«Pairs Hon Jon Ford Hon Norman Moore Hon Ken Travers Hon Alan Cadby Hon Adele Farina Hon Bill Stretch Question thus passed. Bill read a third time and ...»
[Tuesday, 9 November 2004] 7659
Hon Kim Chance Hon Graham Giffard Hon Louise Pratt Hon Giz Watson
Hon Robin Chapple Hon Nick Griffiths Hon Ljiljanna Ravlich Hon Ed Dermer (Teller)
Hon Kate Doust Hon Kevin Leahy Hon Jim Scott
Hon Sue Ellery Hon Dee Margetts Hon Christine Sharp
Hon George Cash Hon Peter Foss Hon Robyn McSweeney Hon Bruce Donaldson (Teller) Hon Murray Criddle Hon Ray Halligan Hon Simon O’Brien Hon Paddy Embry Hon Frank Hough Hon Barbara Scott Hon John Fischer Hon Barry House Hon Derrick Tomlinson Pairs Hon Jon Ford Hon Norman Moore Hon Ken Travers Hon Alan Cadby Hon Adele Farina Hon Bill Stretch Question thus passed.
Bill read a third time and passed.
FINANCE BROKERS CONTROL AMENDMENT BILL 2003Second Reading Resumed from 23 September.
HON NICK GRIFFITHS (East Metropolitan - Minister for Housing and Works) [9.41 pm]: First, I thank those members who have contributed to the debate. Hon Simon O’Brien raised a number of issues, and I will endeavour to deal with them. He raised the issue of disclosure requirements. In that context, the Western Australian legislation applies to persons arranging all loans of money for all sorts of purposes, not just consumer loans for personal or household purposes, as is the case in New South Wales. Therefore, a single set of disclosure requirements, in the Government’s view, cannot be included in the Act to apply to all kinds of loans.
Finance brokers are currently subject to disclosure requirements that are included in the finance brokers’ code of conduct. There is a requirement to disclose any direct or indirect interest a broker may have in a loan transaction.
Brokers are also required to disclose any interest that members of the broker’s family or employees may have in a transaction. The inclusion of disclosure requirements in the code of conduct allows for different requirements to be imposed on brokers according to the kind and type of loan being arranged. It also allows for disclosure requirements to be amended or added to quickly, in line with changes in marketplace behaviour and in response to problems that arise in the industry.
Currently, the code is made by the Finance Brokers Supervisory Board. The Bill will amend the Act to provide that the code can be prescribed by regulation, anda finance broker who contravenes a requirement of the code of conduct is liable to disciplinary penalties, as is a broker who contravenes the Act. Currently, the penalties can be imposed by the board. The Bill amends the Act so that a broker may be disciplined by another body, which is the subject of another piece of legislation that is currently before the House - dare I say the State Administrative Tribunal. I am advised that the board is currently reviewing the code of conduct, and will amend the code to include additional disclosure requirements based on those contained in New South Wales legislation.
Hon Simon O’Brien raised the issue of exceptions to the meaning of finance broker, and foreshadowed that he proposed to move an amendment to proposed section 5(1). He stated his intention to seek to have the Bill amended to except insurance brokers from the meaning of finance broker. I am advised that late last year the board became aware that insurance brokers, who are currently required to hold an Australian financial services licence under the Corporations Act, sometimes arrange or negotiate premium finance for clients seeking insurance. Insurance brokers undertaking this activity are not currently excepted from the meaning of finance broker, and are required to hold a finance broker’s licence. The Bill seeks to amend section 5(2) of the Act to include a power to make regulations exempting persons and classes of persons from the Act or particular provisions of the Act. A regulation can include conditions to which an exemption is subject. Currently, the Act contains a limited power for the minister to except persons from the meaning of finance broker, but does not contain a general exemption power. The National Insurance Brokers Association of Australia has written to the Minister for Consumer and Employment Protection, requesting that an amendment be made to the Bill excepting insurance brokers from the Act when arranging premium insurance for clients as part of their insurance broking function.
7660 [COUNCIL] The proposed amendment is considered to be unnecessary, because the Bill already seeks to amend section 5(2) by amending the regulation-making capacity. That will deal with other problems of an unforeseen nature that may arise or an inappropriate application of the Act to persons and classes of persons. It is really a matter of finding the right way around the problem that has been raised. The Opposition and the Government both recognise the problem. However, the Government’s position is that exemption by regulation is preferred, because there is provision to include in the regulations conditions to which the exemption is made subject.
I am advised, and I am in a position to inform the House, that the Minister for Consumer and Employment Protection has given an undertaking to the Australian Finance Conference that if the Bill is enacted, he will present a regulation to the Governor in Executive Council exempting insurance brokers from the Act when arranging premium insurance in the course of organising insurance on behalf of clients. That envisaged regulation will provide an exemption for insurance brokers identical to that proposed by Hon Simon O’Brien when he made his second reading observations.
Hon Dee Margetts raised a matter to do with - I hesitate to use the phrase when I am directing my comments to Hon Dee Margetts through you, Madam Deputy President (Hon Kate Doust) - the national competition policy.
Hon Simon O’Brien: It is all right; you are closing the debate. You are quite safe.
Hon NICK GRIFFITHS: I was being very hesitant. I am advised that a national competition policy review of the Finance Brokers Control Act in 1998 recommended that the Act be repealed. The basis of the recommendation was that as a result of the Managed Investments Act 1998 the Australian Securities and Investments Commission assumed responsibility for regulating those finance brokers who were arranging or negotiating pooled mortgages, and state regulation was no longer required. I am advised that the Bill recommended that if it became necessary to regulate finance brokers arranging single investor mortgage loans, this could be achieved by enacting a mandatory code of practice under the Fair Trading Act 1987. The review did not recommend that the Act be replaced by a voluntary industry code of conduct. I am advised that the national competition policy recommendations were not acted upon because of problems that emerged in the industry in the late 1990s and also because of the emergence of mortgage originators who arrange or negotiate loans when the lender is an institutional finance lender, such as a bank or credit union. I am advised that because the profile of the finance broking industry changed significantly in the period after 1998, the review recommendations became irrelevant. Also, the report of the New South Wales Consumer Credit Legal Centre conducted on behalf of ASIC and released in March 2003 revealed numerous incidents of consumer detriment due to actions of mortgage originators, and recommended increased regulation of the finance broking industry.
The proposal to amend rather than repeal the Act was subjected to scrutiny in accordance with national competition policy. Officials and those who carried out the scrutiny - the honourable member may be pleased to hear this - agreed with the proposition that continued regulation was justified having regard to national competition policy principles and the changes in the marketplace.
Hon Dee Margetts: I think it is ridiculous to make legislation and ask them whether it is agreed.
Hon NICK GRIFFITHS: I note the member’s view on that. It is not a matter for the National Competition Council in that sense but for officers within government looking at the matter and running a ruler over it in terms of national competition policy principles.
Hon Barry House: They need someone to tell them what to do.
Hon NICK GRIFFITHS: Members opposite certainly did, but did not take advice on this issue. However, I do not want to engage in politics in the Legislative Council.
The bottom line is that the national competition policy review is no longer relevant. The decision not to repeal the Act has not resulted in that favourite body of Hon Dee Margetts recommending a reduction or a suspension in national competition policy payments to Western Australia.
The question was asked whether the rules of evidence applied to disciplinary proceedings before the State Administrative Tribunal. Currently, the Finance Brokers Supervisory Board is not bound by the rules of evidence. The other piece of legislation that is before the House has SAT not being bound by the rules of evidence that apply to courts of record. SAT will be able to inform itself of any matters that it sees fit. It is not envisaged that there will be a significant difference in the practice and procedure of SAT compared with matters of practice and procedure currently applicable before the Finance Brokers Supervisory Board.
Hon Dee Margetts raised the issue of the structure of the industry and unfair commercial arrangements between finance brokers and subcontractors. As I understand it, the honourable member was concerned that the structure of the finance broking industry is resulting in unfair commercial pressures being exerted on finance brokers who are working under contract for other brokers. It is understood that this is a reference to brokers entering into subcontracting arrangements instead of contracts of employment with other persons. As a result, these subcontractors must be licensed, have their own professional indemnity insurance and be responsible for their own overheads. The Act and the Bill are concerned with protecting consumers and other persons who use the services of finance brokers. As such, this is primarily a piece [Tuesday, 9 November 2004] 7661 of consumer protection legislation. The issues raised, though important, relate to employment and contractual matters, which are considered to be outside the ambit of the Act.
Hon Dee Margetts: Do you not think there is a conflict with unfair pressures and their services to their customers?
Hon NICK GRIFFITHS: I understand the point the honourable member is making. This legislation is concerned with consumer protection as distinct from employment and contractual matters. However, I note the point that if people carrying out these employment contractual matters are under pressure, it may lead to a lower level of service to their clients and, therefore, consumers will not be as protected. Notwithstanding that, the issue Hon Dee Margetts raises is in respect of employment and contractual matters as distinct from what the Act and this Bill are primarily concerned with;
namely, consumer protection.
I thank Hon Dee Margetts and Hon Simon O’Brien in particular for their contribution to the debate. I commend the Bill to the House.
Question put and passed.
Bill read a second time.
House adjourned at 9.57 pm __________ 7662 [COUNCIL]
BURGLARY AND ROBBERY OFFENCES, NUMBER OF CONVICTIONS AND TERMS OF IMPRISONMENT
2371. Hon Norman Moore to the Minister for Housing and Works representing the Minister for Justice Will the Minister provide the following information for the years 2000-01 to 2003-04 How many adults were convicted for burglary offences?
(2) How many adults were sentenced to a term of imprisonment where burglary was the most serious offence?
(3) How many adults were convicted for robbery offences?
(4) How many adults were sentenced to a term of imprisonment where robbery was the most serious offence?
Hon NICK GRIFFITHS replied:
(1)-(2) The Department of Justice advise:
2000-01 2001-02 2002-03 2003-04 Adults Convicted Aggravated 1007 1120 1112 1107 Home 338 564 498 580 Other 829 535 544 495 Adults Sentenced Aggravated 338 382 440 400 Home 96 107 36 51 Other 43 52 3 0 From 2001-02 to 2003-04 there was a 25% increase in the number of persons convicted of aggravated and home burglary offences. From 2000-01 to 2003-04 there has been an 18% increase in the number of persons sentenced to imprisonment where the most serious crime was aggravated burglary.There has been a 4% increase in the number of persons sentenced to a period of imprisonment where the most serious offence is aggravated or home burglary. The Department of Justice advise it is important to note that these figures do not represent all persons imprisoned who were convicted of burglary offences, as a number of persons convicted of burglary were also convicted of other offences considered more serious.
(3)-(4) The Department of Justice advise:
2000-01 2001-02 2002-03 2003-04 Adults Convicted Armed 187 157 121 151 Unarmed 87 99 156 97 Adults Sentenced Armed 123 92 117 109 Unarmed 48 43 46 37 From 2000-01 to 2003-04 there has been a 9% decrease in the number of persons convicted of robbery.
In addition, the Department of Justice advise there has been an increase in the minimum sentence length for sentences where the most serious offence is break/enter or armed robbery, reflecting a tougher stance on crime.
The increased sentence length impacts upon the number of persons in prison. Since 30 June 2002 there has been a 13% increase in the number of prisoners in the prison system where their most serious offence is a burglary or robbery offence.
RANGEVIEW REMAND CENTRE, NUMBER OF DETAINEES
2395. Hon Ray Halligan to the Minister for Housing and Works representing the Minister for Justice I refer the Minister to the Rangeview Remand Centre, and I ask Can the Minister advise of the number of persons currently detained as at August 31 2004 at Rangeview Remand Centre?
(2) What was the total number of persons detained at Rangeview Remand Centre during the 2003 calendar year?
(3) For the numbers in (1) and (2), can the Minister advise how many detainees were referred to the remand centre from courts in a) Perth;
(b) the Wheatbelt;