REPLACEMENT explanatory STATEMENT
Issued by the Authority of the Parliamentary Secretary to the Treasurer
Competition and Consumer Act 2010
Revocation of existing permanent ban on miniature motorbikes (monkey bikes) with unsafe design features and imposition of new permanent ban on miniature motorbikes (monkey bikes) with unsafe design features
Background
In July 2010 a temporary ban on miniature motorbikes (monkey bikes) with unsafe design features was made under subsection 65C(5) of the Trade Practices Act 1974 (TPA). The temporary ban was made following the harmonisation of State, Territory and Commonwealth product safety bans in preparation for significant changes to consumer law in Australia.
On 1 January 2011, amendments to the TPA established a new national consumer law regime known as the Australian Consumer Law (ACL) and changed the name of the TPA to the Competition and Consumer Act 2010 (CCA). When the ACL took effect, the temporary ban on miniature motorbikes (monkey bikes) with unsafe design features became an interim ban under the CCA.
Subsection 114(1) of Schedule 2 to the CCA provides that the Commonwealth Minister may impose a permanent ban on consumer goods of a particular kind if an interim ban exists for those goods, or it appears to the Commonwealth Minister that consumer goods of that kind will or may cause injury to any person or a reasonably foreseeable use (including misuse) of consumer goods will or may cause injury to any person. The interim ban on miniature motorbikes (monkey bikes) with unsafe design features was made a permanent ban on 11 February 2011.
The permanent ban on miniature motorbikes (monkey bikes) with unsafe design features
Miniature motorbikes are replicas of popular motorcycles scaled down to about half the size. Powerful miniature motorbikes have internal combustion engines and can reach speeds up to 80 kilometres per hour. To improve safety, powerful miniature motorbikes should have safety features such as:
- a self-closing throttle
- effective brakes
- adequate footpegs
- effective steering
- supplemental engine stop.
The Australian Competition and Consumer Commission (ACCC) conducted a review of the scope of the permanent ban. The ACCC found that the permanent ban unintentionally captured miniature motorbikes with low powered electric motors as well as those with high powered internal combustion engines. Following a risk assessment, it was concluded that there was no justification for the ban to apply to electric powered miniature motorbikes.
The permanent ban has been revoked under subsection 117(a) of Schedule 2 to the CCA and
re-imposed under subsection 114(1) of Schedule 2 to the CCA. The new permanent ban applies to miniature motorbikes powered by internal combustion engine only.
Consultation
Under the CCA, a permanent ban is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LIA). Section 17 of the LIA requires that the rule maker should consult prior to making a legislative instrument. Prior to revoking and re-imposing the permanent ban a proposed ban notice, inviting suppliers to request a conference with the ACCC was published on the internet as required under subsection 132(3)(b) of Part XI of the CCA. Known suppliers of miniature motorbikes were provided with a copy of the proposed ban notice in accordance with section 132K of Part XI of the CCA. Suppliers did not request a conference with the ACCC.
Commencement
This legislative instrument commences the day after it is registered on the Federal Register of Legislative Instruments.
Disallowance
This legislative instrument is not subject to disallowance due to section 44 of the Legislation Act 2003.
Sunsetting
This legislative instrument is not subject to sunsetting due to section 54 of the Legislation Act 2003.
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Overview
The Competition and Consumer Act 2010 was enacted to provide a comprehensive framework for consumer protection, competition, and fair trading in Australia. This Act, along with the Australian Consumer Law, replaced the Trade Practices Act 1974, creating a unified national consumer law regime. One significant issue addressed by the Act is the regulation of consumer goods that pose safety risks, including the temporary and later permanent ban on miniature motorbikes, commonly known as monkey bikes, with unsafe design features. Initially, a temporary ban was placed on these motorbikes in July 2010 under the Trade Practices Act, and this was made permanent under the new Act on 11 February 2011. However, a subsequent review by the Australian Competition and Consumer Commission identified that the ban was overly broad, capturing low-powered electric motorbikes that did not present the same level of risk as those with internal combustion engines. Consequently, the permanent ban was revoked and re-imposed to specifically target miniature motorbikes with unsafe internal combustion engines, ensuring that the safety regulations are appropriately targeted and effective.
Scope and Application
The Competition and Consumer Act 2010 applies to a wide range of persons, entities, industries, and conduct within Australia, aiming to protect consumers and promote fair competition. Specifically, the Act addresses the safety of consumer goods, including miniature motorbikes, by allowing for the imposition of permanent bans on products deemed unsafe. The Act applies nationally, with the Commonwealth having the authority to implement and enforce these bans. The geographic reach of the Act is national, affecting all states and territories within Australia. The Act excludes certain products from its purview if they do not meet the criteria for being classified as consumer goods, and it allows for exemptions or thresholds to be set based on the nature and potential risk of the goods in question. The Act also provides for the extension or restriction of its application through subordinate instruments, such as legislative instruments created under the Legislative Instruments Act 2003. These instruments enable the detailed regulation of specific products, as demonstrated by the ban on miniature motorbikes with unsafe design features.
Key Provisions
The key operative sections of this legislation (subsection 117(a) and subsection 114(1) of Schedule 2 to the Competition and Consumer Act 2010) provide the Commonwealth Minister with the authority to revoke and re-impose a permanent ban on consumer goods that pose a safety risk. In this instance, the ban pertains to miniature motorbikes (monkey bikes) with unsafe design features, specifically those powered by internal combustion engines. The ban was initially imposed in response to safety concerns and was subsequently reviewed and adjusted to ensure it targets the appropriate products.
The Act imposes obligations on suppliers of miniature motorbikes to ensure that any products they supply comply with the specified safety standards. Specifically, suppliers must ensure that any miniature motorbikes they sell are equipped with the necessary safety features, such as a self-closing throttle, effective brakes, adequate footpegs, effective steering, and a supplemental engine stop, if they are powered by an internal combustion engine. Failure to comply with these safety standards can result in the goods being considered unsafe and subject to the permanent ban.
There are potential civil and criminal consequences for breaches of this Act. Under section 132N of Part XI of the Competition and Consumer Act 2010, a person who contravenes the ban by supplying or offering to supply a banned consumer good can be subject to civil penalty proceedings. The maximum penalty for contravening the ban is significant, with section 132O of the Act specifying that the maximum penalty is 10,000 penalty units for a corporation and 1,000 penalty units for an individual. In addition, the Act may also provide for criminal penalties for serious or repeated breaches, although the specific provisions for such penalties are not detailed in this explanatory statement.