December 2013.

• Surplus funds are allocated to the various State/Territory Governments in accordance with clause 27.2 of the TCF Trust Deed.

Linking with Option 1A The key date of 30 June 2012 under Option 2A for the cessation of TCF prudential oversight links in with the same key date under Option 1A for the commencement of issue of ATAS accreditation licences for travel intermediaries.


Bibliography

Australian Federation of Travel Agents 2010 (AFTA 2010), Review of consumer protection measures in the travel and travel related services market in Australia including the role of the Travel Compensation Fund, April 2010 Centre for International Economics 2000 (CIE 2000), Consultative Draft National Competition Policy Review of the National Scheme for the Registration of Travel Agents, August 2000 Council of Australian Governments 2007 (COAG 2007), Best Practice Regulation, A guide for Ministerial Councils and National Standard Setting Bodies, October 2007 Council of Australian Governments 2011 (COAG 2011), COAG Communiqué 13 February 2011, February 2011 Department of Resources, Energy and Tourism (RET 2011), National Tourism Accreditation Framework (NTAF) Factsheet, April 2011 Ministerial Council on Consumer Affairs (MCCA 2009), A new approach to consumer policy, Strategy 2010-12, December 2009 Office of Best Practice Regulation 2007 (OBPR 2007), Best Practice Regulation Handbook, August 2007

Pricewaterhouse Coopers 2010 (PwC 2010), Review of consumer protection in the travel and travel related services market, November 2010 Standing Committee of Officials on Consumer Affairs (SCOCA 2011), Consumer protection in the travel and travel related services market, Consultation paper, March 2011


Appendix 1: AFTA endorsed consumer protection in the travel services market


Appendix 2: Implementation of consumer protection reforms in the travel services market


Appendix 3: ATAS

AFTA Travel Accreditation Scheme (ATAS)

AFTA supports voluntary industry accreditation under the National Tourism Accreditation Framework and will establish the AFTA Travel Accreditation Scheme (ATAS) to facilitate this. The NTAF Governance Handbook5 states that the Tourism Quality Council of Australia (TQCA) will administer the NTAF and make policy decisions so that the NTAF is accessible, credible, useful, inclusive and sustainable.6

ATAS will be committed to ensuring consumer satisfaction and will be guided by the following principles, in accordance with NTAF’s strategic objectives. ATAS will be: ⇒ marketed nationally and internationally to consumers;

⇒ highly visible through such marketing nationally and internationally; ⇒ accessible to all tourism businesses, including small businesses;

⇒ credible, with a high level of integrity and standards reinforced by

AFTA’s Code of Ethics, to assure consumer confidence;

⇒ inclusive of all qualified tourism-related programs;

⇒ sustainable and flexible enough to respond to the changing business environment; and

⇒ improved continuously to raise standards and quality.

AFTA notes that it has provided this overview of ATAS based on the latest information available at the time of writing.

5 Tourism Quality and Innovation Section, Tourism Division, RET, Issue No: 0.2, 24 November 2009. 6 Ibid, p 7.


Appendix 4: The COAG deregulation agenda

AFTA notes that COAG has agreed to bring forward the completion date of its Deregulation and Competition and Seamless National Economy reform by 6 months from June 2013 to December 2012. AFTA notes that the Occupational Licensing reform agenda is yet to be completed. Implementation of Options 1A and 2A by December 2012 would be agreeable with the revised COAG deadline. See the COAG reform agenda below.

0

Department of the Prime Minister and Cabinet

REFORMS COMPLETED BY COAG TO BE COMPLETED OVER 2011 AND 2012Reform

Develop model national occupational health and safety legislation

Streamlined environmental assessment and approvals

Harmonisation payroll tax arrangements

Establish Australian Health Practitioner Regulation Agency

A single national system of trade measurement

Nationally consistent rail safety regulation

A national consumer protection framework

A national consistent product safety framework

Agreement to a national oil and gas regulator

National regulation of trustee corporations

National regulation of mortgage broking

National regulation of margin lending

National regulation of non-deposit lending institutions

Code-based assessment for single residential dwellings

Agreement to develop a national construction code

Developed model national mine safety regulations

Nationally consistent approach to food regulation

Standard Business Reporting

Wine labelling

Established the National Occupational Licensing Authority

Review of parallel import restrictions on books

Agreement to national vocational education and training regulator

Agreement to legal profession reform

Regulation of chemicals and plastics

Personal property securities

National Electronic Conveyancing System

National system for consumer credit

Review of Australia’s anti-dumping and countervailing system

Energy reforms

Infrastructure access regulation

Infrastructure access and regulation regimes

Transport regulators, including maritime regulation

Road reform plan

Occupational licences

Registering business names

Directors’ liability

Not-for-profit sector

Retail tenancy

COAG has agreed to bring forward the completion date of the current Seamless National Economy reforms by six months

from June 2013 to December 2012

Element of the National Partnership Agreement to Deliver a Seamless National Economy

Identified by COAG Reform Council as completed by 30 September 2010 or completed subsequently

THE COAG DEREGULATION AND COMPETITION AGENDA


Appendix 5: NTAF Factsheet


“Without a travel agent, you are on your own”

The Australian Federation of Travel Agents

Level 3/309 Pitt Street Sydney NSW 2000

Telephone: 02 9287 9900

Facsimile: 02 9264 1085

Website: www.afta.com.au

australian federation of travel agents- submission to ... · afta submission in response to scoca...

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