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Legislative Assembly for the ACT: 2003 Week 5 Hansard (6 May) . . Page.. 1564 ..

MR STEFANIAK (continuing):

account. At the moment, that account holds about $8.2 million, so we are talking about a fair amount of money-some $10.4 million all up.

I understand that, at present, the department is working with the board to see if they can properly size the consumer compensation fund. Past attempts to properly size that fund have been relatively informal. I am advised that that is proving to be difficult, because the ACT does not have a broad enough claims history. For example, if the sizing of the fund indicates that it should be at $10 million, then under the new act there will, I understand, be a mechanism-and obviously available funding-that will permit the transfer.

The new act will permit the minister to approve annual transfers from the statutory investment interest account to a specially designated fidelity guarantee fund which, under the new act, will be renamed the Consumer Compensation Fund. I think that is a sensible name-it basically tells it as it is.

That fund was established to meet the claims of persons who have suffered pecuniary loss because of an agent's failure to account. Under the new act, the arrangements will largely remain intact. However, the statutory interest account and the consumer compensation fund account will be moved to within the department's accounting structure and renamed, and will be subject to the provisions of the Financial Management Act.

Moneys received from interest, licence fees et cetera will continue to be paid into a designated departmental trust account and the minister will continue to determine, each year, how much should be transferred to the renamed Consumer Compensation Fund, which will continue to be invested with the Central Financing Unit in Treasury.

The new legislation provides that funds not transferred to the consumer compensation fund can be used for a number of things-for example, to promote education of agents, staff and the public; dispute resolution services; reimbursed costs incurred in proceedings against agents; and to reimburse the department for the costs of administering the legislation. That seems quite logical to me, Mr Speaker. We will be watching, though, to see how this not inconsiderable amount of money is divvied up and how it all pans out in practice.

The bill delivers a number of significant reforms. It deals with licensing and registration of agents, which will now be done by the Commissioner for Fair Trading; sales people, including property managers, will now be regulated under the act; and Fair Trading officers will be given power to serve on-the-spot fines on agents who commit offences under the act. I note also that the fines have been increased. The old act is a 1968 act and I do not have any real query with the fines proposed.

Agents who give financial investment advice will also be required to give warnings to consumers when they provide general financial advice as an incidental part of selling real estate. The warning can be fairly simple-that is, they may say, "Look, I'm a real estate agent-I'm not a financial agent. I must give you this warning because I am not a qualified financial expert."It can be a simple warning like that. Again, because that might happen occasionally, it is a protection to all concerned.

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