The federal government is proposing increasing maximum penalties from $250,000 to $10 million for telecommunications providers that breach industry codes and standards, as it seeks to give the industry regulator greater powers.

The reforms, announced on Tuesday, were aimed at better protecting consumers, Communications Minister Michelle Rowland said.

The proposed changes would allow the Australian Communications and Media Authority (ACMA) to take “direct and immediate” action against telcos which breached their obligations to customers, the government said, and the regulator would no longer need to issue a company with a direction to comply — and then wait for that direction to be ignored — in order to act.

Under the proposal, maximum penalties for breaches of industry codes and standards would brought in line with current penalties for breaches of existing telco obligations, such as identity checks.

“This will also better align telecommunications penalties with other sectors like energy and banking,” the government said in a statement.

Following a string of recent scandals such as Optus allegedly targeting vulnerable consumers and Telstra breaching rules for emergency calls, Minister Rowland said the government wanted to better support consumers.

“These changes provide a powerful deterrent, improve the likelihood of compliance and lead to a better functioning telecommunications sector,” she said.

“We’ve listened to wide ranging feedback from industry, regulators, the Telecommunications Industry Ombudsman and consumer advocates to develop these reforms.

“Most importantly we’ve listened to customers — these are the changes everyday Australians deserve — so we’re delivering them.”

Courts would determine exact penalties providers would need to pay, depending on their financial turnover and the scale of any breach, the government said.

Telcos' peak body welcomes changes

The peak body for Australia’s telecommunications industry, Communications Alliance, said it supported the government’s proposed consumer protections.

CEO Luke Coleman said, “Australians expect the highest standards of business behaviour from telcos, and these new direct enforcement powers will ensure they are held to account by the regulator.”

Coleman said Communications Alliance had written to the government in December calling for such reforms, after the alliance unveiled an updated Telecommunications Consumer Protection Code for public comment.

“Pending any further revisions and if accepted by the ACMA, the revised Code will provide stronger safeguards for consumers when combined with these new measures,” Coleman said.

The public can comment on the revised Telecommunications Consumer Protection Code through the Communications Alliance website.

'Major win' for consumers

The peak body for communications consumers, the Australian Communications Consumer Action Network (ACCAN), said the government’s pledge was “a major win for telecommunications consumers”.

ACCAN CEO Carol Bennett said the reforms would help turn around Australians’ eroding trust in the nation’s telcos, and improve what she argued was “relatively weak regulatory settings of the telco industry”.

“The government’s announcement to boost the enforcement powers of the ACMA will ensure telcos face real and meaningful penalties if they breach their obligations to Australians,” she said.

“This is a critical step towards ensuring that the telco sector works in the interests of consumers.”

The government has also pledged to establish a registration scheme for telecommunications providers, which it said would “increase visibility of providers operating in the market” and help to protect consumers from harm.