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- 26 September 2007
Motor Dealers Amendment Bill 2007
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Page: 2355
Agreement in Principle
Debate resumed from 27 June 2007.
Mr ANDREW CONSTANCE (Bega) [12.11 p.m.]: The Motor Dealers Amendment Bill 2007 has two main purposes: First, to eliminate duplication of forms filled out by motor dealers transferring second-hand or demonstration cars to another motor dealer; and, secondly, to include demonstrator vehicles within the definition of second-hand motor vehicles.
New South Wales has a large and important motor vehicle wholesale, retail and repair industry. It is predominantly made up of small businesses. Of 20,000 businesses, 96.2 per cent have fewer than 20 employees, 11 .3 per cent of businesses are in retailing and the other 88.7 per cent are in vehicle services. Half of all businesses are non-employing; in other words, the operators are self-employed people. The other 10,000 businesses employ 84,600 people, with 29 per cent working in retail and the other 71 per cent in services. So the motor vehicle sector is of huge significance to the New South Wales economy and the wellbeing of those reliant on the industry, whether as consumers or for their incomes.
The Liberal Party and The Nationals hold the industry in high regard and thank the businesses for their continuous efforts to improve protections and standards for consumers. We particularly acknowledge the tireless efforts of the Motor Traders Association, which has for many decades worked to secure sensible and fair reforms for industry that also benefit consumers. Let us not forget that businesses want happy customers, and an enormous effort has been made by the car industry to develop long-term relationships with customers and to secure repeat business. This is healthy for employment, consumers and the ongoing viability of a very competitive and challenging industry.
The Minister indicated in her second reading speech that this legislation is the result of a 2006 Small Business Regulatory Review Taskforce review of red tape in the motor industry. Businesses involved in the review included new and used car dealers, smash repairers, service stations, auto electricians, tyre dealers, tow truck operators and auto dismantlers. The Motor Traders Association and the Service Station Association were represented on the task force. The report was completed in July 2006 and the Government said it fully supported the recommendations. Today is 26 September 2007, so it has taken more than a year for these matters to be debated in the Parliament. Perhaps we should not complain, because plenty of other matters date back before 2006 on which the Government has pledged action but which are stuck in the overflowing ministerial in-tray. The reforms to the Retirement Villages Act, regulation of mortgage brokers and substantial changes to the Consumer, Trader and Tenancy Tribunal are but a few matters that have turned the residents of New South Wales blue from holding their breath waiting for action promised years ago by the New South Wales Labor Government.
The Government says it supports the findings of the task force that reviewed the motor industry, but the Minister has not provided detail to the House about progress in implementing those recommendations. The bill is welcome in that it reduces duplication of forms and clarifies the definition of a "demonstrator", and the Opposition supports that. However, I would appreciate the Minister telling the House in her reply what has happened to the other recommendations that were "fully supported" more than a year ago. They included: eliminating specified equipment lists for categories of motor vehicle repairers; addressing anomalies in the existing categories of motor vehicle repairers to address uncertainty and confusion; writing to the Federal Minister concerning environmental issues; and recommendations in relation to occupational health and safety, WorkCover, business names registration, the sharing of information across agencies including Commerce, the Attorney General's Department and the Cabinet Office; and greater consistency in inspections by local government and New South Wales Government agencies. A lot of work has been undertaken by the task force and it is important, more than a year after its release, that the Minister ha s followed through. Will she inform the Parliament of what has been achieved?
This bill deals with the discovery made by the task force that motor dealers had to fill out different forms for different government agencies that in effect asked for the same information. The bill addresses that and reduces the number of prescribed forms from 19 to 15. It will particularly affect the wholesale market by reducing red tape for inter-trade dealing. Given that there are 600,000 inter-trade transfers a year, the Opposition welcomes this improvement. It is also anxious that the Fair Trading Commission follow through on these reforms by monitoring industry compliance to ensure Form 2s—known as police books—are kept up to date with accurate vehicle identifiers because this is where opportunities may exist for criminals to enter incorrect information.
I understand the Fair Trading Commission has assured the motor industry that vehicles known as "demonstrators" can still be marketed and that stamp duty exemptions still apply. I also understand from the Minister's second reading speech that warranties for demonstrator vehicles that are more generous than the statutory warranties for used cars will not be affected. Businesses in the motor industry are all concerned to eliminate fraud and theft, not only to ensure the good reputation of dealers but also because dealers are often the targets and the victims of criminals rebirthing cars and winding back odometers and other unscrupulous behaviour.
The Motor Traders Association has worked tirelessly over the years to make positive suggestions. Many relate to our state-based system of regulation and more needs to be done to eliminate crime that is occurring because of gaps between government agencies and between States. It is all very well for governments to tell industry what they must do to prevent opportunities for crime, but it is incredibly frustrating when a creaky old Government allows great gaping loopholes in its own systems that are obviously and easily being exploited by criminals. Government must play its part if the crime prevention effort is to work as a whole. Minister Burney has said a great deal in this debate about the importance of "written off vehicle data". Mr David Smith of the Motor Traders Association has written to the Opposition asking:
Given the significance of this matter, why is it that New South Wales REVS does not carry all or the most up to date information relating to the written off vehicle history of a motor vehicle?
The MTA highlighted to the Government in October 2006 that this was occurring and when a response finally did arrive in 2007 the answer was that the system would be modified "early 2007" to provide greater protection.
I have been advised by the Office of Fair Trading that the system is currently undergoing testing on an upgraded service, but consumers and businesses still do not currently have access to all written off vehicle data via REVS. While this issue has been in the "too hard basket" countless unsuspecting consumers and businesses have found that they have done their REVS check only to discover at a later time that their vehicle is listed on a written off vehicle register in another jurisdiction, usually Queensland ...
In addition to this, vehicles that are written off in another jurisdiction are all too readily accepted for re-registration by the New South Wales RTA, albeit as a high risk vehicle. The RTA knows they have been written off, yet REVS does not.
This bill is apparently all about cutting red tape. I respectfully suggest the Government has a very long way to go to get its house in order, to reduce inefficient regulation, to make the system operate effectively and to ensure proper protection of consumers and businesses. Finally, I note the Government's statement in the summary of the task force report:
The Taskforce believes that the best way to find out about small business regulation is by asking small business operators.
The Opposition understands that, when asked, both small business and industry associations have been telling the Government a move from 12-month licences to three-year licences would be a major improvement and would reduce red tape and regulation burden. It is pointed out that builders have three-year licences so why not motor dealers and motor vehicle repairers? This is not just about the Minister asking; it is also about listening to the answer. This request for three-year licensing has been made for a number of years and it has simply been ignored. Why? I hope the Minister will explain her position, as it seems wooden headed and inflexible, at a time when the Government seeks to brag about cutting red tape. The Opposition supports this bill. We will listen carefully to what the Minister has to say in reply, in particular in answer to the questions I have raised. On the issue of licensing we reserve our right to pursue the matter further in another place, depending upon the Minister's response today.
Mr ROBERT COOMBS (Swansea) [12.20 p.m.]: The ability of small business owners to get on with the job of running their businesses with the minimum amount of government red tape is an ongoing concern for the private sector. Of course, any attempt to reduce regulation and the overall red tape burden on small business must be carefully balanced with the need for appropriate oversighting and controls. The motor trade continues to be an area of high risk for consumers, and can be used as a path to legitimising and disposing of stolen, written-off and encumbered vehicles. This bill sets an even and fair-handed approach. Dealerships are mostly made up of small businesses that employ fewer than 20 people. They are less able to absorb the cost of meeting unnecessary red tape.
Any reforms that lessen the burden of paperwork on small businesses are to be applauded. In this regard, the amalgamation, merging and streamlining of a number of forms as set out by the Minister, plus the complete abolition of others, are welcome changes. The forms and registers prescribed by the Act contain a lot of valuable information for consumers. Advice on any statutory warranty that may apply, identifier details about the vehicle, when a pink slip should be provided and advice on written-off status and any encumbrances is provided. The changes ensure that this information is still provided. The changes also ensure that police and Fair Trading investigators can continue to enforce the law. Each form and register provides an auditable trail of a vehicle's history. Forms can be used to help in the investigation of odometer interference, consumer fraud and car theft and re-birthing. The changes will still allow the information to be accessed from a register directly or through the information held by the Roads and Traffic Authority. I commend the bill to the House.
Mr STEVE WHAN (Monaro—Parliamentary Secretary) [12.23 p.m.], in reply: I thank members for their contributions on this bill. The Motor Dealers Amendment Bill introduces a number of changes to the record-keeping requirements. It is aimed at cutting red tape across this important sector. At the moment, under the Act dealers are required to keep a number of prescribed forms. These forms include a variety of different registers of the vehicles they are buying, selling and transferring. The data stored in the registers is vital for investigating consumer fraud and to help stamp out the trade in stolen cars and spare parts. Currently there are 19 separate prescribed forms under the Act. The Small Business Regulation Review Taskforce recommended that the Office of Fair Trading look at each of these to identify opportunities for simplification and reduction.
This bill includes a number of changes to the law that will significantly reduce the burden for dealers and result in the abolition of four of the 19 prescribed forms and reduce the usage of one other. It is important to note that the change will not impact on the law enforcement capabilities of Fair Trading, the Roads and Traffic Authority or the police. Fair Trading has already been in contact with the authority about the information it collects to ensure that required data is collected and both the police and Fair Trading will be able to access the authority's database when conducting investigations.
The Office of Fair Trading has indicated that the changes will bring about an estimated $1.17 million saving for dealers in processing, printing, handling, storage and retrieval costs associated with this high number of transactions. It is certainly a win-win position for industry and consumers. The changes should have a significant and immediate impact on reducing red tape for motor dealers. As I mentioned, the changes have been discussed with various authorities, including the Roads and Traffic Authority, the New South Wales Police Force, the Motor Traders Association, the Institute of Automotive Mechanical Engineers and the chairperson of the Motor Vehicle Industry Advisory Council. All have indicated support for the measures, which are designed to cut red tape.
The member for Bega, in his contribution for the Opposition, raised a number of issues including why the Government has not adopted the first recommendation of the task force to reduce the numbers of categories of licence? The Office of Fair Trading examined the various licence categories under the Act and I am advised that it found that only around 1 per cent of licensees would be affected should there be a reduction in licence categories, with the overwhelming majority of dealers only having one category. Having several different categories of licence helps licensees choose the licensing option that best suits their particular needs. As would be expected, there is a higher level of regulation of dealers who are able to sell vehicles to the public and they must also contribute to the Motor Dealers Compensation Fund. However, for wholesalers, who only sell to other licensed dealers, there is no consumer risk, so it is appropriate that they do not have to contribute to the fund, and they face less burdensome regulatory requirements.
Recommendation 2 of the task force is about records for auto dismantlers being streamlined. Records kept by auto dismantlers are required particularly by the New South Wales Police Force in its fight to combat motor vehicle theft and rebirthing. It is essential in these investigations to be able to trace the path of a vehicle and its parts to prevent criminal gangs from breaking a vehicle up and onselling the parts or using the parts and identifiers to give a vehicle a new identity. The police have advised that the current record-keeping requirements are absolutely necessary to investigate these matters. The police also note that the current requirements are not particularly burdensome. The Government is committed to ensuring that the police have whatever tools they require to investigate crime, particularly car theft. For this reason the Government has followed the advice of the New South Wales Police Force and decided that the current requirements are necessary.
Recommendation 5 of the review is that the Office of Fair Trading examine existing classes of repairer in order to address anomalies. Movement towards a national approach for the qualifications for licensees in the motor vehicle repair sector has been underway for some time. New South Wales has had to wait for finalisation of the new national framework before proceeding with changes to this State's scheme. A review of the Motor Vehicle Repairs Regulation is due to be undertaken this year. The regulation spells out the categories of trade certification. Recommendation 8 of the review, that Fair Trading should work with other State and Commonwealth agencies to streamline the registration of business names and business numbers, is being addressed through the Council of Australian Governments, which is working towards a nationally consistent scheme.
The member for Bega also mentioned written-off vehicle data with the register of encumbered vehicles system. The New South Wales system is working with the Commonwealth and other States to develop a national personal property securities register, which will take over all the similar State-based systems including the New South Wales system. The project was approved in principle by the Council of Australian Governments, and the Commonwealth has provided budget funding for the project. The Commonwealth is proposing implementation during 2009. The Commonwealth has recently confirmed that it will be implementing a national exchange of vehicle and driver information systems access as part of the national personal property security system, which was the key consumer protection issue raised by the Ministerial Council on Consumer Affairs. That measure will benefit consumers, dealers and financiers. Of course, New South Wales will continue to be a strong participant in this worthwhile national project.
The member for Bega said that the Government was not going far enough in reducing red tape. The reviews of individual industries that the Government has undertaken have produced positive outcomes for this industry and other industries. The Government has undertaken a positive program to deal individually with the industries. It is not often possible to use a broad-brush approach to remove red tape. It is important to review each industry individually. This positive approach has been welcomed by the industries that have been reviewed. It shows the Government's commitment to ensuring that appropriate safeguards are in place for consumers while at the same time minimising red tape for small business.
Labor takes this approach in contrast to the Federal Labor Government, which over the past 10 years has introduced more red tape when it promised to reduce it. When small business complains about red tape inevitably it refers to the business activity statement [BAS]. That is a practical difference between the Coalition approach and the Labor approach. The Howard Government has encumbered business with BAS while the State Labor Government has introduced important changes to industry in an endeavour to streamline red tape while protecting the rights of consumers. I commend the bill to the House and thank the Opposition for its support.
Question—That this bill be now agreed to in principle—put and resolved in the affirmative.
Motion agreed to.
Bill agreed to in principle.
Passing of the Bill
Bill declared passed and transmitted to the Legislative Council with a message seeking its concurrence in the bill.
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