The Travel Compensation Fund is set to be axed after government ministers agreed to adopt a new structure of consumer protection.
A draft transition blueprint will now be released for public consultation with a final plan to be agreed at December’s meeting of consumer affairs ministers in Sydney.
A communiqu√© issued by ministers after a meeting in Adelaide today said the TCF has played an important role in protecting consumers. But “fundamental changes in the market” and stronger legislative protections under Australian Consumer Law have rendered the TCF outdated.
“Ministers agreed that the TCF could not continue to be the primary vehicle for consumer protection in the travel market,” it said. “In particular only about a third of affected consumers have any redress under the scheme and more money is being spent on the administration of the scheme than is being paid out to consumers.”
The current system is a “significant regulatory burden with declining benefit”, ministers said.
They also noted that “larger jurisdictions” indicated they would leave the TCF in the absence of an agreed transition plan.
“This may mean the TCF may be no longer viable,” the communiqu√© said.
Officials have drafted a plan of transition that will be subject to consultation with interested parties ahead of a final plan to be agreed at the end of the year.
