Worth Richard: Real Estate Agents Bill — Second Reading In Committee Third Reading 
Worth Richard: Real Estate Agents Bill — Second Reading In Committee Third Reading 
[Volume:649;Page:18374] 
Dr RICHARD WORTH (National) 
: 
 I cannot empathise on any basis with the comments that the previous speaker Lynne Pillay made. I think a very good starting point for looking at this type of legislation is to gauge the reactions of both the public and the industry organisation to what has occurred. Just by way of contrast I look for a moment at the Lawyers and Conveyancers Bill. In the passage of that legislation a very committed effort was made by the Law Society and the policy advisers in the Ministry of Justice to come up with legislation that would provide a workable framework for the future and would also enable a high level of consumer protection to be offered to the public and society more generally. 
This bill certainly did not have that intent in mind. It immediately put the Minister in a situation of conflict and confrontation with the industry. He believed quite clearly that there was massive rorting and fraud going on the sector and he decided he would make an example of this particular occupational group. I have had the good fortune as a practising lawyer for perhaps 30 years to have a close involvement with the industry and I can certainly make some comments that although not exactly insider comments reflect an understanding of its operations. One of the things one could say about those involved in the sector particularly those in leadership positions is that they have a passionate concern about the sector and they have in many cases given thousands of hours of time to seeking to improve the lots both of those who work in the sector and of those who seek to take advantage of its services. 
We saw clearly when the bill was introduced where the Minister and his advisers were coming from because the explanatory note to the bill had in it a general purpose statement that started off by noting that “The Real Estate Agents Act 1976 is over 30 years old”. That in itself seemed to the Minister and his advisers a reason for making change. Yet I reflect on the Crimes Act 1961 which is old legislation in respect of which there is no necessary warrant for change. The Crimes Act 1961 would be—what—some 47 years old. So in itself the fact that legislation might be 30 years old is not significant. 
The policy advisers also said in the general policy statement that the shortcomings of the Real Estate Agents Act included that “It provides for a system of industry self-regulation that lacks independence transparency and accountability. This combined with the significant risk posed to consumers from real estate activity such as mishandling of funds poor contractual advice misleading representations conflicts of interest and misuse of information make it essential to provide a regulatory framework that affords consumers an adequate level of protection.” So battle was joined. The end result in a setting of confrontation I believe has not been to produce a statute that has those key elements of consumer protection that may be required. 
What was the response of the institute to all of this? Well it had a number of concerns and I would identify them in two broad categories. First of all it saw—as must be readily apparent—that the bill lacked consistency. It exposes thousands of people to new risk through its failure to include property management and residential letting and leasing within the new regulatory framework. I think it is right to say that the fall-out from the Blue Chip collapse clearly demonstrates the need for these activities to be regulated. I have heard the comments of the previous speaker but here an opportunity to effect significant change and make a significant advance to improve the merit of this legislation was not taken. It is all very well to say that these issues may be addressed in the future but the reality of the shortage of parliamentary time is that it will be some considerable period—certainly if this Government lingers in office for another term—until any appropriate change is made. 
So there was a criticism of lack of consistency. But I think there is a stronger criticism that can be made and that is basically that the bill lacks balance. I do not doubt that the Minister has done his very best but in a setting where he has no basic knowledge of what the problems are it is an exercise fraught with difficulty. So I am not criticising the Minister—he has done the very best he can with his intellect and with the advice that he has had available to him. That a shortfall has emerged is quite understandable. The Minister should not feel bad about that as he shouts across the House. He should not feel embarrassed. I certainly do not feel embarrassed in making comments about the challenge that he has had to face and in fact the failure that has so sadly occurred. 
I was saying that the bill lacks balance and I would just like to develop that for a moment. The 1976 Act has been completely dismantled. Even those parts of it that have worked really well over the past 32 years have been thrown out. There has been this substantial transfer to the authority or to the Minister of a raft of regulatory functions. I note that in its submission the Real Estate Institute spoke about a scorched earth approach. Maybe those are heavy words but I think they can be justified because a number of things have happened here including putting at substantial risk a very cost-effective system of conveyancing at a time when housing affordability as we all know is a significant concern. If this bill is to pass we will also have produced significant avoidable expense some of which will quite clearly be passed on to consumers. 
We will see significant delays to the establishment of the framework and that of course is associated with the issue in the Supplementary Order Paper of an extended period for the transitional provisions. We have compromised the workability and practicability of the new regime by denying input to those with direct industry experience. So the outcome is less satisfactory legislation than might have been expected. 
I think it is appropriate to respond directly to comments that the Minister may make at a later stage in connection with National’s perspective on the bill. I have pretty much summarised where the institute and those in the industry stand but National took a full part in the bill as it was reported from the Justice and Electoral Committee. It noted that some of the concerns that it had expressed had been the subject of patching but it continued to oppose this bill. I think we do so for reasons that are soundly based. Are they based on an industry perspective? Sure. But they are also based on the perspective of the community. 
I think we would say that a new independent authority with industry representation is required to give consumers confidence that there is effective oversight of this industry. I am bound to say that there are circumstances—fortunately only a few—where fraud and resultant loss have occurred. But this bill is not adequate; it is not up to the task of achieving the objective that should have been set. I have spoken about the fact that a majority of submitters were concerned that property management was not included in the bill and I think we all know that the last claims in respect of the fidelity guarantee fund were in relation to property management. The committee was told that about one in five complaints relates to property management. 
Hon Clayton Cosgrove 
: They had no evidence for it. They did a ring-round. 
Dr RICHARD WORTH 
: The Minister is critical of the evidence that has come to the committee. A lot of the evidence that came to the committee may have been flawed. It seems to be the case that it is that flawed evidence that the Government members have relied upon. I hope in the course of further comment on this bill to deal with issues that remain of true concern. 
Amendments recommended by the Justice and Electoral Committee by majority agreed to.