Treasury Laws Amendment (Acquisition as Consumer—Financial Thresholds) Regulations 2020

Administered by Department of the Treasury

Legislation au F2020L00907 Regulations Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Issued by authority of the Minister for Housing and Assistant Treasurer

 

Australian Securities and Investments Commission Act 2001

Competition and Consumer Act 2010

Treasury Laws Amendment (Acquisition as Consumer—Financial Thresholds) Regulations 2020

The Treasury Laws Amendment (Acquisition as Consumer—Financial Thresholds) Regulations 2020 (the Regulations) give effect to proposal 15 of the Australian Consumer Law Review (ACL Review) which recommended changing the monetary threshold in the definition of ‘consumer’ for the purposes of the Australian Consumer Law (ACL).

The ACL Review assessed the effectiveness of ACL provisions, including the ACL’s flexibility to respond to new and emerging issues and the extent to which the national consumer policy framework had met the objectives set by the Council of Australian Governments. Consumer affairs ministers, through the Legislative and Governance Forum on Consumer Affairs, agreed to increase the monetary threshold at their meeting in October 2018, to restore the real value of the monetary threshold that has remained unchanged since 1986.

The Australian Securities and Investments Commission Act 2001 (the ASIC Act) provides for the Australian Securities and Investments Commission to administer the Corporations Act 2001 (the Corporations Act) and other prescribed laws of the Commonwealth. The Competition and Consumer Act 2010 (the CCA) promotes competition and fair trading and provides for consumer protection.

Section 251 of the ASIC Act and Section 172 of the CCA provide that the Governor‑General may make regulations prescribing matters required or permitted by these Acts to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to these Acts.

The Regulations amend the Competition and Consumer Regulations 2010 (CC Regulations) to increase the monetary threshold in the definition of ‘consumer’ for the purposes of the Australian Consumer Law (ACL), which is Schedule 2 to the CCA. It also amends the Australian Securities and Investments Commission Regulations 2001 (ASIC Regulations) which contain mirror consumer protection provisions for financial products and services.

The ACL is a generic law applying to all sectors of the economy. However, separate laws dealing with financial products and services are necessary, due to constitutional issues relating to the States’ referral of those powers under the Corporations Agreement 2002. In this regard, the Intergovernmental Agreement for the ACL provides that the Commonwealth should enact changes to the consumer protection provisions of the ASIC Act to ensure that they are consistent with the ACL.

 

 

Section 12BC of the ASIC Act and section 3 of the ACL define a ‘consumer’ for the purposes of acquiring goods or services. A person is taken to have acquired particular goods or services as a consumer if they meet one of the three criteria listed in the definition, one of which includes a monetary threshold.

Item 1 and 3 of Schedule 1 of the Regulations insert new regulations 2DA into Part 1 of the ASIC Regulations and 77A into Part 6 of the CC Regulations respectively to prescribe a monetary threshold of $100,000 in these Regulations, for the purpose of the definition of ‘consumer’. This is an increase from the original threshold prescribed in the primary legislation of $40,000.

Increasing the monetary threshold in the definition of ‘consumer’ from $40,000 to $100,000 will ensure that it remains fit for purpose. A finding from the ACL Review was that the level of protection afforded to consumers (including small businesses) has been eroded due to inflation in the cost of goods and services over time. The decline in the real value of the threshold means that certain business purchases once covered under the ACL are no longer covered. The higher monetary threshold in the ‘consumer’ definition will assist in efficient economic transactions by restoring the level of coverage for business purchases in real terms, assuring minimum standards of protection for the goods and services purchased by business consumers. It would also capture ordinary consumer purchases of commercial products above the current threshold.

In addition to the consultation undertaken through the ACL Review, the Treasury consulted on the potential regulatory impacts of increasing the monetary threshold of the ‘consumer’ definition. The Decision Regulatory Impact Statement, ‘Australian Consumer Law Review: Clarification, simplification and modernisation of the consumer guarantee framework’, identified the change will impose minimal compliance burden on businesses, but provide greater benefit ensuring the ACL definition would remain fit for purpose [OBPR Ref #22023].

The Decision regulatory impact statement is available at: https://ris.pmc.gov.au/sites/default/files/posts/2018/11/3_consumer_guarantee_framework_decision_ris.pdf.

State and territory consumer affairs officials, the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission were consulted on the draft instrument.

Under section 12 of Legislation (Exemptions and Other Matters) Regulation 2015, the Regulations are exempt from sunsetting.

The Acts do not specify any conditions that need to be satisfied before the power to make the Regulations may be exercised.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The Regulations commence on the latter of the day after it is registered on the Federal Register of Legislation and 1 July 2021.

A Statement of Compatibility with Human Rights is in the Attachment.


ATTACHMENT

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Human Rights Act)

Treasury Laws Amendment (Acquisition as Consumer—Financial Thresholds) Regulations 2020

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights Act.

Overview of the Legislative Instrument

The Regulations amends the Competition and Consumer Regulations 2010 (CC Regulations) to increase the monetary threshold in the definition of ‘consumer’ for the purposes of the Australian Consumer Law (ACL), which is Schedule 2 to the Competition and Consumer Act 2010. It also amends the Australian Securities and Investments Commission Regulations 2001 (ASIC Regulations) which contain mirror consumer protection provisions for financial products and services.

The change to the monetary threshold was recommended in proposal 15 of the Australian Consumer Law Review (ACL Review) in March 2017. Consumer affairs ministers, through the Legislative and Governance Forum on Consumer Affairs, agreed to increase the monetary threshold at their meeting in October 2018, to restore the real value of the monetary threshold that has remained unchanged since 1986.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms. Consideration has been given to the international conventions as set out in section 3 of the Human Rights Act.

This Legislative Instrument does not impose or amend penalty provisions, nor does it apply retrospectively or concern privacy rights of individuals or groups of people.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Treasury Laws Amendment (Acquisition as Consumer—Financial Thresholds) Regulations 2020 (the Regulations) were enacted to implement proposal 15 of the Australian Consumer Law Review (ACL Review), which recommended increasing the monetary threshold in the definition of 'consumer' for the purposes of the Australian Consumer Law (ACL). This change aims to restore the real value of the threshold that has remained unchanged since 1986, addressing the erosion of consumer protection due to inflation. The Regulations amend the Competition and Consumer Regulations 2010 and the Australian Securities and Investments Commission Regulations 2001 to raise the monetary threshold from $40,000 to $100,000. The enactment of these Regulations was authorised by Sections 251 of the Australian Securities and Investments Commission Act 2001 and Section 172 of the Competition and Consumer Act 2010, which allow the Governor-General to make regulations necessary for carrying out or giving effect to these Acts. The policy objective of the Regulations is to ensure that the ACL definition of 'consumer' remains fit for purpose, providing adequate protection for business consumers and capturing ordinary consumer purchases of commercial products above the current threshold.

Scope and Application

The Treasury Laws Amendment (Acquisition as Consumer—Financial Thresholds) Regulations 2020 apply to the definition of ‘consumer’ under both the Australian Securities and Investments Commission Act 2001 and the Competition and Consumer Act 2010, thereby impacting the scope of consumer protection in these areas. Specifically, the Regulations amend the monetary threshold that determines when a person is considered a consumer for the purposes of acquiring goods or services, raising it from $40,000 to $100,000. This amendment ensures the monetary threshold retains its real value in the context of inflation, thereby restoring the effectiveness of consumer protection provisions under both Acts. The increased threshold applies to all sectors of the economy and to financial products and services alike, with the exception of those explicitly excluded under state and territory legislation due to constitutional considerations. The Regulations are not subject to sunsetting provisions and have been designed to impose minimal compliance burden on businesses while enhancing consumer protection. They commence on the latter of the day after they are registered on the Federal Register of Legislation or 1 July 2021.

Key Provisions

The Treasury Laws Amendment (Acquisition as Consumer—Financial Thresholds) Regulations 2020 (the Regulations) introduce significant changes to the definition of 'consumer' under the Australian Consumer Law (ACL), which is incorporated in Schedule 2 of the Competition and Consumer Act 2010. The primary change, as per Item 1 and Item 3 of Schedule 1 of the Regulations, is the increase of the monetary threshold from $40,000 to $100,000. This amendment affects both the Competition and Consumer Regulations 2010 and the Australian Securities and Investments Commission Regulations 2001, thereby ensuring that the consumer protection provisions are consistent across these regulations. These changes are intended to restore the real value of the monetary threshold that has remained unchanged since 1986, in response to inflation and the erosion of consumer protection over time. Under the amended regulations, a person is deemed to have acquired goods or services as a consumer if they meet the criteria in the definition of 'consumer', one of which includes the new monetary threshold of $100,000. This change is designed to protect small businesses and ensure that the ACL continues to provide adequate coverage for business purchases. The increase in the monetary threshold aims to provide greater assurance of minimum standards of protection for the goods and services purchased by business consumers. The Regulations are intended to provide minimal compliance burden on businesses while ensuring the ACL remains fit for purpose. The Regulations impose obligations on businesses to ensure that their transactions with consumers are compliant with the updated definition. This means that businesses need to be aware of the new threshold when engaging in transactions that could be classified as consumer acquisitions. The Regulations are explicit in their application to the Competition and Consumer Regulations 2010 and the Australian Securities and Investments Commission Regulations 2001, ensuring that the changes are comprehensively integrated into the existing framework. There are no specific offences, penalties, or civil/criminal consequences outlined in the Regulations for breach of the updated monetary threshold. However, non-compliance with the consumer protection provisions of the ACL and the Corporations Act 2001 may result in enforcement actions by the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC). Such actions could include fines, legal proceedings, and other remedies available under the respective Acts. The Regulations themselves do not impose or amend penalty provisions but align with the existing enforcement mechanisms provided in the primary Acts.

Legal classification tags

Area of Law
Consumer Law
Competition Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Regulatory Standards
Reporting & Disclosure Obligations

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.