Second Reading Speech
Mr ANOULACK CHANTHIVONG (Macquarie Fields—Minister for Better Regulation and Fair Trading, Minister for Industry and Trade, Minister for Innovation, Science and Technology, Minister for Building, and Minister for Corrections) (17:48): I move:
That this bill be now read a second time.
The Government is pleased to introduce the Motor Dealers and Repairers Amendment Bill 2023. The bill makes amendments to the Motor Dealers and Repairers Act 2013, most of which are based on a statutory review completed in 2020. The bill will ensure this legislative scheme can continue to operate as Parliament intended by making amendments that will result in significant but important reforms to the automotive industry in New South Wales.
The reforms include inserting a new legislative framework to permit and regulate online sales of motor vehicles by motor dealers; replacing the requirement for motor dealers, recyclers and repairers to maintain separate registers for specified matters with a more general requirement to keep certain records in relation to their business; making it an offence to possess a device capable of rendering the odometer of a motor vehicle inoperative or inaccurate; making it an offence for a motor vehicle recycler to buy a motor vehicle, motor vehicle part or accessory with cash, and to buy or sell an unidentified motor vehicle; extending the period for which a person may make a claim for compensation from the Motor Dealers and Repairers Compensation Fund; enhancing existing disciplinary provisions; increasing the maximum penalty for various offences; and making other minor and consequential amendments.
These proposals have been informed by consultation with key stakeholders, including the industry, the public and government agencies such as Transport for NSW and the NSW Police Force. Through this bill, the Government is committed to providing a statutory foundation that will ensure a thriving automotive sector here in New South Wales. I note that for years the industry has been calling for legislative change to reflect the modernisation of the sector. I am pleased that the Minns Labor Government is delivering this much‑needed reform.
The automotive sector is a vital component of the New South Wales economy and critical to the lives of our fellow citizens. The automotive sector is worth over $37 billion to the Australian economy, with New South Wales being the largest jurisdiction in terms of the numbers of vehicles registered and individuals employed and of registered enterprises. From Casula to Coffs Harbour and Campbelltown to Cobar, the bill before the House will benefit employees and business operators in the industry along with consumers, drivers and passengers.
The global automotive industry is undergoing a period of rapid change and innovation unprecedented in the past 100 years. Shifting consumer preferences towards digital sales, the acceleration in uptake of new technologies and new manufacturers entering the marketplace all require a statute that is fit for purpose. New South Wales must not be left behind in this crucial sector. New South Wales needs to have the right legislative settings to meet consumer demands for online sales and companies progressing to new online sale business models.
Previous consultation found that close to half the responses from the public said they would consider purchasing a new motor vehicle online in the future. Some 71 per cent of existing motor dealers said they would be looking to provide an online sales option to consumers in the future as well. This is what the bill will do. It sets up the whole framework for online sales, addressing consumer preferences and adapting to this rapidly evolving industry. The bill not only provides an updated legislative framework for the benefit of consumers, dealers and repairers, but also ensures that New South Wales remains a leader in vehicle sales, repairers are appropriately skilled and consumers benefit from these technological innovations while enjoying fit‑for‑purpose protections. New South Wales is known as the premier State. This Government is intent on making it the premier State for the automotive sector with this future‑focused bill.
I now turn to the amendments in the bill: firstly, those which will create efficiencies and futureproof the legislative framework. This Government is committed to providing statutory tools that will help this highly significant and dynamic industry thrive. Currently, section 100 (3) of the Act says that prescribed parts are listed in the regulations. The bill proposes an amendment to this section to move the list to a register approved by the secretary and updated on the NSW Fair Trading website. As new technologies enter the marketplace, such as electric vehicles, this amendment will provide industry with increased certainty and enable faster changes in an evolving marketplace. The amendment will help to identify parts that need to be tracked and recorded. It will also enable the Government to better work with industry—both repairers and recyclers—to ensure the list is up to date as new parts and technologies enter the marketplace.
To prepare for this dynamic future, we need to ensure that the training packages provided to our apprentice mechanics align with the technological shifts seen across this sector. This bill will propose amendments to sections 25 and 26 of the Act to remove qualification requirements for the issue of a licence or tradesperson certificate from the regulations. Instead, qualifications will be approved by the secretary and published online on the NSW Fair Trading website. This will mean it is easier and faster to update prescribed courses as they become available or are modified. This reform will ensure our legal requirements can quickly recognise the latest skills and best practice as new world‑class courses are offered. For future apprentices and those seeking to update their skill set, this will ensure they can meet the challenges of an ever‑changing marketplace.
As part of this Government's commitment to futureproof the automotive industry and streamline administrative work for dealers, the bill proposes an amendment to the wording of section 100 of the Act to remove the requirement to keep certain registers. Industry has advised us that compliant systems are already in use, and that the removal of these requirements in favour of a more flexible approach could result in significant financial savings for repairers and recyclers, removing unnecessary red tape. This amendment opens the possibility of expanding the way dealers carry out their business by catering for the digital world and automation while still providing the consumer protections akin to those of the traditional sales model. The amendment would enable the Act to be more flexible in its compliance requirements and enable information to be obtained and provided electronically.
The bill seeks to amend section 11 to insert a new provision to allow for the secretary to declare that a trade show is a "declared trade show". A declared trade show allows interstate motor dealers to display their vehicles at New South Wales motor shows without requiring them to hold a New South Wales motor dealer licence. Currently the Minister is required to declare the trade shows through a ministerial order that is gazetted. It is proposed that an amendment be made to the Act to allow the secretary to temporarily exempt interstate dealers from the requirement to hold a licence for the purposes of participating in a New South Wales trade show. This will improve efficient processing of trade show declaration applications and reduce the administrative burden on the department and Minister while maintaining a proper process to ensure that trade shows are properly declared. Instead of being gazetted, it is proposed that the declarations be made by the secretary and published on the NSW Fair Trading website.
The bill also introduces new amendments focused on shifting consumer preferences and online car dealing trends. The COVID‑19 pandemic accelerated consumer preference towards online retail and sales in the broader economy. This trend is affecting the automotive industry and dealer‑franchise model. Developing effective statutes that assist consumers and the automotive industry during this period of transition forms a key component of the bill before us today. The bill will insert a new provision, section 19A, that will allow motor dealers to include their licence number on advertising material distributed and displayed by the motor dealer as well as on the website of the motor dealer. This amendment will also make it an offence to fail to display this information on those platforms. These changes will help dealers throughout the State who use online platforms to engage with consumers and also provide assurance to customers that they are dealing with licensed business when buying online.
Amendments to section 20B of the Act will require an applicant for a motor dealer licence who plans to sell online to provide an Australian URL address of the website they intend to use to carry on their business. Under proposed new section 20B (4A), online dealers will also be required to provide the addresses of premises used to store motor vehicles and records, premises intended to be used as an office and premises of a kind prescribed in the regulations. These measures will support compliance work prescribed by the relevant legislation and uphold consumer protection across the sector. New part 4, division 3A inserts new definitions for an "online motor dealer" and "online purchaser". An online motor dealer means a motor dealer who carries on the business of a motor dealer wholly using a website through which the online motor dealer offers for sale and sells motor vehicles. In order to protect consumers, it is important that the same protections that apply to dealers selling out of a physical premises also apply to those who sell online.
New section 66B will stipulate that an online motor dealer must, before entering into a contract for sale of a motor vehicle with an online purchaser, provide the prospective purchaser with a disclosure document in the approved form. Disclosure documents refer to inspection reports, dealer's notices and other documents attached to the vehicle. These provisions would be considered satisfied under the proposed amendment if the documents are available to be viewed on the website used by the online motor dealer. Proposed new section 66C will require an online motor dealer to give a prospective online purchaser the opportunity to carry out inspections of a motor vehicle at certain points in an online sales transaction and at certain places. Finally, new section 66D places a cap on the deposit that an online purchaser may be required to pay to an online motor dealer before the online purchaser takes possession of a motor vehicle.
As I have previously noted, the last two years have led to significant shifts in consumer preferences in the automotive sector. As a result of shipping delays and a shortage of key components for new cars, New South Wales has seen an increase in consumers purchasing second‑hand vehicles. Unfortunately, this has also led to a rise in cases of odometer tampering. In 2021‑2022 there were $112,200 worth of fines and 76 penalty notices issued for odometer fraud, compared to just 22 penalty notices issued in 2020. This trend has continued, with a further 35 penalty notices issued in 2022-23, totalling $35,000. New South Wales consumers not only lose large sums of money by inaccurate mileage readings but also are at risk of serious harm because mileage is used to determine the timing of safety checks and repairs to their vehicles. This Government will not tolerate the abhorrent act of fleecing consumers with substandard motor vehicles. The proposed bill is intended to give pause to any individual or business that thinks they can get away with this behaviour.
I also emphasise that some of the most vulnerable consumers in New South Wales, including from our culturally and linguistically diverse and Indigenous communities, are at the greatest risk of this illegal act. Members from these communities are often unaware of their consumer rights under legislation or do not have the skills or means to make complaints to NSW Fair Trading. I am proud to say that my department will continue to prioritise outreach and engagement initiatives for the culturally and linguistically diverse community and the Indigenous community to support consumers when purchasing a used vehicle.
For many households confronting the challenges of the cost-of-living crisis, a used vehicle is their only option if they wish to travel to work or send their kids to school. Stamping out this behaviour to protect at-risk households, particularly in vulnerable communities, is my priority. This Government is intent on imposing significant financial penalties on these actions to protect consumers. New section 53 (1) will make it an offence for a person to possess a device capable of rendering the odometer of a motor vehicle inoperative or inaccurate. However, the proposed amendment will make allowances if the defendant holds a motor vehicle repair licence and repairs and/or replaces an odometer over the course of carrying out their business as a motor vehicle repairer.
This Government also supports proposed amendments that will insert elements of the Scrap Metal Industry Act 2016 into the Act to address inconsistencies between the scrap metal laws and the motor vehicle recycling provisions in the Act. As part of the consultation process for the bill, the NSW Police Force recommended the introduction of cashless transactions for recyclers in line with the requirements of the Scrap Metal Industry Act. I thank the NSW Police Force for its valuable contribution to the consultation process.
New section 99A will make it an offence for motor vehicle recyclers to buy a motor vehicle or motor vehicle parts with cash, by cheque payable to cash or in kind with goods or services. The inclusion of cashless transactions would allow for greater enforcement and auditability of scrap metal dealers to prevent the theft and disposal of stolen vehicles and other parts. New section 99B (1) will also make it an offence for motor vehicle recyclers, unless they have police permission, to buy a motor vehicle if the unique identifier has been altered, defaced or removed.
New section 99B (2) will make it an offence to sell or dispose of an unidentified vehicle, unless with express police permission. These offences will also include significant financial penalties for businesses and individuals caught breaching these provisions. The bill seeks to enhance existing disciplinary provisions in the Act to provide the secretary with additional legislative tools to crack down on illegal conduct and further protect consumers. These amendments were informed by intelligence collected by NSW Fair Trading investigators, who are tireless in their work to weed out misconduct in this industry.
The amendments will enhance disciplinary provisions in the Act. They will allow the secretary to issue monetary penalties for certain offences, extend the time frame for disciplinary action against former licence holders and prevent certain individuals from holding licenses. They will also enhance the ability of the secretary to take disciplinary action against certain licence holders. New section 45 (1) (d) will also enable the secretary to issue monetary penalties as disciplinary action. Section 45 of the Act lists the disciplinary actions that the secretary can take if a ground is established under sections 38 or 39 of the Act. At present, the secretary does not have the ability to impose a monetary penalty. The ability to impose a monetary penalty would bring the Act into alignment with other legislative instruments administered by Fair Trading where this action is available. It would also allow the department to access a full array of disciplinary options. A monetary penalty would be a disciplinary instrument that strikes a balance between existing measures that, in some scenarios, may be considered too harsh, such as cancelling a licence, or too lenient, such as issuing a penalty notice.
It should be noted that this new suite of monetary penalties would not lead to cases of double punishment or double jeopardy. It is the department's established practice not to impose a monetary penalty where a fine or penalty notice has already been issued for the conduct in question. Disciplinary measures will also be enhanced by amending section 38 (2) to allow for disciplinary action to be taken against former licence holders five years after they last ceased to hold a licence. Currently, disciplinary action must not commence more than 12 months after the individual ceased to hold a licence. My department has encountered scenarios where it has received information concerning the conduct of a former licence holder under the Act. However, because of the limitation in section 38 (2) of the Act, disciplinary action against the individual could not be considered due to the 12-month time frame.
To further enhance disciplinary action, section 186 (2) (f) of the Act will be amended to allow the regulation‑making powers for the secretary to prohibit certain persons working at a licensed business. The Act currently requires that a person must be convicted of an offence before they can be prohibited. This is to be expanded to persons charged or found guilty as well as convicted. In situations where a person is found not guilty or a conviction is overturned, this prohibition would be lifted. It is also proposed to expand the list of prohibited persons to include a person who has been refused a licence or who is a director or officer of a body corporate that has been refused a licence; a person whose licence has been suspended, cancelled or revoked; or a person who is disqualified from holding a licence or being involved in the direction, management or conduct of a business for which a licence is required. These regulatory actions, such as cancelling a licence, are not done lightly and are a punishment for serious offences where a person is not fit to carry on their business.
Finally, new section 39 (a) will be inserted to allow for disciplinary action to be taken against an individual responsible for misconduct by a licensed body corporate. Currently, in situations where a licence is held by a body corporate, disciplinary action can only be taken against the licensed body corporate. This means that the individual responsible for the misconduct of the body corporate can simply re-establish a new body corporate with a new licence and continue operating. This behaviour, known in the industry as "phoenixing", allows a person to continue their misconduct under the protection of multiple corporate structures. This new provision will enable the secretary to take disciplinary action against a person who is a member of a partnership or officer of a body corporate. This would then prevent them from being able to obtain future licences to operate as motor dealers, repairers or recyclers. This is a pressing matter, given that a significant number of motor dealer licences, motor vehicle repairer licences and motor vehicle recycler licences are held by corporations.
The bill before us today marks a significant development in the automotive industry in New South Wales and implements the key reforms recommended in the statutory review of the Act. Industry and consumers will benefit from legislated online end-to-end sales of motor vehicles, reduced red tape through more flexible recordkeeping requirements, and increased transparency and traceability of end-of-life vehicles by introducing cashless transactions and enhanced penalty amounts to ensure that the deterrent effect is maintained. The bill would not be possible without the input of key industry, consumer and other Government stakeholders. The bill has been in development for some time through public consultation, stakeholder round tables and surveys.
I thank the Motor Traders' Association of New South Wales, the Institute of Automotive Mechanical Engineers, the Australian Automotive Aftermarket Association, the Caravan and Camping Industry Association, the Australian Automotive Dealer Association, the Federal Chamber of Automotive Industries, the Insurance Council of Australia and Legal Aid NSW for their considered input and for ensuring that the motor industry in New South Wales remains a fair and thriving part of the economy. Through the bill, this Government is committed to ensuring that this critical industry is futureproofed for the benefit of dealers, repairers, recyclers and all consumers in New South Wales. I commend the bill to the House.
Debate adjourned.
