The government’s Consumer Data Right is set to pass Parliament this week after Labor agreed to support it despite having “deep concerns” with some aspects of the new laws.
The legislation, which paves the way for open banking and other industry data-sharing schemes, was passed through the lower house on Tuesday evening and will pass the Senate by the end of the week.
It’s a win for the Coalition, which had been running against time to pass the legislation before the winter break, with the next sitting session not until September.
The bill was introduced to Parliament earlier year but the federal government failed to pass it before the May election.
At the time, Labor had promised to move a series of amendments to the legislation in the Senate, raising concerns over privacy, security, consumer protection and sectoral coverage.
But with the CDR legislation re-introduced by Treasurer Josh Frydenberg earlier this month, the Labor caucus agreed to support its passage through Parliament on Monday.
The bill’s passage sets the stage for the full open banking regime to begin in February next year.
Mr Frydenberg said the new laws would benefit consumers and providers in a number of sectors.
“Improved consumer control over data will support better price comparison services, taking into account peoples’ actual circumstances, and promote more convenient switching between products and providers,” he said in Parliament.
“Improved access to data will also enable the development of better and more convenient products and services, customised to individuals’ needs. Improved competition and data-driven innovation will support economic growth and create new high value jobs in Australia.”
The FinTech sector has long been lobbying for an open banking scheme, and it will now soon be able to better compete with the large financial providers.
A trial program of open banking launched at the start of the month, with three of the big four banks already participating, while the proper launch is slated for February next year.
The Opposition opted not to refer the legislation to a senate committee for another review, after a quick inquiry was completed in February.
Shadow financial services minister Stephen Jones did move one amendment in the lower house, merely calling on Parliament to note the need to uphold privacy and security around the CDR.
“We’ll be supporting the legislation in this place and the other place, but we’ll be watching carefully. We believe this bill is not the last word on this matter,” Mr Jones said in Parliament.
The amendment focused on the right for customers to request the deletion of their personal data held by a company, to prevent the use of technologies which may operate outside of the regime such as screen-scraping technology, and the impact of the bill on vulnerable consumers.
A number of Labor MPs spoke in Parliament of their concerns with the legislation and the government’s approach to it.
Former shadow digital economy minister Ed Husic said some improvements had been made to the bill since it was first introduced, and that the new laws would be a “challenge” for the FinTech sector.
“We hope the broader FinTech industry can demonstrate that this will be a reform that will generate benefit, not just on the basis of wealthy people but for lower income groups too,” Mr Husic said.
Labor had previously raised a number of concerns with the legislation earlier this year in a dissenting senate report, focusing on privacy, consumer protection, sectoral coverage and a rushed process.
The Labor senators had pledged to move a number of amendments in line with these concerns in the Senate.
The Opposition had said that there is a “significant risk” that vulnerable customers would be excluded from essential services due to the new laws, and claimed there wasn’t adequate awareness of the impending open banking scheme.
“Consumers will only exercise their rights under the CDR if they understand what the purpose of the scheme is and are satisfied with the level of consumer and privacy protections,” they said.
“Labor Senators are yet to be convinced that the government’s proposed policy framework adequately responds to these very real risks.”
During the inquiry process, the Australian Privacy Foundation said that the government had “severely underestimated” the privacy risks associated with the CDR.