Fair Trading (Motor Vehicle Insurers and Repairers) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 25 August 2021.)

Mr PEDERICK (Hammond) (10:36): I rise to speak to the Fair Trading (Motor Vehicle Insurers and Repairers) Amendment Bill. This is an issue that goes back many years in the vehicle repair industry. Back in the day, after meeting with some of my local crash repairers in the last term of parliament, I remember that the former member for Goyder, Steven Griffiths, and I met with insurers, not just local representatives but their lead company men from Sydney, I believe. They flew in for the meeting. As we know, there are only a few—maybe as limited as two or three, but I am not sure—main insurance companies that cover a whole raft of smaller companies for car insurance.

It is interesting that it has become a closed shop, so to speak, where if you have an accident the recommendation will be to go to a certain crash repairer. In a democratic society, I do not believe that to be right. What really alarmed me during that meeting was that when I asked these insurance bosses from Sydney what their script was—because they said they read a script over the phone to people when they put in a claim—and if they could play me the script or read it to me, that was denied. That proved the exact point and that is why the member for Waite has brought this bill.

The Economic and Finance Committee also investigated this, and rightly so. It did alarm me when I could not even get either a written portrayal of the script or hear it played to me, so the question was answered without being answered. One of my local repairers has had to spend many thousands of dollars making sure that people acknowledge their business. Especially over the years as an MP, and with multiple kangaroo hits over time, I have been a reasonably regular customer of this crash repair company and they do a magnificent job. But, again, even I have had to make a point that that is where I wanted to get my car repaired.

I remember one such incident. We were down at an event at the former member for MacKillop's home and left at night to go to Mount Gambier—we had a seminar there—and I just took off down the road—

Members interjecting:

Mr PEDERICK: I won't even listen to those comments. I did not get very far down the road, which is supposedly a shortcut to Mount Gambier, and soon found it littered with kangaroos. Well, guess what? The Hon. John Dawkins was in the passenger seat at the time and, next thing, we were looking at this six foot, close to two-metre high kangaroo buck looking at us out of one eye. I thought, 'It's just a matter of motion that we are going to hit you.' I hit him doing about 100 km/h, threw him about eight or 10 metres and caused about $14,000 damage to a Prado with a bull bar: it crunched in all the front end.

The bull bar was written off, the front end was written off and the bonnet and I think both side front panels were written off. Then the tail of that big roo, that big buck, came around and slapped the passenger door and wrote that off as well. We went back, and I witnessed the former member for Schubert, Ivan Venning—

The Hon. D.C. van Holst Pellekaan: The plot thickens.

Mr PEDERICK: Well, I don't think there was much mystery. I do not know whether the former member for Schubert thought he was a supersleuth, but he was taking photographs at the scene. I made sure the kangaroo was dead because you do not want an animal to be in pain, and he was definitely dead from getting hit at that speed.

I had a look at what had happened, and a bit of bull bar was scraping a tyre, so we did what we could with the few tools we had. We levered the bull bar off the tyre and limped into Mount Gambier. I found a crash repair shop the next morning, and I said, 'Just get an angle grinder and cut that bit off and I will trundle home.' They wanted to fix it, but I said, 'No, I've got my own repairer,' and they did a fantastic job.

I had to do a similar thing with my Holden ute many years ago now. I used to buy machinery in Western Australia and, between Kalgoorlie and Norseman, you would come over the crest of a hill. One day, there was an emu, and I thought the same thing: he went underneath and put the bull bar into a tyre. I had to be picked up with that one, as that was not driveable because the radiator had gone. Anyway, we got home after the appropriate pick-up by a truck that came out of Norseman. It took us down to Esperance, where I had actually organised to buy an air seeder, of all things.

With the work vehicle, the LeasePlan vehicle I had at the time, I went through the process, and I just had to make sure that I could get the repairer that I could get. It is interesting to note that out of the Economic and Finance Committee inquiry there is a broad range of 11 recommendations, including whether they are non-original equipment in parts. The one recommendation I am concentrating on here, as you have heard from my contribution, is recommendation 5:

5. The South Australian Government require motor vehicle insurers to disclose any direct or indirect ownership or contractual arrangements in place when directing policy space holders to specific crash repairers or providing crash repair options.

There is a whole raft of other recommendations, including recommendation 6:

6. The South Australian Government introduce legislation to ensure all South Australian motor vehicle insurance policies allow for, at the customer's discretion, the motor vehicle to be repaired by a crash repairer located within a reasonable distance of a regional customer's home address.

As I indicated, I found it quite concerning when I asked senior people with one of the main oversight insurance companies, one of the lead insurers, about the script people hear down the line when they put in a claim, and it would be very coercive. As we have seen through COVID, South Australians are a pretty compliant lot, which is good—unlike Melbourne, but that is another story. It is not unreasonable to think that people get a message down the line, 'You have to get your vehicle repaired by such and such an insurer and this and that,' and I am sure there would be extra dialogue, 'If you go elsewhere, this is the issue with that.'

I must stress that even now people do have a choice of crash repairer. They do not have to listen to that script, whatever it is. I have not had to listen to it because if we send a kangaroo to a better place we go through LeasePlan. I must admit they have been very effective in getting our vehicles fixed, and I get them fixed at the local crash repairer that I choose in Murray Bridge.

I think this a fair piece of legislation to support. I know there are some moves nationally, but I congratulate the member for Waite on bringing this to the parliament because we need to find better equity for motor vehicle operators in this state.

Ms MICHAELS (Enfield) (10:46): I rise to indicate our support on this side of the chamber to the member for Waite's Fair Trading (Motor Vehicle Insurers and Repairers) Amendment Bill 2021. As a member of the Economic and Finance Committee responsible for the report that forms the basis of the bill, I have to commend the member for Waite for bringing the bill to the house.

The final report of the Economic and Finance Committee into the motor vehicle insurance and repair industry received 53 written submissions, with a significant proportion of small businesses in the vehicle repair industry participating. This included small businesses that were so concerned about the repercussions from insurers that they made their submissions to the committee confidentially. The committee also heard from 35 witnesses across seven public hearings and two in camera hearings, from October 2019 until July 2020.

The committee's findings are of great concern not just for small businesses but also for our motoring consumers. It found:

difficulties for consumers accessing their repairer of choice;

claims of insurers steering consumers towards a preferred network of repairers;

the use of second-hand or non-original parts for repairs and related safety, warranty and liability concerns when using those parts;

insurers cash settling consumers instead of repairing their vehicles, often leaving them worse off;

a lack of transparency of information, with consumers often not being made fully aware by insurers of all the details related to their repairs and/or their policies; and

disagreements over the methodology used by crash repairers and insurers to assess the repairs needed, and the cost of those repairs, to restore the motor vehicle back to its pre-accident condition.

Small businesses, not only in my electorate but more broadly across the automotive industry, have spoken to me and expressed their concern for what is happening in the crash repair industry at the moment. They have said to me that they would highly support the bill being passed by this parliament. No doubt there are many others in this house who have also received similar submissions from representatives of the crash repair industry.

The Fair Trading (Motor Vehicle Insurers and Repairers) Amendment Bill, brought forward by the member for Waite, in its present form represents a straightforward, uncomplicated and workable solution to achieving the first of the recommendations in our Economic and Finance Committee report. In this bill, the national code is simply referred to by regulation and, as such, any updates can be gazetted by the responsible minister to ensure national consistency—something that both repairers and insurers have told us they want.

Most importantly, however, the bill gives teeth to the voluntary national code by compelling parties to sort out their disputes and, very importantly, by introducing penalties for breaches. Currently, that is not happening in South Australia in the crash repair industry. Right now, consumers with a choice of repair policies who disagree with the repair method or value of repairs insisted on by their insurers are often left high and dry without their vehicle, while insurers use their market power to pressure small family-run businesses in the industry.

The findings and recommendations from the committee's report were not merely a push by one side of politics. In fact, there was bipartisan support and that was clear. I call on at least the committee members from that Economic and Finance Committee to make their votes count during this debate. I wholeheartedly support the member for Waite in his push for this bill, hoping that our parliament will indicate their support for small family-run businesses in the automotive industry and for the safety, quality and transparency of repairs for our motoring consumers. I commend the bill to the house.

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General, Minister for Planning and Local Government) (10:50): I rise today to speak on the Fair Trading (Motor Vehicle Insurers and Repairers) Amendment Bill 2021. The government will be supporting this bill introduced by the member for Waite. The bill allows for the applicable industry code to be declared by regulation in relation to the conduct of the business of insurers and repairers. As has already been identified, the member for Waite has taken a keen interest in this, following the Economic and Finance Committee inquiry into the motor vehicle insurance and repair industry in South Australia of which he was a Chair.

There were 11 recommendations made by that committee. I note that a rather large number of people in this house at one time actually served on that committee, and I acknowledge all of them, but particularly the member for Colton, who was the final Chair for the committee of inquiry. In that regard, I also appreciate his advice in relation to how we progress this matter.

The government has provided in-principle support for the recommendations, noting that there is a number of associated issues that need to be considered in further detail. The recommendation to mandate the voluntary commonwealth Motor Vehicle Insurance and Repair Industry Code of Conduct in SA has attracted the most interest. It is fair to say that there had been a working group established to look at how this could be progressed at a national level. Everyone agrees that this would be a sensible way to go, but it is very clear to me, our office having made regular inquiry with the office of the relevant federal ministers.

The Hon. Bruce Billson, during his role as the Australian Small Business and Family Enterprise Ombudsman, has attempted to support the ACCC coming into this process and looking at how a national program would be developed. It is under the purview, I am advised, of the Hon. Michael Sukkar, who is the minister for consumer matters—I cannot remember his full title. It is clear on that inquiry that there has not yet been a bill prepared or advanced for this national movement.

This is not the first time the South Australian parliament has been asked to consider matters ahead of the federal parliament, and from time to time I think we need to do that. I therefore indicate the importance of us progressing this—South Australia and any other state that might advance it, but South Australia at the very least; I think Western Australia is also considering this—to try to bring some national attention to this matter so that it might be finally put to bed.

In the meantime, the Commissioner for Consumer Affairs—that is Mr Dini Soulio, who is our commissioner here in South Australia—together with advisers from his department, has been looking at this issue, and I acknowledge Ms Nerissa Kilvert, who is, I think, the deputy. In any event, I think she is the second or third most senior person in the department of consumer affairs and is also appointed as the Acting Small Business Commissioner. They have all been involved.

There has been a task force established to consider various options in relation to mandating a code in South Australia, and I thank all members of that working group for doing that. The options they looked at were maintaining the status quo; mandating the code in SA, similar to New South Wales; mandating the code in SA with the inclusion of financial penalties for specified provisions; establishing a new industry code broadly consistent with the national voluntary code; and utilising the existing Fair Trading (Motor Vehicle Industry Dispute Resolution Code) Regulations 2014.

Advice provided to me by the commissioner indicates that although the working group is unable to reach complete agreeance, both the insurance and repair sectors generally supported mandating the code in South Australia. It remains the government's view, as I have said, that a national approach whereby the code is mandated nationally by the commonwealth is preferable to ensure consistency over the jurisdictions; however, in the absence of this and in light of the findings of the working group presented to me by the commissioner, the government supports this bill and it has been put to the house but, in doing so, proposes a number of amendments to address some issues relating to the administration of the code.

In this bill, we are proposing a change to the Fair Trading Act. That piece of legislation implements Australian Consumer Law. It also has a direct role here in South Australia to make provision for industry codes and otherwise regulate unfair and undesirable practices affecting business and other consumers. So we have a means by which we can deal with that. As the bill assumes that responsibility for the administration of the code would sit with the Commissioner for Consumer Affairs, an amendment to this is proposed to provide the option for certain provisions of the code to be administered by the Small Business Commissioner in a manner similar to which currently exists for those industry codes under the Fair Trading Act.

The government also proposes amendments to the bill to replace the criminal penalties with civil penalties and expiation fees, consistent with penalties that apply to existing industry codes under the act. I interrupt myself to indicate that I have not had an opportunity to confer with the mover of this bill, but I have had a number of conversations, or my office has, with parliamentary counsel to try to work out how we should be progressing this. It appears as though the bill had been prepared on instructions that it be criminal code but all other industry codes in the Fair Trading Act have a civil penalty, so we just need to be able to sort that out and have some consistency.

Secondly, the government proposes to enable fees to be prescribed in relation to the dispute resolution procedures undertaken under the applicable industry code of conduct. Again, I interrupt myself to say what has been a concern I think from members of the committee during its inquiry and others is that there appears to be no dispute resolution procedure and that has been one of the other weaknesses that needs to be addressed, and so obviously we need to have a process to be able to facilitate that. Thirdly, we propose to require industry consultation on regulations declaring an applicable code of conduct, again for consistency, with a similar requirement applying to industry codes under the conduct.

We are at one with the mover as to the need for this. We would have liked to see the commonwealth advance it. They have not. We are here, we will support the mover's motion but with the explanation which I am happy to provide further to the mover as we progress through this debate to try to make sure that it is consistent with other Fair Trading Act applications.

I understand that Ms Nerissa Kilvert will be coming down to the parliament this morning and will be available to answer any questions in relation to those aspects in relation to the amendments that have been tabled. As I have indicated, they are a facilitation of the process consistent with the merits of the bill. I therefore confirm our government support for the bill.