Perspective – March 2011

Regulatory reform: so far so good

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Ian McMahonRegulatory reform: so far so good

TRAVEL agents have every right to be pleased with the contents of the PricewaterhouseCoopers (PwC) report on the review of consumer protection in the travel industry and the consultation paper that was released simultaneously.

As AFTA chief executive Jay Westbury points out in his AFTA View column “the majority of the findings fully support many of the aspects of the AFTA policy and assertions contained within our submission”.

Certainly, in two key essentials, the report and the paper have kept open the possibility of rational reform of travel industry regulation.

Firstly, the PwC report keeps the sort of industry-based accreditation and regulation scheme proposed by AFTA on the table. It concludes that such a scheme is a viable option, saying that it has merit and should be given further consideration.

Meanwhile the consultation paper suggests that Australian consumer law – with the states and territories now all adopting a uniform national standard – could provide the necessary protection for travel consumers. In other words there is a good case for the abolition of the Travel Compensation Fund and it should be given further consideration.

So it is easy to see why these documents give AFTA heart.

While the reports may not completely endorse, they certainly do not rule out the case made by AFTA that Australia’s present ramshackle, incomplete travel regulatory set-up is in need of a radical overhaul.
And they specifically urge further consideration for key planks of AFTA’s alternative proposals.

AFTA and its chief executive Jay Westbury are to be congratulated for the way in which they have prosecuted the federation’s case that regulations framed in the 1980s are inadequate for a 21st Century industry distributing product globally through a multiplicity of channels.

Their contention that the solution is an industry-based system covering the whole of the travel industry, rather than narrowly focusing on bricks and mortar travel agencies, is clearly gaining credibility.

But it must be borne in mind that government and bureaucratic processes are tortuous and move at glacial speed – as is demonstrated by the inexplicable nine month delay between the July 2010 completion of the PwC report and its public release this month.

There are still a number of steps to be taken but hopefully it could be as early as June when consumer affairs officials finalise their recommendations for the Ministerial Council on Consumer Affairs.
That means there are still many shoals to be navigated before the industry can hope to achieve its goal of rational reform of travel industry regulation.

Far from relaxing, AFTA must step up its efforts to argue its case. Fortunately this seems to be the case with AFTA announcing it will again use KPMG (which drafted its submission to the PwC report) to prepare its response to the consultation paper. Travel agents should wish their federation well in this process.

As Westbury says of the PwC findings, they have “the potential to re-shape the way the Australian travel industry is regulated on a national basis”.






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