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ANDREA SHARAM[*]
In 2006 Consumer Affairs Victoria (CAV) commissioned Chris Field, former Executive Director of the Consumer Law Centre Victoria, to review consumer advocacy in Victoria. The resultant discussion paper, ‘Consumer Advocacy in Victoria’, was a key presentation to the CAV’s 2006 Annual Consumer Conference (http://www.consumer.vic.gov.au). The Director of CAV, Dr David Cousins, said the paper ‘documents the current consumer advocacy framework in Victoria and makes an assessment of the effectiveness of consumer advocacy in practice’[1] This article is a response to some of the issues discussed in the paper.
Chris Field’s paper is comprised of three main areas: a brief history of consumer advocacy in Victoria; a questioning of what is meant by ‘consumer advocacy’; and discussion of the practice, effectiveness and the future of consumer advocacy in Victoria.
Field’s argument is that there is a consensus in the literature that ‘consumer advocacy’ means providing a ‘voice’ for consumers. He then argues that consumer advocates should champion competitive markets, as markets are more efficient and effective than regulation. Market-orientated consumer regulation nevertheless enhances efficiency rather than detracting from it. He suggests that there should also be some form of socially just distribution of wealth.
One of Field’s primary concerns is that existing consumer organisations focus on specific industries and are concerned with low-income consumers rather than addressing the needs of consumers generally. He concludes by arguing that better consumer outcomes in Victoria would be achieved by a single consumer advocacy organisation. To this end he proposes the amalgamation of the Consumer Law Centre Victoria, the Consumer Credit Legal Service and the Financial and Consumer Rights Council. Nationally, he proposes the creation of an Australian National Consumer Council along the lines of the UK National Consumer Council.
Before outlining my response, it is worth stating that the object of inquiry in this CAV paper is highly meritorious, and CAV should be congratulated for seeking to stimulate debate. It is over 25 years, for example, since the introduction of banking deregulation and more than a decade since the Kennett government engaged in wholesale privatisation and market reform of essential services. In addition, technology and, in particular, internet technology, has radically altered the way all types of transactions are done. This includes the payment of wages, government pensions and benefits, retail sales, the payment of household rent, mortgages and utilities, and banking and finance services, among others. Workplace reform, the federal government’s social welfare framework and housing policies have significantly altered the pattern of household income and expenditure, to name but a few influences on the practice of consumer advocacy. For consumers and advocates alike there is spectrum of regulation and there are degrees of public and private rather than the public/private dichotomy of the past. Are things better? Are they good enough? Is there a need for consumer advocacy? Consumer advocacy in Victoria has its origins in a diverse critical grassroots culture but in fact there has been too little reflection on the practice and theory of consumer advocacy itself. CAV’s effort to promote review is, therefore, timely.
This article seeks to critique Field’s review of the literature and his use of that literature. In particular, I contend that Field’s paper does not adequately manage to review current consumer advocacy because of a failure to properly locate consumer advocacy within an historical and political context. While Field puts his view and asserts its rightfulness, he fails to engage in alternative perspectives as might be expected of a review. Field has been selective about what he presents without establishing a credible raison d’être for his omissions. This examination therefore attempts to provide an overview of some of the gaps — the other histories, the other understandings of the subject. This article is not intended to be a comprehensive critique. For example, I do not review the framework for consumer advocacy that Field provides (Chapter 2) or his assessment of the effectiveness of existing advocacy (Chapter 3). In terms of what consumer advocacy should look like in the future, my concern is very specific. Further, I avoid discussion of the merits of markets versus regulation as there is an extensive literature on the subject.
The brief history of consumer advocacy provided by Field is less a history than a short chronology of selected organisations. Although Field is correct in stating that the source literature is limited, it is not as limited as he presents it. He overlooks, for example, the work undertaken by the Centre for Urban Research (CURA) in the 1980s and more than two decades of work by the Energy Action Group (EAG). CURA was formed in 1969 and the EAG in the late 1970s. The EAG advocated for domestic electricity and gas consumers. CURA had a broader remit and contributed to a broad range of consumer issues including tariff reform, electricity pricing, housing discrimination, social security issues, tenants’ issues, caravan residents’ issues, and a rental insurance scheme. These organisations are inexplicably ignored.
The difficulty with Field’s use of literature and history is that he utilised a narrow meaning of ‘consumer’ and ‘advocacy’ and failed to explore contesting views about consumption, citizenship, markets and welfare that would have provided an end justification for his interpretation of these terms. A short paragraph on the ‘citizen’ is provided as a ‘matter of completeness’ yet it only serves to draw attention to exclusions that are made but not justified.[2]
Field’s selective review enabled him to conclude that the history and literature suggested a commonality of view that ‘consumer advocacy is about providing a voice for consumers’,[3] and that ‘consumer advocacy should, as a first principle, be a voice for competition’.[4] ‘Voice’ is indeed a very common theme in the literature concerning consumption, citizenship, markets and welfare. The different meanings attached to ‘voice’, however, go to an ideological debate that is ignored by Field but would have been useful to recap, given the purpose of the paper.
Putting the argument that ‘voice’ means representation by consumer organisation(s) and using this as a rationale for the recommendation to amalgamate several existing organisations into one super consumer advocacy service sidesteps the very historical and political reasons why there is a diversity of ‘consumer’ advocacy organisations in the first instance.
The past 15 years of market reform in Victoria provides a rich source of debate about consumers’ interests. The struggle during the 1990s over essential services alone reflects very different understandings of market relations, the state, the purpose of consumer protection and advocacy. It is at this time that Ernst noted a group emerging within the broad consumer movement that embraced the neo-liberal view of consumer sovereignty and who were notable, in his view, for their advocacy of procedural rights in lieu of substantive socio-economic rights. He called it ‘new consumerism’,[5] and differentiated it from older forms of consumer advocacy based on a social democratic view of citizenship.
While the new consumerist group lent support to marketisation and deregulation, their concept of the market diverged from that of the radical neo-liberals. This, in part, arises from an historical recognition that markets do not always serve customers as well as commentators such as Alan Moran from the Institute of Public Affairs (IPA) would like us to believe. Nevertheless, the libertarian view of citizenship in which ‘the relationship between the individual and the state’ becomes ‘explicitly contractual’ and where consumer sovereignty provides the mechanism of choice and restitution,[6] found its way into new consumerism’s support for self-regulation or co-regulatory regimes such as alternative dispute resolution schemes (ADR) and Codes of Conduct. These models largely replaced older forms of social protection with contractual relations. Moreover, the shift from public regulation to private management — ADRs are commonly corporations owned by the industry they police — offered an alternative source of funding when government money dried up. These funds have proven intrinsic to the survival, both in terms of finances and legitimacy, of much of the contemporary consumer sector. Brown and Panetta argue that the rise of co-regulation in Australia is an unconscious heralding of Third Way politics. They provide what could be described as a definition of new consumerism:
What the last decade has seen is a blurring of the boundaries between consumer advocates and business men and women. Indeed, there seems to be an increasing flow of people from the [consumer] movement into business, particularly into customer relations areas. While there has not been a big return flow, a growing number of men and women in business seem to be becoming members, in a broad sense, of the consumer movement. The consumer is no longer a thing outside, or other than business; it is an association of people in many walks of life subscribing to the idea that markets can be made to work for people.[7]
What then is, or was, ‘old’ consumerism? As Brown and Panetta note, but Field fails to mention, the consumer movement had always been filled with ideological tension reflecting the attempt to merge consumer campaigns with social justice oriented reform.[8] One strand was typified by the Australian Consumers Association (ACA), which was ‘focused largely on issues like inflation, advertising, trading hours, food purity, packing and labelling, product safety and standards, and pricing’.[9] The other strand was comprised of various social movements that sought to ensure access to services as well as the democratisation of services, both public and private. Community legal centres and community health are examples. Field mentions these old consumerisms, including the cooperative movement, but does not link these histories with contemporary political debate. Even a brief history of consumer advocacy should have included a discussion on the welfare state, universal service provision and the implications for consumer advocacy of dismantling such a system in favour of the market.
It is also worth noting that the democratic expectations underpinning new social movements of the 1960s and 1970s (such as feminism and environmentalism) inevitably lead to a consideration of the conditions under which choices are made.[10] Consumer-orientated civil rights based on choice increasingly replaced old paternalistic social rights based on status. Yeatman, for example, has argued that choice can be facilitated by adopting a service user/provider relationship model that embraces the ‘individualised personhood’, which is central to the liberal use of contract.[11]
Yeatman, however, has been criticised by Ramia for being a supporter of a shift to market-based contractualism that is devoid of social protections.[12] Irrespective of the merits of Ramia’s argument, this debate is useful because the democratic expectations of individual choice and treatment of which Yeatman speaks ended up finding their way into co-regulatory regimes via new consumerism. In Yeatman’s defence, the problem she identifies is that choice is conflated with contract: ‘Contract can establish the conditions of entry and exit with regard to a relationship, but it cannot regulate the internal workings of that relationship’.[13] The exercise of choice:
can be argued to be operating when the parties to a relationship are adequately informed about their relationship, and their respective entitlements within it, and they have the right to negotiate the substance, process and direction of this relationship. This right of negotiation involves the right to discussion, debate and contestation in respect of this relationship. Negotiation entails the additional principles of explicitness and accountability.[14]
This ‘choice’ of Yeatman’s is not that of neo-liberalism’s sovereign consumer. Yeatman’s subjects would be entitled to argue whether there should be a market at all. While her civil rights were consumer orientated they remained fixed within a complementary understanding of political rights. New consumerism, on the other hand, emphasises the civil rights (as contract law) and tends to alienate such market-based rights from broader political rights and processes.
As Marginson observed, ‘the New Left rubrics of freedom and participation survived but were transformed’ in the displacement of the New Left in the 1970s by the New Right in the 1980s’.[15] Complaint mechanisms such as ADR schemes are an example of a new set of ‘rights’ that Marginson describes as containing a ‘curious mixture of continuities and discontinuities’ between left and right politics.[16]
Delving into recent history, there were two impulses behind new consumerism. The first was the effort of the broad consumer movement in Australia to promote a strong peak body that could be a participant in the corporatist style of government characterised by the Hawke Labor government of the 1980s. The second arises from the impact of the neo-liberal ascendency within government. Parts of the broad movement, such as the new consumerist group, accommodated reform and assisted in developing ‘grey’ or non-formal ‘co-regulation’ which sometimes included industry funded assistance for consumer advocacy participation in the process.
Brown and Panetta state that the ACA disaffiliated from the Australian Federation of Consumer Organisations (AFCO) on the grounds that funding from industry compromised consumer advocacy.[17] AFCO and many other consumer organisations at the time received the bulk of their income from government (the ACA was a prominent exception). This funding was threatened with the rise of neo-liberalism and public choice theory. The adoption of self-regulatory regimes offered an alternative source of funding for consumer organisations in the form of paid consultative positions (corporate and governmental) and board memberships of alternative dispute resolution schemes. As Brown and Panetta explain, self-regulatory arrangements were justified
as a privatisation of government functions. It is one of the ways in which the state has limited the scope of its intervention in markets and is part of the general phenomenon of the retreat of government. But it can also be viewed, quite positively, as a means of containing the cost of consumer complaints and disputes within industry and relieving the general taxpayer of the costs of using state institutions.[18]
While such arrangements held out some financial support to individuals, the organisations still required alternative sources of funding when government funding was withdrawn or diminished. While the Commonwealth stopped funding consumer peak organisations, States such as Victoria maintained funding to NGOs engaged in direct service delivery (for example financial counsellors and consumer support workers) and their peak bodies. Consumer advocacy organisations that did not have such a connection have not generally been successful in gaining a restitution of funding. Even where pressure to re-fund advocacy has been intense, the Bracks Labor government in Victoria has chosen to establish and fund new organisations under corporations law (such as the Consumer Utilities Advocacy Centre) that are notable for their lack of membership. More recently, CAV has taken some casework services such as the consumer support workers and the Consumer Credit Legal Service ‘in-house’.
It is interesting that Field does not respond to the criticisms put by those such as Ernst but replies to Alan Moran of the IPA who, using public choice theory, argues non-government organisations have a vested interest. Moran argues:
Associations claiming to represent consumer interests rarely have the appropriate accountability or governance structure and are often dominated by and express the views of a small clique. If those groups are given preferred access, this could actually undermine consumer interests …[19]
The attack on public funding by commentators such as Moran is but the first line of attack by the radical right who would appear to reject some of the established features of political pluralism.[20] Nevertheless, both Field and Moran agree that the primacy of competitive markets should be the first principle of public policy. Field’s position differs only in that he believes that in some circumstances consumer advocacy can improve the outcome of markets and this advocacy should be publicly funded.
The social democratic critique of neo-liberalism on the other hand challenges at a far more fundamental level Field’s assertion that markets can satisfy our notion of redistributive justice and ‘voice’. Ernst has argued that:
To market advocates, accountability is refracted through individual interactions with the service system — hence the emphasis on accountability mechanisms such as individual service guarantees and consumer surveys. For opponents of privatisation and market testing, accountability is refracted through the idea of collective responsibility for collectively provided services, and the machinery of democratic politics is seen as central to the achievement of this.[21]
Ryan argues that the point of constructing the ‘citizen as consumer’ is to isolate service delivery from policy-making and protect governments from the ‘political demands of society’.[22] This is why the formal and conspicuous self-regulation regimes of governmental oversight of privatised and deregulated markets are ‘no less powerful for being detached from government-as-state’:[23]
by transferring certain activities from politics to economic management, market reform narrowed the scope of public policy and reduced political pressures on government [which can] steer output, methods of production and pricing from a distance, while evading responsibility for the effects on users and employees.[24]
One of the more worrisome arguments made by Field in the paper is that the consumer movement cannot be pluralistic; that diversity dissipates the ‘voice’; that the ‘voice’ really should only express one view. There is clearly a difficulty here in accepting the essentially democratic impetus of consumer advocacy. This conclusion was based on Field’s own view of the lack of success, or lack of effectiveness of existing consumer advocacy. The paper was intended to assess the effectiveness of advocacy but in fact little of that takes place. A whole paper could be devoted to how we should approach assessment let alone actually making an assessment.
The new consumerist model embraced market reform while claiming a legitimacy born of earlier social democratic reforms in the delivery of both private and public goods and services. Indeed Field, cites the success of ADR schemes over the past ten years as an example of consumer advocacy being on the right track. As Siemon has noted about utilities, these post-privatisation consumer rights were directly derived from earlier social democratic reform.[25] The ‘consumer’ protections won in the 1980s largely survived (perhaps demonstrating the effectiveness of some consumer groups?). What changed were the institutions that administer these protections. Field claims that for utilities the ADR scheme and independent regulator have been highly successful in addressing the needs of low income and vulnerable consumers. There is evidence to suggest that this may not be true.
The Energy Retail Code provides legal entitlement to those customers with an ‘incapacity to pay’, to pay only what is affordable; but the casework of financial counsellors and the experience of many consumers does not support Field’s claim. Financial and Consumer Rights Council (FCRC) research found referrals made by financial counsellors to the Energy and Water Ombudsman Victoria (EWOV), especially because retailers were demanding unaffordable repayment plans, had not resulted in any reduction in payment. FCRC found EWOV was permitting the retailer’s original demands to stand. EWOV, in effect, ignored retailers’ non-compliance with the Code.[26]
Further to this, a Freedom of Information request to the Essential Services Commission (ESC) revealed that EWOV was very conscious of retailers’ non-compliance with the law and the lack of enforcement by the ESC.[27] The ESC has consistently ignored evidence of non-compliance. It should be noted that the ESC has never conducted independent research to determine what consumers are experiencing in the market; they ask the retailers if they are complying rather than asking the consumer!
There are a number of other startling assertions made by Field. He says, for example, that consumer advocacy has been ‘either less effective or wholly ineffective’ in the areas of ‘insurance, superannuation, building and motor vehicles’.[28] But other than also saying that building and motor vehicle markets are expensive and have poor reputations in terms of retailing, no evidence or methodology is employed by him to justify such a statement. What studies, for example, have been done regarding the Building Guarantee Fund?
Field’s narrow conception of ‘consumer advocacy’ permits him to claim that ‘consumer advocates have not been a loud, clear and consistent voice for socially just distribution of wealth. These debates require participation in areas of public policy that are not obviously areas of consumer advocacy, particularly debates about tax policy and social security policy.’[29] Field first sets up what many would regard as a false dichotomy between consumer advocacy and welfare advocacy, and then accuses consumer advocates of not being effective in terms of social justice. Again, history and definition is important: financial counsellors have participated in Victorian Council of Social Service (VCOSS) working groups on taxation, consumer bankruptcy and social security, and there is a Welfare Rights Unit, just to mention two examples. Moreover, his assertion conveniently disregards the debates over the replacement of universal service with community service obligations, the GST and so on. The implication is that there is only one legitimate argument.
Field places himself within the current economic orthodoxy of neo-liberalism but mitigates the market mantra by oft-repeated appeals to ‘distributive justice’. By way of explanation he cites the influence of ‘welfare economics’.[30] As welfare economics is another term for liberal or classical economics (more popularly known as ‘economic rationalism’) the explanation provides little guidance for those without knowledge of economics. The term ‘distributive justice’ itself is left largely undefined. Distribution of wealth is one of the most problematic philosophical areas the new consumerists need to deal with. While Brown and Panetta may gush at the contribution of the Third Way/new consumerism, Third Way writers (such as Giddens)[31] offer little guidance in relation to equality measures ‘which deal directly with the unfavourable outcomes of competition policy’.[32] Field too offers little explanation of what distributive justice means in practice, leaving his argument unsupported.
So what contribution does Field’s paper make to the questions of what is consumer advocacy, whether it is effective in Victoria and its future? In terms of the neo-liberal argument for markets and competition there is nothing new or insightful offered. The exclusion of literature that critiqued marketisation actually did not leave that much to discuss, and the insistence that there is a dichotomy between ‘consumer’ advocacy and ‘welfare’ advocacy while claiming ‘consumer' advocates need to address ‘distributive’ justice appears somewhat inconsistent. Most problematic, however, is the economic understanding that permits Field to assert that there is only one legitimate form of service delivery — the market — and that this ideological view justifies a disregard for history and dissenting or critical voices.
For a sector considering its future it is important to recognise the major fault line in the movement between its old and new elements and the interweaving of old consumerism, social democratic initiatives and neo-liberalism. The challenge for Field is to answer commentators such as Webber and Ernst who suggest that we should be concerned with recognising substantive as well as procedural rights, with ensuring that access rights are guaranteed and protected, with recognising collective as well as individual rights and responsibilities, and locating strategic decision making within the domain of democratic accountability and public policy.[33] In effect, how should modern consumer advocacy also relate to democratic principles and practice, not just economic precepts?
[*] ANDREA SHARAM was a researcher on consumer issues with the Citizenship and Government program at the Institute for Social Research, Swinburne University between 2001 and 2006.
© 2006 Andrea Sharam
email: agsharam@yahoo.com.au
The Editors have invited Chris Field to respond to this article in the next issue.
[1] Chris Field, ‘Consumer Advocacy in Victoria’ (Research Paper No 7, Consumer Affairs Victoria, 2006) i <http://www.consumer.vic.gov.au/CA256902000FE154/Lookup/CAV_SeminarsConferences_ThirdNationalCongress2006/$file/7_consumer_advocacy.pdf> at
23 November 2006.
[2] Ibid 7.
[3] Ibid 6.
[4] Ibid 1.
[5] John Ernst, Whose Utility? The Social Impact of Public Utility Privatization and Regulation in Britain (1994) 155.
[6] David Miller, ‘Citizenship and Pluralism’ (1995) 43(3) Political Studies 440.
[7] Robin Brown and Jane Panetta, ‘A View of the Australian Consumer Movement from the Middle of the Web’ in Simon Smith (ed) In the Consumer Interest (2000) 23.
[8] Ibid.
[9] Ibid 13.
[10] Anna Yeatman, ‘Interpreting Contemporary Contractualism’ in Mitchell Dean and Barry Hindess (eds) Governing Australia (1998) 229.
[11] Anna Yeatman, ‘The New Contractualism and Individualized Personhood’ (2002) 38(1) Journal of Sociology 63.
[12] Gaby Ramia, ‘The “New Contractualism”, Social Protection and the Yeatman Thesis’ (2002) 38(1) Journal of Sociology.
[13] Anna Yeatman, ‘Contract, Status and Personhood’ in Glyn Davis, Barbara Sullivan and Anna Yeatman (eds), The New Contractualism? (1997) 40.
[14] Yeatman, above n 10, 231.
[15] S Marginson, Markets in Education (1997) 78–9.
[16] Ibid.
[17] Brown and Panetta, above n 7, 21.
[18] Ibid 21.
[19] Alan Moran, ‘Funding End-User Advocacy’ (Energy Issues Paper No 19, <http://www.ipa.org.au/files/Energy19.pdf#search=%22alan%20moran%20funding%20end%20user%20advocacy%22>
at 2 August 2006.
[20] Joan Staples, ‘NGOs Out in the Cold: The Howard Government Policy towards NGOs’, (Democratic Audit of Australia, Discussion Paper No 19/06, Australian National University, 2006).
[21] John Ernst, ‘The Cost-benefit of Privatisation and Competition: Towards a Broader Frame of Reference’ in Colin Clark and David Corbett (eds), Reforming the Public Sector (1999) 96.
[22] Neal Ryan, ‘Reconstructing Citizens as Consumers: Implication for New Modes of Governance’, (2001) 60(3) Australian Journal of Public Administration 105.
[23] Marginson, above n14, 82.
[24] Ibid 85.
[25] Don Siemon, ‘Consumer Sovereignty or Economic Necessity: Good Enough Reasons for Privatisation?’ (1997) 1(5) Consumer Rights Journal 6.
[26] Andrea Sharam, ‘Power, Markets and Exclusion’, Financial and Consumer Rights Council (2004).
[27] Energy Action Group, ‘Report on the Essential Services Commission/Energy and Water Ombudsman Victoria Response to Retailer Non-compliance with “Capacity to Pay” Requirements of the Retail Code’ (Energy Action Group, 2004).
[28] Field, above n 1, 3.
[29] Ibid.
[30] Ibid 7.
[31] Anthony Giddens, The Third Way: The Renewal of Social Democracy (1998); and Anthony Giddens (ed), The Global Third Way Debate (2001).
[32] Cathy Lowy, ‘Is there a Third Way?’ (2002) 20(1) Law in Context.
[33] Michael Webber and John Ernst, ‘Privatisation in Review’ in Michael Webber and Mary Crooks (eds), Putting the People Last: Government, Services and Rights in Victoria (1996).
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