TRAVEL AGENTS REPEAL BILL

Tuesday 17 June, 2014

Mr TARZIA (Hartley) (17:19): I acknowledge the esteemed contributions of the Hon. Stephen Wade in the other place and my colleagues in this place, the members for Stuart, Hammond, Heysen and Morphett. The member for Stuart correctly highlighted that there are a number of questions that still remain outstanding. It is certainly not my intention to also enter into the committee stage here, but I would certainly echo the sentiments of the member for Stuart and ask that the government do present those answers to the house.

Mr TARZIA (Hartley) (17:19): I acknowledge the esteemed contributions of the Hon. Stephen Wade in the other place and my colleagues in this place, the members for Stuart, Hammond, Heysen and Morphett. The member for Stuart correctly highlighted that there are a number of questions that still remain outstanding. It is certainly not my intention to also enter into the committee stage here, but I would certainly echo the sentiments of the member for Stuart and ask that the government do present those answers to the house.

I rise today to speak in support of the bill. However, the bill also raises many concerns that I would ask the government to consider. I would like to do two things today. I would like to speak a little bit about the background and good reasons for supporting the bill, but I would like to view those in light of the concerns with it as well. As this place has heard, the current bill serves to repeal the Travel Agents Act 1986, and it is part of the national reform to cut red tape in this area, which is understandable.

Currently, the Travel Compensation Fund (TCF) is funded by charges priced into travel agent fees, and it has been an area of much market change, for several reasons, especially in the last 10 years. There have been substantial changes to the travel agent market in recent times, as we all know. It has been published, as we have heard earlier today, that about two-thirds of travel spend is now done without a travel agent. Consequently, most transactions seem not to be caught by the existing scheme and are not covered by TCF compensation.

It seems to be easier every day to book travel online, especially with market players like Wotif, Expedia, etc. Additionally, technology has now bridged the world and the world has become much smaller than it once was. Several overseas firms have entered our local market and simultaneously have bypassed the national scheme completely. A consolidated marketplace has also seen, as we have heard, a minute cluster of players dominate the market. Failure of the scheme has been at the expense of consumer compensation when, arguably, some of these consumers need it the most.

Furthermore, the expense of complying with this TCF has also presented much difficulty. We have heard two figures here today where independent financial firms have actually calculated the cost of complying with the TCF arrangements, being $19.3 million in 2011, calculated by PwC, and about $18.4 million, calculated by KPMG in 2012. Obviously, the overlapping of these regulatory measures leads to many inefficiencies in the economy.

I note that the Travel Industry Transition Plan has been developed to address the challenges after many rounds of public consultation. The plan has notably been established and been passed by a majority of state and territory governments, and it certainly would be prudent to follow suit. I note that travel agents will still be subject to some regulation and consumers will certainly have protection under an array of means. I will give a couple of examples: basic contract law and the Australian Consumer Law. These are some examples where there will be protection provided for our consumers dealing with travel agents and suppliers.

A novel accreditation scheme named AFTA Travel Accreditation Scheme (ATAS) is being established by the Australian Federation of Travel Agents and commences from 1 July. Other accreditation mechanisms already available include the International Air Transport Association, the Cruise Lines International Association of Australasia and the National Tourism Accreditation Framework.

That tells us a little bit about the background of the bill. There are, however, many grave concerns. Any act which purports to reduce red tape and regulation must consider many things, but one of them is the balance between a fair market and a free market. There are many concerns which still need to be ironed out in this bill, and I encourage the government sooner rather than later to answer the questions that we are putting before them.

The first thing that I want to mention is the concern that under it travel agents need not be accredited anywhere near the current level. In recent times, I spoke to the good people at Jetset Glynde, in my electorate of Hartley, which is my travel agent, Deputy Speaker. It is a very reputable organisation, let me tell you, and if anyone needs any travel bookings I would encourage them to go down to Payneham Road and consult with Rick Pirone and John Longo, the good people at Jetset Glynde. They tell me especially that they have been in the business for a long time and they have developed much expertise in the area, and they certainly have concern that the level of accreditation is much less post 1 July.

Apart from that, as we have heard today and as the member for Stuart pointed out very well, the relaxing of insurance requirements on the part of the travel agents is also in grave danger. In relation to TCF funds, I understand that the TCF funds at the end of 2013 were $27 million, and the TCF trust deed requires that any funds remaining after the TCF closes will be redistributed to participating jurisdictions. Beneficial projects for these funds to be allocated include funding educational and instructive material about the reform for companies and consumers.

Education concerning the reform is certainly of great concern to me. From talking to these and other travel agents, owners, employees and also their customers and consumers, it is evident to me that community awareness is certainly not where it needs to be in relation to this reform. Consequently, I believe the current government has an obligation to inform customers of the potential perils of the industry moving forward.

While I will support the bill, we certainly must acknowledge these issues confronting the future of the travel industry, not only for consumers but also for existing providers, and that we think about exactly who we want to let into this industry and at what expense. The government must educate consumers of the changes that the bill will present. As I mentioned earlier, we need to achieve the right balance between a fair market and a free market in the travel industry.