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Legislative Assembly for the ACT: 1995 Week 10 Hansard (6 December) . . Page.. 2753..

MR CONNOLLY (continuing):

The point to which we do object and on which we will be moving the amendment which was circulated this morning is the number of vehicles that you have to sell to be a deemed dealer. What came out of the consultation process, with the strong support of both the consumer movement and the Motor Trades Association, was that the figure of three was settled on. If you sell more than three vehicles in a 12-month period you will be deemed to be a dealer. That means that the warranty provisions then cut in. This seems to be an essential part of the legislation.

There were concerns that people were backyarding and so avoiding the warranty provisions. People in the motor trade, as well as consumers, said to us in government, "We think it is unfair that we are required to stand by the product that we sell by having to offer warranties if the vehicle fits the warranty provision. We will be required to have cooling-off periods and refund provisions". The Motor Trades Association saw that as a fairly onerous consumer protection requirement, but one that it was prepared to cop. It did say, "It is hard for us when backyarders have no warranty, no cooling-off and none of the other probity checks". There is a fairly extensive provision in here which I understand the Motor Trades Association as a group is quite comfortable about and which requires them to make fairly extensive checks about the body number, the chassis number and the engine number, all of which is helpful in the fight against car theft.

They are prepared to cop a lot of that, but they did say, "We want protection against the backyarder". The three sales a year was the formula that was settled upon quite early in the consultation process and remained that way right through. It was in the final version of the draft that we tabled last year. It was broadly accepted that the backyard operators are probably operating with vehicles in a husband's name, vehicles in a spouse's name and probably vehicles in some adult children's names. Three can easily become six or nine or 12, if you are operating as a family unit. Equally, six can become 12 and so forth. With six, it can be quite easy to evade.

The one argument that I have heard that justifies six instead of three is that some people - and I understand this applied to Mr Moore in his youth; not in a white shirt but in a grubby, grease-stained set of overalls - would spend some time underneath vehicles. They would buy a cheapie, do it up a bit and either get a bit of income out of that or buy a slightly better vehicle and do it up. Certainly, there are a lot of people who do that as a hobby, particularly young people who might be mechanically minded. They will buy and sell, and gradually up the quality of their vehicle. There is an argument that for them three may be difficult.

That would have been an easier argument to sustain under the old warranty provision, where you had to provide a warranty if the vehicle was above a certain price - $3,000. You have to provide a warranty for only the newer vehicle; the less than 10-year-old vehicle, with fewer than 160,000 kilometres; the relatively modern vehicle, with relatively low kilometres. The tinkering with the old bombs and gradually doing them up is irrelevant. The deeming provision is irrelevant in that case. It is fair to say that most people who do that are doing it with vehicles that are older than 10 years and with more than 160,000 kilometres. The people who want to tinker about in the backyard with older vehicles and perhaps sell more than three a year should not be affected when they are dealing with that style of vehicle. They would be if they were buying and selling low kilometre, less than 10-year-old vehicles.

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