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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2010-07-20 Daily Xml
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TRUSTEE COMPANIES (COMMONWEALTH REGULATION) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 23 June 2010.)

Ms CHAPMAN (Bragg) (11:02): Today I rise to indicate that the opposition has considered the Trustee Companies (Commonwealth Regulation) Amendment Bill 2010 and, on behalf of the opposition, I indicate that we will be supporting the bill. I thank the minister for members of his staff and members of the department who were available to provide us with a briefing on the background of the bill and to answer relevant questions. That was provided promptly and comprehensively. The Attorney-General's second reading explanation states:

Most trustee companies have expanded their activities into other areas of wealth creation, management and transfer. They now offer a range of financial services, including acting as superannuation trustees, acting as Responsible Entities for managed funds, providing custodial or depository services, and acting as trustees for debenture holders. They are regulated under Commonwealth legislation for these other financial activities.

Whereas a trustee company can provide these other financial services across Australia by dint of their licensing or approval under Commonwealth legislation, under the State and Territory regulated trustee company regime they also had to be licensed or authorised in each state or territory in which they offer traditional trustee company services.

The opposition agrees with this and, on consultation, that position has been confirmed. Accordingly, it brings about the basis upon which (we do not doubt) the June 2008 COAG meeting, I think represented by the Premier of South Australia, agreed that the commonwealth government would assume responsibility for regulating trustee companies at the entity level and minimise the duplication of regulation as required.

It is important to note that the commonwealth already has powers in relation to corporations and therefore this agreement involves the commonwealth exercising more of its current constitutional power rather than a referral of state power. I, for one, am known in this parliament for raising some considerable objection and disquiet if the latter is to occur, but in this instance it is clear that there has been an overlap and we need to streamline that.

The commonwealth Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 commenced operation on 6 May this year. That act implements the transfer of entity level trustee company regulation to the commonwealth regulation, which will be undertaken by APRA, and we are assured that will enhance consumer protection rights. That is often a claim; it may, but I am yet to see whether that is of direct benefit, but I think the performance of APRA will tell us whether that is going to translate into actual protection and enhancement.

However, the bill under consideration today implements South Australia's obligation under that COAG agreement. This, and another 26 reforms, will entitle South Australia to commonwealth payments of $47 million over four years. We are not certain, although we had not inquired in detail during the briefing, as to whether there would be a direct penalty of the whole of that amount in the event we were not to comply with the agreement but, on the basis that we affect the principle upon which the agreement was made—and that is meritorious—it is of little consequence.

I will say for the record that these inducement payments by the commonwealth are not something that I favour to the extent that, while obviously we are happy to receive them in this instance as in others, for the commonwealth to hang over our heads some impecunious consequence if we fail to comply with what it considers to be important, personally I find quite offensive. However, as I have indicated, we accept the merits of the basis upon which this agreement has been reached and, therefore, it is inconsequential as to the application or offering of funds as some kind of inducement or threat; it is probably irrelevant.

I place on record our understanding that state legislation will be maintained in respect of wills, administration and probate. This will continue to apply to trustee companies as they apply to other participants in the field. I think that is important to note. This is an important jurisdiction which will be maintained. It is effectively administered through the Supreme Court in South Australia and a highly skilled legal profession sits alongside of that administration which provides services to South Australians in this area. It is local, efficient and highly competent, and I am pleased to note that it will be maintained.

The opposition also notes that state and territory public trustees will not be subject to the new commonwealth regulatory regime unless the relevant government consents to this occurring. It is our understanding that from the South Australian perspective, at least at this stage, it is intended that the state will not grant consent for our Public Trustee to become subject to the new commonwealth regulatory regime. I simply comment in this regard that it always puzzles me as to why something is ostensibly good for everyone else but not for our state public institutions or employees as applied when we stood in this chamber to debate the transfer of power to the commonwealth in relation to industrial relations. It seemed to me an argument that was good enough for every other worker in South Australia but not appropriate for South Australian public employees or local government employees.

I find that quite incongruous. Nevertheless, the state administration says that it will retain responsibility for the Public Trustee. Having read the Legislative Council review on the Public Trustee recently, tabled in this parliament in the past couple of years, and having heard the plight of some constituents whose cases have been raised in this forum as to their service by the Public Trustee, not to mention allegations of bullying among staff and the like, it is an ongoing and worrying concern.

A number of assurances have been given by the government in response to that review that there is a new administrative regime, a new chief executive in place and that the situation is improving. However, cases still come to me, and I am sure to other members in the chamber, where that standard is not up to speed. We commonly hear about what may seem to be minor problems in the scheme of things where relatives or parties who are under the administration of the Public Trustee are denied access to very small sums of money for their adequate care or protection or for lifestyle enhancement. These may seem to be in the lower order of things to us, but let me assure members they are high in the minds of those who are in those circumstances.

I had a recent situation within my own family when I found that my brother, who had been the executor of the will of a former employee of our family who, for various reasons, the family (in particular, my brother) had undertaken continued support of in providing him with accommodation and ensuring that, despite what very small personal assets he had, he would be provided for. This man had an estate of, ultimately, a few thousand dollars and no real estate. To wait eight months for the Public Trustee to administer that estate demonstrates the type of problem that real people out there in the community are facing when they are attempting to deal with estates that are sometimes very small. Obviously, complex cases will attract some delay, but in simple cases it seems to me to be unacceptable on the face of it but certainly without any rational explanation.

This is an example of where it is important that the government continues to ensure that the promises it has made about the supervision of the Public Trustee and its service to the people of South Australia are met. These are often people without the capacity to be heard on their own and sometimes without the support of a legal guardian or power of attorney. We are here in the parliament to ensure that the government brings this agency to account and that it provides a good service to South Australians.

I understand that the Hon. Stephen Wade, our spokesperson on these issues in another place, has received responses from the legal fraternity and organisations to which this bill will apply—a number of trustee companies, very few of which have their headquarters in South Australia now—and that they are supportive of this change. This gives us further confidence that our support is appropriate.

The Hon. J.R. RAU (Enfield—Attorney-General, Minister for Justice, Minister for Tourism) (11:13): Thank you very much to the honourable member and members of the opposition for supporting this bill. I think we all can see the benefits of having these matters sorted out and dealt with as this bill seeks to do. I am very appreciative of the cooperative and helpful manner in which the member for Bragg and the opposition have approached this matter.

The honourable member for Bragg said a couple of things in the course of her remarks that I would like to mention very briefly, the first of which was a comment about the undesirability of the succession of state powers to the commonwealth. With the greatest of respect, I have always held a view very similar to hers and will continue to do so. Whether or not that prevails in every circumstance we will see.

The second remark the honourable member made, which I found very interesting, was in relation to, in effect, national competition policy payments or the equivalents thereof. Again, I think the honourable member knows that we share a very similar view about that as well. It actually illustrates a certain view of the relationship between the commonwealth and the states, whereby the states are led around by carrots in the shape of dollar bills to perform duties for the commonwealth. I guess all of us would hope that in a mature federation there should be some better way of achieving those outcomes, but that seems to be the only thing that is presently operational.

The honourable member also made mention of the question of the Public Trustee. I have also read the reports in relation to the Public Trustee, and I am very concerned to see that there is no improvement in relation to the performance of the Public Trustee. It is a matter that I think is important for all South Australians because, as all of us here would know, there are many vulnerable people whose lives are in the hands of the Public Trustee, and there are also many people with very minimal assets for whom the Public Trustee has been the only practical alternative in terms of having their estates managed and so forth.

Whilst the amount of money concerned in each individual case may not be large, it is very significant for the individuals and the families concerned, so I agree with the member for Bragg that the performance of the Public Trustee is a matter that we should be interested in—and I am interested in this matter. I hope and expect to see an improvement in the performance of the Public Trustee and some recognition coming through by virtue of members of the public dealing with the Public Trustee saying, 'We actually appreciate that this is being done a bit better than it was before.' Hopefully, members of this place will receive less by way of complaint about the performance of the Public Trustee.

I think that all the points made by the honourable member were very valid and very important. Again, I thank members of the opposition for their support and, hopefully, this bill will receive a speedy passage elsewhere as well.

Bill read a second time and taken through its remaining stages.

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