Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 2002 Week 6 Hansard (16 May) . . Page.. 1765 ..

MR HUMPHRIES (continuing):

This scheme will be much more complex than other fidelity funds operating in the ACT, such as the motor vehicle dealers compensation fund or the agents fidelity guarantee fund run by the Agents Board. An appropriately higher level of bureaucratic overview will also be necessary. I ask the government to indicate how well it believes we will be able to provide that backup to the prudential standards and, in particular, whether it will be necessary to bring in resources from outside government to be able to do that.

I have had a brief opportunity to overview the regulations, and I raise one concern in particular that needs to be considered by the minister. The regulations set out the way trustees will be appointed to the fund that is being established, and they provide very extensive controls on the way in which trustees operate, on what they must do and on what kind of person they must be in order to fulfil that role.

The Building (Approval criteria) Determination suggests, in clause 4 (s), that a trustee should not receive any payment for the performance of his or her duties. Also, it is provided in clause 11 (c) that a trustee of a fidelity fund should maintain professional indemnity insurance in respect of his or her position. In any event, cover should be to an amount of not less than $5 million. (Extension of time granted.)

It occurs to me that a person asked to serve on such a trust will be doing so in what could potentially be very difficult professional circumstances-if they are a lawyer, an accountant or somebody else in a professional position or if they have very onerous standards to meet, particularly in the circumstances we are talking about here. They will not be able to recover any costs associated with their service on the trust and they will be required to maintain professional indemnity insurance of at least $5 million but not be able to recover the cost of the premium for that insurance from any source, because they cannot receive any fees in respect of their service.

My fear about those provisions, in cumulation, is that people serving on such trusts will not be top flight in their particular field. People of high calibre in a profession such as accountancy or law might well feel that these circumstances are extremely onerous-particularly given that elsewhere in the regulations there is a requirement for them to bear personal criminal liability for failings on the part of the trust.

So I ask the minister to consider whether the combination of these factors might lead to a situation where trustees of sufficient calibre cannot be found. Without being too direct about the circumstances of this trust, it is being set up to benefit consumers in which the building industry will have a direct interest. So it is obviously appropriate that we not have members of the trust who are there to serve the building industry's interests as opposed to the interests of consumers. This is ultimately about the protection of consumers and not about protection of the building industry. It is therefore important that people be there who have got as much regard for public interests as they have for the interests of the building industry.

I also note that clause 11 (e) of that first, approval criteria instrument, says that the trustee must not be under investigation by, have been disciplined by or have been removed from membership of a professional body relevant to his or her duties as a trustee. I know that in the legal profession lawyers are frequently investigated by the Law Society. I was investigated by the Law Society when I was a practising solicitor.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .