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What will become of $25 million of agents’ money?

December 10, 2015 Business News, Headline News 2 Comments Email Email

egtmedia59Some AUD 25 million paid by travel agents into the Travel Compensation Fund over the years is due shortly to disappear into state consolidated revenue throughout Australia.

Calls for the money to be used to establish some sort of reimbursement fund to protect consumers when agents go bust appear to have fallen on deaf ears.

Global Travel Media raised the topic with NSW Minister for Innovation and Better Regulation, Victor Dominello, into whose portfolio NSW Fair Trading falls.

The question we put was:http://www.ramadaphuketdeevana.com/

  • “With the termination of the TCF to be completed in December 2015, will the state governments continue with their intention to absorb the AUD 25 million of TCF funds contributed by travel agents as consolidated revenue or will they place a hold on taking up these funds in order that the impact of the TCF’s closure on consumer risk can be more fully investigated with a possible view of reintroducing  some form of universal consumer protection?”

A Fair Trading spokesperson has provided the following answer.

  • “When the TCF is closed any money in the Trust will be distributed to jurisdictions in proportion to the number of participants as at 30 June 2014. This is an original provision from 1986, when the TCF was created. Australian jurisdictions made no changes in this regard. It will be a matter for each State Government to determine how those funds are used.”

The Fair Trading spokesperson added: “Essentially the former industry regulation did not prevent business failures and only in some circumstances provided compensation for consumers.

“The old regulatory scheme also did not apply to businesses providing travel services directly to consumers (particularly online) or travel agents based outside Australia. This had the effect of raising the costs for all Australian-based travel agent businesses, costs that direct suppliers and off-shore based competitors did not pay.”

Industry critics, however, continue to feel that remnant funds in the TCF could be used more constructively than just disbursed to state consolidated revenue.

The key point, they note, is whether the state governments continue with their intention to absorb the AUD 25 million of TCF funds contributed by agents as consolidated revenue, or instead place a hold on taking up these funds, so the impact of the TCF’s closure on consumer risk can be more fully investigated – with a possible view to reintroducing some form of universal consumer protection.

That is the critical question. Consumers and industry would appreciate a direct answer – but time is rapidly running out.

Written by Peter Needham

Currently there are "2 comments" on this Article:

  1. Noel Leach says:

    I cannot see the Sheriff of Nottingham and Prince John relinquishing the unused monies to their subjects.

    Those monies levied from travel agents for the protection of their client travellers.

    Granted it was not total protection but at least many were helped over the years that the TCP was in place.

    Maybe after a few more collapses there might be a case for class action against those governments/principals responsible for the decision to disband the TCF.

  2. Harry Schneider says:

    outright theft clear and simple !

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