2nd Reading Speech

23 October 2018

The Hon. ADAM SEARLE (20:48): I lead for the Opposition on the Fair Trading Legislation Amendment (Reform) Bill 2018 and the Charitable Fundraising Amendment Bill 2018. The changes presented in these bills are significant. The Government must provide an efficient yet robust regulatory environment that encourages strong and healthy competition. More importantly, it is also a key responsibility of governments to provide a regulatory environment that ensures consumers are protected, whether it be protection from unsafe products, consumer confidence in licensing schemes for tradespeople, or improving transparency in our markets so consumers can make better, informed choices.

The Charitable Fundraising (Amendment) Bill 2018 deals with the recommendations contained in the report of the inquiry under the Charitable Fundraising Act 1991 undertaken by Justice Bergin. While the Opposition supports the intent of the bill, I note that the Minister should consider a move towards nationally consistent fundraising laws to reduce the administrative burden on charities. The Fair Trading Legislation Amendment (Reform) Bill 2018 also seeks to achieve these consumer protection outcomes, and while the Opposition has some reservations over specific sections or aspects of the bill, we support the bill overall. I will now address the substance of the bills.

The Charitable Fundraising Amendment Bill 2018 gives effect to a number of recommendations contained in the report of the inquiry under the Charitable Fundraising Act 1991, which was undertaken by Justice Bergin. Justice Bergin made 29 recommendations, 23 of which related to law reform. The remaining six recommendations related to administrative or compliance issues. The bill seeks to deliver the substance of these recommendations. New South Wales residents donate more than $1 billion to charity each year. Any legislative reform should seek to bolster confidence in the sector so charities can continue to efficiently fundraise and return those funds to local and international communities through their projects and other initiatives.

Reducing duplication and administrative burden on small charities will of course be beneficial to the sector. In particular, item [12] of schedule 1 will streamline the registration process for charities. Charities will be able to use their proof of current registration with the Australian Charities and Not-for-profits Commission [ACNC] to apply for fundraising authority in New South Wales. Legislative harmonisation will occur for charitable fundraising authority holders who conduct community games to fundraise. The streamlining of the legislation will make it easier for authority holders to comply with the relevant legislation.

While these changes and others detailed in the bill will assist in harmonising legislative requirements for fundraising authority holders in New South Wales, the Opposition maintains concerns that the full administrative burden is not lifted from charities, particularly large charities. This is because there is still a desperate need for nationally consistent fundraising laws for charities operating across State boundaries or in multiple States. There is still confusion regarding online donations and the alignment of reporting in different States, as many large charities and peak bodies have noted. As Justice Connect appropriately highlights, a charity can be required to report its bank details in one State, get a police check in another and advertise in a paper in a third. Justice Connect’s campaign Fix Fundraising has highlighted many of these administrative problems and that a change in one State does not fix what is clearly a national problem in this area. There are seven sets of rules in seven jurisdictions.

The Opposition therefore asks the Minister and the Government what concrete action they are taking to streamline the process? Will they be raising the need for nationally consistent laws at the meeting of consumer affairs Ministers? With more and more donations occurring online and between State borders, it is of the utmost importance that we develop and implement nationally consistent laws on fundraising. While these new laws are a step in the right direction, the Opposition calls on the Minister to push for national legislation to address the significant burden on charities and community fundraisers amongst his ministerial colleagues from our Federal Parliament and the other States and Territories. The bill also addresses Fair Trading’s compliance and enforcement powers in the Act to conduct random inspections of charities and to investigate any breach of the Act that may occur.

The public inquiry addressed these concerns and the bill responds by proposing a number of changes to strengthen compliance, including through item [26], which provides powers of investigation to authorised officers. Under proposed new section 25K, the Minister can direct a person or body to pay remuneration and the expenses of an authorised officer for the exercise of investigation functions in relation to the person or body if a person has been found guilty of an offence. The Opposition asks the Minister to clarify the definition of an ‘”offence” under the legislation and clarify if the proposed section is retrospective—for example, if it will apply to offences that have occurred prior to the commencement of the legislation, even if an inquiry occurs after the legislation has been brought into force and effect. We ask the Government to address the lack of definition of “offence” in the legislation.

The Fair Trading Legislation Amendment (Reform) Bill 2018 details a significant number of consumer and business‑focused reforms arising from the Government’s Easy and Transparent Trading report. More than 500 submissions were received, providing feedback to the Government before the introduction of the bill to the Parliament. The bill introduces a number of reforms that will increase transparency for consumers. It addresses the use of non‑disclosure agreements used by businesses to circumnavigate or avoid their responsibility to provide consumers with safe products or services. Consumer advocates such asChoice have expressed concerns about the use of non‑disclosure agreements. This was most noticeable in the case of Thermomix, where serious incidents highlighting the unsafe nature of the product were not disclosed to the Australian Consumer and Competition Commission or relevant State authorities because customers who had complained to the company were asked to sign non‑disclosure agreements before receiving their remedy.

It is absolutely vital that dangerous products or services are reported to the authorities immediately because that information potentially has a wider impact on the public. This reform will give consumers a way to make that report without voiding non‑disclosure agreements. This then equips Fair Trading NSW and other authorities with the relevant information to investigate the problem and, if necessary, issue a public warning or alert the Australian Consumer and Competition Commission to potential problems.

A number of other reforms are designed to help consumers navigate complex markets such as the disclosure of commissions. This is addressed particularly in schedule 1, which deals with the problem of information asymmetry with third-party referrals, information and recommendations that can lead consumers into purchasing a substandard product or service. Services such as comparator websites—for example, in the insurance industry—market themselves as offering a range of products across the market when in fact they cover only a limited number of services. Consumers may be none the wiser on the financial kickbacks or incentives involved in these transactions. The reforms in the bill seek to provide consumers with better information so they can make better purchases through requiring up‑front disclosure.

I also note that the reforms on rental bonds will streamline processes from tenants, allowing the bond to be transferred from one property to another before that first bond has been released. In relation to trades licensing, the Minister and this Government seek to reduce red tape for businesses, particularly trades. Licence holders for 13 minor trades, including kitchen benchtop installation, painting and decorating, dry plastering, fencing, glazing, and paving, will now only need to notify the regulator every five years that they still require a licence. This is a departure from the Government’s previous position, as stated in its Easy and Transparent Trading paper. The Minister previously sought to abolish those licences altogether and the response from stakeholders was overwhelming.

The Government received more than 400 submissions and reported in budget estimates that only seven submissions were in favour of abolishing licences for those trades. There was overwhelming majority support for licensing to remain. However, as recently as September the Minister was refusing to rule out the abolition of those individual licences. Thankfully, the detail of the bill shows that the Government has listened to community and business voices and has seen reason on this issue. The licences will remain and consumers will have confidence in the work being performed by these tradespersons. Tradespersons will retain their licences, which they can then market as a signal to consumers of their skill and qualifications.

The legislation will introduce new specialised classes for motor vehicle repairers to allow certain employees to require certain qualifications for work they are not performing. For example, an employee who changes tyres may require only a certificate I or II instead of higher qualifications. This is a backflip on the Government’s previous position where it abolished restricted licensing in this sector. The Opposition remains concerned at the prospect of restricted licensing for liquefied petroleum gas and electrical repairs to caravans and recreational vehicles in schedule 4 to the bill. The Opposition will move amendments to reflect its concern with this section of the bill. Electrical and gas fitting is no joke, particularly the complex work required in caravans and recreational vehicles [RVs]. Problems with gas and electricity in caravans and RVs are not new; the Opposition and the relevant shadow Minister are familiar with complaints from consumers about so‑called “lemon” caravans.

A news report inCHOICE magazine quotes Tracy Leigh, the administrator of the Facebook group Lemon Caravans and RVs in Aus. She says the industry is a shambles and notes that despite electrical faults and other significant problems plaguing the industry, little recourse is taken. The last thing we want to do is reduce the standards and quality of installation and repairs for caravan and recreational vehicles [RV] manufacturers. If these manufacturers cannot get it right with fully qualified tradespeople working on their vehicles, we should not seek to restrict licences.

The proposed amendment would omit all words in schedule 4.1 [3] and schedule 4.2 [1], which are those words pertaining to the definition of specialist work for electricity and liquefied petroleum [LP] gas fitters for caravans and RVs, and the category of work for electricity and LP gas fitters for caravans and recreational vehicles. If this Government is serious about consumer protection, as it appears to be in addressing the use of non‑disclosure agreements, it should consider favourably the amendments being proposed this evening by the Opposition because these amendments take the safety of people in New South Wales seriously.

In his introduction to the Government’s Easy and Transparent Trading paper, the Minister expressed his wish to empower consumers and businesses in this State. While many of the reforms in the bill do seek to address issues in the current legislation by supplementing existing provisions with additional protections, some of them will reduce consumer confidence, in particular those reforms identified by the Opposition’s amendments to the bill. The safety of consumers should be the most important factor in amending the legislation. While much of the bill seeks to protect consumers, we highlight that a reduction in red tape in some areas such as the installation and fitting of LP gas and electrics in caravans and RVs, will reduce consumer confidence and open up the possibility of severe harm to people in this State. That is not in the public interest.

In regard to the Charitable Fundraising Amendment Bill 2018, we ask that the Minister consider the national implications of this bill and addresses, where possible, the complicated jurisdiction‑by‑jurisdiction legislation at a national level through regular meetings of consumer affairs Ministers across the country. We commend the Government for taking steps to improve consumer protection, streamline regulation and increase transparency both in the private and the not-for-profit sectors. Having identified some issues with both bills, the Opposition will be watching the implementation of these significant reforms and will ensure that they are working as intended, particularly if we come to government next year. With these observations, we do not otherwise oppose the legislation.