SECOND-HAND GOODS BILL

Second Reading

Adjourned debate on second reading.

(Continued from 5 March 2013.)

The Hon. T.A. FRANKS (17:23): I rise to speak on behalf of the Greens in regard to the Second-hand Goods Bill 2012 and indicate from the outset that, while we are generally supportive of the bill and will certainly support it into the second reading stage, we do have questions, which I will put on notice for the government to bring back a response at this stage of the second reading debate. We will be most interested in following a robust committee system on this bill.

The bill is intended to regulate second-hand dealers and pawnbrokers and will repeal and replace the Second-hand Dealers and Pawnbrokers Act 1996. The bill would see licensing of all pawnbrokers and second-hand dealers who deal in goods deemed class 1. This would include goods considered commonly stolen such as jewellery, electronic goods, tool sets, CDs and DVDs. Other goods regularly stolen but not in as great a number or that are deemed to be not as portable are motor vehicles and components, bicycles, caravans, trailers and watercrafts and, most of note in relevance to my questions later on in this second reading speech, musical instruments, will be deemed to be class 2.

Dealers in class 2 goods will require registration as under the existing act and will have similar obligations as currently exist in terms of regarding recording details of sellers or pawnbrokers, recording an accurate description of all the goods, retaining the goods for a prescribed period—and I note that there is a rise of four days in that prescribed period from 10 days to 14 days—labelling the goods with a unique code and notifying the police if they suspect the goods are stolen. Additionally there will be a minimum age limit of 16 years imposed for sellers, and dealers will be prohibited from dealing with an intoxicated person.

Other safeguards include 100 points of ID to be required for sellers, noting that those are not as stringent as those used by the banking system but they are certainly something that I think most citizens would welcome, including details of the items, and sellers being forwarded to SAPOL through an electronic transaction management system (TMS).

Importantly, this bill will not regulate online sites such as eBay or Gumtree nor is it intended to cover garage sales, school fetes, charity shops or situations where trade-ins are offered. I know that there has been some extensive background to this bill and it is not the first time this bill has attempted to be passed into law in this state, that there have been several rounds of consultation to it and that modifications on two previous incarnations of the bill have been made. On that, I thank Chief Superintendent Michael Cornish, Acting Senior Sergeant Jeff Hack, Acting Sergeant Rob Malone, Mr Graham Close (senior project officer, Consumer and Business Services), Mr Kaes Cillessen (ministerial liaison officer, office of minister O'Brien), and minister O'Brien for ensuring that our office has been briefed on this bill, although I know that is only a recent occurrence. I also thank the minister's office for ensuring that we received a copy of the SAPOL consultation report which detailed the consultation processes around this particular incarnation of the bill.

That consultation report details that a public consultation notice was published in The Advertiser on Saturday 30 April 2011. It advertised the proposed bill and invited submissions. I also note that consultation process report document indicated that letters were sent out to 1,572 affected companies and businesses which were registered with SAPOL under the existing Second-hand Dealers and Pawnbrokers Act. I note that 281 of those letters were returned to the project team and, to quote the report, were most commonly marked 'unknown' or 'not at this address'. Now, 281 out of 1,572 is more than one in six; that raises some alarm bells with me because not all of those letters that may not have reached their rightful recipient may have been returned through the postal system. For one in six to be returned most commonly marked 'unknown' or 'not at this address' when these are the constituencies that are registered with SAPOL under the existing act raises some concerns.

The same letter was also sent to industry peak bodies, stakeholders and interested parties including the Law Society of South Australia, Motor Trade Association, Recyclers Association of South Australia, offices of fair trading in New South Wales and Queensland, as well as Western Australia, New South Wales and the Queensland police services. Other invitations to provide submissions and feedback were also placed online via the SAPOL and OCBA websites.

Formal meetings were held with industry stakeholders and peak bodies such as the South Australian Metal Recyclers Association, Motor Trade Association, Insurance Council of Australia, Law Society of South Australia, Pawnbrokers Guild of South Australia, Society of Auctioneers and Appraisers (SA) Incorporated, Jewellers Association of Australia, Caravan and Camping Association of SA, as well as EB Games Australia and Cash Converters (SA) Head Office.

I am informed that while there were 17 submissions received in total, along with another 80 contacts by email or phone, no responses were received from any specialist music stores, industry bodies or stakeholders with regard to representing the views of South Australian musicians or music retailers in response to these legislative proposals. In fact, there is no indication that the consultation specifically looked to actively contact a specific group of stakeholders, and certainly the Australian Music Association would have been an appropriate body given that it represents music retailers and can easily be contacted.

In recent days, I have made contact with both the Musicians Union and Music SA about this issue. Certainly, the knowledge does not seem to have been out there about the impact and the decisions made about class 1 and class 2 goods under this bill and why musical instruments are considered a class 2 good, but CDs, DVDs, amps and effects are a class 1 good. The instrument, which is in fact many more times valuable and, indeed, likely to be stolen, I would contend, is not treated with the same seriousness as CDs, DVDs, amps and effects.

I have spoken previously in this place about the value and benefit of the live music scene in South Australia and the contribution it makes to the state in terms of not only the social fabric and culture, but of course its economic importance. I note and commend to the government that there has been a recent audit of the Victorian live music scene and that has proven to bring significant benefits to the city of Melbourne.

Unfortunately, as anyone who is familiar with the live music industry would be aware, the theft of musical instruments is an all too frequent and disturbing downside to the cultural vitality that the live music scene provides. In recent days, the conversations I have had with organisations, individuals and industry bodies around this issue who are involved in the live music scene, or indeed music instrumental retailing, is that they were not aware of this legislation. In fact, while they support the overall intention of the bill to reduce property crime, they remain concerned that as it stands they are, apparently, not being afforded the highest level of protection for their members and stakeholders.

The Greens are supportive of the general intent of the bill. We believe it is worthwhile to consider, before we move further, how the various goods that are proposed to be classified under the regulations are being assessed. In a nutshell, the Greens believe that opportunities for property thieves to be able to convert their ill-gotten gains into cash should be reduced, and this bill will certainly go a long way to ensuring that, but we are unconvinced that the current proposal to classify musical instruments as class 2 goods is the appropriate classification. Indeed, we would consider that they should be a class 1 category under the regulations rather than class 2, as is currently proposed.

I note that, in consultation with the minister's office, we have also raised concerns about why CDs are considered a class 1 good when in fact literally they are a dime a dozen these days. Certainly, the indication we have had in informal discussions has been an acknowledgement that it is probably not reflective of the current contemporary nature of that particular item and they possibly should be moved into class 2.

The current rationale for categorising a class 2 good is that they are regularly stolen but not at high volume or portability compared to class 1 goods. Guitars, anecdotally, are understood to be the most commonly stolen instrument in terms of musical instruments and are extremely portable, often coming with their own carry case, and may (commonly) be worth up to $5,000, or even more. There are countless stories, as I am sure the President is well aware, of bands losing entire van loads of all of their instruments. Certainly, there is—

The PRESIDENT: They forgot where they parked the truck. Order—I am calling order on myself!

The Hon. T.A. FRANKS: I do believe that the President truly does understand how common it is for musicians, particularly those engaged in the live music scene, to have their equipment and instruments stolen. Indeed, it is not just the rock music industry, for want of a better genre specification; of course, concert violins can be worth $20,000 or more, and they are certainly very portable, transportable, and the trade in stealing them would bring a lot more than a CD or a DVD collection.

Including musical instruments as class 1 goods would ensure that a higher level of scrutiny applied to transactions involving these items, as transactions would indeed have to be conducted or supervised by a fully licensed and/or approved person who has to comply with the rigorous licensing regime the act will provide if passed, and this includes a fit and proper person test administered by Consumer and Business Services. As it currently stands, operators conducting only class 2 transactions do not require this.

We believe that including musical instruments as class 1 goods in the regulations would provide a stronger disincentive to would-be thieves, meaning that anyone who stole a musical instrument would find it harder to easily dispose of it or convert it into cash through these outlets. As it currently stands, the anomaly exists around musical instruments, where amplifiers for an electric guitar, or an effects pedal for an electric guitar, would currently be considered a class 1 good and, as such, would require the licensed and/or approved person to conduct or supervise any transaction involving those particular items, but somebody wanting to sell the guitar would not have to comply with that.

If somebody wanted to go and sell a guitar and an amplifier, they could only do so together if, in fact, they went through a pawnbroker or a second-hand dealer who was licensed to handle the class 1 prescribed goods anyway. One would imagine that those who are selling such items for legitimate purposes would indeed usually be looking to sell the lot and so would use retailers who are able to handle the class 1 goods anyway.

Anecdotal evidence suggests there is not a large number of music stores that deal with second-hand instruments in the first instance, but any store taking instruments as part of a trade-in or other instruments would of course be exempted from this legislation. Information we have gathered from other states indicates that South Australia is currently unique in its two-tier classification proposal, falling somewhere in the middle of other jurisdictions, such as WA, which has quite stringent reporting requirements, and/or indeed New Zealand, across the ditch, where all second-hand dealers are captured by the relevant legislation there. I understand that it is contended that Victoria is not nearly as rigorous as South Australia proposes to be.

Whilst the use of regulations to determine where various goods sit does allow flexibility if required as fashions change or technological advances reduce the attractiveness or resale value of a previously sought-after or profitable item—one only has to remember the video recorder and, as we have now switched to digital from analog, the analog TV, which has a far lesser value than it had only a decade ago—it is likely that musical instruments, however, will continue to be valuable and highly sought after well into the future and, sadly, they are frequently stolen.

Any move to reduce the opportunity for thieves to convert their ill-gotten gains into a profit is welcomed, and I believe that, with a little more discussion with musical retailers and musicians, what the Greens are proposing in terms of musical instruments being in the class 1 category will indeed be supported. My questions to the government before the Greens are willing to proceed further with this bill are: why were stakeholders representing the South Australian live music industry, such as Music SA, the Musicians Union and the Australian Music Association (the industry body for the music product sector representing wholesalers, manufacturers, retailers and associated services for musical instruments) not consulted directly around this bill in the way that other stakeholders were by being invited to meetings etc.? Was there due diligence to try to get across the diversity of opinion from all the second-hand dealers captured by this proposed bill?

How many specialist musical instrument stores did SAPOL contact as part of its process, and how many of those stores deal in second-hand instruments? What feedback, if any, was sought or received from any of the specialist instrument stores that are in South Australia, and how was that feedback collated and fed into the final drafting of the bill? On what basis was the decision made to include items such as guitar amplifiers and effects pedals as class 1 items, whilst leaving the musical instruments and the guitars themselves as class 2 items? What is the rationale for including compact discs as class 1 goods, given the minimal and declining value that this media format currently has? What number of musical instruments have been reported stolen in the last reporting period, and what have been the most commonly stolen instruments?

I note that we had sought some of that information from SAPOL prior to the debate now before the council, but at this stage we have not received that information. I commend the second reading of the bill to the council, and I look forward to the committee stage of the debate.

Debate adjourned on motion of Hon. G.A. Kandelaars.