Mallesons Stephen Jaques briefed clients on the key recommendations of the 3000-page privacy report released by the Australian Law Reform Commission in May 2008.

A reccurring theme identified by the Mallesons panel, headed by partner Andrea Beatty, was a new host of powers available to the Privacy Commission. Beatty said the reforms would give “teeth” to the Privacy Commissioner, comparing its new powers with those of other regulators such as the ACCC and ASIC.

The new powers and remedies available to the Commissioner may include powers to seek civil penalties, enforceable undertakings similar to those issued ASIC and the ACCC, compliance notices and compulsory audits of privacy performance.

However, Beatty told Lawyers Weekly that the extent of the commissioner’s new powers will be very much dependent on the level of government funding allocated in support of the changes.

“There’s definitely the potential that the Privacy Commissioner is going to be given enormous power, [but] the big issue will be whether they are also given funding to match that power,” Beatty said.

“I think traditionally the Privacy Commissioner’s office has always been under-resourced and underfunded, and the real issue will be just to what extent this [legislative reform] is going to be backed up with funding.”

Beatty also queried whether the market needs yet another “super regulator”, especially given the knock-on effect of rising compliance costs for business. Instead, she suggested that the regulation of privacy be tied in with the operations of ASIC.

“The difficulty for business is that it’s yet another regulator — one wonders if the Privacy Commissioner should be somehow wrapped in with ASIC.”

The difficult economic climate will be a test for the new look Privacy Commissioner and whether it can effectively enforce the new laws and create a level playing field for large and small business. Cutbacks to business spending tend to impact on regulatory and compliance projects first, especially among smaller players in the market, Beatty said.

“One of the things I’ve seen in the last 15 years of Australia’s regulatory changes is that the laws are introduced, but the regulators are not given appropriate funding with the result that all the good ‘brand name’ players like the big banks stick to the letter of the law and it costs them a fortune to comply…whereas the fringe dwellers at the edges don’t even bother incurring those costs and just keep on doing what they are doing because the law is not being enforced.

“The result of that is that the big guys think ‘Oh well, it’s not worth spending any money on this’,” she said.

If this attitude prevails in the market, enforcement will require an even greater level of funding commitment by the Federal government, Beatty said, adding: “There’s no point introducing laws unless they are going to be enforced.”

On a positive note, Beatty said that clients who complied with the law should feel reassured by the proposed changes: “The advantage is that people that don’t comply with the law will be caught, and that creates improved confidence and trust and business,” she said.