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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
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Bills

Retirement Villages Bill

Committee Stage

Debate resumed.

The Hon. S.G. WADE: I move:

Amendment No 8 [Wade–1]—

Page 18, lines 6 to 10 [clause 26(2)(b)]—Delete paragraph (b) and substitute:

(b) either—

(i) a period of 18 months has elapsed since the resident ceased to reside in the retirement village; or

(ii) a period of not less than 18 months has elapsed since the resident gave the operator a notice in accordance with subsection (3) (being a notice that has not since been withdrawn in accordance with subsection (4)(b)) and a period of not less than 3 months has elapsed since the resident delivered up vacant possession of the residence; or

One of the important entitlements for residents through this legislation is that residents will be able to continue to reside in a unit while it is going through the sale process. One of the concerns, particularly of operators, is that, particularly at the tail end of the 18-month period, there may be factors which are impeding the final sale of a unit which would be overcome if vacant possession was provided. This amendment is to give a three-month window at the tail end of the statutory buyback period, which would entitle the operator to have vacant possession if they needed it.

The Hon. I.K. HUNTER: The government welcomes this amendment and will support it. The bill allows a resident to remain in situ while their residence is being remarketed. If their residence is not relicensed 18 months after providing the operator with notice of their intention to vacate, the operator must repay the resident their exit entitlement. This amendment provides that, if a resident chooses to remain in situ, they must vacate the residence at 15 months in order to receive their exit entitlement payment at 18 months. It is reasonable, we believe, to expect that a resident will vacate the residence prior to receiving payment of the exit entitlement, and so we are happy to support the amendment.

Amendment carried.

The Hon. S.G. WADE: Amendment No. 9 is consequential, so we can go over that. I move:

Amendment No 10 [Wade–1]—

Page 18, after line 21 [clause 26(3)]—After paragraph (b) insert:

; and

(c) any previous such notice given by the resident to the operator was withdrawn at least 6 months before this notice was given to the operator.

I appreciate that this amendment arises out of an abundance of caution. I think it would be very rare for people to want to, if you like, game the system. It is trying to address the remote risk that somebody might choose to put in a whole series of notices to vacate, such that by the end of the 18-month period they have an ongoing right to vacate. I appreciate that is not the intention of the government, and it is not an interest of operators or residents (in terms of the residents as a broader community), so this amendment is simply to say that you can only have one notice running at a time and that you should not be able to issue a notice less than six months after the last one was issued.

The Hon. I.K. HUNTER: The government supports this very sensible amendment. The provision will ensure that a resident does not lodge a notice of intent to vacate, rescind that notice and then submit another one within a six-month period. It is probably going to be an isolated occurrence but, in the abundance of caution that Mr Wade recommends, we will be happy to support this amendment.

Amendment carried.

The Hon. I.K. HUNTER: I move:

Amendment No 1 [SusEnvCons–1]—

Page 18, line 38 [clause 26(5)(d)]—After 'the retirement village' insert 'within the prescribed period'

Currently, in clause 26(5) of the bill, a resident may elect not to receive the exit entitlement after 18 months if the resident remains unlicensed. However, there is no deadline prescribed by which time a resident must make their decision whether or not to receive a payment at 18 months. This was a reasonable concern, raised by operators, on the practical application of the clause. Inserting a time frame for election will create clarity and reduce uncertainty for operators and all residents. The amended clause would require the resident, within the specified time, to make an election to await repayment based upon the actual resale. The time frame for election will be prescribed in the regulations. This will allow for consultation with stakeholders as to the optimal period. This is one of the beneficial amendments that the Hon. Mr Wade referred to earlier, which will improve the bill.

The Hon. S.G. WADE: The opposition supports the amendment.

Amendment carried.

The Hon. I.K. HUNTER: I move:

Amendment No 1 [SusEnvCons–2]—

Page 19, after line 11—After subclause (7) insert:

(7a) In considering an application under subsection (7), the Tribunal must have regard to—

(a) the financial hardship likely to be suffered by the operator if the order were not made; and

(b) whether the operator has taken reasonable steps to fulfil the conditions specified in the residence contract for the payment of the exit entitlement.

This new amendment will provide greater guidance to the tribunal in their determination as to whether to grant an extension. I am pleased to advise that this amendment was discussed and is supported by the industry. In my view, these extensions should be granted where an operator has acted reasonably to achieve the contract conditions (typically relicensing) and where the forced payment of an exit entitlement would cause financial hardship for the operator.

The Hon. S.G. WADE: The opposition supports the amendment and notes that the way it is worded avoids the problem with the original draft bill which the operators particularly objected to, which was using the phrase 'financial hardship' instead of 'special circumstances'. This, if you like, clarifies special circumstances without asking the operator to identify themselves as an entity at risk.

The Hon. R.L. BROKENSHIRE: Family First has spoken to a representative sector of the owner group and they were quite concerned about some other provisions. I believe this is a good improvement, and I think the industry is actually happy about it, so we will be supporting it.

Amendment carried.

The Hon. S.G. WADE: I move:

Amendment No 11 [Wade–1]—

Page 19, after line 17 [clause 26(9)]—After paragraph (b) insert:

provided that the charge only operates to the extent of the ingoing contribution paid by the resident.

This provision seeks to moderate the impact of the statutory charge by limiting it to the incoming contribution. This allows liquidity for operators but continues to maintain protection for residents. A resident's exit entitlement, if it provides for capital gains, would still include capital gains.

The Hon. I.K. HUNTER: The government will be supporting the amendment. As the honourable member said, it relates to the statutory charge over retirement village land created by a resident's right to repayment of an exit entitlement. This amendment, if it is operable, will mean that the resident's right to repayments is limited to the ingoing contribution and not the exit entitlement amount as calculated in accordance with the resident contract. So, restricting this charge to the amount of ingoing contribution would provide certainty to operators as the amount of the charge. In that case, we support it.

Amendment carried.

The Hon. I.K. HUNTER: I move:

Amendment No 2 [SusEnvCons–1]—

Page 19, after line 25 —After subclause (12) insert:

(12a) If the Supreme Court approves the enforcement of the charge in a case where the operator is not the village land owner, the village land owner may, subject to any order of the Supreme Court, recover the amount of the charge so enforced from the operator as a debt.

The bill creates a distinction between operators and village landowners which is not present under the Retirement Villages Act 1987. The obligation to repay an exit entitlement lies with the operator, but the exit entitlement is a charge over the land. Where the owner of the land is not the operator, this can cause an enforcement issue. The proposed amendment will allow the landowner to recover the amount of the charge from the operator as a debt.

The Hon. S.G. WADE: The opposition supports the amendment.

Amendment carried; clause as amended passed.

Clauses 27 and 28 passed.

Clause 29.

The Hon. S.G. WADE: With the leave and consent of the Hon. John Darley, I propose to move and speak to his amendments, so I make it clear that these are his positions, not mine, and of course they will lack the eloquence of the honourable member. Therefore, I move:

Amendment No 1 [Darley–3]—

Page 22, lines 29 to 30 [clause 29(1)]—Delete 'payments to be made to the aged care facility on behalf of the resident under this section' and substitute:

payment of so much of the exit entitlement as the resident requires to secure entry into residential care at the aged care facility

This amendment is consequential to the other amendments in [Darley 3]. The purpose of this set of amendments is to address issues raised by the South Australian Retirement Villages Residents Association, and concerns residents who move from a retirement village to a care facility.

When entering a care facility options are to either pay the lump sum upon entry—for example, $550,000—or, if the resident cannot afford this sum, they can pay the daily accommodation payment. For example, there may be a $550,000 entry fee to a care facility; however, if this is unaffordable the resident can opt to pay a daily fee of $94.60. The daily accommodation payment is, essentially, interest, and is calculated on the value of the care facility room the resident will occupy.

If the resident cannot afford to pay the daily $94.60 they are able to make application for the retirement village to pay this on their behalf until their unit sells and their exit entitlement is paid. At the moment the bill outlines that exit entitlements must be paid after 18 months until the retirement village operator has paid 85 per cent of what they could reasonably expect to achieve for the vacated unit.

The purpose of the [Darley 3] amendments is to limit the time an exit entitlement is repaid in these circumstances to six months rather than 18 months. Using the same example above, interest on a $550,000 unit at $94.60 per day would be approximately $17,000 after six months. In comparison, interest over 18 months would be approximately $51,000. This results in residents having to pay an additional $34,000 of interest because of the delay in selling the unit they have vacated.

The Hon. I.K. HUNTER: The Hon. Mr Darley has four amendments, and I believe the Hon. Mr Wade has introduced amendment No. 1 on his behalf; however, most of the work has been done in amendment No. 2 and the others are, in effect, consequential on that. I think the Hon. Mr Wade will take defeat of amendment No. 1 as being—

The Hon. S.G. Wade: Yes.

The Hon. I.K. HUNTER: Yes? So, I will speak to all of them even though only one has been moved, because the effect of amendment No. 2 is the one that does the work. These amendments are to introduce a six-month statutory repayment period for residents who enter into an aged care facility. This sort of clause could precipitate significant liquidity issues for industry, with repercussions felt by both residents and operators alike.

Entry into aged care will no longer require the payment of a lump sum. Commonwealth reform has provided choices for the resident. The payment of a daily fee secures the accommodation and the resident can nominate to pay an accommodation deposit at any time. We believe the bill, as drafted, achieves a balance between assisting a resident to secure aged care accommodation through the payment of daily fees and the sustainability of the industry to remain financially viable.

I understand that the amendments in the name of the Hon. Mr Darley are not accepted by industry; as I said, industry fears they may precipitate significant liquidity issues. I can say that whilst industry itself has a problem with it, I think there would therefore be unforeseen follow-on impacts on residents and, as industry experienced those liquidity issues—if they do—then the service delivery to residents and the availability of different styles of accommodation may be restricted. For those reasons we will not be supporting the amendments in the name of the Hon. Mr Darley.

The Hon. S.G. WADE: I will resist the temptation of turning the minister's words back on himself in relation to earlier amendments. He is certainly right; impacts on operators do impact on residents, both current and future, and the opposition will be joining the government in not supporting the amendment.

The Hon. M.C. PARNELL: Just for the record, the Greens are supporting the Hon. John Darley's amendments. We can see that the numbers are not with those amendments and, whilst we do accept that these are complex matters, we tend not to be swayed too much by trickle-down arguments that anything that might be seen to cause difficulties for operators must trump a consumer protection measure—and I think this is what the Hon. John Darley has put forward. We will be supporting the amendment, but clearly the numbers are against it so there will be no division called by us.

Amendment negatived; clause passed.

The CHAIR: Is this set of amendments all consequential?

The Hon. I.K. HUNTER: They are.

The Hon. S.G. WADE: I agree with the minister that they are consequential.

Clause 30 passed.

New clause 30A.

The Hon. S.G. WADE: I move:

Amendment No 12 [Wade–1]—

Page 23, after line 30—Insert:

30A—Rights in relation to remarketing

If—

(a) a residence contract includes conditions that make the payment of an exit entitlement, or any part of an exit entitlement, contingent on the subsequent sale of a right of occupation of the premises; and

(b) a period of 9 months has elapsed since the resident—

(i) ceased to reside in the retirement village; or

(ii) gave the operator a notice in accordance with section 26(3) (being a notice that has not since been withdrawn in accordance with section 26(4)(b)),

the resident (or a person claiming under the resident) is entitled to participate in the remarketing of the premises in accordance with the prescribed scheme.

This amendment would allow a resident or for that matter a beneficiary of their estate, after nine months of giving notice to leave, to take joint control of the marketing of a unit. We propose that this is an opportunity for residents and beneficiaries to have greater confidence that all appropriate steps are being taken to facilitate the sale of the unit.

The Hon. I.K. HUNTER: The government does not support this amendment. The provision entitles a resident or their representative to participate in the remarketing of the residence when the residence has been vacant for nine months, or it is nine months since the resident provided notice of their intention to vacate. Of course the government fully supports the ability of a resident or their representative to be involved in the remarketing of a residence, and the regulations will provide for accountable remarketing practices and justification of remarketing costs.

However, prescribing that a resident or their representative can take over marketing at a certain period could be problematic due to the specialist nature of retirement village contracts. It is unclear from the amendment how this provision would work in practice and what benefit would be provided to the resident. On that basis, without that clarity, we foresee untold problems with it and suggest to the chamber that they should not support it.

The Hon. S.G. WADE: By way of response, it is my intention as the mover that the scheme would be specified in regulation. It is quite practical because it happens in Victoria. In terms of the benefit, I think the benefit to the resident or beneficiary is that they can facilitate a sale in a way. Why should a resident have to wait for 18 months to get an automatic buyback entitlement? Why shouldn't they be able to participate at nine months and save themselves nine months?

The Hon. M.C. PARNELL: The Greens will be supporting this amendment because we see that it makes sense to allow someone who believes that the people responsible for remarketing are not doing enough—I think the existence of this clause will be a bit of a wake-up call for people to more actively engage in remarketing, knowing that when nine months comes around someone else might step in and take over the exercise. I accept what the honourable member says in relation to the statutory scheme and I also note what he says in relation to this being a provision that operates successfully in Victoria. We see it as a consumer protection measure and the Greens will be supporting it.

The Hon. R.L. BROKENSHIRE: I ask the mover of the amendment whether he can advise the house if he has spoken to SARVRA about this, and if so, are SARVRA supportive of this amendment?

The Hon. S.G. WADE: I have discussed all my amendments with SARVRA and, for that matter, with other stakeholders. To be frank, I do not explicitly recall their position. Let us put it this way: I think I would have recalled if they had objected, and I cannot imagine why SARVRA would not want a right to be available to residents. After all, it is completely at the initiative of the resident; nobody can force them to take up this right.

The Hon. R.L. BROKENSHIRE: I have thought long and hard about this and discussed it with my colleague, the Hon. Dennis Hood. I hear what the minister has said on behalf of the government. Generally, my experience has been that retirement villages, through their managers and other executives involved in marketing, do a diligent job. These people have a lot of expertise in marketing and have great knowledge of the intricacies of a retirement village—some of which can have supported accommodation, independent living units and the like as well.

At times, they may have several units for sale and it gives them the opportunity to show a possible new resident the benefits of individual units, rather than just one. Sometimes it is position, be it quiet, be it the view, be it the more open space garden areas and so on. But, on the other hand, we have had residents request that they have a right to be involved in marketing if they so desire, and I take what my colleague the Hon. Mark Parnell has said about applying a little bit of pressure to make sure that it is sold. Weighing up the balances on this, we will support the opposition's amendment.

The Hon. I.K. HUNTER: I see where the numbers are, but my advice is that the Victorian regulator says that the provision in their act that does this work has no benefit for residents whatsoever. It is very difficult to insert a land agent in the process between the village and the resident, particularly when a land agent may have no expertise or a low level of expertise in retirement village residences, which require a certain level of specialised understanding of the system. Having said that, I see the numbers are against me, so we will go quietly.

New clause inserted.

New clauses 30A, 30B, 30C, 30D, 30E and 30F.

The Hon. R.L. BROKENSHIRE: I move:

Amendment No 1 [Broke–1]—

Page 23, after line 30—After clause 30 insert:

Division 2A—Capital maintenance and replacement

30A—Interpretation

(1) In this Division—

item of capital means—

(a) any building or structure in a retirement village; and

(b) any plant, machinery or equipment used in the operation of the village; and

(c) any part of the infrastructure of the village; and

(d) any other item prescribed by the regulations,

but does not include any item excluded from this definition by the regulations.

(2) In this Division, an item of capital for which an operator of a retirement village is responsible means any item of capital within the retirement village other than an item of capital—

(a) that is owned by a resident of the retirement village; or

(b) that is of a class prescribed by the regulations for the purposes of this section.

(3) For the purposes of this Division, maintenance or replacement of an item of capital is urgent if it is for the purpose of rectifying any of the following:

(a) a burst water service;

(b) a blocked or broken lavatory service;

(c) a serious roof leak;

(d) a gas leak;

(e) a dangerous electrical fault;

(f) flooding or serious flood damage;

(g) serious storm or fire damage;

(h) a failure or breakdown of the gas, electricity or water supply to residential premises within the retirement village;

(i) a failure or breakdown of any essential service on the residential premises for hot water, cooking, heating or laundering;

(j) any fault or damage that causes the retirement village to be unsafe or insecure;

(k) any other matter prescribed by the regulations.

(4) The regulations may specify particular works that are to be taken to constitute capital maintenance for the purposes of this Division and may specify particular works that are to be taken not to constitute capital maintenance for the purposes of this Division.

30B—Obligations of operator with respect to capital maintenance or replacement

(1) The operator of a retirement village must maintain each item of capital for which the operator is responsible in a reasonable condition having regard to the following:

(a) the age of the item;

(b) the prospective life of the item;

(c) the money paid to the operator by the residents under residence contracts (including ingoing contributions).

(2) If it is not practical to maintain an item of capital in accordance with this section, the operator may replace the item.

(3) The operator of a retirement village must carry out the maintenance of, or replace, an item of capital for which the operator is responsible within a reasonable time after becoming aware of the need for the maintenance or replacement of the item.

30C—Obligations of residents with respect to capital maintenance or replacement

(1) A resident of a retirement village must notify the operator of the retirement village of the need for maintenance to be carried out on, or the replacement of, an item of capital for which the operator is responsible and that is located within the resident's residential premises as soon as the resident becomes aware of the need for the maintenance or replacement of the item.

(2) A resident of a retirement village must reimburse the operator of the village in respect of any damage (other than fair wear and tear) caused by the resident to an item of capital for which the operator is responsible.

(3) A resident of a retirement village must not hinder or obstruct the operator of the retirement village or a person authorised by the operator, from carrying out capital maintenance or capital replacement in respect of an item of capital for which the operator is responsible.

30D—Resident may carry out urgent capital maintenance or replacement

(1) A resident of a retirement village may carry out capital maintenance or capital replacement in respect of an item of capital for which the operator of the retirement village is responsible if—

(a) the maintenance or replacement of the item is urgent; and

(b) the resident first gives the operator a reasonable opportunity to carry out the maintenance or replace the item.

(2) A resident of a retirement village who carries out the maintenance of or replaces an item of capital in accordance with this section is entitled to be reimbursed by the operator of the retirement village for the reasonable costs incurred by the resident in doing so.

(3) If the operator of a retirement village refuses or fails to reimburse a resident for costs in accordance with this section, the resident may apply to the Tribunal for resolution of the dispute.

30E—Tribunal may make orders for capital maintenance and replacement

(1) If a resident of a retirement village is of the opinion that the operator of the retirement village is not maintaining or replacing items of capital for which the operator is responsible when necessary, the resident may apply to the Tribunal for resolution of the dispute.

(2) If the operator of a retirement village is of the opinion that a resident of the retirement village has caused damage to an item of capital for which the operator is responsible, the operator may apply to the Tribunal for resolution of the dispute.

(3) Subsection (2) does not apply to damage caused by fair wear and tear.

30F—Operator not to sell items of capital to residents

(1) The operator of a retirement village must not sell any item of capital for which the operator is responsible, or pass responsibility for any such item of capital (whether directly or indirectly), to a resident or prospective resident of the retirement village under a village contract or otherwise except as provided by the regulations.

Maximum penalty: $35 000.

(2) Any contract, agreement or scheme is unenforceable to the extent that it purports to sell or pass responsibility for the maintenance or replacement of items of capital in contravention of this section.

(3) This section does not apply to the sale of residential premises within a retirement village, including fixtures in any such premises.

I have discussed this matter with a portion (not the whole lot) of the industry, and again I put on the record that we are making, I think, some pretty good progress, and we will end up with a piece of legislation that I foresee will be a marked improvement on what we or the industry are working with currently, and this will definitely be an improvement overall.

I have talked to a portion of the industry sector. Whilst the Property Council of Australia are generally off the running blocks very quickly, they were slow getting off the running blocks, in my assessment, this time, as were all, even representation by SARVRA, because it has only been in recent weeks that we have had this accelerated representation from both sides of the industry.

Whilst I want to put on the record my appreciation to both sides in the work I have done with them—they have been very available on weekends and out of hours—those to whom I have spoken from the building owner sector I understand can live with this, and SARVRA are very keen for this. To let all colleagues know, this amendment really involves maintenance and replacement of capital items other than those owned by a resident.

The issue is that from time to time a capital item in a resident's unit—maybe a hot water service, air conditioner, dishwasher, cooker or fixed carpets—may need to be repaired or replaced. Most village operators, as owners of these items, accept responsibility for the cost of maintenance and replacement thereof. Recent times have seen the emergence of what can only be described as a disturbing trend in that some new village owners are making residents responsible for the maintenance, repair and replacement of these items.

It is important to put in Hansard that this is in addition to the village owners receiving ongoing resident contributions to their capital replacement funds, often called the sinking fund, for this very purpose. There is an intended purpose in that, as it takes into account depreciation and therefore replacement of capital items.

I am advised that there are currently three village operators, out of a large number, who collectively manage almost 500 dwellings and who participate in what can only be described, in my opinion, as a cost-shifting scheme. With over 530 retirement village complexes comprising 18,200 dwellings registered in South Australia, there is major concern that this practice may progressively become the accepted norm, with other village owners adopting this policy as existing residents come up for relicensing. I congratulate the absolute majority of the owners of retirement villages who are not into this cost-shifting exercise, but sometimes it starts with a couple and then expands.

The implications of this cost-shifting technique is penalising, not only current residents, but also provides the potential to penalise future residents of other villages as contracts are enhanced to expand, what I can only describe as, and others have, an unconscionable practice. So, although the existing act is actually silent on this regarding the village owners' obligations in this regard, it is Family First's belief the legislators who promulgated this act would not have anticipated otherwise.

Section 92 of the New South Wales act is clear in relation to the obligation for capital maintenance and replacement, and it describes an item of capital for which an operator of a retirement village is responsible as meaning, and I quote:

…any item of capital within the retirement village other than an item of capital:

(a) that is owned by a resident of the retirement village…

The South Australian solution that I am putting before the house now is for the protection of South Australian retirement villages residents. It is a retrospective amendment, similar to that adopted in New South Wales, in order to stop village owners broadening this cost-shifting policy to further capture both existing and future retirement village residents.

We already know that councils double dip in retirement villages, and the residents, and I guess to an extent, the owners, but particularly the residents, are paying for that because we know that the roads, the curbing, the road verges, the lighting, are all covered and it is a disadvantage for the residents already there. This is something that is starting to open up and something that I believe we have an opportunity to knock on the head very quickly.

As I said, at this point in time there are only three retirement village owners that I am aware of that are exercising this anomaly, so clearly the rest, at this point in time, are abiding by the intent of the act, and I congratulate them for that. I suggest to the house and even the government, who I know are going to come back with a reason why we cannot accept this amendment, that part of that might be: because we have not had time to consult broadly enough. Well, there has been plenty of time and that is why we finally agreed to debate this bill today through committee. I think this is a good move and it is one that I commend to the house.

The Hon. I.K. HUNTER: The government will not be supporting these amendments, and for very good reasons, which I will now outline. These amendments will transfer the obligation for repair or replacement of all capital items in a village, including those within individual residences, to the operator. It prevents an operator from selling items of capital to residents or passing on responsibility for repair or replacement of these items to a resident.

The department, I am advised, is aware of four operators who structure their six villages in such a way that residents are responsible for the repair and replacement of all fittings and fixtures within their homes, not just capital items. In these cases, residents' maintenance fees are used for the maintenance and replacement of communal areas and facilities. These villages, I am advised, have structured their finances and contracts to reflect this. Even within these villages, I am also advised, arrangements may be structured differently.

Residents have chosen to buy into specific villages under the arrangement that suits them best. The inclusion of provisions within the bill that relate to capital maintenance and replacement, and prohibiting the transfer of responsibility from operators to residents, may limit future business models and restrict diversity of coverage and diversity of offering to those residents who want to move into a village that suits their financial situation and their style of living.

I am advised that the president of SARVRA has advocated for these amendments. However, I am also advised that he has not consulted with the residents of the directly affected villages, nor more widely with residents generally to determine if residents actually want this. The president is the only person, I am advised, to have raised this issue during the consultation process, when he was a resident and prior to him being the president of SARVRA. I am also advised that SARVRA has only raised this issue in recent weeks.

This amendment has not been canvassed with residents or operators, I am advised. It is difficult to gauge the impact of this amendment on residents of the villages which have been set up in this way, let alone the many villages which have been set up over the years and do not have a capital replacement fund. One can envisage that it would most certainly trigger an increase in monthly contributions to the maintenance and other funds. Further, it would impact on the many villages which have been set up over the years and do not currently have a capital replacement fund. We would, by supporting this amendment, be putting untold financial stress on these people without having first consulted them about whether this is something that they would see as being a benefit to them.

I understand also that the Hon. John Darley's amendment to clause 19 provides that the residence contract will be required to include detailed information about who is responsible for repairing or replacing the fixtures, the fittings and the furnishings provided in the residence and how the cost of repair or replacement is to be funded, thus providing transparency to potential residents. Currently, the regulations, I am advised, specify that information must be included in the contract about what funds are set up in the village, when residents contribute to the fund, and the purpose and use of each fund in the village, and this will remain the case in the regulations.

These provisions, coupled with a disclosure statement, will ensure that residents are fully aware of what costs they are responsible for in a village they intend to move into, including amounts relating to capital items in both residences and common areas. Again, the government does not support this amendment. It is too blunt an instrument, it has been introduced at short notice without consultation with residents, and we fear that it will introduce fearful financial impacts for residents for which they have not asked.

The Hon. S.G. WADE: If I could take the lead from the Hon. Robert Brokenshire and acknowledge some of the stakeholders who have been very supportive in terms of the opposition's consideration of this legislation. Obviously, there is a whole range of stakeholders, but I just mention two in particular: Mr Bob Ainsworth, the president of the South Australian Retirement Villages Residents Association, and one of the small operators, Mr Jim Hazel. I have certainly found it very useful to have conversations with a range of stakeholders and those two gentlemen in particular.

One of the comments I made in my opening comments to this committee stage was that I believe that, if you like, the closing of the window of opportunity to look at an agreed set of amendments to this bill—in that context, I believe that both of these gentlemen have positive ideas for the future of the industry. As the minister has indicated, this particular amendment is one that is promoted by Mr Bob Ainsworth, the president of the residents' association.

If members go back to earlier stages in the committee, I tabled almost identical amendments and indicated that the opposition understands the concern and in principle supports the concerns being raised. However, we indicated earlier that we were not going to move it in this consideration of the bill for the very same reason that we had concerns about the government's proposal itself: neither have been subject to a regulatory impact statement, neither have been subject to proper analysis.

What I would say is that we believe that this is something that should be considered in the three-year review. I would suggest to any operator who decides to restructure their arrangements so as to shift responsibility onto residents that they should be mindful that at least a significant proportion of this house has concerns about this practice and is therefore more likely to support provisions that might otherwise have retrospective effect.

I think the honourable member highlighted that this does have retrospective effect. We as a Liberal Party are very cautious about retrospective provisions in any event. My understanding is that section 92 of the New South Wales legislation was given retrospective effect, so it may be essential to have a workable clause, but we cannot support it at this time because it has not had, in our view, due consideration and consultation. As the minister put it, it is difficult to assess the impact. It could be assessed, but it has not been done.

The Hon. M.C. PARNELL: I come to the opposite conclusion to the Hon. Stephen Wade, but for the same reasons. I accept what the minister said, that we have not had this very long. We have only had it for a day or so. Relying entirely on what the Hon. Rob Brokenshire said, the fact that these provisions exist interstate and that it is being promoted by the president of the residents' association is enough for me to say, 'Well, let's say yes today and if the government comes back with cogent reasons later on as to why it is not going to work, well we will consider it between the houses or if it comes back from the other house.' Whilst I do not have the answers to all the questions that have been raised—and I accept what the Hon. Stephen Wade said, that we can look at it again at a three-year review—our inclination was to support it now and then if there are good reasons why it was a bad idea we will revisit it.

I guess this is part of the dilemma that comes from amendments moved on the run. I am not calling the kettle black. All of us do this: when we come across a good idea, we move the amendments, and we get them on as quickly as we can, so there is no criticism of the member. The question of whether provisions like this are better placed in a contract or whether they are better placed in legislation, I guess the answer to that depends on whether it is simply a matter of transparency or whether it is a matter of the parliament dictating some basic contractual standards and, if it is the latter, then yes, we do need to put it in legislation.

Saying that we can put things in contract and that therefore they will be transparent, you can put unfair things in contracts, very transparent unfair things in contracts. Whilst I can see the numbers are against this amendment today, and whilst I am sorely tempted to divide, for no other reason than I do not think we have ever had a division where it is only the Family First Party and the Greens together against everyone else in the parliament—I do not think we have ever had that permeation or combination, but I am not going to test it today—I do appreciate that the Hon. Rob Brokenshire has put this on the agenda now, but we certainly will not be dividing over it and we look forward to considering it in three years.

The Hon. R.L. BROKENSHIRE: I thank all honourable members for their contribution: the Hon. minister Hunter, the Hon. Stephen Wade, and the Hon. Mark Parnell. I can count and clearly the numbers are not here, but I think the important thing for future debate as we head towards, I understand, three-year reviews, is that this is on the public record, and I congratulate Mr Ainsworth on pushing for this. It is an opportunity for him now to bring it up more widely within SARVRA and hopefully it will go through with the next review. In the meantime, at least, it signals to the operators that the parliament is watching this particular issue.

The CHAIR: I put the question as a test for other clauses that new clause 30A, as proposed by the Hon. Mr Brokenshire, be inserted.

New clause negatived.

Clause 31 passed.

Clause 32.

The Hon. S.G. WADE: Amendment Nos 13 and 14 are consequential to Amendment No. 1 [Wade-1] which was not supported by this house so I do not propose to move them. I move:

Amendment No 15 [Wade–1]—

Page 26, after line 17—After subclause (11) insert:

(12) The operator must ensure that a question arising for decision at a meeting is determined by secret ballot if any resident present at the meeting so requests.

This is a secret ballot provision, as opposed to an absent vote provision. In the opposition's view it is important to protect residents from intimidation and we believe that providing a secret ballot for votes provides an element of protection for residents, which we submit to the house should be supported.

The Hon. I.K. HUNTER: The government does not support this amendment, which would allow a vote at a meeting of residents be held by secret ballot, if at least one resident seeks this form of voting.

My understanding is if residents seek, or believe a secret ballot is necessary, they are able to put this motion to a vote of all residents in accordance with the general voting requirements already. The ability for a sole resident to be able to request a secret ballot could be problematic. It is foreseeable that this could result in all matters being put to a vote at meetings of residents having to be undertaken by a secret ballot.

Imagine if you had one person who, for whatever reason, wanted to make things difficult at a meeting, they could, if they had this right inserted here, insist that every single thing that would be discussed at such a meeting would have to be put to a secret ballot. This could tie up countless hours of meeting time and be misused. As I say, if a majority of residents wanted a secret ballot they can currently do it already. They are able to put a motion to a vote of all residents in accordance with the general voting requirements. I say to the chamber, if you put in an ability for any member to request a secret ballot on any issue, then you need to be prepared for the consequences of that, that some person may, at a future time, misuse that right.

The Hon. R.L. BROKENSHIRE: Having observed previously a retirement village in Woodcroft, when I was privileged to be in the House of Assembly as the member for Mawson, I saw what went on in that retirement village, and it is the most extreme example I have seen in a retirement village. It was not a nice village to be in at that time for many of the residents.

I think we need to understand that retirement village communities are actually pretty tight knit. There are no fences in between their residences, as a rule. They are very open, in any case. They have community facilities together. They have an afternoon tea together and it is a close community. At times there are decisions that have to be made at AGMs or special general meetings that may pit one resident against another on that issue, if it is just a show of hands. They want harmony in these villages.

I do not agree with the minister on this occasion. I often do agree with minister Hunter, but on this occasion I cannot agree with him for the reason that we need to give people an opportunity. If you have ever read an annual general meeting's minutes, they are not that onerous, they do not go for that long as a rule. In fact, if the village is running really well, then it is a very happy event and they are more interested in having perhaps an orange juice or a glass of champagne or a red or white wine after the event than going through the process of the AGM. However, at times there are contentious issues. They do not want to necessarily show their hand in a public sense.

I actually have no problem with secret ballots. I would have thought that the Labor Party was pretty keen on secret ballots, but clearly not for retirement villages. Family First supports the amendment.

The Hon. I.K. HUNTER: I just want a clarification. The Hon. Mr Robert Brokenshire may have inadvertently misled a few members and that would be a shame because it might preclude him from going on to the Senate chamber at some stage, if it was shown that he did mislead the house.

This amendment does not just apply to AGMs. It applies to every single meeting of residents. Some of you have been working with retirement villages and as part of your duties you know that they are not always happily run. You sometimes know that there is one person who has a particular axe to grind, and if this right was enshrined in the legislation, as it is, giving them the ability to call—it is like calling a division on every motion that we are discussing in the clause—some people might be tempted to use it.

I am suggesting to you that the better option is to stick with the system that is currently in place, where a resident can convince a majority of residents to support a secret ballot and then they can have one. However, that will do away with this issue of someone calling for secret ballots on every matter at every single meeting if they had this right enshrined in legislation.

The Hon. M.C. PARNELL: This might be a good case study in old-fashioned Pollyanna-ish parliamentary democracy. My original notes from the first time I looked at this amendment was that—as fans, in the Greens, of more democratic processes—we like the idea of secret ballots, if called for. The minister has made quite a pressing case, I think, that it does not just apply to a small number of issues that might be dealt with at an annual general meeting. It could be every single minor issue that is up for decision.

All of us here are members of political parties, and we are acquainted with the various natures that people bring to that decision-making—and yes, a disgruntled person wanting to cause trouble could, in theory, call for a secret ballot on every question, no matter how minor. I think it is unlikely that that would happen, but I think the way the amendment is currently worded—that any single resident can call for the secret ballot—is probably is too broad.

I am not proposing that we draft on the run, but if there was a provision that it was a quarter or a third or, as the minister presently says, a half, then that would be different. However, allowing any one member to effectively double or treble the length of time that a meeting takes, given that in a secret ballot—especially if the question was not just 'yes' or 'no'—the ballot papers would need to be written out, a returning officer be appointed and possibly no further business be conducted until the count of that ballot, if subsequent items depended on the outcome of that item.

We support the idea that secret ballots are a good idea for people to be able to express their view but not suffer victimisation as a result, especially in a scenario where you can get bullying behaviour. So, I am disappointed, in a way, that we will not support it today, but if there was some mechanism for bringing back a modified version later, we would consider it again.

The Hon. S.G. WADE: I am pleased to assist the honourable member by suggesting bicameralism. The member was referring earlier to the possibility of supporting the Hon. Robert Brokenshire's amendment to keep it alive and discussing it between the houses. Well, I can give you that opportunity, because, believe it or not, if we pass this amendment today, it will go to the House of Assembly. If they demur from it, they can suggest an alternative. If a Greens principle is worth standing up for, it is worth standing up for today and giving the opportunity for that principle to be expressed in a way that can be applied in relation to the Retirement Villages Act.

Let us remember that people in a retirement village can often be quite vulnerable to an operator. The Hon. Robert Brokenshire quite rightly highlighted the possibility of conflict between residents and the opportunity that the secret ballot might give to maintain harmony within a village. However, with all due respect to operators, I am also concerned about residents who feel very vulnerable to the person who runs their village. They do not want to get on the wrong side of them and, to be frank, it does not take much intimidation by an operator to make a majority of residents voting for a secret ballot a minority of residents voting for a secret ballot.

I think the Hon. Mark Parnell raises some good alternatives. If we think that the potential for one resident alone to call for a secret ballot is too low, let us talk about a threshold—10 per cent, 20 per cent, 30 per cent, whatever it might be. If we think that it would be dangerous to have all matters subject to a secret ballot, then we either put it in the act or we put it in the regulations. If a Greens principle is worth standing up for, I think it is worth keeping this amendment alive.

The Hon. I.K. HUNTER: We have the Hon. Mr Wade encouraging this chamber to make policy on the fly and make amendments to bills without due consideration. I think that is appallingly bad practice. Admittedly, I raised an unlikely situation, but I imagine that we have all been in meetings where there is one curmudgeonly person who looks at the constitution and takes a point of order on the basis of that constitution time and time again, to run down the clock and to play out a meeting. Do we really want to introduce that sort of behaviour in retirement villages? This is not limited, and if you put in this huge, wide ability, someone at some stage will use it. I suggest to you that is bad policy and bad legislation.

The Hon. K.L. VINCENT: To assist the chamber for clarity and to be on the record, Dignity for Disability has already reached, I think, the same position as most members here which was to not support the amendment, although we appreciate the spirit with which the Hon. Mr Wade is moving it. We want people to feel comfortable voting and engaging in democracy when it comes to retirement villages but not in a way that could unnecessarily hinder the efficiency of those meetings, so we are not inclined to support the amendment at this stage.

The other point I would make is that while I appreciate the Hon. Mr Wade's reference to bicameralism as the solution—I am a big believer in bicameralism. Unicameralism is a swear word in my house, as it turns out, but that is okay because I live on my own, so I never use it. I appreciate what I think he is trying to say which is that we can give the other place the opportunity to reach a compromise, but we have to consider: what if they do not?

What if they pass the amendment as is or pass the bill as it would be with the amendment incorporated? We would end up with this bill that could hinder the efficiency of these meetings, so I do not think we can guarantee that the House of Assembly is going to reach a compromise. I would suggest that the best way is perhaps to abandon the amendment for the time being and then if the Hon. Mr Wade can suggest a compromise amendment, he can bring that forward another time, and we would be happy to collaborate on that.

The Hon. S.G. WADE: I am actually flabbergasted that the crossbenches are wanting to say: let us not risk keeping amendments alive between the houses because, you never know, the government might agree to something that they would not agree to up here. This house repeatedly says: an idea that is worth working on, let us keep it alive between the houses. To be honest with you, I am more committed to that principle than I am to this particular amendment, so I would question the crossbenches on this. If we are seriously saying that we believe in a principle but we do not have time to work on it, if we are going to stop keeping issues alive between the houses, we are seeing a significant shift towards the executive here. Let's listen to what we are saying.

The Hon. K.L. VINCENT: If I may, I do not think anybody is saying we agree with this principle but we do not have time to work on it. I think what we are saying is that we want to take the time to work on it, and right now it is not in the right shape, so we would appreciate leaving it for the time being, come back to it and give it sufficient time. I do not think anybody is saying that the reason we do not support this amendment is because we do not have the time to deal with this issue. I think we do not support the amendment because it is not a solid suggestion in its current form.

The Hon. M.C. PARNELL: I take the Hon. Stephen Wade's point, but I note that the result last time was that it would be reconsidered but not between the houses. It was going to be reconsidered at the three-year review. The Hon. Stephen Wade cannot have it both ways. This is one of those ones on the numbers that I see that is going to end up as part of the three-year review. As I said, if it had been drafted slightly differently, we would have considered it.

We are looking at the words before us, it is any resident, any meeting, any issue, and I am thinking of the practicalities of it. It would require the secretary of the meeting to handwrite sufficient ballot papers, and yes, unlikely, but curmudgeonly I think was the word the minister used. We all know these people. They exist in all societies. I think in the three-year review there will be plenty of opportunity for people to collect evidence as to whether behaviour in retirement villages is so bad that it really needs greater protection for residents by the inclusion of a secret ballot clause.

The Hon. S.G. WADE: I would make the point that the reason why the capital items amendment was put to the three-year review stage in terms of the opposition position is because it is not possible between the houses to do the analysis. This is just legislative drafting, this is the stuff we do all the time.

I can see that the numbers are not with me, but I just note that the crossbenchers often put up amendments and ask us to keep them alive. I am disappointed that we are stepping back from that, and I hope that we will not be, if you like, spooked by what, in my view, is not an unrealistic task in terms of consulting between the houses as to a better form of the amendment.

Amendment negatived; clause passed.

Clauses 33 to 36 passed.

Clause 37.

The Hon. S.G. WADE: I do not propose to move this amendment.

Clause passed.

Clauses 38 to 43 passed.

Clause 44.

The Hon. R.L. BROKENSHIRE: This is consequential, and I have already been beaten on this occasion so I withdraw any consequential amendments.

Clause passed.

Clauses 45 to 54 passed.

Clause 55.

The Hon. S.G. WADE: I move:

Amendment No 17 [Wade–1]—

Page 38, line 5 [clause 55(1)]—After 'scheme' insert 'to an eligible person'

Amendment No 18 [Wade–1]—

Page 38, line 8 [clause 55(2)]—Delete 'the exit entitlement owing to a' and substitute:

either the former resident consents (in accordance with any requirements prescribed by the regulations) to the lease, or licence or the exit entitlement owing to the

The minister has invited me to move my amendments Nos 17 and 18 at the same time. These amendments seek to allow an operator to lease out a unit where the exiting resident has not been paid their entitlement but only when the exiting resident agrees. Also, the proposed tenant would need to be an eligible person in their own right.

The Hon. I.K. HUNTER: The government supports both the amendments moved by the Hon. Mr Wade. The bill allows an operator to lease or grant a licence to occupy land within the village that is not immediately required for the purposes of the scheme. This amendment, moved by the Hon. Mr Wade, provides clarity that an operator is able to lease out a residence to an eligible person where an exit entitlement has not been paid in relation to that residence and the exiting resident agrees; for example, entry into a 'try before you buy' arrangement for prospective residents. We think that is a common-sense approach and we are happy to support it.

Amendments carried; clause as amended passed.

Clauses 56 to 65 passed.

New clause 65A.

The Hon. S.G. WADE: With the leave and consent of the honourable member, standing in the name of Mr Darley, I move:

Amendment No 4 [Darley–2]—

Page 41, after line 13—Insert:

65A—Review of Act

(1) The Minister must, 3 years after the commencement of this Act, undertake a review of the Act.

(2) The Minister must cause a report on the outcome of the review to be tabled in both Houses of Parliament within 12 sitting days after its completion.

This amendment would insert a new provision to call on the minister to conduct a review of the act after three years. Mr Darley understands that there has been some deliberation of a time frame in which a review should be conducted and he indicates that he is open to amendment on this matter. However, the amendment is for a review of any aspect of the bill and this has been done deliberately, rather than confining a review to one particular matter. Mr Darley's reasoning for this is that there are a number of very significant changes to the current act and there may be unintended consequences. Mr Darley wants stakeholders to be able to have the opportunity to have these raised and addressed as appropriate, and limiting the scope of the review would remove this opportunity.

The Hon. I.K. HUNTER: In the spirit of cooperation, the government will be supporting this amendment.

The Hon. R.L. BROKENSHIRE: In further spirit of cooperation, Family First supports this amendment. Based on what we have seen with this debate so far, it is very important that this act be reviewed for the whole sector in three years' time, so we do support the amendment.

The Hon. M.C. PARNELL: For exactly the same reasons, the Greens support it as well.

New clause inserted.

Remaining clause (66) and schedule 1 passed.

Schedule 2.

The Hon. I.K. HUNTER: I move:

Amendment No 2 [SusEnvCons–2]—

Page 45, lines 18 to 21 [clause 10(2) and (3)]—Delete subclauses (2) and (3)

In the spirit of cooperation, we just changed the period of time before a review is required—it was originally five years—to three years. These amendments are consequential on that.

Amendments carried; schedule as amended passed.

Title passed.

Bill reported with amendment.

Third Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (17:14): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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