Page 4249 - Week 12 - Tuesday, 24 October 2017
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amendment bill appears to be something of an emergency measure in that its main purpose is to ban the sale of commercial guarantees for residential tenancy bonds while the government catches its breath and decides how to regulate these. These are very new products but they are being offered right now, and this bill aims to press pause so that the market operation for the sale of commercial guarantees is effectively in suspended animation while the government and the bureaucracy work out exactly what to do with them.
The stipulations of the bill provide a set of high level requirements which, from where I sit, appear to line up pretty consistently with the current bond process. The bill requires that the terms and conditions for a commercial guarantee must be registered by each vendor with the Commissioner for Fair Trading. Each vendor must apply to register their standard guarantee contract and, in turn, a commercial guarantee sold to a tenant to indemnify a lessor must comply with the standard guarantee contract terms and conditions.
To some extent this is another case of the government providing us with an incomplete bill and the regulations are still to be figured out. I would hope that the terms to be prescribed by regulation in the standard guarantee contract are not so excessive that they deter the provision of commercial guarantees as a viable alternative to cash bonds.
In relation to regulation-making powers, the minister has given himself a lot of wriggle room in the requirements he can impose on vendors seeking to sell commercial guarantees within the territory. The regulation-making powers allow Mr Ramsay to determine a number of things, including the terms and conditions to be offered in commercial guarantees, the matters that must be excluded, the conditions for applying to register a standard guarantee contract and also information required to register a standard guarantee contract. The minister will be able to set fees associated with this bill, but it is unclear what the fees will be and whom they might apply to or what they might apply to.
I am not sure if you have noticed, Madam Assistant Speaker—I dare say you probably have—but this government is building quite a reputation when it comes to fees and charges. Certainly that is what I am told whenever I am doorknocking in Tuggeranong or hosting shopping centre engagement sessions. I am sure that operators like Snug will be waiting with bated breath to see what the government will come up with on that fee front.
There are a few things I would ask the minister to keep in mind as he develops his regulations to administer this bill, to enable schedule 2 to come into effect. First, the minister’s regulations must not impose a burden on lessors by loading them up with excessive administrative prescription. This will simply deter their ability to make a claim against the commercial guarantee. If so deterred, they will vote with their feet by avoiding commercial guarantees in preference for cash bonds.
If this bill is to provide a genuine alternative to cash bond lodgement, the registration process and costs for standard guarantee contracts should not be a disincentive to using these, nor should the administrative process be structured in a way that adds to
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