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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-03-05 Daily Xml
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Bills

Second-hand Vehicle Dealers (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 22 February 2024.)

Ms HOOD (Adelaide) (11:02): I rise in support of this amendment bill, which seeks to reform processes within the second-hand vehicle dealer industry. Many of us will remember the iconic scene from the 1996 movie Matilda, based on Roald Dahl's classic novel, where Matilda's dad, a used-car salesman played by Danny DeVito, glues a bumper sticker back on a vehicle, adds sawdust to the transmission and winds back the car's odometer using a drill. Unfortunately, these practices are not confined to works of fiction or Hollywood movies. Consumer and Business Services have ramped up their investigations into dodgy car dealers and have found an increase in unlicensed dealers tampering with odometers and dodging up logbooks.

While we acknowledge most dealers do do the right thing, this amendment bill will target those unscrupulous operators. It will substantially increase penalties for odometer tampering to better protect consumers. The penalties for odometer tampering will go from $10,000 to $150,000 for the first and second offences, and for the third and subsequent offences it will be $150,000 and/or imprisonment for up to two years.

Odometer tampering is when someone winds back the odometer to conceal the true mileage of a vehicle, which is a crucial aspect in determining wear and tear on an engine and the remaining life expectancy of the vehicle. In addition to misrepresenting the value of the car in order to potentially scam consumers, it also means that the necessary checks, services and repairs may not be undertaken at the required times, potentially leaving unsuspecting consumers exposed to mechanical and safety issues. This could have serious consequences on the purchaser and on other parties throughout the life of a vehicle.

Further, our government will assist victims of odometer tampering by introducing a compensation scheme. Courts will now have the capacity to order compensation for victims who purchase a vehicle with a tampered odometer from a private seller. Previously, compensation could only be sought if the dealer was convicted of an odometer-tampering offence, and not if it was sold by a private seller.

This amendment bill also proposes to increase penalties for unlicensed dealing. For first or second offences by an individual, the penalty for unlicensed dealing will increase from $100,000 to $150,000. For third or subsequent offences, the penalty will increase from $100,000 or 12 months' imprisonment or both to $250,000 or two years' imprisonment or both. The maximum penalty for body corporates will also increase, from $250,000 to $500,000.

This bill will also remove current provisions that allow a purchaser to waive their general right to have a vehicle repaired by the dealer under duty to repair obligations. This approach is consistent with Australian Consumer Law requirements that purchased goods must be of acceptable quality and fit for purpose. The bill will also improve the act to include provisions relating to cooling-off periods and disclosure of information about previous owners and contracts of sale.

I know previous speakers have had a chance to reflect on their very own first vehicles, which often happened to be of a second-hand nature. In my experience, my first car was perhaps not a second-hand car as probably more like a 15th or 20th-hand car by the time it came into my possession. It was a Datsun 180B. To be honest, I would not be able to describe the colour; perhaps a faded version of the green that we sit on today.

It was completely unroadworthy, I would have to say. It had the unique ability, even though it was an automatic car, to stall daily. I ended up having to pretty much stick on the carburettor each afternoon in order to get it home on my drive home from school. It is safe to say we do not want to see those kinds of Datsun 180Bs still on our roads today, and I know that this amendment bill will go a long way in making sure that we have much safer cars on our roads to protect both consumers and the general public. With those comments, I commend this bill to the house.

The SPEAKER: A classic vehicle, the Datsun 180B.

The Hon. V.A. TARZIA (Hartley) (11:06): I was fortunate enough to have a grandfather who worked at Holden for many years, in fact over 30 years, so children and grandchildren of my grandfather were able to buy Australian-made Commodores at a discount. Can I tell you, that was very popular in my family. I went from a black Commodore to then the blue Commodore, the Commodore that I still have today, a VE Series II from, I think, 2012. It has been especially enlightening to hear about members of parliament and their experiences with vehicles, new and second-hand as well.

This brings me to the bill at hand. I also rise to support this bill. We know that consumer protection is a fundamental part of any free market. When consumers feel that they are protected, they have more confidence to spend in that market, so why would we not want to do everything possible to make sure that consumers have protection in that market? I know that this is an area that has been discussed for some time. I am certainly happy to support the bill at hand.

Amongst other things, it will increase the existing penalties for carrying out business as a second-hand vehicle dealer without a licence. Those penalties will go up for a first or second offence and actually for a third or subsequent offence as well. For an offence committed by a body corporate, the penalty will increase to $500,000 from $250,000. These penalties are obviously quite substantial because we want to deter people from engaging in this sort of conduct. If we look at clause 12, it increases the existing penalties—sir, I do not think I have a timer, unless my time is unlimited?

The SPEAKER: Sorry, member for Hartley, your dreams have not been answered. You have 18 minutes.

The Hon. V.A. TARZIA: I was hoping I do have a timer. I do not like the sound of my own voice that much. Clause 12 will increase the existing penalties for interfering with an odometer, which is a really interesting area. I might even ask a question in committee about that particular area because I have had certain constituents raise this very issue with me. There is certainly a lot of intrigue around that issue. That penalty will actually increase to $150,000 from $10,000 per offence, and for third and subsequent offences introduce the option of a maximum of two years' imprisonment.

Clause 13 introduces new sections 34A and 34B which will stop false or misleading statements with regard to an odometer and also grant the Commissioner for Consumer Affairs the power to direct the correction of an odometer that has been interfered with.

Often, if someone has an issue with an engine, what you might see is them purchase another motor and that motor is put into the old body of the car—a new engine. I find that a very interesting part of the Consumer Law that we might ask some questions about.

The remaining clauses of the bill deal with what are predominantly administrative matters. Clauses 3 and 9 somewhat alter the language to ensure that legislation covers electric vehicles. As we know, this is the new frontier. I note that the MTA are supportive of this bill. I thank the MTA for their advocacy in this area. We know that there are many things around which the laws of the day will need to be pretty quickly updated to make sure that we support the new frontier: electric vehicles.

Clauses 7 and 14 remove obsolete references to facsimiles. Not many people I know use faxes anymore. Every now and then someone asks me what my fax number is and those people I find very special. Clauses 5 and 8 remove the requirement for dealers and auctioneers to display the name and address of the previous owner of the vehicle.

This bill amends the Second-hand Vehicle Dealers Act 1995. I am hoping that it will somewhat streamline the purchase for people who buy these vehicles, I hope that it will reduce red tape for second-hand vehicle dealers, but ultimately I hope that it will strengthen those protections for consumers.

After buying a house, buying a car is probably one of the largest purchases a person will make. It is certainly one of the most expensive purchases they will make in their lifetime. We know that there are well over one million licensed drivers in the state. Depending on the stage of your life, you might buy and sell a car and you might need a certain type of car.

At the moment, I am at the stage in my life where I am buying small vehicles for my two-year-old son from Target or Kmart. Once he hits 16, we might be looking at a second-hand, safe vehicle. As a parent—and as I am sure many parents are doing—you want to make sure that when you buy that vehicle for your child you have those consumer protections in place. As families expand, vehicles may change and as people slow down a bit later in life, after they get their sports car, they might return to smaller, more efficient vehicles.

This bill is important because it will modernise and improve parts of the act relating to duties such as repairing vehicles, cooling-off periods, what information you have to disclose about previous vehicle owners, information pertaining to electric and hybrid vehicles and contracts of sale. Also, there has to be a deterrent for people who do the wrong thing. You have to punish people if they do not comply with the law.

I am glad that the minister has made these changes subject to consultation with various industry groups, including the Motor Trade Association and the Royal Automobile Association of South Australia. We have been told they support these changes.

I think it is also important that the bill will actually allow second-hand vehicle dealers to disclose defects that will not be subject to the duty to repair, provided that the vehicle remains roadworthy as well. Of course there are a number of exemptions. All in all, I look forward to seeing this bill pass through this place. I might have a couple of questions when it comes to odometers at the committee stage, depending on whether it is the will of the house to go into committee.

Ms HUTCHESSON (Waite) (11:15): I rise in support of this bill. It has been a long time since I had any dealings with a second-hand car dealer, until earlier this year when my son finally found the car—or should I say the ute—of his dreams. He had been driving around in a Mitsubishi Outlander, which I had owned since he was a baby, making it just over 20 years old, and it was pretty shabby, but really its only task was to drive him to the local on Friday night, and then we would pick it up the next day, or sometimes the day after that. We did lend it to friend of my brother for a few years before my son started driving it, and sadly he was not aware that it needed oil or coolant, and that engine was pretty much cooked when we finally got it back.

Fortunately, there is a great scrap yard down south that deals with Mitsubishis, and they were able to give us a new engine to squeeze a bit more life out of the car. It was not an Outlander engine, though—they only had an old Lancer engine, but we were advised that it was comparable, so the Outlander became the 'Outlancer', and she hung in there for another two years. But, in January this year she was traded in for the new ute.

I am not sure that the car dealer will have much luck in selling it, and I wish him luck. I do not really think it should go anywhere, but we will see what happens. This process, though, did give me a bird's-eye view into the second-hand car dealer process and, to be honest, I was quite surprised at how easy it was for a 20-year-old to get a $25,000 loan. Even though he can afford it, it was a very quick process and actually quite easy. But we had to sign countless forms that were contracts, loan documents and insurance documents, and one to waive the cooling-off period. That one did concern me, but we had agreed to take out cover to fix any warranty issues, so I let it go. It was interesting to have this bill raised, and I can understand the endless forms and red tape that the dealers are obliged to comply with currently and think that some of changes being proposed here will make it more efficient, with more protections for buyers.

I fell into the trap of buying a car from a friend once; he would not have known the lemon he was selling, as it was mostly okay when he had it. But my alarm bells should have gone off when it was a Holden Cruze. They really should issue a big bingo sheet when you buy a Cruze—a bingo sheet of all the things that are likely to go wrong with it the minute it comes out of warranty. Let me tell you, I would have called out 'bingo' fairly loudly, fairly quickly. By the time I managed to get it running smoothly I think I had spent more than it was worth, with about $10,000 worth of improvements, just to get it to go. Of course I did a lot of research and I thought I would check the advice, which was still current, and today I found the following:

You are looking one of the worst cars on Australian roads, a car with an appalling record on safety and reliability, a car that encapsulates everything wrong about the local car industry. If you ever wondered what a lemon looks like, this is it: simply, the Holden Cruze. What is really sad is that I knew that, as a friend of mine had bought one previously and had all sorts of issues with it, but I was buying from a friend who was leaving the country, and it did have leather heated seats, so what could go wrong?

I will say, though, that after it had over $11,000 worth of repairs, some covered by Holden themselves, and after I cried, it had been running okay. I only sold it two years ago and it is still going strong. So there you go, Holden: a few more tweaks and it could have been a good car. So, do not buy from friends, and make sure you know what you are doing when you are buying from a dealer.

I cannot say that I have had any issues with winding back the odometer—or at least I do not think so. This bill will go a long way to discouraging dealers from doing it, though. Penalties for odometer tampering will increase from $10,000 to $150,000, or imprisonment for two years, making South Australia's jurisdiction the toughest in terms of penalties in Australia for this harmful activity. Changes to the act will also allow purchasers to apply to the court for compensation from a private seller, where the private seller has been convicted of odometer tampering. Previously, purchasers could only seek compensation from dealers for any disadvantage they had suffered after buying a vehicle with a tampered odometer.

For unlicensed dealing offences, the penalty for a first or second offence will increase from $100,000 to $150,000. The penalty for third and subsequent offences will increase from $100,000 or 12 months' imprisonment to $250,000 or two years' imprisonment, and the maximum penalty for body corporates that engage in unlicensed dealing will also increase from $250,000 to $500,000. Increasing these penalties will act as a deterrent for those who seek to profit from unsuspecting purchasers and better protect the community and licensed dealers from the adverse impacts of these activities.

Additionally, a new offence will be created for false and misleading statements in relation to odometers. Further to this, the Commissioner for Consumer Affairs will be able to direct a person to rectify an odometer that has been altered and to stop a person from selling or disposing of a vehicle with a tampered odometer. These decisions will be reviewable with the South Australian Civil and Administrative Tribunal (SACAT) and failure to comply with the direction will attract a maximum fine of $20,000.

The commissioner will also have the option of paying to rectify an odometer where these costs are not recoverable by other means, such as compensation following a prosecution. It is expected that these new enforcement powers will reduce the risk of unsafe vehicles being driven on South Australian roads like my Outlander, or 'Outlancer'.

The dealer that my son and I went to was great. They seemed honest and the process was quick and seamless. Of course, there was the hard sell of insurance and upgrades, but as an ex-banker I could see it and took time to understand what I was signing. As mentioned previously, there were mountains of paperwork, and this bill goes some way to streamline this process for dealers.

This bill will modernise and improve parts of the act relating to the duty to repair vehicles, cooling-off periods, disclosure of information about previous vehicle owners, electric and hybrid vehicles, contracts of sale, and penalties for noncompliance by dealers. These changes have been subject to consultation with key industry groups, including the Motor Trade Association and the Royal Automobile Association of South Australia, and have strong support.

This bill will allow dealers to reveal defects to the prospective buyer, which will then not be subject to the duty to repair, as long as the car remains roadworthy. This will need to be provided in writing and the consumer will acknowledge they are aware of these defects on purchase. I can tell you that the 'Outlancer' would have quite a list, and, given it is over 15 years old, it would be exempt from this requirement anyway.

The Second-hand Vehicle Dealers Regulations will also be amended to include a prescribed form that must be used when providing notice about a defect. As an added protection for consumers, the bill will also remove current provisions that allow the purchaser to waive their general right to have a vehicle prepared by the dealer, under duty to repair obligations. This approach is consistent with the requirements that purchased goods must be of acceptable quality and fit for purpose.

We know that we will be seeing more and more electric and hybrid cars as manufacturers move to only manufacturing this technology. As such, this bill will expand the duty to repair to cover the main propulsion battery for hybrid and electric cars within the statutory warranty period specified in the Second-hand Vehicle Dealers Act 1995.

A transitional provision has also been included in the amendment bill to cover hybrid and electric vehicle batteries in vehicles purchased either prior to or following commencement. This provision will begin when clause 9 of the amendment bill comes into operation, and will allow electric and hybrid vehicles that are still under the statutory warranty period to receive the new protections.

The bill also makes changes to reduce red tape for consumers and dealers where a consumer exercises their right to waive the cooling-off period after buying a vehicle. Currently, consumers have two clear business days to consider the purchase of a second-hand vehicle from a dealer. A consumer may cancel the sales contract by written notification before the end of the cooling-off period, unless they have chosen to waive this right. To waive the right to a two-day cooling-off period, a separate form must be signed by the purchaser and a person independent of the sale. This requirement imposes an extra burden on consumers to obtain a witness who will sign the form. As mentioned, we signed this form and we have not had issues—touch wood.

Consumers and dealers will also benefit from changes to disclosure requirements about previous owners of a vehicle. This change will save on paperwork and protect the privacy of previous owners. The information will be available if asked, but it will not need to be displayed in the window of a vehicle on the car lot. This bill makes similar amendments to disclosure requirements where a vehicle has previously used a taxi or hire car. Both of these changes to disclosure requirements will also apply where vehicles are sold at auction.

This bill also makes minor changes to the Second-hand Vehicle Dealers Compensation Fund. Currently, dealers provide financial contributions to this fund, and it is primarily used to compensate consumers where there is no reasonable way of recovering the money they are owed by a dealer. This bill broadens the use of the fund to include programs relating to education, research or reforms that benefit dealers, salespersons or members of the public. This bill has been brought in to not only streamline the process when you are buying a second-hand vehicle but also to provide extra protections for the purchaser and the dealers. I commend the bill to the house.

Mr PATTERSON (Morphett) (11:24): I also take the opportunity to speak today about the Second-hand Vehicle Dealers (Miscellaneous) Amendment Bill 2023. As others have spoken about, second-hand cars form an important part of the overall car sales market. Of course, there is always that wise advice that you get in terms of buying new cars that, the second you drive out of the lot with your new car, the value dramatically drops.

There certainly is appetite in terms of people looking for a second-hand car that is economical compared to a new car. Equally, having a second-hand car market also allows those purchasers of a new car to know that, if they want to purchase a new car replacement down the track, there will be a market for that vehicle to be onsold, whether that is a trade-in through dealers (usually the common way of changing over cars) or potentially as a private seller—but more commonly through dealers.

Of course, there is an advantage for consumers when they make the choice to buy a second-hand car through a dealer: they get greater consumer protections and they also get associated warranties, depending on the age of the car and the price paid for that second-hand car. You get increased warranties that at least cover it in the first few months in some cases after the sale if there are breakdowns. I know a good story around that.

I knew someone who bought a second-hand car through a private sale. I think they paid about a thousand dollars for it and, literally, within a day, the car engine froze and broke down and was undriveable. Of course, it then had to be sold as scrap. They got nowhere near close to the purchase value of $1,000. The fact that there was $4 in gold coins under the footwell was probably the most value in that car if truth be told. That was a sobering lesson as to why it is advantageous to buy through second-hand dealers, because of the warranty, and that will certainly be the advice that I give to my kids when they come to buy their car.

We also saw the important role that the second-hand car market plays with all the massive supply-chain interruptions that came out of COVID. People had trouble getting new cars into the country because of issues around shipping restrictions, and supply-chain issues, and so a lot of second-hand cars defied the usual economic narrative of car values declining over time. In that case, some second-hand cars actually went up in value, which is quite unusual. Of course, the long-term trend is that second-hand cars will lose value. What you do not want to experience as a purchaser of a second-hand car is the situation I described previously: when a car actually becomes undriveable and not only loses value but is basically valueless.

So there is good cause for having consumer protections, and that is what the Second-hand Vehicle Dealers (Miscellaneous) Amendment Bill is looking at. It is looking at what needs to be changed potentially and improved to take into account modern circumstances as well. If we look through some of the changes that are in the bill, one of the big changes to help consumer protections is the increase in penalties for tampering with an odometer.

One thing that consumers look for when they purchase a second-hand vehicle is the age of the vehicle and another is the number of kilometres that have been put onto the odometer. That gives you a bit of a gauge as to not only how old the car is but whether that car has been driven a lot in its life span or a little bit.

The dream, of course, for many, and quite often proclaimed by the salesperson in the car yard, is, 'Well, this car is a bit old, but it has only been owned by one owner and only driven to church each Sunday.' This is to try to elicit confidence in the potential purchaser that the car, while it might be a little bit older, should be in good condition. Of course, the odometer speaks to that. It verifies the veracity of that claim.

Members have spoken about various movies with dodgy car dealers winding back the odometer to reduce the visible display of the number of kilometres driven. It is a practice that really needs to be safeguarded against. The current act has penalties in place for odometer tampering at $10,000. That is to be increased to $150,000. There were occasions when the potential profit to be made by winding back the odometer and underquoting it could be far in excess of $10,000, so in excess of the penalty, and so might encourage that behaviour, whereas now a penalty in the order of $150,000 for the first offence and a third and subsequent offence eliciting two years' imprisonment as well as that $150,000 certainly sends a strong message that that behaviour is not to be tolerated at all.

Further to that, there are changes to the act that make sense to help consumers around false or misleading statements in relation to odometers regarding how many kilometres have been driven. In fact, there is provision in this amendment bill that the commissioner can direct the owner of the second-hand vehicle to correct the odometer and refrain from selling it, so if they do know that the odometer is incorrect it can be rectified so as not to catch people unaware.

Additionally, in terms of this, at the moment the bill allows for some recourse where the odometer has been tampered with if it is with a dealer. However, if it is with a private seller, there is no such provision, so the act seeks to amend that by deleting the reference to 'dealer' and replacing it with 'person' so it means that people who try to sell cars via private means also have to not interfere with odometers knowing that there will be a significant impost in terms of fines and potential imprisonment as well.

Moving on, I talked about consumer protections and why going through dealers can provide some comfort to consumers and here again there are changes to the penalties for unlicensed dealing. Dealers are meant to be licensed. It gives consumers protection to know they are dealing with a licensed dealer, so again the penalties have been increased from $10,000 to $150,000 in regard to making sure that people selling cars as dealers are actually licensed as well.

In terms of the actual cars themselves, I talked about new cars having a market in the second-hand car market. Electric vehicles are a growing segment of the car market. Of course, they are very new, so on most occasions people are driving around in new electric vehicles. At some stage, those electric vehicles will be sold, and we will need to have a second-hand car market for those.

A significant cost with these vehicles relates to, of course, the battery because there are substantial requirements on their energy usage to propel the car around. A lot of investment goes into those vehicles to try to reduce the weight of them and to make them quite powerful and responsive, so that people get as good or better a driving experience with electric vehicles as with internal combustion engines.

Normally, when you buy those batteries new from the manufacturer the warranty is around eight years. They have a lifespan that the manufacturers are prepared to warrant of around that, which does talk to the fact that one of the issues around electric vehicles is that once they reach that eight to 10-year mark the value of the vehicle decreases substantially because of the fact that a big part of the cost is the battery. Having to replace a battery after 10 years on a car would form quite a substantive cost, whereas modern internal combustion engines can last for 10, 15 or 20 years. People have talked about their Datsun 180Bs; their engines are very old.

There is an issue there. How that is handled with second-hand cars at the moment is that second-hand car dealers are not liable. They have to make sure their cars are roadworthy, but they are not liable for tyres or the normal batteries, the lead acid batteries used to help run ancillary services of the car as opposed to the primary running of the car to actually make sure it can move. There are issues about what can be done with that. This amendment bill seeks to give a duty to repair, within the warranty, the actual EV battery or hybrid battery as well, but still includes the general exclusion on tyres and the normal lead acid batteries that are used to have the ancillary services of the car.

Talking about defects, another aspect of this bill is it gives the ability for the dealer to disclose a defect prior to sale. As long as the car is still roadworthy, there is no duty to repair it if they disclose it. It is trying to give a bit of choice and leeway for negotiation between the dealer and potential purchaser.

Additionally, when we are walking through the car yard we are so used to looking not only at the age of the car, the odometer reading, but also the previous owner, trying to see that it has only been owned by one person and driven just down to the shops once a week, compared to potentially having been driven as a taxi or a hire car. The change here is that the name and address of the previous owner does not have to be displayed. That helps with privacy. Rather than having the details of a person who has owned a car on public display, these can be requested from the dealer.

There are some changes here that will modernise the act. When we talk about having a viable second-hand car market, in my electorate at Morphett there are a number of second-hand car dealers that also sell new cars. We have Eblen Subaru. A lot of these are based along Brighton Road. You will see throughout metropolitan Adelaide that quite often these second-hand car dealers are on main roads, busy thoroughfares, where people can see the cars as they go past.

As I said, Eblen Subaru is based in Glenelg East, on Brighton Road. Not only do they sell new Subarus but they also have used cars, often from trade-ins. People trade in their car to buy a new one, so it will not just be Subarus for sale there. Eblen Subaru are well known in the area. They are a really good operator. What speaks to that is they have won a national retailer of the year award for quite a number of years. In 2017 and 2018, they won two years in a row and, most recently, in 2022 they won the national retailer of the year as well as some other awards for being the Central Australian retailer of the year. So from a South Australian perspective Eblen Subaru is certainly a very impressive car sales company.

Just near them as well, just on the opposite side of Brighton Road, there is also Glenelg BMW. Many people would be used to seeing Dave Potter Honda, which was there previously. Glenelg BMW are a different car dealership in terms of sales of cars but certainly in the same physical location. Again, they sell new and used cars. Just recently the used car sales part of Glenelg BMW has moved to Morphett Road in North Plympton.

Not far along, if we keep moving along Brighton Road, just near The Holdy on that busy Diagonal Road/Brighton Road/Pier Street intersection there is the Challenge Motor Company. That's a smaller vehicle yard, but it has been longstanding there and really sells a lot of quite economically priced cars, you would have to say—at a good buying spot for most people in terms of price. It is one of the places where, previously, I have bought a second-hand car. They provide good service.

A newer company that has just arrived recently and that is further up Brighton Road as we go towards Oaklands Road is High Quality Car Sales. I was lucky enough to go to the opening of that car dealership a few years ago. They have a good relationship, I think, with Glenelg Finance; they were there on the day as well. They have a market niche that they are aiming at—you can see they are high-quality cars. They are really looking to be a bit more upmarket in their offering, and they certainly do a good job in that.

While not in the electorate it is worth pointing out, as we go further up Brighton Road, we have Hamilton MG, which used to be Hamilton Holden for many years. Many will recognise that—

Mr Teague interjecting:

Mr PATTERSON: Yes, and the thing with these cars—and we have also got Jarvis Toyota about to set up there; they have moved from South Road to Brighton Road. They are spending quite a significant amount of money on some new showrooms there, a service centre as well. That really re-enlivens that part of Brighton Road, getting that investment into Brighton Road.

I should say that these companies also have quite a good community focus. A number of them sponsor local sporting clubs. I certainly know, as we were talking there about Hamilton Holden in days gone by, now Hamilton MG, they have provided good support to the Glenelg footy club. Jarvis Toyota also provides good support. In fact, Jarvis Toyota sponsors my daughter, who plays at Glenelg footy club. So they are also looking to sponsor into the emerging women's football programs, which is really important.

In the time remaining, I know others have talked about what their first car was. I know that certainly the shadow minister, the member for Heysen, was keen to hear what mine was. Mine was a red Ford Laser, a hatchback. I bought it from—I can still remember the name of the dealership: Realistic Cars, it was called. You would hope that your car was quite realistic when you buy it, but that is what it was.

I bought it, actually, with the money I earned from my football season. I did quite well in that football season. That is when I got the best and fairest at Norwood.

Mr Teague interjecting:

Mr PATTERSON: I was not quite into buying the expensive sports car. I was sensible. I did not go over the top. In fact, that car served me well. I drove it over to Melbourne to play at Collingwood—

An honourable member: Did it have a name?

Mr PATTERSON: Yes, it did have a name. It was Larry Laser. It was very reliable, Larry Laser. It drove over to Collingwood, and I kept it my whole football time in Melbourne—so I did not get too caught up in the fancy cars—and I drove it home. It did not have air conditioning, so it was quite hot, but I drove it home from Collingwood and back across to Melbourne. It is quite funny that, when I drove over there, I was single; when I came back, I was married, had a child, had a dog and could not fit all my worldly belongings in Larry Laser. I had to get a removalist van to bring things back, whereas previously I was able to drive over with my bag of footy boots and shorts and get life underway. With that, not wanting to take up too much more time of the chamber, I will conclude my remarks.

Mr FULBROOK (Playford) (11:44): I rise in support of the Second-hand Vehicle Dealers (Miscellaneous) Amendment Bill. I promise you a riveting speech in which I will, midway, reveal my first car as well, just to go with the program. From the onset, it is fantastic that the changes we are discussing have been advocated by industry. To me, this shows the positive relationship government has in South Australia with our industry stakeholders. This is a two-way street.

While a speech from the backbench can often be labelled as simply being pro-government, what I am really homing in on is the effort that comes from our peak bodies and the great lengths they take in creating respect and trust throughout our broader community. It is not something that magically appears; it takes investment, patience, prowess, time and so many other redeeming elements. Importantly, it reinforces how privileged this government and, indeed, past governments have been to work in partnership with industry experts to get the best outcomes for our state.

When I say 'best outcomes' for South Australia, today I am singling out both the industry and the public. As a result of this bill, we will see a streamlining of administrative processes for the second-hand vehicle dealer sector, reducing red tape, while also bolstering consumer protections. While there are quite a few changes that this bill sets out to deliver, I think what will grab most people's attention is the increase in penalties around the winding back of odometers for second-hand vehicles. If we are successful in getting this bill through, it will see offences rise from $10,000 to $150,000.

I am very fortunate to say that I have not been a victim of such a crime. I imagine the reason is due to the hard work undertaken within industry to ensure unscrupulous dealers are driven out of the sector quickly. I also add that this is because I have only ever owned one second-hand vehicle. That was my first car, a blue 1984 Mazda 323—I think a rebadged Laser—that I bought when I was 18.

I imagine we are all going to take the opportunity to talk about our first cars. While mine did serve me well, I have chosen to buy a new car from that point onwards. This stems from some compelling, somewhat shocking, statistics presented to me when I worked as Minister Rankine's road safety adviser, showing a notable uplift in safety features in new vehicles roughly every four years. Put simply, while it has cost me more for a new car, and I accept that it devalues the moment it leaves the dealership, the chances of surviving a crash increase the newer your vehicle is.

I admit it is an expensive choice and one that, before coming to this chamber, proved at times to be difficult to manage. It is also a decision that I appreciate is not something that everyone, particularly young people or those on low incomes, can afford to make. As lawmakers, we therefore have a responsibility to protect second-hand car buyers not only on matters of value but also on the safety front, for we know that the consequence of concealing the true mileage of a vehicle is a crucial aspect of determining the wear and tear on an engine and therefore the remaining life expectancy of a vehicle.

This is not something that should be laughed off and seen as a petty crime, because the last thing we want to do is to allow unsafe vehicles on our roads. When the odometer is sent backwards, there is also no certainty that the necessary checks, services and repairs would have been carried out at set times, and this creates the potential for unsuspecting consumers to be exposed to mechanical and safety issues, pointing to a dangerous road ahead.

I think we should get it welded into Hansard that the MTA are advocating for this change, because that blue sticker that we often see on an office door of a car dealership or a mechanical workshop represents so much more than just a familiar logo. This is an organisation that works tirelessly to ensure dishonest and dangerous activities like this do not happen within their membership. They do not need the wrongdoing of others to bring the industry down, and nor do we as a government, and this is why I am pleased to support this element of the bill.

The jump in a potential fine is also quite sizeable but an example provided to me by Minister Michaels' office also reinforces the point as to why this change is needed. In recent times I have heard of a licensed second-hand vehicle dealer buying a vehicle for $2,170 and selling it for $7,500 after they had wound back the odometer from 205,000 to 164,000 kilometres. They were then also found to have bought another vehicle for $6,400 and sold it for $9,900, after they had wound back the odometer from 219,000 to 167,000 kilometres.

Where this gets interesting is that the guilty party was fined $900 and ordered to pay $5,372 in compensation to the purchasers. After paying compensation and the fine amounts they still walked away with $2,500 in profit. It therefore becomes apparent that we need a change to ensure that our laws are moving with the times.

I also became aware that in the 2022-23 financial year, Consumer and Business Services successfully made nine prosecutions for odometer tampering. Depending on whether you use a bucket half empty or a bucket half-full lens, there are a few ways you can translate these numbers. Firstly, it seems to illustrate that this is still a problem and this deceitful activity continues, and secondly, it shows that the system does appear to be working somewhat, and that there is a reasonable risk of getting caught.

However, I think what I am most mixed about is that for some people what we have in place does not seem to be an adequate deterrent. If anyone thinks that increasing fines from $10,000 to $150,000 for a first and second offence is not off-putting enough, then maybe they will be trembling at the thought of a subsequent offence attracting higher fines (hopefully soon) and also up to two years' imprisonment. The message should be loud and clear that as a community we are not prepared to let buyers of second-hand vehicles suffer from other people's greed.

While I have touched on the safety elements of this concern, we cannot ignore the consequences of community members not receiving value for money on their purchases when this despicable act happens. Let's face it, many people buying a second-hand vehicle are doing so because that is what they can afford. When they are hurt by these dishonest acts the pain felt is considerable, and we must do everything we can to ensure that it is kept to a minimum.

This brings us to another section of reform the bill seeks to achieve, by broadening the compensation for those falling victim to odometer tampering. Currently, victims can only obtain compensation after a dealer has been convicted. Under current laws, when a private seller is found guilty of the same offence there is no compensation available under the act. Under section 34, it is intended to give the courts the power to order compensation for a person who bought a vehicle with a tampered odometer from a private seller where the private seller has been convicted of an odometer-tampering offence. In this case, compensation would relate to any disadvantage suffered by the purchaser, including costs incurred or likely to be incurred to fix the odometer on the vehicle.

Another element of the bill, which is mutually beneficial to both the industry and consumers, is the increased fine for unlicensed dealing. The rules are clear: if you buy, sell or offer for sale four or more vehicles in South Australia over a 12-month period, you must be a licensed second-hand car dealer. This is a reasonable community expectation where consumers have confidence that laws are followed and that they are dealing with a person of reputable character.

We know that this is what the peak bodies want, and that is why I am happy that we are taking their advice to ensure that the penalty for doing the wrong thing rises from $100,000 to $150,000. For third or subsequent offences, the penalty is planned to increase from $100,000 or 12 months' imprisonment or both, to $250,000 or two years' imprisonment or, indeed, both. The maximum penalty for body corporates will also double, from $250,000 to $500,000.

While there are many other elements within the bill, I think I have covered the parts that I feel are the most important to members within my community. Notwithstanding this, this piece of legislation does some great work around disclosure requirements for defects and previous owner details, cooling-off rights, warranties and waiving the duty-to-repair rights. These are quite significant reforms and, as I understand it, again done in consultation with industry.

I do not want to sound like a scratched record, but I do feel it is important, in a bill like this, to acknowledge the effort that has gone into bringing it before us. I do like to do this with most of the bills I speak to. While I have most likely not had the privilege of meeting those who have been working hard behind the scenes on getting it here, I am aware of the effort that goes into making these bills a reality. To all those within the sector who have been advocating for change, with some efforts dating back to 2016, I offer my thanks and appreciation.

I mentioned earlier that I worked as an advisor to the road safety minister for a few years, back in 2012. That was when I first had the opportunity to meet with the MTA, and I have to say they do a great job not only in advocating on behalf of their industry but also in nurturing young talent through their apprentices and training to create very bright futures.

The RAA also deserves credit, knowing they were instrumental in the call for warranties for small batteries used in electric cars. There are also the very talented teams within Consumer and Business Services and other government departments who helped harness these ideas. These people then worked closely with parliamentary counsel, who also deserve a lot of praise. Creating legislation is not an easy job, but we are blessed to have some fantastic public servants doing their best to make it all happen.

The minister and her great team are also worthy of praise for their hard work in consulting with us and in making sure that we are all aware that there is a great piece of legislation for us as the government, and indeed the opposition, to get behind. It has my support and, with that in mind, I commend this piece of legislation to the house.

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (11:56): I was remiss in not disclosing my first car, so, in the nature of the contributions, I will let everyone know that my first car was a light-blue Ford Laser that looked after me, and I looked after her, for my university days and a couple of years past that. She was very reliable.

I want to thank all my parliamentary colleagues, from both sides of the chamber, for their contributions during this debate. I think the large number of speakers we have had on this bill, and particularly the discussion around increased penalties for odometer tampering and unlicensed dealing, really speaks to the need for this reform.

As most members of this place made mention of during their contributions, the purchase of a motor vehicle is a significant investment for most people. It is one of the most expensive undertakings in most people's lifetimes, so to be able to offer greater consumer protection for that I think is an important thing for us to do. We use cars for taking ourselves to work, taking our kids to school, taking elderly parents to doctors, all sorts of things. We rely very heavily on having cars that work, and work properly.

That is why it is so important that we have confidence in these laws, not only to protect our investment when we are purchasing a car but also to provide recourse to consumers and strict penalties for those who choose to do the wrong thing, particularly with odometer tampering and selling cars without a licence. This bill increases penalties substantially, making us the toughest in the country in this regard.

As you are aware, the act and the regulations have not really been comprehensively reviewed for quite some time—in fact, since 2009—despite minor amendments over the years. Since that time, the Australian Consumer Law has been introduced, and there have been changes to technology that have impacted on vehicle standards, the way that dealers operate their businesses and the expectations of consumers. So it is very timely for this bill to be debated in this place.

As mentioned, this bill will modernise and improve parts of the act relating to the duty to repair vehicles. There will be minor changes to cooling-off provisions, disclosure of information about previous owners, electric and hybrid vehicle battery warranties, some minor changes around contracts for sale and, of course, the penalties for noncompliance by dealers.

These changes have been subject to extensive consultation with key industry groups. I want to particularly acknowledge and again thank the Motor Trade Association and the RAA, both of which have been wonderful to deal with in this legislation and have strongly supported it, so I want to thank them. I also want to thank the opposition for their support of the passage of this bill through this house and for their contributions.

I will briefly touch on a query that the member for Hammond had, when his odometer went backwards during some repair work that was done to it and he wondered what to do about it. There is actually a process for what to do in that situation. I have been advised by CBS that if an individual has repairs on their vehicle that actually change the mileage on the vehicle, the individual needs to take steps to have that odometer wound forward to the correct mileage. To do that, there is an application process through the commissioner at CBS. If the commissioner approves that, the individual then takes their car to a mechanic to have the odometer properly altered to rectify that situation. So there you go, member for Hammond; that is what you ought to have done.

I want to thank all members for their contributions. I also want to thank the staff at Consumer and Business Services, particularly principal policy officer Leigh Kinsela for her assistance—she has put a lot of effort into these reforms over quite some time—as well as Emily Sims and our acting commissioner, Fraser Stroud. They have all put a huge effort into this piece of legislation.

I will also briefly take this time to publicly acknowledge the commissioner who started this process with me and who has now gone on to what I will not call greener pastures, but he has moved on, and that is the former commissioner, Dini Soulio. I want to publicly acknowledge him because I have not had the opportunity to do that.

Mr Soulio joined what was then the Office of Business and Consumer Affairs back in 2009 and was appointed commissioner in 2014. He served with distinction under successive Labor and Liberal governments for the following nine years. He has seen substantial reviews and reforms in that time, including state liquor laws, gambling laws, the introduction of the small bar licence which has really reformed the Adelaide CBD, many other legislative reforms on consumer protection, petrol price transparency, the residential tenancies laws that passed through this place late last year—a whole raft of reforms under the leadership of Mr Soulio. I want to thank him and wish him well in his new role as Chief Executive of Super SA, and I want to thank Mr Fraser Stroud for stepping up as acting commissioner.

Again, thank you to all members who contributed. I commend this bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr TEAGUE: First of all, I might pick up where the minister left off with some words of appreciation for the outgoing commissioner, Dini Soulio. I also, in what I am often finding myself describing as the nanosecond in which I was in the role with responsibility for Consumer and Business Services, very briefly had the opportunity to work directly with Commissioner Soulio, as well as before that time, over the course of my time in the parliament and over the last two years of this government. It has always been a complete pleasure. Dini has conducted himself, in my experience, with diligence, expertise and with a level of dignity and humanity that I think is a model for all of us. It was a total pleasure working with Dini Soulio over the journey. I wish him well in his new role and just want to record my thanks for his service at this time.

The ACTING CHAIR (Mr Brown): Any questions?

Mr TEAGUE: I do have a question at clause 1. There has been reference in particular in the course of the debate to the fact that the Motor Trade Association has called for and supported the changes the subject of the bill. I wonder if the minister might take the opportunity to put on the record the range of other significant stakeholders who have had input into the bill, and primarily those who are speaking for and on behalf of the industry.

The Hon. A. MICHAELS: I thank the shadow minister for that question. In terms of the organisations involved in the consultation, there were a broad range. As well as the MTA and the RAA as the predominant organisations that were focused on this, the Office of the Small Business Commissioner, Department for Infrastructure and Transport, SACAT, Business SA, Consumers SA, the Society of Auctioneers and Appraisers (SA) Inc, the National Motor Vehicle Theft Reduction Council, the Legal Services Commission, and the Law Society of South Australia were consulted on this.

Mr TEAGUE: I have a final question on clause 1. If necessary by particularly focusing on the MTA, but there may be others who had particular priorities that have been not yet referred to: is there any particular highlight priority for the MTA (or, as I say, any of the others) that has not found its way into this particular round of miscellaneous reforms and, if not, why not?

The Hon. A. MICHAELS: I think I will just touch on the two main areas that they were focused on that we have decided, for consumer protection, we were not going to proceed with. They asked for a reduction in the statutory warranty period down to 10 years and, I think, 160,000 kilometres, where it is now 15 years and 200,000 kilometres. That would obviously reduce protection for consumers with those older vehicles. South Australia does have the oldest vehicle fleet of all the states, so we decided not to proceed with that. Also, they did request completely abolishing the cooling-off period. We have decided not to do that. We have made it simpler in not requiring an independent witness, and that has been included in this bill. But we decided not to completely abolish it once possession of the vehicle is taken.

Clause passed.

Clause 2 passed.

Clause 3.

Mr TEAGUE: Here we see, by the insertion of new subsection (2), the first circumstance in which we are dealing with the new purpose and operation of a battery in an electric vehicle, being much more central to driving the vehicle and not only a standalone item. I see that this is now going to provide for the universal replacement of a battery, as I read it, wherever there is an identified defect in the battery. The minister has given some indication as to the range of stakeholders that have been consulted on the bill more broadly.

Perhaps the first question is whether or not there has been any consultation with manufacturers or other specialists in terms of understanding the electric vehicle side of things: how batteries might be repaired, how they function and what we are looking to in terms of the future environment in this space, particularly as we start to see these vehicles coming to end of life on battery 1, and whether we are going to see a practice of battery replacement or whether defects are really an odd glitch, an odd occurrence, in circumstances where batteries might be intended to last for the life of the vehicle.

The first question is whether or not there is any particular range of stakeholders—experts, including manufacturers—that have had something to say about this whole move towards repair of a defect by replacement of the battery in electric cars.

The Hon. A. MICHAELS: I draw the member's attention in particular to the Motor Trade Association, with their membership base obviously being motor vehicle repairers. I would expect they would have a certain degree of knowledge on repairing electric vehicle batteries. The issue with electric vehicle batteries is they are such a core component of an electric vehicle, and it is particularly dangerous if they are faulty. This is the ability now to have that repair, if that is possible—I understand repairs are very often very challenging for electric vehicle batteries, but if that is possible—or otherwise a replacement of the battery, in particular for the safety of the people driving those vehicles.

Mr TEAGUE: To explore this matter, I do not claim fully to appreciate the consequences of the change myself, and I do not know how widespread it is already as part of industry practice, this whole question of a defect that might be analogous to the sort of defect that you would have in an ordinary battery, end-of-life types of issues. We are told in the very helpful document that has been prepared by Consumer and Business Services and circulated that, with respect to these changes, which also affect section 23(7):

Duty to repair requirements will be expanded to cover the main propulsion battery for hybrid and electric vehicles within the statutory warranty period, recognising the growing popularity of these vehicles in South Australia and the need for equivalent protections for these vehicle owners. The duty will apply to electric and hybrid vehicles purchased before or after the commencement of the amendment act.

The first question is one of appreciation overall as to what new cost burden or risk exposure this will bring, given that, as I read it, we are now going to be applying an obligation to replace—and, as I understand it, the replacement of a battery in an electric vehicle is a significant thing, if not an existential thing.

I might take my chance on the next occasion, if necessary, but the next question would be: have we covered the field in terms of the possibility to repair that item instead? We have gone to include that a defect includes the main drive battery of an electric car, and then said 'repair' means replacement. So have we covered off on the economic financial side of doing that? Secondly, have all questions in terms of the possibilities to repair such things also been navigated?

The Hon. A. MICHAELS: In terms of repair versus replacement, my advice is that actually repairing an electric vehicle battery is incredibly difficult, so most commonly they are replaced. Dealers will most often, if there is a fault, go back to the manufacturer. Most manufacturers, I am advised, have a four to eight-year warranty period on those batteries. So, if there is a car that goes back to a dealer because of a faulty battery, they will inevitably go back to the manufacturer and have the battery replaced. That is, as I understand it, the most common scenario when there is a faulty battery.

Mr TEAGUE: That is particularly helpful at least for me and I hope helpful for the record more broadly. Perhaps a final question on the clause: is there an indication or does the minister have as part of the process an indication as to the typical replacement cost of such a battery, just to put it in some sort of perspective?

The Hon. A. MICHAELS: We can take that question on notice. I do not have that advice at the moment.

Clause passed.

Clause 4.

Mr TEAGUE: Clause 4 relates to the penalty provision. As has been referred to at some length during the course of the second reading debate, there are significant increases in penalties for first and second offences and, in turn, for third and subsequent offences, including the addition of a maximum term of imprisonment, and also, while we are at it, a big new fine for an offence committed by a body corporate. The question is: how was the amount in each of those three categories determined? Is it referable to anything else directly, and where do we see it fitting in terms of proportionality elsewhere?

The Hon. A. MICHAELS: We did compare our penalties with those of other states, and we are the highest. For example, New South Wales has a maximum penalty of up to $110,000 for a first offence, and a second offence is $110,000 and/or 12 months' imprisonment. We will now be the highest in the country, but we also took advice, in particular from the MTA, on that particular issue.

Mr TEAGUE: I am grateful to Consumer and Business Services and, in turn, the minister for the provision of the summary of key changes. That sets out the facts, I suppose, the gradation and the provision of a substantial penalty increase for bodies corporate. It sets out there the purpose that has been referred to during the course of the second reading debate: to deter more individuals from flouting the law and better protect the community and licensed dealers from harmful activity.

I hear the minister's response in terms of a comparative. Is there anything else that might be added to explain reasons for applying, firstly, the step up for a third and subsequent offence, including imprisonment, and, secondly, for having a substantially increased penalty, including, as I read it, for a first offence committed by a body corporate?

The Hon. A. MICHAELS: It really is the deterrent effect. We are seeing more of this; we are seeing more and more people selling on Facebook Marketplace and other social media platforms who ought to be licensed and who are not licensed. We are definitely taking into consideration the deterrent factor in this, and it does have huge implications for consumers if they do not have the statutory warranties that are afforded by a licensed dealer.

It really is that deterrent factor; we certainly want to make sure people know what they ought to be doing and that they are doing the right thing. I think the severity of those penalties will indicate that to the general public.

Clause passed.

Clause 5.

Mr TEAGUE: With clause 5 we head into territory to do with previous owner's details, the display of notices, and so forth. The rationale for changing the obligation to display has policy objectives including privacy concerns for the individual previous owner. I understand that the MTA is supportive of the change as well, but not as clear on the reasons, in practice, for its support of the change.

What reasons, advantages or improved practice and so on, has the MTA, in particular—and perhaps other stakeholders as well—identified in terms of the improvements these section 16 changes are expected to bring?

The Hon. A. MICHAELS: This was actually one that was requested by the MTA. They initially requested this change to protect, as the member mentioned, the privacy of previous owners and also to reduce the administrative burden on dealers having to print that on the forms attached to the vehicles; so it is a combination of those two reasons. The information will still be available on request, but it will not be a matter of being able to see people's personal or private details as you walk through a car yard, as you currently do.

Mr TEAGUE: I hear the minister indicating that the information is still to be made available on request. I hear that there is that administrative point about printing and putting those notices in the windows of vehicles, something that we have all become accustomed to over that long practice, whether or not it ever had any particular merit.

My question perhaps then zeros in on the change to subsection (5) that obliges the dealer, on request by a potential purchaser, to disclose the name and address of the last owner or lessee of the vehicle to that potential purchaser before the contract is made. There is a maximum penalty provided there of $5,000. Particularly in light of one of the key purposes of the bill being substantially to increase penalties, as we have just seen in relation to being licensed, is it anticipated that there is actually not a perceived problem about failure to have those records or anticipated failure for dealers to be able to respond to such a request?

Perhaps the end of the line question is: to what extent is there capacity for the commissioner and for Consumer and Business Services and others to do what might be regarded as necessary in the event that we start to see a kind of lackadaisical approach to the holding of those records, a lack of provision to individuals who might ask? A relatively low maximum offence in all the circumstances; is it a potential weak point through which there might be examples of noncompliance for which there is not a great deal provided, at least there, beyond a thwarted potential purchaser?

The Hon. A. MICHAELS: I will make a few comments on the matters raised by the member. As I mentioned, this was an MTA request partly for privacy and partly for easing of administrative burden. To balance that, the RAA requested that that information actually remain available because it is very useful for consumers to know where a car has come from and who owned it previously. We have reached this balancing point of not requiring it to be published in a public forum where people can walk through, it saves the dealers having to print it on those forms that are on the car, but it is still available.

Where the information is genuinely not available to the dealer—and sometimes that happens if the car has come from interstate, for example, and that information is not available to the dealer—I would envisage CBS would take a practical approach to that and if it is genuinely not available and they have investigated for that offence, they would unlikely take any action against that. We do want the information to be available for consumers.

Many other states do not have that information available. We have gone someway down that path, but not fully to the extent of completely removing the requirement. We expect dealers to have that information available to consumers who do ask for it. Frequently it is available to the dealers, because that is where they are buying their cars from—they know who sold it to them, but in some situations it is not available, and CBS would take that into account with any enforcement action.

Mr TEAGUE: Further in that line—because we do not see anything remotely resembling a provision that provides for the contract to be rendered voidable or terminable for failure to provide any or accurate disclosure—there is a $5,000 penalty. In circumstances where there is a motor vehicle that might be at the more expensive end, $5,000 might be a relatively small percentage of the sale price. Bear in mind that we are dealing with a wide range of circumstances.

I suppose there is the possibility, in an individual case, where the potential purchaser has made clear that it is particularly important that those previous details be provided and, if it is not complete or accurate, that would be regarded as an essential term of a contract and they would be left to litigate that if it was not provided accurately. On the MTA's side, as I understand it, there is a school of thought in the industry that it is now very widespread that cars are bought from auctions nationwide, they routinely come from interstate, and that previous owner details are both not necessarily easily available nor in some industry participants' view are they all they are cracked up to be in terms of being a measure of the value of the individual vehicle—there are other indicators.

In terms of focusing, there is the obvious privacy bit—I think that is clear enough. In terms of then what an individual purchaser might need to contemplate, for whom until now they were presented with a form with a whole lot of information on it and they can form their own view of what is there, now they will be in this territory where, yes, they can request and there is a statutory obligation on the dealer with a penalty attached, is it the case then that individual would-be purchasers need to keep their wits about them, chart their course, and, if it is particularly important to know those details, then to make it clear in relation to the individual contract that, if it turns out that what has been provided is incomplete or incorrect, then it is of unusual importance. Is there any other remedy, and have I otherwise captured the environment that we will now see playing out?

The Hon. A. MICHAELS: I would suspect that in practice, if it is something that is important for people to know, they would probably not enter the contract until they have that information, is my guess. If they are using that information to determine whether the car is of value to them, how much they want to pay for it and all those things, I suspect that they would not enter into the contract. I am not sure there would be many instances where a contract is entered into and then they found out the owner. If it is something that is of importance to a particular consumer, I suspect they would ask, get the information and then decide on what contract they wanted to enter into.

Clause passed.

Clauses 6 to 8 passed.

Clause 9.

Mr TEAGUE: We have covered this to a degree and I am focused on the amendment to section 23(7)(ba). This is now the change of classification of a battery from what has been long excluded, along with tyres, from the general warranty, to now recognising that the battery in an electric or a hybrid vehicle is core to the vehicle and so it is no longer to be excluded.

It is at this point that I might reveal some ignorance: in terms of an electric or a hybrid vehicle, is there not a separate starter battery in any of those vehicles? Once we head into hybrid and electric territory, are they configured universally in such a way that the one and only battery is—and hybrid is where it has its application, of course—the main battery, the drive battery, which also operates as a starter battery for the internal combustion engine?

The Hon. A. MICHAELS: Not having the technical knowledge either, I am advised that in electric vehicles there is the main propulsion battery, which is the battery that is intended to be covered by this and will be covered by regulations. There is a separate starter battery, which is described to me as akin to the normal battery you have in a normal petrol car. The intention is for the regulations to cover the main propulsion battery, which is the one that is integral to being able to drive the vehicle, I guess similar to plugging a toaster in—that is really what gets it going. So it is the main propulsion battery that will be covered, but there is, you are right, a smaller startup battery.

Mr TEAGUE: At this point, I might have misread the substitution. Is it intended, or is it actually there on the face, once you have made the amendment, that we are still separately exempting from the warranty that smaller startup battery? That remains there, does it? At present, of longstanding, is a general exclusion from warranty of tyres and battery. We are moving to say that a defect in the battery of a vehicle that is not a prescribed electric or prescribed hybrid vehicle—and I get that, but what about the defect in the starter battery of a vehicle that is a prescribed, and I had in mind particularly, hybrid vehicle? As the minister is saying, it might be that fully electric vehicles also have a separate starter battery for other electronic items. Have we thrown the baby out with the bathwater in any respect?

The Hon. A. MICHAELS: We might take that on notice. The parliamentary counsel advice is that when we prescribe the vehicle in the regulations we will also be able to cover that particular issue of the starter battery in that. We might take that on notice and, if there is anything between the houses, we will advise.

Mr TEAGUE: Just for my own clarity, as well as maybe for the record, if one thinks about good old Joe's six-cylinder ICE (internal combustion engine) vehicle, age-old, as the economists want to describe it, Joe's six-cylinder vehicle in the second-hand car yard has tyres and it has a starter battery for an internal combustion engine. Those are not covered by the duty to repair. We know that.

What this is now providing is that the starter battery, such as there is, that is in a prescribed electric vehicle or prescribed hybrid vehicle, might without more be unwittingly now covered by the general warranty in a way that would make the warranty extend further than it need to, if we are being consistent, from one type of vehicle to another. That is my understanding of it as it presently sits. I think that is what the minister has just articulated, so I am glad that that matter might be taken on notice. I am not clear, as I read it, how that might be cured to the extent that it needs curing by regulations, seeing as (ba) is talking about the one and only battery.

Again, if that might all be taken on notice and, if there is any necessity to revisit it, I would be interested in navigating that as well.

The Hon. A. MICHAELS: We will take that on notice, but I just want to put on the record that the main propulsion battery will be covered by the duty to repair, and we will ensure between the houses that that is as it is intended.

Clause passed.

Clause 10.

Mr TEAGUE: New section 23A(1)(b) will provide:

(b) the dealer, in accordance with any requirements set out in the regulations, gives a notice in the prescribed form to the purchaser—

(i) identifying the defect; and

(ii) stating that there is no duty to repair under Part 4 in relation to the defect;

So the question is one in terms of the substance and/or form. We have an indication there that it is a notice in the prescribed form. What sorts of requirements are in prospect in terms of any regulations?

The Hon. A. MICHAELS: As the member mentioned, the prescribed form will be set out in regulations. That form will be subject to further consultation. The intention of 23A is really to align us more with Australian Consumer Law and what happens in other states, where it might be a broken radio that does not affect the roadworthiness of a vehicle. If that is disclosed to the consumer and the consumer acknowledges that and acknowledges that their warranty does not extend to those sorts of defects that are disclosed that is covered by new section 23A.

Mr TEAGUE: If you could just state any requirements set out in the regulations. Is there anything in the nature of those regulations that the minister can shed any light on? As I said, we understand that the notice will need to be in a prescribed form. Are the regulations going to the time of its provision or whether it is provided on request? How appropriately specified is it, in terms of the description of the defect? Is there anything of that nature? It is an open question.

The Hon. A. MICHAELS: We have something we prepared earlier. I will just indicate for the record that what we will go and consult with is a new form 17 Notice of Defects, where at the start of the form there is a section where there is a description with a blank table so the dealer can put in those defects that are being disclosed under that, such as details of the vehicle in terms of the manufacturer, model number, year of manufacture, registration and VIN, and then an acknowledgment by the purchaser that on this draft states:

I acknowledge that, before the signing of the contract for the purchase of the vehicle referred to in this notice, I received the following information:

(a) the list of defects present in the vehicle prior to sale;

(b) that there is no duty to repair under Part 4 in relation to those defects

A signature is then required for the purchaser. Further information for the consumer is to clarify that there 'is no duty to repair the defects listed in this notice under Part 4 of the Second-hand Vehicle Dealers Act 1995'. That is the form we are looking to consult on. It is fairly self-explanatory: list the defects and the purchaser acknowledges that they know those defects exist and they know that there will be no duty to repair those defects.

Mr TEAGUE: Just to focus on the nature of those defects that might now be covered, we know that they cannot be any defect that could reasonably be expected to affect the ability of the vehicle to be driven safely, so they are not affecting roadworthiness. We have had an example from the minister that one might be that the radio is not working. Another category might be a defect in the nature of cosmetic paint damage and that sort of thing that might be analogous to the sort of thing that might be declared to an insurer and excluded.

Another analogy I can think of is that on a rental car form one often might see a map of the vehicle and identification of pre-existing cosmetic damage that the renter is not liable for on return because it has been identified beforehand. I confess to not having interrogated the prescribed form. I suppose that the natural setting in this regard is that the onus is naturally on the dealer to make sufficient specified disclosure of that defect so that the obligation to repair might be avoided and these things might need to come back to common sense.

To take the example of the radio not working, the radio electronics and overall communication system of cars is more and more central to the car. If a dealer said, again, about good old Joe's six-cylinder that the radio does not work, we know exactly what that means. If you say the radio does not work about a modern car that has a touchscreen and embedded navigation and connection to other internet services and all those things, a description along the lines of 'the radio doesn't work' might just be a pretty vague sort of notion.

Again, that might just be necessary territory and onus on the dealer to effect the exclusion of liability. Is there any contemplation that the regulations are going to stipulate anything there that might further put that on the rails, or are we just in territory where you have a form, you can describe it if you wish, but you better describe it accurately if you really want to be excluding that obligation?

The Hon. A. MICHAELS: As the member says, it is as simple as being very accurate on the description. I take it back to Australian Consumer Law principles. If you go outlet shopping, you might find a dress that has a mark on it. The consumer needs to be aware that that is there, or that there is a rip or whatever it might be. It is a similar sort of process. It is really based on Australian Consumer Law principles.

We will clarify if similar templates are being used interstate in that process, but essentially it is Australian Consumer Law principles. Yes, the dealer will have to be specific as to what the defects are, and of course if a consumer is aware there is a defect in a car I would strongly encourage them to take it to a mechanic or have a mechanic inspect it, to make sure that there are no other consequences of that particular defect.

Mr TEAGUE: Just because it is consumer protection legislation in this sense, where one is weighing up the pros and cons of purchasing with declared defects, is there any indication or availability of assistance from Consumer and Business Services in terms of assisting consumers to value the nature of the benefit and the risk, or is that something that consumers will need to inform themselves about, how they might value the relevant defects?

We are not talking about 'Okay, there are three category C defects,' and we are all in a kind of framework and we know what a category C defect is worth, roughly. It sounds like we are in a blank form scenario, where on any given vehicle there might be something unique to that vehicle all the way through to something that you would find on every vehicle, and so consumers might have a hard time forming a general view about what that particular defect might be worth.

The Hon. A. MICHAELS: It is really consumer due diligence. It will come down to that. I am not sure if CBS would be in a position to advise on differences in values of different defects. I do not see that as a role for Consumer and Business Services. Obviously, if there are inquiries about the impact of that in terms of a contractual dispute with a dealer, CBS would be there to advise on that, but not in terms of the due diligence side. That would be for the consumer. We say it time and time again: go and get your vehicle checked out by an accredited mechanic. The RAA does inspections. There is a range of mechanics who will do inspections. That is the safest way, and it will continue to be the safest way, to buy a car.

Mr TEAGUE: I put on the record, to the extent that I have not already and it has not come up already in the course of the debate, that it is a regime that I for one welcome in terms of a basic freedom of contract principle. It creates a dynamic of disclosure and exchange of information that can work in the interests of everybody provided that, of course, there is the necessary equality of bargaining power and that consumers are alive to the possibility of saving money as the result, if that is their desire.

At the same time, it might incentivise dealers to be appropriately fulsome in their specifying of defects where they wish to market a vehicle and not be burdened with having to repair something that is in the interests of both purchaser and seller not to be a factor in the transaction. So it seems to me that in these circumstances of change the important thing is to make sure that that is something that is promoted so that both consumers and dealers are aware of the change and encouraged, to the extent that they are utilising it, to navigate that with their eyes open.

Clause passed.

Clause 11.

The ACTING CHAIR (Mr Brown): Are there questions on clause 11? The member for Heysen?

Mr TEAGUE: Yes. Actually, I'm not sure if it's actually here. This is a question about the—

An honourable member interjecting:

Mr TEAGUE: Yes, the limits on the waiver of rights. Perhaps I can squeeze in a question here. To what extent has there been stakeholder engagement in terms of providing arbitrary limits on the waiver of rights, bearing in mind the debate that we just had about the defect disclosure regime that is to be inserted? In short form, why and at what point do you limit the capacity for a purchaser to waive rights?

The Hon. A. MICHAELS: In essence, again being consistent with the Australian Consumer Law so that when an item is purchased, in this case a vehicle, it is of acceptable quality and fit for purpose and, for a car, it is roadworthy and safe, we are attempting to limit the ability of, for example, a dealer asking a consumer to waive their right to have that vehicle repaired where it might be otherwise unroadworthy. So we are certainly in the frame of consumer protection with this particular clause and making sure that a car is safe to drive, and you cannot otherwise waive any rights to have that car repaired to a level that is safe to drive.

Progress reported; committee to sit again.

Sitting suspended from 12:59 to 14:00.

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