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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2016-09-20 Daily Xml
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Retirement Villages Bill

Second Reading

Adjourned debate on second reading.

(Continued from 4 August 2016.)

The Hon. T.T. NGO (16:04): I rise to speak on the Retirement Villages Bill. This bill follows significant public consultation that attracted over 300 written submissions. According to the Office for the Ageing, South Australia has over 500 registered retirement villages, housing around 25,000 people over the age of 55. This is a significant industry which will only grow as our population ages.

The bill aims to ensure that there is a balance between the rights and responsibilities of residents and operators of retirement villages. Strengthening the disclosure requirements placed on retirement village operators is crucial to achieving this aim. I am supportive of these provisions. Full disclosure of the costs involved in entering residential village agreements will allow retirees to enter these arrangements with greater certainty.

This bill prescribes a disclosure statement, which will help prospective residents make an informed decision when they choose which village to live in. It will enable direct comparisons between villages by requiring each village to provide certain information, including any ongoing fees, services provided and services available to the residents. Undoubtedly, such comparisons are useful when making what could essentially be a significant investment decision. My understanding is that the disclosure statements will be developed by a number of key operator peak bodies and residents' associations.

I see this working much like an enterprise bargaining agreement between a chamber of commerce or Business SA and a trade union, in the way they provide advice to their prospective members. In my view, this is a positive development and demonstrates how two different groups can work towards a win-win situation for their prospective members. I understand that the bill also improves the way in which operators are obligated to provide financial reports to residents.

While I am certain that the majority of operators already provide suitable information about how management funds are spent, it is also important that an industry standard is set. It can be extremely confusing for people who are not in the financial industry to understand financial reports. Providing a reasonable breakdown of fees will enable residents to understand how their funds are being spent. This is a reasonable expectation that I think we would all have when making payments to a third party.

If funds are being used to run the village in line with residents' expectations, then operators should have no concerns with the changes in this bill. Perhaps what has been seen as the most controversial element in this bill has been the changes to statutory repayment provisions. Currently, if residents want to leave a residential village property, they may have to wait years before operators sell their property. Operators are currently not obliged to release any funds until the property is sold.

This bill proposes an 18-month time limit. If the property is not sold in that period, operators are obliged to release funds to residents. South Australia's peak body for older Australians, COTA SA, has welcomed the changes, noting that while the much-awaited bill did not address everything COTA SA asked for, it will significantly improve the act. With regard to the statutory repayment provisions, COTA SA chief executive Jane Mussared stated:

These provisions replace an Act 30 years old and it is important to reflect on what provisions were in place. We are disappointed it wasn't a 12 month repayment period, but it does relieve some of the uncertainty around being able to access an estate.

COTA SA highlighted the experience of one of its members, in her 90s, who contacted the organisation because she and her husband vacated their unit over two years ago but had not been able to access their investment as the unit had not been relicensed. Another aspect of the bill which Ms Mussared has also supported is the ability for residents to occupy a unit while it is in the process of being relicensed. She stated:

At the moment residents are required to move out, even though the unit may be vacant, which is often highly disruptive and stressful. This bill will give people more confidence and protection in retirement villages and more certainty.

The Property Council has opposed the statutory buyback provision in this bill, claiming that it will stifle investments in the sector. It is important to note that the Property Council's own data suggests that the average time it takes for a retirement village unit to sell is 315 days—well under the 18-month threshold.

I understand that other states and territories have repayment provisions, including Victoria, New South Wales, Tasmania, Northern Territory and Western Australia. These jurisdictions have repayment provisions well below the 18 months, ranging from 45 days to six months. I do acknowledge, however, that in some of these jurisdictions operators can avoid responsibility to make repayments by agreeing to let residents sell properties themselves. I consider this greatly inappropriate, given the highly specialised nature of retirement living accommodation. There are also provisions in this bill to allow operators to apply for an extension of time in extenuating circumstances. This could include natural disasters or unforeseen changes in the housing market.

Finally, the bill includes a five-year review clause on the statutory repayment method to assess any impact and ensure it has achieved the desired outcomes. With an ageing population, it is increasingly important that South Australians are confident in the consumer protections in place for retirement village agreements. The bill before the chamber certainly improves the protection available to South Australians. I take this opportunity to congratulate minister Bettison for putting this bill before parliament and I commend it to the chamber.

Debate adjourned on motion of Hon. J.S.L. Dawkins.

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