Proposed changes to product safety standards legislation explained

By Gail Greatorex, Product Safety Solutions Australia

Under a proposed revision of Australian Consumer Law (ACL), businesses selling consumer goods that are subject to mandatory safety standards will have several costly obstacles removed. The proposed amendments are a game-changer, but there may be a catch.

Easier compliance and safety

The Federal Government has released an exposure draft of the bill Treasury Laws Amendment Bill 2024 – Product Safety Regulation (Draft Bill). The proposed changes will make it easier to recognise overseas product safety standards in Australia, provided they offer at least an equivalent level of consumer protection.

There are currently 48 mandatory ACL standards regulating a range of product categories including infant and nursery products, children’s toys, recreational equipment and household goods.

The Draft Bill proposes amendments to the ACL to allow the Commonwealth Minister to recognise overseas product safety standards alongside Australian safety standards when creating a new or updating an existing mandatory safety or information standard.

Businesses will benefit from this policy by more easily importing products which already comply with applicable overseas standards. It will significantly reduce the cost, time and confusion involved when importing certain goods, and therefore support businesses while maintaining consumer safety.

At the same time, the Draft Bill proposes amendments to the ACL to more easily allow businesses to comply with the latest Australian and overseas standards as they are updated from time-to-time.

This is the game-changer. This proposal would ensure that Australian mandatory standards do not become outdated, preventing businesses from using the latest and safest Australian or overseas standards that are available, as is currently the case. Benefits will include:

• Reduced compliance costs for businesses by not having to test products to outdated requirements.
• Reduced confusion about which version of an Australian or overseas standard a product must comply with.
• A greater choice of products for consumers and at a lower cost due to decreased compliance costs for businesses.

Business and other stakeholders overwhelmingly support this reform.

A step too far?

Associated changes proposed in the Draft Bill create new imposts on businesses that make, import or sell products that are subject to a mandatory standard.

Where two or more standards (e.g. an Australian Standard and a British Standard) are listed as optional for compliance with a mandatory standard, businesses are currently required to nominate which one. The Draft Bill adds amendments to strengthen this requirement by imposing penalties for not providing documents that substantiate compliance with the nominated standard.

The Draft Bill also includes amendments that would allow the government to stipulate that businesses keep related records and provide related information to “any person, including the regulator”.

The wording in the exposure draft is very broad and is not even tied to the new requirement to provide documents related to a nominated standard.

Several business associations have raised concerns that these supplementary inclusions are unjustified and go too far. They argue that suppliers of goods should choose how to manage compliance without government dictating business practices. Further, such stipulations may add to compliance costs, countering the savings achieved elsewhere in the Draft Bill’s main objective.

Regulators still need to ensure compliance, and greater choice of standards requires some accountability. However, balance must be achieved to make sure all parties’ needs are met.

Department of Treasury allowed a two-week window for comments on the Draft Bill which closed on 25 October. It is now a watch and wait situation to see how this plays out.

Gail Greatorex is a consumer product safety consultant and advocate, based in Melbourne.

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