Consumer protection, modern regulation, paternalism and the nanny state: understanding the legitimacy challenge

Regulation to protect consumers from making choices that may be harmful to themselves is common place in Australia. Yet commentary on such regulation can be both polarised and bi-polar. At one extreme are libertarian groups and business for whom much regulation is a reflection of government overreach and interference. ‘Nanny state’ is the label they oft attach to it, and to the experts that advocate it. Those experts on the other hand, describe such regulation as the epitome of the modern regulatory state - one that seeks to proactively shape a world in which people live healthy, wealthy and happy lives. And in the middle are people for whom discussion of consumer protection regulation produces contradictory impulses. Such extreme and variable views represent a challenge to the legitimacy of consumer protection regulation. This paper examines developments specific to the consumer protection regulatory landscape to understand the underlying causes of this legitimacy challenge. It is only by understanding those causes that governments can hope to navigate a path to better legitimacy.