STATUTES AMENDMENT (OCCUPATIONAL LICENSING) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 12 September 2013.)

Mr GRIFFITHS (Goyder) (17:20): It was on Thursday 12 September that this bill was introduced on behalf of the Minister for Business Services and Consumers by the member for West Torrens. The bill seeks to amend the Building Work Contractors Act 1995; the Conveyancers Act 1994; the Fair Trading Act 1987; the Land Agents Act 1994; the Plumbers, Gas Fitters and Electricians Act 1995; the Second-hand Vehicle Dealers Act 1995; and the Security and Investigation Industry Act 1995 also.

In South Australia, Consumer and Business Services is responsible for the administration of occupational licensing. In 2012, CBS undertook a process improvement review relevant to the occupational licensing legislation that it oversees. As part of the review, discussions with peak construction industry representatives were held to identify areas requiring regulatory reform. Feedback was also sought from CBS employees on options to improve the administration and regulation of occupational licensing legislation.

I do commend them on this, actually. There has been a level of frustration for some time, and the member for Kavel in a previous role has reported on apprenticeship issues about licensing opportunities, so it is appropriate that this review was undertaken, and I am pleased that the bill has come before the house. The intention of the bill is to, one, reduce regulatory costs for businesses by removing unnecessary red tape and, two, to improve administrative efficiencies for CBS.

Reforms within the bill include the following: removing the requirement that building work contractors may only nominate their directors or employers to be building work supervisors. I am certainly advised that this will enable contract workers to be nominated for this role. Currently, over 6,400 building work contractors require a nominated building work supervisor, but this reform will significantly reduce staffing costs for industry, as it will give people maximum flexibility in the way they can structure their businesses. Again, this is a good move forward.

It will enable builders, plumbers, gas fitters and electricians who are the subject of a bankruptcy order to work as subcontractors. The current situation is that a person is not entitled to hold a licence under the act if they become bankrupt, and CBS is required to take them to court to cancel their licence. This reform will enable many tradespeople to continue to work in their field and make a living. Restricting their licence to that of a subcontractor only will ensure that consumers remain protected—a very important area—as they will not be entering into contracts with bankrupt persons. The main contractor will be responsible for the subcontract.

The reform will also assist in reducing skill shortages across the state. It is a very sad case that businesses—predominantly small businesses in South Australia—are failing. It was only last week that Marshall Thompson Homes announced the financial pressures that they have been under. I am pleased to see that the introduction of this bill and its passage will allow the skills that exist within workers to still be used even when they are involved in these small businesses where bankruptcy is unfortunately occurring to them.

Point No. 3 is that the bill will increase the powers of the Commissioner for Consumer Affairs on the basis of improving administrative efficiencies and increasing consumer protection. I am advised that, currently, the commissioner has the power to suspend a licence in urgent circumstances for a period of no longer than six months under the relevant acts to prevent significant harm. Only the court has the power to cancel, suspend or impose a condition on an occupational licence. I think it is actually in clause 12 of the bill that it details this.

Initiating court proceedings is a lengthy and often costly process for CBS. Enabling the commissioner to take disciplinary action against licensees will reduce costs for the government, reduce the burden on courts and enhance consumer protection, as the speed at which action may be taken against licensees will be increased. In circumstances where it is identified as part of an investigation that inappropriate activities are taking place by people who are licensed and consumers are being impacted very negatively, I think this is a reasonable move, but there are questions I just want to pose on that.

The right of a licensee to appeal a decision of the commissioner to the District Court will remain—and that is very important for due process to be allowed—as will the usual process of the CBS investigation team following up consumer complaints before the commissioner takes any disciplinary action. I will talk about this during the committee stage at clause 12, but indeed the question was posed to me in the joint party discussion of how often the commissioner has had to take the court action process in the past.

I noted, I think, from the 2011-12 financial year annual report of CBS that there were 46 actions; 18 of those involved assurances and 28 of those went to court action. Again there was a level of concern expressed about where actions requiring courts to make determinations were being provided via a change to legislation to an appointed person, as in the role of the commissioner. There might just be some questions posed on that one.

Another point of the bill is indeed to provide the commissioner with increased power under the Fair Trading Act 1987 to oblige a trader to personally attend a compulsory conciliation conference arranged to resolve a consumer dispute. A party will be able to seek approval from the commissioner to participate in a conference by telephone in certain circumstances.

This reform aims to increase the resolution of disputes between traders and consumers through conciliation rather than going to court, and you can see that this is an extension of the role of the Small Business Commissioner and the panel that they have appointed, where there is an opportunity to sit down and conciliate, hopefully, in a dispute between a prime trader and a consumer, and try to get a resolution. I can understand the reason for that one.

The bill also simplifies the audit requirements for land agents and conveyancers in circumstances where no trust money is held in an agent's trust account during an audit period. The feedback that came back to me from the Real Estate Industry of South Australia is that they are fully supportive of that, so there is no requirement for any change or for questions to be posed.

Another area of the bill is clarifying and expanding the definition of building work. In the details provided to me, it includes tasks considered to constitute building work such as the installation of solar panels—and we do have subsequent amendment from the government on this area—or an air-conditioning system and painting. When the area of painting was flagged in the joint party discussion on this, there was a query about what the impact will be upon not just the licensing requirements.

I would like some clarification from the minister on not just whether there is an additional responsibility on people who undertake painting to have a different level of licence but also whether there is a fee structure in place for that. I do respect that, in the discussion I had with the minister's adviser, it was confirmed that there are some licensing issues attached to it but no fee structure is intended to come from that. I would just like some clarification from the minister on that, also.

The bill also increases the maximum penalties that may be imposed on a person for trading unlicensed in accordance with the penalties regime proposed under the National Occupational Licence Scheme (NOLS). The current maximum penalty is $20,000 which is not considered to be adequate to deter rogue licensees. The exception is the Second-hand Vehicle Dealers Act 1995, where the maximum penalty is $100,000. It is proposed that this penalty regime will be amended, as it will not be included under the National Occupational Licensing Scheme.

A commencement date for NOLS has not yet been set, nor has the legislation been brought to the chamber. However, the plan is to pre-emptively introduce a penalty regime proposed under NOLS as follows: $50,000 for a first or second offence for an individual; $50,000 and/or 12 months' imprisonment for a third or subsequent offence for an individual; or a $250,000 fine for a corporate body.

I have referred to the fact that the Consumer and Business Services Annual Report 2011-12 outlines that the CBS licensing register contains approximately 67,000 licences and registrations for builders, plumbers, gas fitters, electricians, security and investigation agents, travel agents, second-hand vehicle dealers, conveyancers and land agents. These licences and registrations are administered under seven separate pieces of legislation, and that is why we are considering this bill which amends those seven. I again confirm that in 2011-12, a total of 46 actions were taken against traders who breached the conditions of their licence with 18 being assurances and 26 being court action.

In relation to the National Occupational Licensing System, initially it was anticipated to commence in 2013 for selected occupations. The national system will allow licence holders to work anywhere in Australia without the need to pay and apply for an additional licence in another state or territory. It is anticipated that the system will reduce overlapping and inconsistent licensing and bring consistency to licence eligibility requirements and licensing procedures. The issue raised with me about that is the level of consistency on the skill-set required for a licence to be held, so that will be an interesting debate when it occurs across the different skill set areas.

The opposition and I have consulted with industry groups on this. As I said earlier, the real estate industry was quite firm in their support for it. Feedback from the other groups has been rather slow, it is fair to say, and I noted in the second reading speech that there has been extensive consultation with industry on that, so I take via the fact that there has been very slow response, that there is a level of support for it. I have also noted that an amendment was formally tabled yesterday I think. I am grateful that I was provided with a copy of that several weeks ago by Mr Green, advising on behalf of the minister. I am not sure if anyone else is going to stand up and speak to this one but we will need to go into committee to further consider the issues.

The DEPUTY SPEAKER: If the minister speaks, he closes the debate.

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (17:32): I do not have carriage of the bill so I might wait for the Attorney to come in, otherwise I might make a series of comments that might undermine me in terms of the legislation.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Industrial Relations, Minister for Business Services and Consumers) (17:32): I thank in particular the honourable member for Goyder for his contribution. I apologise. I had a matter that distracted me partly, but that was not intended to be in any way a reflection on the honourable member's contribution and, indeed, the first thing I will do tomorrow is dig out the Hansard and have a look.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 11 passed.

Clause 12.

Mr GRIFFITHS: Minister, I respect that you were not here before so I might outline some areas again. This is where, as I understand it, the intention is to provide an opportunity for the Commissioner of Consumer and Business Services' powers to be extended so that instead of having to make application to the courts for a suspension—even though in an urgent situation an action can be taken—it allows, after an investigation is undertaken, for the commissioner to authorise the suspension of a licence and then there is a subsequent appeal opportunity. I can appreciate all that, but there is some level of concern raised again where the decision is being taken away from the courts process and put in the hands of an appointed person.

That is not to say that there is a level of disrespect for the commissioner or concern about the level of investigation that would be undertaken. There is a level of concern that exists within our membership of where another role from the judiciary or the parliament has been taken away from the hands of a person. I am just wondering if you could outline some particular reasons as to why this course has been undertaken.

The Hon. J.R. RAU: Yes; as I understand it, if you have a look at clause 12(19A), it is fairly clear that the intention is that we are talking here about the urgent circumstance; we are not talking about anything that is routine—that is point number 1. Secondly, if you look at (19A)(1) it requires the commissioner to form certain opinions before the commissioner can then take forward this particular form of remedy. They have to have reasonable grounds to believe the contractor, or whatever, is engaged in disciplinary matters, in effect.

Also, it has to be assumed that they are going to continue to be misbehaving and, thirdly and on top of all of that, there is a danger that a person or persons might suffer significant harm or damage as result of that conduct unless the urgent action is taken; so it is a pretty high bar actually. My expectation is that this would not be used very frequently, but there would be some particular circumstances, infrequently, where it was in the public interest for the commissioner to be able to move in quickly and deal with the matter, and that is what this is intending to deal with.

Mr GRIFFITHS: If, as I understand it, the commissioner has the power in urgent circumstances to take action already—and you at the start of your explanation referred to urgent circumstances—and if that is already covered, it seems as though there is a transfer occurring here where an authority already exists in an urgent circumstance.

The Hon. J.R. RAU: I am advised that at the moment it can be done with respect to people who have contractors' licences in fairly quick order but not for people in this category. This expands it to work as registration, such as electrical workers, or whatever the case might be. That is what I am advised. It also enables conditions to be imposed as well, not just a blanket shutdown.

Mr GRIFFITHS: I just need some clarification on the conditions. A licensed operator is still available in that skill set that that person possesses, and some form of restricted licence, but is there a condition attached to the value of work that they can undertake, for example, or where the work might be applicable?

The Hon. J.R. RAU: I think we are talking here about something like, for example, you can only work but you must work within certain parameters, or you can only work to finish this particular job without going further, or something of that nature; so, in a sense, a supervision order, I guess, of the individual.

Mr GRIFFITHS: So has this been a particular issue that the commissioner and the CBS staff have held some frustration over for some time? I am interested in the history of this one, if I am able.

The Hon. J.R. RAU: I am told that there have been frustrations with people—not many people—for example, performing electrical work in an incompetent fashion, and because they were not a contractor this speedy remedy was not available. Another example I was given was that you may have somebody who is doing a range of work and they are more or less satisfactory at one bit of what they are doing but not satisfactory at other bits they are doing. So these conditions might be used to say, 'Well, you can do job A but you can't do job B until some predetermined event.'

Mr GRIFFITHS: I accept those answers, minister. I do have one further area. If I have read your second reading contribution correctly, you say that some reform is proposed to be included in the regulations aimed at improving clarity; for example, the definition of building work. It is in the regulations. As I understand it, there is no particular spot in the bill where I can ask the question, so can we do that now?

The Hon. J.R. RAU: Yes.

Mr GRIFFITHS: Unfortunately you might have been absent from the chamber briefly, but that is when I posed the question of where there seems to be an extension. The question was posed to me about what is identified as building work, and painting was an example quoted to me, or the installation of a security screen door, for example. If this is an extension of building work, does it require some form of licensing to allow it? And if that is in place, will there be a fee structure, which will be an additional impost upon small business?

The Hon. J.R. RAU: I am advised that there is no intention that there be additional licensing required. It is just management of the existing classes to create some legislative certainty. People like painters, for example, are in. I am told that it would include people installing solar panels, for example, people installing air conditioning units and installers of security doors. It is relying on a fairly common sense definition of what constitutes building work. I guess the ultimate question is: are we going to introduce new fee structures? The answer is no.

Mr GRIFFITHS: Not being very good with my hands on occasions, I am jealous that my son is magnificent at it. What about garden building work, for example, because it is associated with the home and that is where the majority of consumers will come from? It can be quite expensive on occasions. Is that in the regulations proposal? Is the construction of a wall or a watering system or a $30,000 complete refit of a garden considered to be building work also?

The Hon. J.R. RAU: I am advised that constructing a wall, for example, is clearly building work. However, in the event that you or I felt the motivation or the inclination to do it for ourselves, this does not stop us. What it does do is interfere with us going out and selling that service to other people. So the home handyman who is building his own things in the backyard, or whatever he might be doing, is not captured by this; the person who is offering it for reward is.

Mr GRIFFITHS: I understood that to be the case. It is only where those of us who admit defeat and are unable to actually undertake the work who engage someone else to do it. The question is whether those skills in the examples I gave are considered to be building work and therefore need to be registered in some way.

The Hon. J.R. RAU: Yes, and they already are, or already should be. This is not intending to capture new people.

Clause passed.

Clauses 13 to 28 passed.

Clause 29.

The Hon. J.R. RAU: I move:

Amendment No 1 [DepPrem–1]—

Page 17, after line 12—After inserted section 33A insert:

33B—Requirements for contracts for domestic plumbing, gas fitting or electrical work that contain a charging clause

(1) If a contract entered into to perform plumbing, gas fitting or electrical work on domestic property contains a charging clause, the following requirements must be complied with:

(a) the contract must be in writing;

(b) the contract must set out in full all the contractual terms;

(c) the contract must set out the name in which the contractor carries on business under the contractor's licence, the contractor's licence number and the names and licence numbers of any other persons with whom the contractor carries on business as a contractor in partnership;

(d) the contract must comply with any requirements of the regulations as to the contents of such contracts;

(e) the contract must be signed by the contractor and the property owner personally or through an agent authorised to act on behalf of the contractor or property owner;

(f) the property owner must be given a copy of the signed contract as soon as reasonably practicable after it has been signed by both parties together with a notice in the prescribed form containing the prescribed information;

(g) the copy of the contract and the notice given to the property owner must (apart from signatures or initials) be readily legible.

(2) If any of the requirements of subsection (1) is not complied with, the contractor is guilty of an offence.

Maximum penalty: $5,000.

(3) In this section—

charging clause means a clause in a contract for the performance of plumbing, gas fitting or electrical work that gives the contractor the party to the contract a legal right to lodge a caveat over the property on which the contractor is performing work under the contract;

domestic property means a house or other building intended for occupation as a place of residence but does not include property of a class prescribed by regulation.

Mr GRIFFITHS: I appreciate the fact that the minister's staff ensured that I had this amendment available to me several weeks ago, so thank you for that. Why was it necessary to move an amendment to your own bill? Was this something that was discovered late in the process, or was there an issue that arose that necessitated it?

The Hon. J.R. RAU: First of all, can I say that, unfortunately, these things are not rare, in my experience. There is a whole bunch of reasons why the bills we get and introduce here wind up being modified subsequently by the mover of the bill. In this case, that reason, I am advised, is that there was other work being done which might have constituted a separate piece of work all by itself. It was decided that, since this bill was here and open, we might as well take advantage of the bill being available. That is what I am told.

A more general answer to that question is that there are umpteen reasons why one might be doing it. For example, in relation to the Civil and Administrative Tribunal legislation we had here, I think I moved 97 amendments to my own bill. That is because the bill had been sitting here and there had been comment made on the draft bill over the winter break and so on. Sometimes it is because parliamentary counsel have a eureka moment and realise they could do something better. Sometimes it is an industry group, or somebody who says, 'Look, we have seen the bill but we wouldn't mind a change.' There can be any number of reasons, but in this case the bill was open, it was available, it was something that was sitting there in the 'to do' basket, so it has simply been moved in.

Mr GRIFFITHS: I note towards the bottom of the page that it talks about the lodgement of a caveat over the title, too, so I worked on the basis that it was to do with the solar systems and some publicity that was given to that and concern about people signing away an issue associated with the property. I confirm that the opposition has considered the amendment and offers its support to it.

Amendment carried; clause as amended passed.

Remaining clauses (30 to 38) and title passed.

Bill reported with amendment.

Third Reading

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Industrial Relations, Minister for Business Services and Consumers) (17:48): I move:

That this bill be now read a third time.

Bill read a third time and passed.