Page 2198 - Week 08 - Wednesday, 6 June 1990
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Minister invite the principal industry associations acting on behalf of the landlord and tenant groups to enter into negotiations to formulate a code of practice relating to tenancies, including an appropriate dispute settling mechanism; secondly, that fair trading legislation be enacted to support a code of practice; and, thirdly, that if general agreement on a code of practice cannot be reached within six months of tabling this report the Government should prepare a code for discussion within the industry.
The Government has two options available, based on experience of other States, to provide a solution which would be fair to both parties - either the enactment of specific legislation or the introduction of a code of practice backed by appropriate legislation to provide legal sanctions for non-compliance.
Both options have a very similar effect. They provide a mechanism under which the industry will operate and provide legal sanctions for breach of law. The difference between the two is that the code of practice backed by appropriate legislation provides flexibility, places emphasis on self-regulation by the industry, and provides a low-cost, fast-track dispute resolution mechanism with legal sanctions for breach of the code. On the other hand, highly prescriptive legislation covering all aspects of the problem would, without a code of practice, embody an inherent rigidity; does not accord with Government policy of minimising regulation; and is likely to be more costly.
As I said at the beginning, the Government proposes to take action to provide a suitable mechanism for regulating commercial lease tenancies. We intend, therefore, to introduce a code of practice backed by fair trading legislation. This legislation will also ensure that some unacceptable practices, such as the requirement to pay key money, are dealt with effectively. This solution will accord with the Alliance Government's policy of providing a legal mechanism for regulating the industry.
In New South Wales a code of practice to address similar problems encountered by landlords and tenants in that State has been agreed by the industry and presented to the New South Wales Government for incorporation in their fair trading Act. While the Government does not wish to pre-empt the outcome of industry negotiations on the code of practice to apply in the ACT, the Government considers that implementation of a code of practice in the ACT as far as possible should ensure comparability and compatibility within the economic region of which we are a part. As provided in the first recommendation of the select committee, I shall be asking the principal industry associations to enter into negotiations to formulate a code of practice, including an appropriate dispute settling mechanism, based on the New South Wales code.
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