Page 1866 - Week 07 - Wednesday, 19 August 1992
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I believe that we need to examine the essential operation of this Bill and what it will do in terms of the administration of estates of deceased people. As the Attorney pointed out in the presentation speech, the Bill does three essential things: It allows people to negotiate with a trustee company for the joint administration of a deceased estate; it allows trustee companies to charge fees on a service basis, rather than the commission basis on which they presently charge; and it builds on the power set out in the other trustee Bill that we will consider later, in allowing trustee companies to invest in so-called common funds.
It is the second of those three matters that gives the Opposition some concern. As I think Ms Szuty has pointed out, there is a question of the basis on which particularly small estates will be administered under this Act in the future. Under this Bill the equalisation which has gone on to some extent in the administration of estates will disappear. Previously, small estates of perhaps only a few thousand dollars or a few tens of thousands of dollars would have been administered on the basis of a small percentage commission of that total estate, with the result that that work would have been done, in many cases, on the basis of a very small, if existent at all, profit for the trustee companies; that is, those companies would probably conduct the work on an unprofitable basis. Alternatively, very large sums of money would have been recouped by the companies in some cases in the administration of very large estates.
The difference is that, by giving companies the power to charge on a user-pays basis, we find that it will become more expensive in many cases to administer small estates and less expensive to administer large estates. That gives the Opposition some concern. There was previously, before this Bill, some equalisation going on - some redistribution, if you like, of the cost of administering those estates, with larger estates bearing a heavier cost than smaller ones, in real terms. I believe, Madam Speaker, that, as a result of the passage of this Bill, we will undoubtedly make it more expensive for some families to administer small estates; there is no question about that.
I acknowledge that the Government's basis for proceeding to make this reform is that it believes that the trustee companies concerned ought, like others in the community, to be able to recover the cost of what they do for the families whose relatives' estates they administer, and that is a good point. This party certainly is not opposed to the concept of user pays or, to some extent, deregulating archaic rules which prevent people from properly recovering the amount that they spend in doing something; that is fair enough. But let us not make any mistake about the impact of this Bill. At the end of the day I think it will have an unfortunate social justice - to use the jargon - impact. It will make it more expensive to administer small estates. Having said that, Madam Speaker, we accept the argument that has been put for the Government, and we will support the legislation.
The questions which I raised with the Attorney dealt with joint applications by more than one person and a trustee company to administer a deceased estate. That is spelt out quite explicitly in proposed new section 6, but it is not so clear in the cases of proposed new sections 7 and 8. I am assured that the reason for the difference has to do with the difference in the nature of the applications being made, that there is less reason for that to occur in those cases and therefore it ought not, for good drafting's sake, to be there; and I will defer to that view.
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