Perspective – July 2012

What follows the TCF?

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Ian McMahon

What follows the TCF?

EXPECT NSW and Victorian consumer affairs officials to play a key role in determining the shape of future travel agency regulation.

This will begin to emerge with next month’s release of a draft transition plan from the present Travel Compensation Fund-based system.

The state and federal Ministers of Consumer Affairs see the draft plan as an opportunity for all stakeholders to have input on a finalised proposal to be implemented next year.

Buried deep within the Ministers’ announcement was the following: “The larger jurisdictions signalled that in the absence of an agreed transition plan, they would withdraw from the TCF”.

That is bureaucratic code, insiders assure me, for the fact that NSW and Victoria want an end to the TCF.

So it is logical to assume that officials in those states have some pretty clear ideas on what should fill the vacuum.

It is difficult to imagine that the transition plan will involve any radical new proposals given the countless submissions and reports that have already been tabled, culminating in the independent PricewaterhouseCoopers investigation of the issues.

Indeed it is difficult to see how the plan can deviate substantially from the PwC recommendations.
These favour a combination of voluntary industry accreditation and Australian consumer law which, reassuringly for travel agents, pretty much coincides with AFTA’s views on the subject.

Certainly this approach would be superior to the present system which, as the Ministers’ communique points out, covers only about a third of affected consumers and spends more on administration than it pays out to those consumers.

So let the process roll on and let’s be done with what I have repeatedly called a ramshackle and inadequate regulatory regime.

At the same time, as I have also suggested, travel agents should be careful what they wish for. For all its faults, the TCF did provide a measure of protection for consumers – as is currently being demonstrated with the Kumuka collapse.

Its financial disciplines have also driven the adoption of sound accounting practices by small travel agents.

And it has acted as a barrier to entry to the industry – not just against crooks and charlatans but also against entrants who, in the view of retail agents, would have provided unfair competition. The defeat of the proposal for Australia Post outlets to sell Jetstar tickets was a prime example of the latter.

Congratulations to NTIA winners

CONGRATULATIONS to all the companies and individuals who took out “gongs” in this month’s AFTA National Travel Industry Awards. And indeed to all those who scored coveted award nominations.
Don’t miss our next edition – the official awards souvenir issue containing comprehensive reports and photo coverage of all the action at the industry’s night of nights.





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