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Legislative Assembly for the ACT: 2002 Week 6 Hansard (16 May) . . Page.. 1764 ..

MR HUMPHRIES (continuing):

regulations since, by the time we get to that stage, this scheme will have been put in train already.

My understanding is that the bill is to be passed into law as quickly as possible after it is passed tonight, that the regulations are to be made as quickly as possible after that point, that an application under the regulations is to be made as quickly as possible after that, that the necessary steps to set up a fund will be taken and that payments will be made by builders to the fund to begin its operation.

It may be appropriate to protect members of the industry, and I am fully cognisant and very strongly aware of the urgency with which some members of the industry view this matter. But it is also true to say that it effectively takes out of the hands of this Assembly the power to substantially change the direction of the scheme. We might fiddle at the edges in subsequent sittings if a motion for disallowance were to be brought on, but we cannot pass this bill tonight and reasonably expect this scheme not to be well on the way to being implemented, if not fully implemented, by the time we come back to this place for debate on these matters at a later time.

That is why I say that, to some degree, the Assembly needs to take it on trust that the government has properly and carefully viewed the circumstances of this matter as much as to warrant this decision being taken in this quite exceptional way.

Because of the lack of real opportunity to be able to change substantial aspects of the scheme later on, I want to raise a few issues about both the legislation and the scheme, which I hope the minister will consider when he comes to make the regulations after tonight if this bill passes, as I think it will.

Prudential standards are in the process of being built into the framework adopted by the Australian Prudential Regulatory Authority, APRA. That was, I think, in response to the collapse of HIH. An amendment to the General Insurance Reform Act 2001 was passed in the Commonwealth parliament that provides that prudential standards for insurance can be inserted into the Insurance Act 1973.

It is not clear how many of those prudential standards will be taken up in this arrangement, but I assume the minister will operate on the assumption that whatever is appropriate for an ACT fidelity fund should be adopted. The question is: to what extent should a requirement fall on the shoulders of the minister to emulate or adopt the standards to be used in the Commonwealth Insurance Act? That is a matter on which debate will resume later on.

Another question that arises is the extent to which the ACT has an adequate skills base in government to be able to provide monitoring of a prudential scheme at the level that might be expected of an organisation like APRA. It probably follows without any further knowledge that we cannot replicate the work of a body like APRA in the ACT; we simply do not have the knowledge and the expertise within the ACT public service. But, if we are going to adopt as many of the prudential standards as possible, we need to be assured that as much expertise is available to us, directly or indirectly, as will be needed to properly monitor those standards. In other words, there is no point having good standards if we simply cannot ascertain, on a month-by-month or year-by-year basis, that those standards are being adhered to by the particular fund concerned.

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