Page: 14676
Second Reading
[Debate resumed.]
Mr WINDSOR (Tamworth) [1.05 p.m.]: I will speak only briefly in this debate. I had assumed that amendments were to be moved by the Opposition to meet the concerns that some of my constituents have raised. That does not seem to have been the case. I bring to the attention of the Minister some of those concerns and perhaps next week I will relay those concerns to him in a written form for his consideration when the bill is dealt with in the upper House. It may well be that amendments will be moved in the upper House. I congratulate the Minister on the way in which this legislation has been processed.
There will always be problems with any legislation, but the process of seeking consensual arrangement in relation to the bill is to the Minister's credit. The legislation probably leans a little towards consumer protection rather than taking account of the genuine concerns of the building industry. The Minister may have already heard the concerns of the building industry. It is important to note that there has been an extended period of consultation during which the Minister and his staff have held meeting with interested parties, including myself. The Minister should be given due credit for that.
I will briefly run through some areas of concern. I acknowledge, as most members of Parliament do, the concerns that consumers have from time to time about the Department of Fair Trading and the building industry. Item [13] of schedule 1 inserts new subsection 40 (2B), which gives the director-general the ability to reject an application for the renewal of a licence if the applicant has been involved in the management of a company that has been the subject of a winding up order within a period of five years before the date of the application. The Master Builders Association is concerned that this provision is inconsistent with the current bankruptcy period of three years and the consequential problems that creates.
I ask the Minister to look closely at that. I am concerned about new section 120, which relates to the register. There are concerns that recording a caution on the register constitutes more of a penalty than a caution and, therefore, the caution in isolation should be sufficient. At this time I will not expand on concerns about the cooling-off period. The Minister is aware of concerns about kit homes, and those concerns should be revisited from a slightly different perspective. Perhaps we can deliver a better outcome. Division 2 of schedule 4 deals with building disputes, and the proposal for early intervention in building disputes is supported by the Master Builders Association. The association also welcomes the further amendments to the first draft of the bill.
The Master Builders Association is of the view that the bill can be further strengthened if all applications to the tribunal are required to go through the early intervention process rather than giving the discretion to the tribunal. I will elaborate on that in writing to the Minister. Division 4, which relates to the jurisdiction of the Fair Trading Tribunal in relation to building claims, is under consideration. The bill proposes that $500,000 should be the limit of the jurisdiction, although that is regarded by some as too high. Claims in amounts up to $500,000 represent only 1 per cent of the claims to the tribunal, whereas 80 per cent of claims relate to amounts up to $100,000. Some of my constituents believe that $100,000 should be the limit of the jurisdiction rather than the $500,000.
The powers of the tribunal are also of concern because they may encourage a jackpot mentality. Any work the subject of a dispute should be rectified and the discretion to make a monetary order could be viewed as taking the easy option rather than focusing on the work. The question of how the value of such monetary orders is formulated also arises. I will put that matter in writing in a broader perspective and provide that to the Minister prior to debate in the upper House. I know that the process of consultation is ongoing.
The collapse of HIH Insurance is related to the bill. Only yesterday I rang the Minister's office. I compliment the member of his staff to whom I spoke on her quick reaction to my concern about the renewal of building licences, a concern that is shared throughout the building profession. Ian Lightfoot, the principal of a building firm that has been operating in Gunnedah for many decades, Lightfoot Building, contacted me yesterday to say that the firm's building licence is due on 11 June and the company is having difficulty getting its home warranty insurance renewed. He has been given an indication that the company will receive an interim licence. However, he believes that insurance problems could arise if that process is followed. Undoubtedly, many others are in the same situation. It is important that the growth of reputable building businesses not be inhibited, and any assistance that can be given to them would be greatly appreciated. I thank the House for the opportunity to make a contribution to this debate. I will not be able to remain in the Chamber for the Minister's reply but I will read it with interest tomorrow.
Mr WATKINS (Ryde—Minister for Fair Trading, Minister for Corrective Services, and Minister for Sport and Recreation) [1.13 p.m.], in reply: I thank members representing the electorates off Oxley, Georges River, The Entrance, Cabramatta, Port Stephens, Coffs Harbour, Kiama, Burrinjuck, East Hills, Hawkesbury, Keira, Vaucluse, Liverpool, Heffron, Miranda, Murrumbidgee, Tweed, Newcastle and Tamworth for their contributions to the debate. All members who have spoken about this most complex matter understand that this debate has many aspects. However, I would have liked to have heard more from more Opposition members about their detailed concerns or about possible amendments to the bill as I understand amendments will be moved in the upper House. The members who have spoken in the debate understand that the Government is trying to bring some clarity and certainty to this contentious and difficult matter.
As I said in my second reading speech, the bill has something for everyone. It tries to address the most critical problems facing insurers, builders and consumers across the board. It is not perfect but no legislation can be. Home owners are the big winners, and rightly so. I am confident that the bill goes a long way towards addressing the consumer protection issues that are of concern to all honourable members. I have received representations from most members of the House about building works that have gone bad. Those sorts of problems cause such pain and difficulty for families because in many ways their homes are their most expensive and precious possession.
In my second reading speech I made it clear that the consultation and the improvement process will continue until the bill passes through the upper House. I give that commitment to the honourable member for Tamworth, in particular, who I understand will provide me with suggested amendments and submissions on his areas of concern. I will consider those before the bill is received in the upper House and if the changes are reasonable they will be made. The preparation of the bill has been a long and exhaustive process. I thank consumer groups, insurers and, in particular, representatives of the Master Builders Association and the Home Industry Association. We have had many meetings about the detail of the bill and the representatives of the groups I have mentioned approached that consultation with a positive manner in an endeavour to achieve the best outcome for consumers and builders.
A balance must be struck between consumers and builders. I commend the honourable member for Tamworth for his thoughtful comments about the building industry, especially in regional New South Wales. We must ensure that New South Wales has a strong and vibrant building industry. That is critical to the health of our economy and to the delivery of the dreams people have about owning their own homes. The bill provides a balanced approach to achieving that goal. The Master Builders Association and the Home Industry Association still have concerns and we will continue to consult with their representatives until the process is finished. I reiterate my support for the good, decent, hardworking builders and tradesmen of this State. Bearing in mind the exigencies of the economy and problems faced by the industry, building is a difficult profession.
In conclusion I want to make some remarks about the effect on New South Wales of the HIH collapse, something that has been outside our control. No-one would have expected the collapse of such a major insurer and it has caused real human problems in our State. Many consumers had home building warranty insurance with HIH—not the wider range of insurance for which I am not responsible such as public indemnity and public liability. The steps taken by the Government to provide assistance to consumers have been effective. I have had contact with many people who thought they were out of pocket and their dreams were gone, but the Government's rescue package has now made a difference to their lives.
In some ways we have moved on from that. Money is going out to those needy people; the scheme is going well. However, the problems the collapse has caused to builders is currently of great concern to me. Many builders are waiting for insurance and are unable to continue work. Some have laid off apprentices, which is especially disturbing, and other tradespeople. We have been working tirelessly, and that is not a cliché, to try to achieve a resolution of that problem. I have met weekly or fortnightly with representatives of insurers and building associations and some progress is being made.
At a meeting held last week under the auspices of my department I was pleased to note that there was better communication between insurers and the building associations. That will ensure that any problems that arise are dealt with quickly. These groups are doing their utmost to get through the applications as quickly as possible and both have different ways of assisting builders in need. HIA Insurance Services [HIAIS] has a 60-day insurance scheme with a rapid turnaround that gets builders working again. We are putting builders in touch with HIAIS as quickly as possible. Dexta, the other main insurer, has a different way of operating and the MBA is helping builders to communicate with that organisation when necessary.
I discussed the current situation with the main players on Monday. It was drawn to my attention that Newcastle has been hit particularly hard because of the high level of insurance with HIH in the Hunter. We have established a clinic that will travel to Newcastle and bring builders into immediate contact with insurers. It is slow progress, but we are getting people insured. There is light at the end of the tunnel, although I acknowledge that it has been a very difficult time for builders. It is out of our hands and those of the MBA, HIA and the other remaining insurers. HIH should not have collapsed, but that issue will be dealt with by the royal commission and in other places.
In conclusion, I draw the attention of the House to the contribution of some extremely hard-working people in my department. They include Chris Aird, Mary-Louise Battilana and Anthea Taylor—to whom the honourable member for Tamworth referred. I thank all of my staff who have been involved in these matters. I reiterate the fine work of Jane Fitzgerald, my chief of staff, who has driven the process of consultation and intelligent discussion in my place to achieve a piece of legislation that meets the needs of the men and women of this State as far as is humanly possible. Whether builders or consumers, they should be thankful for her involvement in this process, and I offer her my deepest thanks. I am sure that we will achieve a good outcome. I look forward to the debate in the upper House and to the passage of this bill so that we can make this State a better place for both builders and consumers.
Motion agreed to.
Bill read a second time and passed through remaining stages.
[Mr Acting-Speaker (Mr Mills) left the chair at 1.23 p.m. The House resumed at 2.15 p.m.]