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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-09-12 Daily Xml
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MOTOR VEHICLES (PERIODIC PAYMENTS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 24 July 2013.)

The Hon. D.W. RIDGWAY (Leader of the Opposition) (15:19): I rise to speak on behalf of the opposition on the Motor Vehicles (Periodic Payments) Amendment Bill 2013. Essentially, this bill provides for a new payment scheme option—that is for owners of light vehicles—and that is to pay with monthly direct debit. Revoking of the registration stickers, along with the six and nine-month registration renewal options, was a Labor initiative which did have a positive effect on the budget, but it caused confusion and anxiety for many motorists.

As noted by the member for Bragg in another place, there are still some problems with the existing system. In the case where a vehicle's owner does not receive a renewal notice, they bear the associated risk of driving both an unregistered and uninsured vehicle. This measure, which the opposition supports, could potentially solve some of these problems. It would be an optional payment scheme for drivers, and I understand the government has modelled it on a 15 per cent uptake rate. The opposition believes that it could be significantly higher than that and very much hopes that the government will get the mechanics of this scheme right and not cause any undue anxiety or confusion to vehicle owners.

There is plenty of room for error in this proposed system and, in taking up such a scheme, motorists will be entrusting the government with their money even more than they already do. We assume that, as with most direct debit schemes in the private sector, a person will sign once for the total 12-month registration, stamp duty and admin fees. The authority will last until the transfer of ownership of that vehicle and whatever amount of fees are charged along the way. These are assumptions that the minister, when we get to the committee stage of the bill, may like to confirm.

The public will rely on effective communication from the government over any changes or technical problems, such as issues in accessing bank accounts. The minister advised my colleague, Ms Chapman, the member for Bragg, that the revenue is neutral from this measure. Quoting some of the figures stated by Ms Chapman, under the new regime there will be an administrative fee of $2 for each debit; that is $24 a year compared to $7 for an annual payment—so clearly there is a cost to the motorist there.

In the briefing, the following modelling was stated: there would be a net operating balance in the financial year just gone (2013) of minus $100,000; minus $558,000 for the financial year we are in; minus $117,000 for the next year; $100,000 in the following year; then nearly $300,000; and over $400,000 in the further out years of 2017-18. However, the opposition will wait to see whether these figures are affected given the government has stated in the summing-up in the other place that it expects the 15 per cent uptake expectancy was a conservative estimate and they expect that it may well be beyond that uptake.

We support the legislation in principle, but we will reserve judgement on the government's success with the mechanics of this initiative.

The Hon. K.L. VINCENT (15:23): I will speak briefly in support of the second reading of this bill and put a question on the record to which I would very much appreciate an expedient response. In debate in the other place it was suggested that it is a wonder that this periodic payment scheme has not been put in place before now. There are certainly large parts of it that constitute a very good idea.

In this state, since registration stickers were removed, we have had, as predicted, a significant increase in the number of cars driving around unregistered and drivers being fined as a consequence. There is some hope that this will improve the situation. The number of vehicles driving around in this state unregistered at any given time is quite extraordinary, particularly, as I see it, since stickers were abolished.

My questions to the government are: is there any evidence from interstate or elsewhere that the implementation of this scheme is likely to improve the registration rate of cars in South Australia; and also, by how much does the government anticipate this periodic payment scheme will reduce the current high levels of non-registration?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:25): I thank honourable members who have spoken in the debate today and particularly those who have left us hanging. This bill provides an additional option for motor vehicle registration renewal payments by allowing the Registrar of Motor Vehicles to create a periodic payment scheme and to set the terms of the scheme by gazette notice.

Detailing the rules for the scheme's operation by gazette notice will allow the rules to be modified relatively easily in keeping with technological advances into the future. This bill, by enabling the scheme, will allow registration periods to be less than three months and will allow registration fees, along with the fees collected at the same time, such as third-party insurance premiums, to be paid by automated charge or debit to a participant's bank or credit card account.

The work involved in creating this scheme has been a joint initiative between the Department of Planning, Transport and Infrastructure and Services SA. This initiative will offer flexibility to vehicle owners and help families and others in the community on limited incomes to manage their finances by allowing more frequent but smaller registration payments to be made by an automated means. It provides a convenient way for the community to meet their registration renewal obligations. Once again, I thank members for their contribution to the debate and their support for the bill. Hopefully, I might have some answers for the Hon. Kelly Vincent at clause 1.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The CHAIR: Minister, you have some information for us at clause 1?

The Hon. I.K. HUNTER: I have indeed, sir. I am advised in relation to the Hon. Mr Ridgway's question about the signing-up period—and I think Mr Ridgway phrased it as whether you sign up for a 12-month period then you have to renew—my advice is: no, you sign up for one month at a time, but it is a rolling situation; you are always one month in advance.

In relation to the Hon. Ms Vincent's question, has there been any evidence from other jurisdictions, my advice is that we are the first jurisdiction in the country to implement such a scheme and so, no, there is no evidence to support this.

The second question was about the level of unregistered drivers. There appears to be a perception in the community that the removal of registration labels has increased the number of people inadvertently letting their registration expire and then getting expiation notices for driving unregistered or uninsured. In fact, the number of light vehicle owners who pay their registration after the actual date of expiry has not increased. The percentage has actually decreased by a small amount. This indicates that owners have adjusted to the absence of labels and they are using the reminder options available to them.

The Hon. D.W. RIDGWAY: I have a question of clarification in relation to what the minister is saying about how once you are on the monthly payment program it is a rolling arrangement. Are you required to renew, activate or whatever, every month so that you are covered for the next month or can you just sign up and it happens automatically?

The Hon. I.K. HUNTER: My advice is that you are only required to sign up once. You will be signing some sort of deduction authority when you do that to your bank account or credit card account perhaps—and, provided there are sufficient funds in your bank account to cover your monthly payment, you will be continuously renewed until you instruct us otherwise.

The Hon. D.W. RIDGWAY: Given that effectively your bank or your financial organisation will be doing this, why is a $2 a month admin fee being charged?

The Hon. I.K. HUNTER: My advice is that administration fees for registration and licensing transactions form a major component of the recovery of cost to the registration licensing service, essentially on a cost recovery basis. These costs include front counter and back of house transactions and information services, provision of customer services via the call centre, records management, leasing of premises, and development and maintenance of IT systems. My advice is that, in fact, this cost is spread across the whole customer base and represents the total administration costs that Service SA incurs.

The Hon. D.W. RIDGWAY: My recollection of what our shadow minister, member for Bragg, had said is that currently if you pay 12-monthly there is a $7 admin fee, but if you are paying monthly it is $2 a month, so it is $24. If the minister is saying that the fee is to cover all of the services in the back office, you would actually be penalised $17 extra per year to sign up to the monthly payment system.

The Hon. I.K. HUNTER: My advice is that extensive work was undertaken in calculating the existing $7 administration fee for renewal of registration transactions and this was used as a base for determining the $2 admin fee on direct debit payments. The reduced admin fee for a direct debit scheme transaction compared to the administration fee for the standard three or 12-month registration period reflects a reduction in merchant card fees, a transaction channel shift to the online channel and a reduction in printing and postage costs. Clearly, if there are more regular deductions there will be a slight increase in costs.

The Hon. K.L. VINCENT: Just to clarify, I may have misheard the minister, but I thought he said that the scheme had resulted in less printing and postage and yet the cost seems to have risen. I am not understanding the link there.

The Hon. I.K. HUNTER: My advice is that there is in fact a slight reduction in cost. For people doing their registration three-monthly, that is four times $7, which equates to a $28 fee per annum. If you are doing it over a longer period but monthly, then the cost comes down to $24 per year, I am advised.

The Hon. D.W. RIDGWAY: Given that I think the government is expecting at least a 15 per cent uptake, how many registered motor vehicles is 15 per cent, roughly?

The Hon. I.K. HUNTER: My excellent adviser advises that it equates to roughly 230,000 vehicles.

The Hon. D.W. RIDGWAY: So, on a quick calculation, if we are going from $7 to potentially $24 in fees annually, is it $2 once or $2 every month for the admin fee for the direct debit system? If it is, it has gone from $7 admin fee on a 12-month registration to $24 a year on monthly registrations, so that $17 increase would equal $3.4 million for 200,000 vehicles, and probably the other 80,000 vehicles would equate to about $4½ million extra cost to South Australian motorists.

The Hon. I.K. HUNTER: My advice is that it is not quite as simple as the honourable member might suppose. The 15 per cent of the overall 1 million light vehicles is made up, of course, of people who pay annually and also those people who pay quarterly, so it is not quite so easy to pull out the annual or quarterly fees as the honourable member might think.

The Hon. D.W. RIDGWAY: But, nonetheless, there will be a couple of million dollars' extra impost on South Australian motorists. On my simple calculations, it is $4.76 million if you had 280,000 vehicles by $17. I hear what the minister is saying—that it is hard to calculate—but what he is saying is that there will be a couple of million dollars' extra cost to South Australian motorists for this service.

The Hon. I.K. HUNTER: My advice is that the situation is not as the honourable member might suppose, and I have to correct him: 230,000 was the approximate number of light vehicles I mentioned earlier, not the 280,000 he used in his calculation.

My advice is that the vast majority of people who may move to this scheme—and of course it is optional; it is not to be obligated on anybody—will move from the three-monthly payment option down to the monthly payment option and therefore receive the minimal slight benefit in reduction of cost. This is a process put in place to increase affordability and as a bill smoothing process within the system. There will be a slight decrease for those who move from the three-monthly option to the other option.

Clause passed.

Remaining clauses (2 to 5), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:40): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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