Retirement Villages (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 21 February 2024.)

Ms HOOD (Adelaide) (16:47): I rise to speak in support of this bill. The Retirement Villages (Miscellaneous) Amendment Bill 2024 seeks to enhance the consumer protections of residents of retirement villages in South Australia whilst also supporting the growth and sustainability of this sector. This bill will help establish a contemporary, balanced and comprehensive framework for the regulation of retirement villages in South Australia, which puts consumer protections at the forefront while also minimising any unnecessary impacts on retirement village operators.

Retirement villages provide an important accommodation option for older South Australians. There are more than 500 retirement villages across South Australia, which are home to more than 26,000 residents. That is the equivalent of one of our constituencies. The Retirement Villages Act 2016 commenced in 2018. It replaced the Retirement Villages Act 1987 and introduced significant reforms aimed at balancing consumer protections with the interests of operators and establishing a contemporary legislative framework to modernise the regulation of retirement villages across South Australia.

In 2021, an independent review of the act was completed by PEG Consulting, with 187 submissions made by residents, operators, peak bodies and other interested parties. The independent review found that many of the provisions of the act were appropriate, effective and operating as intended. However, it also identified that there was room for improvement and made several recommendations for legislative change.

A draft amendment bill introducing important reforms recommended by the independent review was drafted and provided for public consultation, along with several additional reforms aimed at enhancing consumer protections. A public consultation period of seven weeks was held last year, with the Office for Ageing Well hosting 13 information sessions across metropolitan and regional South Australia, including at Tea Tree Gully, Adelaide CBD (my own community), Aberfoyle Park, Findon, Mount Barker, Victor Harbor, Berri, Kadina, Barossa, Murray Bridge, Mount Gambier, Port Lincoln and an online session. In total it was attended by more than 420 residents, operators and interested stakeholders. The consultation resulted in 373 unique submissions.

Following the consideration of feedback provided through the consultation, the bill was finalised and introduced by the Minister for Health and Wellbeing in February this year. The amendments include:

greater regulation of residence contracts and disclosure statements, including defining and explaining contractual terms, occupancy information, residential rights and responsibilities, the presence of embedded networks, how fees and charges are calculated and how those fees can vary depending on the length of time the resident lives in the village by providing worked calculations based on leaving a village at two, five and seven years (this was quite useful information that I know my parents would have enjoyed, having bought into a retirement village in Mount Barker);

additional clarity regarding financial reporting and resident consultation;

strengthened rights of participation for rental tenants;

a framework for managing residence contract deposits;

improved dispute resolution processes;

an obligation for operators to provide safe premises and maintain adequate insurance;

enhanced standards for operators and staff, including mandatory training and disqualifying offences;

additional information-gathering powers for the registrar and expanded capacity to publish relevant information on the register;

additional enforcement actions, including enforceable voluntary undertakings, increased expiable offences and more appropriate timelines for prosecution; and

some administrative and technical amendments to clarify the operation of the act.

The bill also includes additional measures that were subject to extensive community consultation and aimed at increasing consumer protections for existing residents. These include reducing the statutory buyback period from 18 months to 12 months so that vacated residents and their families can receive their exit entitlement sooner. The 12-month buyback period is based on similar provisions in place or being introduced in other Australian jurisdictions, and will provide certainty for residents while remaining feasible and achievable for operators.

The Malinauskas government is committed to ensuring the Retirement Villages Act provides a contemporary, balanced and comprehensive framework for the regulation of the retirement village sector that puts consumer protection at the forefront while supporting the growth, sustainability and diversity of the sector. With those comments I commend the bill to the house.

Ms PRATT (Frome) (16:52): I indicate that I am the lead speaker for the opposition on this bill. The Retirement Villages (Miscellaneous) Amendment Bill 2024 was tabled in the House of Assembly by the Minister for Health and Wellbeing, Chris Picton, on 21 February 2024 in response to the PEG Consulting report triggered by the third anniversary of the act.

Consultation with various stakeholders has certainly been thorough, from the opposition's point of view, while mixed views were shared with the opposition and the government through that process. General feedback is still that there is broad support for most of this amendment bill, and that has been welcomed by all parties. Unresolved debate still relates to existing contracts for residents and whether there should be more, less or no retrospectivity—I suspect we will go down that path through the committee stage.

This bill is a big and necessary step towards providing greater consumer protection for prospective residents, the immediate improvement of residents' rights, and better transparency of disclosure documents and contracts. The Retirement Villages Act applies to all retirement village schemes operating in South Australia. All Australian states have a retirement villages act or its equivalent, with accompanying regulations, which set out the legal responsibilities of developers, managers and owners in an attempt to clarify the rights and responsibilities of all parties.

As has been mentioned, there are 26,000 South Australians living in a retirement village—as the member for Adelaide rightly points out to us, as lower house members, the equivalent of an entire constituency. That is no small statistic. Approximately 6,000 of those are paid members of the South Australian Retirement Villages Residents Association, which we also recognise as SARVRA.

There are 520 villages in SA run by a variety of large and small operators, city and regional, which is important to point out. The biggest village has 347 units. It is known as Golden Grove Lifestyle Village, and the residents there, within the electorate of King, in particular because of its size have been very vocal about their concerns through the consultation process in the lead-up to this bill being introduced because their concern relates to whether this bill overlooks their need in regard to their contracts. The feedback has certainly been that they would have enjoyed even more vocal advocacy from their local member.

The member for Adelaide points out to us that we are talking about the equivalent of an electorate in South Australian terms. In the lower house, in this house, every one of us represents the equivalent of a constituency, but in every electorate we are representatives of people who are living in a retirement village; therefore, we all have a duty to advocate for them through the passage of this bill.

I note in my own electorate, from Balaklava to Clare, Riverton, Burra, Jamestown and Hamley Bridge, I share that duty to bring safe passage of this bill through the house, navigating the challenges that we have as legislators to deliver good legislation but really trying to get the balance right. I note that has been the intention in the drafting of this bill, to get the balance right. I would argue that there has been an imbalance for residents over many years. During the statewide consultation period as part of the YourSAy process, 373 unique submissions were made on the draft amendment bill, and I commend those who made those very important contributions that are really guiding us here today.

Of those stakeholder submissions, the opposition actively sought and received briefings from the South Australian Retirement Villages Residents Association (SARVRA). I pay special mention to president Roger Adamson, who I will come back to at some later point in my speech, as I will address the contributions made by Bob Ainsworth, former president of SARVRA. They are two men with an executive who not only as residents live and breathe their own contract but have taken on the very worthy endeavour of advocating for their 6,000 members and by virtue another 26,000 across the state.

Margaret Hawkins is the treasurer, and Margaret Tuffin is a committee member. Then, dotted around the state are a vast number of residents who have been communicating with the opposition and with me as the shadow minister for ageing. I am certain, because of their passion, that they have been writing to every member in parliament, lower and upper house included. I want to pay special mention to a lady called Denys Slee from Fleurieu Peninsula, who put in a concerted effort to make sure that we were listening to the suggestions that she was making.

I want to thank Jodie and Mark Prosser of the Aged and Community Care Providers Association for their professionalism, their input, their contributions in supporting me as I embraced this bill, answering a number of questions that I had and still have. I want to thank Alok Kumar, who is the managing director of Omega Communities, as one of many service providers or operators that I wanted to meet with to better understand what measures service providers need to see in this bill to ensure the stability and the future investment in housing opportunities for our ageing population.

I want to thank residents from Lifestyle SA and the body proper for its contributions. I am remiss in perhaps not starting with the briefing that was made available by the Office for Ageing Well via the minister. I thank him for the role any minister plays in making sure that the opposition gets access to as much information as possible so that we are coming informed with our approach to the passage of the bill.

I want to thank Council on the Ageing and the access that I appreciate having to the state CEO, Miranda Starkey. I take every opportunity I can to talk about COTA to regional ageing communities, beautiful people who are living their best lives in regional communities, because they need to understand that COTA has a great dedication and focus on making sure that people living and ageing well in our regional communities have access to services.

I recognise also the access, support and information that has been made available by the Retirement Living Council and Daniel Gannon and his team, known to many. He does an extraordinary job of reminding legislators, members of the public, the commercial sector, and using the media to reach out to the public to talk about the demographic changes that we are going to see in our ageing population not just in South Australia but nationally.

We have to be alive to what it means to provide services to an ageing population. Every one of us is going to be tied to a mum, a dad, a grandma, an aunty, a family member who is making great decisions about their retirement options, and we want to do that with the best information available.

I also spent quite a bit of time with parliamentary counsel and Mark Herbst and the team, and I am forever grateful for the wise counsel that they provide me when navigating legislation such as this. I really enjoyed my interactions with the Law Society of South Australia as well, who had not at the time made a formal submission, if you like, but were encouraged to have a look at the bill since it was introduced and they have since shared their views with the minister.

Finally, I reference the Aged Rights Advocacy Services (ARAS). They are another group that I do not hesitate to recommend to those people who are grappling with a breached right or a complaint or are trying to navigate a service.

Retirement village contracts have historically been technical and difficult for consumers to understand and, as I have mentioned, this bill aims to correct that imbalance. For current retirement village residents and their pre-existing contracts, there remains a dispute between them as well as operators that has not been addressed satisfactorily for either party. Residents are still calling for attention to existing contracts where they remain significantly out of pocket after exit fees are paid and contributions made to the capital maintenance fund.

At this point, I want to address some elements of the government's approach to their own consultation process, which included the publication of a document which is called Guide to the Retirement Villages (Miscellaneous) Amendment Bill 2023, which I will refer to as the guidelines.

Consultation conducted by the government included the provision of these guidelines, which was a supporting document to address common issues of concern and step participants through the process to come. With a glossy introduction by the minister, standard for any document—we are familiar with this format—endorsed I would argue by the minister, the guidelines then certainly set some reasonable expectations that the contents within this document were supported by the minister and the government. It also signalled to anyone reading it that existing contracts would be captured in the amendment bill.

The minister and the Office of Ageing Well would have known that the most contested section of this act that has required reform was going to be about contracts, it was going to be about exit entitlement fees, it was going to be about capital fund contributions and any sections or clauses that impacted the financial security of the resident and their family. Most glaringly, specific to this point, it is regarding the anticipated changes requested by existing residents, and that can be found in the guidelines book, pages 32 and 33, where guiding comments speak to the fees and charges that a person would be responsible for when leaving a village. Further, this chapter makes mention of the intention to address the inadequacies of previous contracts. Reading directly from it:

4.2.3…

Payment of capital fund contributions deducted from exit entitlement—Clause 21 (amendment of section 28)…

These amendments would apply to residence contracts entered into before and after the commencement of these changes.

These guidelines have been frequently raised with me as the beginning of the misinformation and misleading nature of the government's own guidelines document and the accompanying original draft of the bill which lifted the hopes of many. They saw this as the pathway to being released from contracts with exit fees that for some had the triple threat of cumulative uncapped fees at 1.5 per cent of the current market value. It is not an exaggeration to say that many residents with this type of contract live with the anxiety of being stuck in this arrangement.

The bill before us seeks to incorporate new regulations of prospective—future—residence contracts and more informative disclosure statements, including defining and explaining contractual terms, occupancy information, resident rights and responsibilities. The bill proposes how charges are calculated and how those fees can vary depending upon the length of time the resident lives in the village by providing calculations based on a resident leaving a village at two, five and 10 years.

Introduced amendments to this bill carry an obligation for operators to provide safe premises and maintain adequate insurance-improved standards for operators and staff, including mandatory training and disqualifying offences. It also includes additional information-gathering powers for the Registrar and expands the capacity to publish relevant information on the register. This involves additional enforcement actions comprising enforceable voluntary undertaking and increasing fees of offences with more appropriate timelines for prosecution.

I note, since introducing the bill to the house at the start of the year, the government has filed further amendments. Given the heavy lobbying that has been happening in the background by all parties on the matter of existing contracts and the questions of retrospectivity that are now before the house, it is possible that the government rushed the initial introduction back in February and missed opportunities to keep working with all parties.

During my own consultation process, I have been alive to the opportunities and challenges that this amendment bill has brought with it. Let me say at the outset that this is doubly true for my electorate of Frome. The opposition is firmly committed to small business, to prioritising standard-of-living services for country communities, to creating economic environments that attract investment and allow our state to prosper.

I want to signal to those service providers who continue to invest in housing projects for our ageing population that we truly welcome their very significant commitment to building infrastructure and providing those services that will allow more and more people to age well at home, to 'right-size', as it has been called by the sector. Some operators and representative peak bodies believe a retrospective cap on capital fund contributions was only likely to impact a small number of villages. I have spent a lot of time exploring this issue with operators and residents as well as actively seeking legal interpretation of this amendment bill where it is clear that there are already elements of retrospectivity embedded within.

The majority of operators and peak bodies representing them who specifically responded to this topic during the public consultation strongly opposed a retrospective cap regardless of whether that cap would directly impact them. Many raised concerns around fairness and commented that there would be a risk that introducing a retrospective application would undermine future investment and confidence in the sector. It is my intention to explore this further during the committee stage. In particular, operator and peak respondents raised high-level concerns that:

village valuation is based on future cash flows, and villages impacted by the proposed cap would be worth less if a cap were to be introduced;

there would be a risk that, where a village has been bought on the basis of a valuation and legislation changes retrospectively, the new operator may experience a loss upon resale of the village;

reduction in the value of any village would have implications for the balance sheets of impacted village operators and for the covenants that they are obliged to maintain in relation to their banking facilities; and

with the average village age in South Australia being 31 years, adequate capital funds are important to maintain amenity standards, and this proposal would undermine that objective.

So it is clear that great detail has been put forward from the sector to ensure that both sides of the house take very seriously reform being considered in this amendment bill.

As the shadow minister for ageing, I have been walking a path between supporting current residents to live their best life in a retirement village by reforming this legislation that dictates many factors out of their control while balancing that with the importance of creating an investment environment that will foster more housing options for our ageing population.

Let us not forget those whom we love and who have aspired to set themselves up for their future and possibly their final twilight years in circumstances that afford them a comfortable and dignified life. There are many who have been captured by antiquated, inflexible and, some would say, unfeeling residential contracts, which have resulted in many families completely devastated by exorbitant exit fees, unreasonable demands to restore a property back to its original condition and heartache for the children of residents, who have discovered how layered and complicated and bureaucratic some contracts are and, sadly, how some will remain.

From this bill it is clear that the government's door is closed when it comes to finding a compassionate resolution for what is likely to be a very small cohort who are being held captive by unforgiving contracts. It has long been the hope of many residents with whom I have spoken that this bill, with the intention of restoring balance to contracts with transparency and better disclosure statements, would now provide some restitution for those who are on less favourable terms.

I must take this opportunity to speak about those residents who were motivated, and still are motivated, to assist others who have navigated this system, lobbied for change, pushed hard to be heard and reassured others who could not and would not perhaps advocate for themselves that finally an opportunity had come for a reprieve.

I was grateful to have unlimited access to the current President of the South Australian Retirement Villages Residents Association, Mr Roger Adamson, who was always available to discuss the circumstances of others, to share his knowledge of the act and to push strongly for changes that were raised from the 6,000-strong membership of this important body. I also enjoyed my conversations with SARVRA vice-president, Mrs Margaret Hawkins, and I thank them both for their time.

In a similar category, I had ready access to the former president of SARVRA, Mr Bob Ainsworth, known to many here in this chamber, whose robust advocacy to all parties meant that none of us were left wondering about what the residents were fighting for. Bob has been relentless in his pursuit of reform in this bill and has been appropriately assertive and productive in his efforts to draft and suggest amendments that would change the lives of hundreds and hundreds of residents across the state.

I have heard it described that his ability as president at the time to drive SARVRA membership numbers up so high represents the largest membership penetration of any state—or maybe that is just what Bob says. His advocacy in the media has reached the attention of us all, including the minister, and I genuinely thank him for his role and his contributions in achieving much success and reform with the amendment bill. I hasten to add that many of the residents who rang or wrote to me directly were also privately disclosing some of the health battles that they were fighting, which they put aside to pursue better outcomes for themselves and future residents.

I began my remarks with my acknowledgements and thanks to those who made contributions to ensure this amendment bill was the best version it could be. I thank the minister for his goodwill and best endeavours to accommodate often opposing views from service providers and residents alike, and I am certain at the heart of his decision-making and his pathway through this legislation he was also reflecting on his beautiful grandmother, who is also a resident, to see the experience of a resident perhaps through her eyes. I hope when the passage of this bill concludes that we see existing and future residents much better off than before this process started.

Mr BATTY (Bragg) (17:15): I rise to speak on the Retirement Villages (Miscellaneous) Amendment Bill 2024. I note that retirement villages are a unique form of housing that currently home more than 26,000 residents in South Australia, including many, of course, in my own electorate, including some fairly large villages such as Pineview in Glenside, Victoria Grove in Glenside, On Statenborough in Leabrook, Wattle Grove in Wattle Park and many, many more.

I would like to thank my constituents at all of those retirement villages for engaging with me throughout the consultation process on this bill and for their feedback. I think it is fair to say while many residents told me they were very, very happy residing in their retirement villages, which is very good news, many others expressed disappointment and frustration at the complexity of their contracts, excessive fees and lack of transparency, sometimes, around what are sometimes punitive exit fees.

It is very important our legislation remains robust and up to date and has appropriate consumer protection. The current act commenced in 2018, replacing a 1987 act to establish a contemporary legislative framework for the regulation of retirement villages. A review was to occur three years after commencement. That occurred in September 2021 and found that many of the provisions were appropriate and operating as intended but also noted some room for improvement and made some recommendations for legislative change.

A draft bill was released for fairly extensive consultation last year. I made a submission to that consultation process on behalf of my own constituents, at that time focusing on issues of transparency, exit costs and time frames, maintenance costs, the complexity of contracts and also, importantly, the issue of retrospectivity.

This bill is an attempt at implementing the recommendations of that review and increasing consumer protections. On the whole I think it does a pretty good job of providing prospective and new residents entering a retirement village with greater consumer protections and rights at the time they enter into the contract, while living in a retirement village and when they leave a retirement village, but unfortunately I think many of the reforms in this bill represent an abandonment of the 26,000 South Australians who are currently living in retirement villages.

Current retirement village residents are excluded from many of the improved conditions in these amendments, including, critically, in relation to the capped capital fund contributions. I think this is a great shame and leaves those 26,000 South Australians still facing many of the very same problems that this government bill is seeking to rectify.

I think this is especially disappointing when we see an increasing number of retirement village residents enjoying life in a retirement village for many, many years, much longer than previously. It is not uncommon now for residents to be in a retirement village for 15 to 20 years, I am told, and I think it would have been good if this bill had also sought to help that cohort of people, many of whom are my own constituents.

As I said, I consulted very widely with my own constituents on this bill, and I thank them for engaging with me on it. I think for prospective residents, this bill does go a long way in addressing many concerns that they raised. As I mentioned earlier, those concerns centre around three points in time: first, before you enter a village, then when you are at the village and then when you are exiting the village. I will look at each of them briefly in turn.

First, before entering a village there are several provisions in this bill that seek to install improved consumer protection for prospective residents. This is something that is very important to my constituents, and I want to share with the house some of their feedback and some of their experiences. For example, I quote a resident in Wattle Park who said:

Eight years ago my husband and I moved into a Southern Cross retirement village at Wattle Park. This was a big mistake, financially…If we had bought a small unit, the council rates and water would have been around $30,000 and the unit would have increased in market value. I would still be better off buying a home unit but can't afford to. My husband passed away four years ago. He was medically retired on a low salary, compared to what people retire on now.

That is echoed by a resident in Leabrook who said to me, and I quote:

My primary concerns are around the clarity of contracts and…exit fees. During the process of purchase at On Statenborough, as required we sought legal advice on the terms and conditions of the contract.

They then went on to explain that even the lawyer missed some of the hidden terms in the contract. Another resident that I represent in Leabrook said, and I quote:

Retirement villages are of course populated by older Australians who perhaps do not have the ability to question these complex contracts.

Several provisions in this bill seek to address some of those concerns, including the amended section 21 with increased disclosure requirements, and also amended section 25, which introduces a new offence of representing that a resident or a prospective resident purchases a title to a property when in fact they do not. These are all good reforms for prospective residents.

Secondly, there were concerns raised while living in a retirement village. Several provisions seek to improve residents' rights while living in a village. My constituents raised a number of concerns on that front. A resident of Wattle Grove Retirement Living said, and I quote:

We didn't expect maintenance costs to increase so substantially from $576.20 now $671.13.

Many others have told me about concerns getting improvements done to their property, accessing financial documents or being consulted about what is happening.

Again, there are several provisions in the bill before the house this evening that seek to improve residents' rights during the time that they are living in a retirement village, including in particular section 31A dealing with recurrent charges. A number of clauses about meetings and the consultation on budget and documents that need to be provided to residents regarding additional clarity are all good reforms for prospective residents.

Finally, a number of my constituents raised concerns about how things were operating when someone needs to exit a retirement village. There are several provisions in this bill that address that for prospective residents, including amended section 27, which introduces a 12-month statutory buyback period, which I understand would be quite similar to other Australian jurisdictions.

Importantly, there is an amended section 28 introducing a cap on the repayment of capital fund contributions. The cap is the lesser of either 1 per cent of the current market value of the residents to which the exit entitlement relates multiplied by the number of years or 12.5 per cent. Importantly, the cap is just that—it is a cap. If some lesser amount is provided for in the contract, then this subsection does not apply.

Again, the cap is good reform. What it seeks to do is provide some certainty and to prevent excessive and punitive fees being charged. Some of my constituents have argued that the cap should perhaps be even lower, around the 10 per cent mark some have said strikes the right balance, others have argued it should be calculated on the original value rather than the current market value. But I think it is fair to say that the biggest problem for some of my constituents is the fact that this cap is not retrospective. We have clause 6 of the schedule of this bill, which states, and I quote:

Section 28(3) and (4) of the principal Act, as inserted by this Act, apply only in relation to a residence contract entered into after the commencement of section 21(2)…

That is in stark contrast to other provisions in this bill that are explicitly retrospective, including with respect to exit entitlements such as new section 27, as well as recurrent charges such as new section 31A.

It is also, as the shadow minister has pointed out, in stark contrast to the materials that accompanied the consultation on this bill. Clause 6, which appears in this bill, was not in the schedule of the exposure draft that was circulated. Indeed, the explanatory materials that accompanied the exposure draft explicitly said the exact opposite, and I refer in particular to the Guide to the Retirement Villages (Miscellaneous) Amendment Bill 2023 on page 33, which deals with the cap on deductions. It states, and I quote:

These amendments would apply to residence contracts entered into before and after the commencement of these changes.

So after many months of consultation, indeed nearly years of consultation, I am quite surprised to see this change now appear in the final bill before the house. On paper, it appears to be a very minor change, but it has very major consequences for the 26,000 South Australians currently in a retirement village. It is effectively, I think, the minister abandoning those South Australians currently in retirement villages. What is good enough for everyone coming in after them should be good enough for those people as well.

One of my constituents, Bob Ainsworth, the immediate past president of SAVRA, has calculated how this small change has had a big impact on him and his fellow residents at his village On Statenborough. He says, and I quote:

At my village On Statenborough (a complex of 132 residences) the CFC is determined at a disproportionate rate of 1.5% per annum, significantly increasing the amount taken at departure by the operator. Moreover, the punitive open-ended or uncapped CFC time period employed by the operators…discriminates significantly against loyal long term residents.

The amendment as drafted means On Statenborough current residents will continue to pay an excessively punitive amount of $247,500 at 15 years or 22.5% of the next sale price while those residents who sign a contract after commencement of the act will pay $137,500 being the capped 12.5%.

The amendment as drafted results in current residents being penalised two-fold by continuing to pay punitive and uncapped CFCs, whilst at the same time unfairly contributing towards a cumulative subsidy for the benefit of residents who sign contracts after the commencement of the Act.

This minor amendment to this bill from the minister is costing Bob and potentially over 100 people like him in Leabrook over $100,000 each. Many other distressed constituents have contacted me urging that this change be retrospective. My submission to the draft bill has reiterated my constituents' view. Many others have submitted the same, and I note recent emails from the residents' committee of The Reserve Lifestyle Village in Woodcroft, who note their great disappointment in this bill, and that it has ignored the plight of current village residents in South Australia.

My constituents On Statenborough argue that the section 28 amendment should be retrospective because:

1. The whole premise of this bill is that consumer protection for those entering into these contracts is insufficient. This bill seeks to remedy that with various safeguards, including more robust disclosure statements and worked examples of exit entitlements at the time the contract is entered into. Those currently living in retirement villages are a vulnerable cohort who did not have the advantage of these safeguards at the time they entered into the contract. If they had, they may not have entered into these contracts. They should now not be penalised—potentially over $100,000 each—with these fees, which we now not only require increased transparency for but, if uncapped, recognise to be unfair and unlawful.

2. It would have a limited impact on retirement village operators because it would only affect those who have been or will be in retirement villages for a very long time on only the most punitive of contracts. I understand that most contracts already provide for amounts that are well below the cap, and these will continue to apply to current residents.

3. Providing the cap to only new residents will create two classes of resident and potential disharmony in retirement villages. It is unfair for current residents to effectively be subsidising new residents.

4. Retrospectivity is not a new concept for this bill. Various provisions explicitly apply irrespective of whether the contract was entered into before or after commencement. We should not pick and choose retrospectivity based on what might suit a handful of retirement village operators.

5. This was what was promised in the explanatory materials produced by the government. The Guide to the Retirement Villages (Miscellaneous) Amendment Bill 2023 states: 'These amendments would apply to residence contracts entered into before and after the commencement of these changes.'

So while I support what this bill is attempting to do to improve consumer protections for residents going forward, I note the disappointment of many of my constituents, the people who I represent, who currently live in retirement villages that the minister has abandoned them at the final hurdle.

The Hon. D.G. PISONI (Unley) (17:30): On the topic of retirement villages, although I think it is perceived as a new challenge, it is a bit like boiling a frog in a pot. The frog is not jumping out because it is nice and comfortable, but it is starting to warm up. The frog does not notice that the water has boiled and, before it knows it, the frog is cooked.

I think we have got to the stage where we must have a large mix of housing and a choice of housing affordability and housing styles. It must be driven by the market, and when needs arise, there should be partnerships with the government and social housing in order to get the best possible outcomes and have that mix.

There is no doubt that people are living longer. Not long before my father passed at the age of 94, just three weeks before his 95^th birthday, I said to him, 'When you were a teenager did you ever meet anybody in their 90s?' Of course, the answer was no; they just did not exist back in the 1930s. He was born in 1927.

It is not unusual for people to be in retirement for 30 years—my father certainly was, and he was very active right up until the last 12 months or so of his life. They made a choice. When my father retired, they moved from Salisbury to the beachside suburb of Semaphore. They were in Salisbury because you could actually see the General Motors Holden factory if you stood on the roof of the house I grew up in. There was no longer the need to be close to work, so consequently they made a retirement shift. My mother is still there and enjoying it.

It is also very important, I think, that we do make it easy for that transition. I do not think the federal government is doing enough. We saw the downsize of the payment program introduced by the previous Liberal government in Canberra for superannuation contributions, which encouraged people to look at the options of downsizing their home and using proceeds left over from the larger home they have sold and the smaller house they have purchased to put into their super fund.

But I do not think $300,000—or $600,000 if it is a married couple or a couple partnered up—is enough, because we have seen large increases in house prices. We have also seen a very volatile share market in the last six months, at least. Fortunately, we saw some quite good rises again last week for people who have their money working for them, whether it be in industry super funds or self-funded super funds. But despite Albanese's promise to not interfere with superannuation, we have seen a cap put in at $3 million where the tax on super is actually doubled.

I was reading a statistic not long ago in the Financial Review that identified that despite the fact that in every other like country to Australia, there has been an increase in the proportion of GDP, or taxes, if you like, spent on pensions—and all due credit to the Keating government for the introduction of the compulsory super scheme—we have seen that even though people are living longer and more people through the baby boomers are retiring, the actual GDP percentage of money that is paid for retirement pensions in Australia has reduced. It has gone up in real numbers, obviously, but it has reduced. We are the only OECD country, I understand, where that has happened.

People are in a position where they are able to have additional choices, but I do think that there are more triggers that can be pulled to make it easier for people to move into a retirement village if they wish to. They may then decide that they have more money that they can use for the finer things in life, such as travel and spending time with their adult families and their grandchildren.

We have what I call a sour spot. Everyone has heard of the sweet spot when talking about sums and events and putting things together, but there is a sour spot in superannuation versus the pension scheme. A married couple with $300,000 in super will have access to the full pension, providing their assets do not exceed—I cannot remember what the amount is off the top of my head, but I think it is about half a million dollars, including their super. Their house is exempt, of course. But they are better off than somebody who does not qualify for the pension, such as a couple who have a million dollars in superannuation, because they will get the full amount of the pension and around about fifteen-odd thousand dollars on top of that from their investment as their super is turned into the pension phase.

If they then decide to downsize, that benefit is gone because the equity in the house is exempt from the calculation of assets for receiving the pension or any of the pension benefits, but it is then turned into cash, and cash is counted whether it goes into super or not. It is counted as an asset that will reduce your pension. This is contributing to the lack of available homes because couples who are still living in the family home in their 70s and 80s, where they might have three or four bedrooms or a granny flat out the back, are thinking of their children. They are thinking, 'Why should I sell this home and use the money to support myself when the government is going to punish me and take away the money that I am receiving now as part of my pension?'

I think it is time that that is addressed at a federal level. We know that in New Zealand, if you want to work more hours or work after receiving the pension, there is not a complicated algorithm that reduces your pension payments by about four times for every dollar that you are earning. You just pay tax on what you earn. It is very simple.

Whereas the example here in Australia is that you might do some seasonal work, you might be someone who has consulting skills in a particular area, and you take on a contract for a month to write something up about a particular issue or a particular bit of research. You might earn $20,000 for that and you decide that you want to do that, and that is all you do for the whole year.

You then have to go through a process of filling out forms or telling the department that manages your pension what you have earned. They calculate how much your pension is discounted and it is quite a regressive outcome for the person who has decided to take some more responsibility for their own retirement. Usually what happens is people say, 'Bugger it, I'm not doing it. It's just too hard and it's not worth it. The government is getting more out of this than I am.'

I do believe that with our retirement living we have to have choice. We need to ensure that the proposition is attractive for developers. We have to make sure that those who use those services and want to move into a retirement village have the protections and the comfort that they need. It is a balancing act, but balancing acts are done right across sectors and industries. I can just imagine what it would be like if the Greens were in charge of a bill like this. We would see some bizarre legislation that would simply punish developers. They would demand that there was a magical bucket of money at the bottom of the garden to fund additional services without the consequences or fiscal responsibility that is required to run such an industry.

Getting the balance right is important. That is what I am hoping this bill will do. It does not mean it will not be tweaked later on, but we certainly do not want retrospectivity. That is the worst thing you can possibly do for senior members of our community. People have made a plan for their retirement, made a plan for their downsizing and made a plan for their future living and then all of a sudden the rug is pulled out from underneath them.

Remember that was the plan that Bill Shorten had for the 2019 election. People had set their retirements up based on income from franking credits. I know a long-term member of the Labor Party in Unley who campaigned for the Liberal candidate at that 2019 election because that Bill Shorten policy was going to cost him $20,000 a year. He was a retired school principal. He has never gone back.

It is disappointing, despite Albanese's promises before the last election that he would not be touching superannuation, that we have seen a significant change—unindexed, mind you. There are many people in their 30s and 40s now who might think, 'Three million dollars, I wouldn't mind having that much in superannuation,' but by the time they are likely to have that much in superannuation, if they are in a profession and they have spoken to an investment adviser about how they could achieve that, they will find that the spending power of $3 million in 20 years' time will be more like about $1.5 million today because it has not been indexed. They will be paying 30 per cent tax on the earnings of that superannuation fund over that $3 million, which in today's dollars would be about $1.5 million.

It is a shocking pea and thimble trick. They are pointing to the rich and arguing, 'Someone with $3 million in superannuation is rich, and so we will make them pay more,' not indexing it, not speaking very loudly about the fact that it is not indexed and, consequently, leaving all future retirees, or those planning retirement, less reliant on the old age pension. They certainly will not have access to it, unless we have a massive population boom of teenagers in the next few years migrating to Australia and joining the workforce and paying high taxes. That simply will not happen. That is a problem in the entire Western world.

We already have one of the oldest retirement ages where the pension is paid at 67. Australians have really done the hard yards in preparing for their future. I think many of the changes that were made have been uncomfortable, particularly lifting the pension age. But, just remember, when the pension first came in, the average age of the Australian male was 61 years—61 years was the average age of death, and the pension kicked in at 65.

There are a lot more people receiving it. Because of the longevity and the baby boomers retiring we are seeing a lot more people receiving the pension. Again, our unique superannuation scheme is open to every single wage earner. Everybody who earns a living through employment receives it compulsorily—and I am fully supportive of that. I was supportive of it at the time when it came in, and I am fully supportive of it now.

But I am not supportive of changes that affect people who have already made plans for their retirement and that may force people to delay their retirement, delay the sale of their home or their downsizing, or do not encourage them or reward them for making their home available for another family so that they can move into a retirement village or a smaller townhouse or smaller accommodation.

Most people when they retire, when they do move they actually want to live within around about five kilometres, or certainly the recognisable neighbourhood where they brought up their families. We are seeing that in Unley with the Living Choice development. It was very controversial at the time. It was on the former Julia Farr Centre land. There was a tower that was burnt out and left there for probably 10 or 15 years as a skeleton. It was knocked down and this amazing retirement village, the first of its type to offer such a range of services for its residents, was built.

Originally, when the planning application came in, it was heavy on one and two-bedroom apartments but when they went out to market the demand was for two and three-bedroom apartments, and so there were fewer apartments built but they were bigger apartments. Why is that? Because these senior people, these people in the youth of their senior years, had international experiences, they had friends or family who lived overseas or interstate, they had grandchildren and they wanted to be able to cater for them when they visited. They did not want there to be a financial burden on their family or friends who were visiting them, flying into Adelaide and then having to pay for accommodation. They wanted to have that ability to do that and so, consequently, that was a big factor in why the design was changed prior to the work being started, but after it went out to market it was to accommodate larger apartments with more bedrooms.

It also has an amazing entertainment and dining area, a public lounge area, and a restaurant that is open to the public. People who live nearby will cross the road and go over for dinner and meet their friends there who may be living at Living Choice. I think we will see more of those. I know that Living Choice are building another one in the southern suburbs that backs onto a golf course. These are the sorts of things that we need to encourage, and we need to see more of, because when people retire it does not mean they are retiring from living.

They want to live, they want to have the freedom to spend their money knowing that they have set their children up to be independent and working on delivering their own nest egg, their own wealth, and so they want to spend the money that they have earned enjoying their retirement. It is so important that we have laws in South Australia in regard to the running of retirement villages that enable those services to be provided, developers to invest and people to be protected.

The Hon. C.J. PICTON (Kaurna—Minister for Health and Wellbeing) (17:50): I would like to thank all the members who have contributed to this debate. This is a very important area and a very important area of reform, and it is one where we need to get the balance right. We need to get the balance right between the rights of people who own and manage and build retirement villages and also the rights of the people who live and buy into retirement villages and leave retirement villages. My view and I think the government's view has been that there needs to be a rebalancing of that and certainly this bill seeks to do so.

There were a number of comments that have been made that have surprised me from some of the contributions to date. I think we have heard a number of comments that have been contradictory from the other side in terms of basically pointing out everybody's wish list on either side without understanding that some balance and decision-making needs to happen in the middle.

It has not just been me noticing that. I have been receiving some notifications from people outside the parliament who have been listening in on the debate, who have been very surprised by some of the comments that have been made from the Liberal Party. In fact, Bruce Djite, who is the Executive Director of the Property Council, contacted me during the debate and he in fact gave permission for me to read in the parliament his thoughts on what is happening in the debate. He said:

The Libs have lost a sense of reality. They have abandoned any understanding of commercial contracts as they worry about one or two squeaky wheels in increasingly marginal electorates for them.

That is a comment from Bruce Djite.

The Hon. N.D. Champion: It's not a ringing endorsement.

The Hon. C.J. PICTON: 'It's not a ringing endorsement,' the minister says. But we have sought to get the balance right. I will be very keen to come back and address some of the detailed comments that have been made one by one. I think the other point that I would make is when people make complaints to me or raise concerns, they have the ability to make amendments, and let's see those amendments when we get to the committee stage. With that, I seek leave to continue my remarks.

Leave granted; debate adjourned.