Retirement Villages Bill

I move, That the Retirement Villages Bill be now read a third time. This is important legislation, and it is long overdue. As members of this House will now be aware, it provides protection for people who choose retirement village living, and builds on the recommendations of the Law Commission. The provisions of this bill will have the effect of addressing a legislative mismatch that has exposed many older people and their families to unnecessary distress. Until this legislation is enacted, there is little in law specifically to protect the rights and various interests of older people living in a retirement village, apart from the securities legislation that covers it now and clearly was not designed for the purpose.

At its best, retirement village living can provide a wonderful lifestyle and a sense of community with as much personal privacy as people want. But at its worst, a choice to buy into a retirement village can result in a feeling of being trapped—a tragic way to spend one’s retirement years. I accept that most operators run good villages and most residents are very happy with their choices, but there are cowboys in the industry, and this bill is designed to ensure that no more cowboys are able to enter the industry. If the cowboys who are there now are put out of business, then I say that is a jolly good thing.

But we need to put in place provisions that will limit risk, protect interests, and promote good practice. I know that the ACT party believes that everyone can protect his or her own interests and should be left to do so. It is not my experience of reality. I think if Stephen Franks had read letters from widows who felt like prisoners because they could not move out of the place they were stuck in, then maybe he would have been prepared to rethink what I can only describe as the modern-day equivalent of the Flat Earth Society approach.

Ignorance creates risk. This bill mitigates that risk. It is true that risk will never be completely removed, but what we have done with this bill is ensure that no one can enter into an occupation-right agreement without being provided with information relevant to making an informed decision. An operator must disclose information relating to entry, residency, and exit costs. An intending resident cannot enter into an occupation-right agreement unless he or she has obtained legal advice.

Good relationships between residents, or between residents and village operators, cannot be legislated for but can be promoted. This bill provides for operators to operate a complaints facility, and for a formalised dispute resolution process involving independent dispute panels whose members are pre-approved by the Retirement Commissioner.

This bill also includes a provision requiring a village operator, unless exceptional circumstances exist, to appoint a statutory supervisor, which ensures that the financial stability of a village is monitored. Another form of external oversight will be provided through the Retirement Commissioner, who will have the role of reporting on and monitoring the effectiveness of the Act.

Another key component of this legislation is that it will compel compliance with an industry-wide code of practice. The matters the code of practice must cover are prescribed, but the specifics of the code will, in the first instance, be generated by the industry and other stakeholders, which I personally believe is a much greater protection than that offered by the amendment proposed by the ACT party, which was voted down in the Committee stage. Stakeholders will be invited to submit draft codes for consideration, and the Retirement Commissioner will publicly invite submissions on them. On the recommendation of the Retirement Commissioner, the responsible Minister will approve a code that has effect as a regulation. The decision as to who the responsible Minister will be has not been made yet. That is my response to New Zealand First members who think I cannot read a bill, when obviously I can.

💬 Dail Jones: Absolutely right about that one.

Yes, but the responsible Minister will be driven off who the registrar is, which I would have thought would be obvious to anyone. Through the formalised processes set in the bill, the code will be able to be refined and adapted so that it remains a living document throughout its life.

This legislation is eagerly awaited by many people living in retirement villages, and it has been well supported by people within the retirement village industry. To those who say we should simply have picked up the Law Commission’s proposed bill and put it into effect, I say that that would have satisfied no one. It would not have satisfied the retirement village industry or people living in retirement villages. This is much better legislation.

I appreciate the work and effort that have gone into producing the bill. I thank the Justice and Electoral Committee; the village operators, the village residents, the Retirement Villages Association, Grey Power, Age Concern, and other interest groups; individuals, including Leo Steele, a Christchurch lawyer with a passion in this area second to none; and all the members of this House who have contributed to the fine-tuning of this long-overdue bill. The Justice and Electoral Committee’s comprehensive consideration of the bill resulted in recommendations that in my view will improve the effectiveness and workability of the provisions. The bill as amended in the Committee stage now strikes an optimally effective three-way balance between promoting the individual rights and interests of residents, protecting the collective interest of residents, and recognising the needs and interests of the retirement village industry itself. It is often difficult to get a balance, but I believe that we have achieved that here today.

In closing, I thank my officials, the people from the Office for Senior Citizens within the Ministry of Social Development who are here in the House this afternoon. I acknowledge they have done a great thing in bringing this legislation together. I know that it is a hard ask for a ministry that is not resourced like the Ministry of Justice is to deal with this kind of legislation.

💬 Stephen Franks: They’d muck it up even worse, don’t worry.

It is extremely unhelpful that the ACT party has made some very unpleasant comments about officials who have worked exceptionally well and hard to try to get a balance in a very difficult situation where it is hard to get a balance between competing interests. I pay credit to those officials in this House. I believe that it is the height of rudeness to try to undermine the effective working of the public service, but we have come to expect that from the ACT party.

I am proud of this legislation. It has been a long time coming. It will be welcomed by all quarters of those interests that we have been seeking to protect. I commend the bill to the House.

The National Party will be supporting this bill. It was one of the first things I got really involved in when I became a new member of Parliament. The Law Commission report was produced in 1996, as I remember, and it identified problems that had the potential to escalate within an industry that had grown over the previous 10 years.

Retirement villages, shortly to be renamed lifestyle villages, are certainly an excellent choice for many New Zealanders who want security, a call system, to have the grounds maintained—especially an elderly woman living on her own—to know that they have companionship, and to know that they are in a community where they get support. In days gone by, people used to go into rest homes. They used to drive to the door. Rest homes had to have a large number of car-parks, but not any more, because these days people go to a rest home in an ambulance. There is a lot of work done to keep people in their own home, and retirement villages offer a very good lifestyle option.

But the Law Commission did identify that there was a need to protect residents and to protect the industry to some degree. I came to Parliament in 1999, and one of the first things I did in 2000 was to turn the Law Commission report into a member’s bill. I had quite a lot of debate with the statutory supervisors. I looked at the compliance costs of legislation such as this. There are some small homes around New Zealand. I think of some of the church homes, some of the kaumātua flats, and some of the places that have developed in, especially, the South Island, where there might be a rest home, a dementia unit, or a hospital, with six, seven, or eight flats or houses around it that are sold. That is quite different from the very large complexes of retirement villages where there are hundreds of houses. I felt that those with up to 6, maybe 12, flats or houses should be exempt. The major compliance costs that come with this legislation will pose a huge burden on places like that. As Mr Franks was saying before, that will really limit access, which will be to the detriment of some of those smaller lifestyle options.

I believe that having the member’s bill in the ballot did push the Government to speed up the development of its own legislation. The select committee did work to improve the legislation. I think the second select committee after the last election did a very good job, as did the officials, to ensure that we had workable legislation that balanced those risks between the needs of the residents, the collective needs of a village, and the ability for new players to come into the market. We see that there have been some substantial changes to the bill for the good.

The Retirement Villages Association has always had a code of rights. The association developed basically to ensure that its members had a very high standard. It did a market research survey of retirement village residents’ satisfaction and found that only 1 percent of village residents were dissatisfied with the village. But Grey Power hears from that 1 percent, and I heard from that 1 percent when I was a geriatrician and working in the aged-care sector. There were a few examples of people who did get trapped in villages and did not enjoy being there. There is now a cooling-off period. People who move into a retirement village have a certain time in which they can change their mind about it. Even though they might have signed up to a legal contract, they may exit without harsh provisions being applied.

There is also a disclosure document to protect residents’ interests. It makes it very clear what a person is buying—that one is buying a licence to occupy, not buying a piece of land and a unit. A person is buying a licence to occupy a house in a village, and that is a lifestyle choice. When people know what they are buying into, generally they are a lot happier. They know the financial implications if they leave, and if they should, by misfortune, die, their families know what they bought into and the financial implications of that. There is that need to protect residents.

There is also a need to protect the collective interests of residents, because most of the disputes in retirement villages are between residents. Noise, pets, cars, and all sorts of things come up as problems when people live next door to each other. There is a disputes resolution process in the bill. It was felt that it would be very expensive if the statutory supervisors were involved in that process, so there are two levels of that process: a complaints facility, which one hopes will be able to deal with the local little problems of people living next to each other; and the more major disputes resolution process, which the Retirement Commissioner has input into by way of appointing the disputes panel.

National has been concerned about some of things that are included in the bill, such as the broad discretionary powers of the disputes panel around delays in the sale or disposal of units. That was one of the things that Grey Power brought up. There is concern that when somebody wishes to exit, or has exited, a retirement village, or someone has died and that person’s family wishes to be able to access the estate, the unit can take time to sell. It is not such an issue at the moment because we have waiting lists for a lot of the villages and there is a very hot property market, but in a situation where that is not the case—and we have seen that many times in New Zealand—some of the units can sit around for 2 or 3 years and take a long time to sell.

It would be of concern if the disputes panel could force buy-back. It would jeopardise the village as a whole, and that must be taken into account. There is the individual’s need, there is the need of the village as a whole, and there is the need of the people—the developers of retirement villages—who have invested their money, time, and effort in developing this industry and supplying people with this lifestyle choice. It is a matter of getting that balance right. National members support the changes that have been made to the bill, because we feel that a lot of those changes make that balance much clearer and better defined.

But the National Party is still concerned about compliance costs and the fact that there are no exemptions for any of the smaller homes and retirement villages. We will also probably see a lack of new investment. It will be harder to enter the market, and to exit the market, as well, under this legislation. The code of residents’ rights has also caused us some concern, because it has not been specified and identified, but the Retirement Commissioner has an obligation to keep an eye on the implementation of this bill and to monitor that code of practice. All in all, we support the bill. We hope it will improve the functioning of all retirement villages in New Zealand.

I rise to take a short call in support of the third reading of the Retirement Villages Bill. In doing so I want to welcome this legislation, which is in the final stage of its passage through the House. It is good legislation that covers a new type of accommodation in which a number of New Zealanders are choosing to live. About 26,000 people already live in retirement villages and there is strong growth every year. My constituency of Otaki has the highest number of people over 65 of any constituency, so there are lots of retirement villages, and I know what an enjoyable way of life that can be for people. I assume I myself will end up there one day; some other members may precede me. I notice Mr Dail Jones speaking; I understand that he is a member of the residents’ committee of a retirement village in Auckland. The Minister, Lianne Dalziel, has done a great job on this bill, ably assisted by the officials, who were very helpful to the Justice and Electoral Committee as well, which was chaired by Tim Barnett. I think we reported back a good piece of legislation, which I very much support, and I look forward to people in my electorate enjoying the fruits and benefits of it.

New Zealand First supports the Retirement Villages Bill, and has done all the way through. As an Opposition party, we have highlighted some of the problems associated with the bill.

One of the greatest problems arises at this very moment, at 2.45 p.m. on what is actually 22 October, when we should be having question time and Ministers should be being put under pressure. Instead, this Government has decided to take urgency, has refused to let us have question time, and has refused to allow, for example, my colleague the Rt Hon Winston Peters to put this Minister, Lianne Dalziel, under even greater pressure, as he invariably does. It is not surprising that the Government prefers to have debate on the Retirement Villages Bill at 2.45 p.m., rather than question time. That is the sort of problem we have in the House.

💬 David Benson-Pope: We would love to have question time. It’s those evil people in ACT.

The senior Government whip can only berate me as I try to make the constitutional point that now should be question time.

I come to the bill. I draw to the attention of the National Party spokesperson that she seems to be slightly confused about clause 27, “Cooling-off period and cancellation for delay”. She has given the impression that there is a very lengthy period for cancellation, when under clause 27(1) “An occupation right agreement must contain a provision allowing a resident … to cancel … by notice given not later than 15 working days after the agreement is signed”, rather than the many, many months and years that she was talking about. She is confused about the difference between the ultimate cancellation in clause 29A that I referred to earlier, and the right to cancel the contract in the first 15 working days.

I had an email from a gentleman about this particular issue. I made the point that no lawyer would allow a client who was selling property to let a buyer into it until the buyer had approved the contract and, in this case, until the 15 days had expired and the money had been made available. One will not be able to go into a retirement village, then, at some distant time in the future, cancel the contract just like that. It will not work like that, in so far as the Minister hopes and in so far as this legislation is concerned. If an elderly widow sells her unit in a retirement village to another couple who are coming in, that couple have 15 working days in which to cancel, as set out in the legislation. She will make sure that that time has gone by, that the contract is settled, and that she has got the money, before letting the buyers move in. Any lawyer who allowed his or her client to let someone in without having got the money and an unconditional contract would, very soon, be sued for negligence. So there is some confusion about clause 27(1) and a purchaser of an existing unit taking possession from the vendor.

As for the abuse by the Minister of those in the industry—she referred to developers as cowboys—I say New Zealand would not have got anywhere if people had not come out here and run dairy farms, taken the risks involved, and got involved in speculation with property building, putting in railways, and the like. For the Minister to abuse people who have had the courage to spend the many millions of dollars involved in creating a retirement village by referring to them as cowboys is totally unnecessary. She should be ashamed of herself. It is clearly a hangover from her former life as a trade union official. That Minister cannot help but abuse people out there who are in business, trying to make a dollar and putting their money on the line, by keeping on referring to them as cowboys. It is interesting that she could not name even one. If the Minister thought there were cowboys in this industry, she should have named at least one. I challenge the next Labour speaker to give me the name of one cowboy in this industry. This Labour Minister in this minority Government hates business. This Government cannot stand business, and it keeps accusing and vilifying the people who go out there and run risks as cowboys. It is totally unnecessary. It is one of the reasons why business, and people generally, will have nothing more to do with this minority Labour Government.

What is good about the bill? I speak as a lawyer who has looked at many of these agreements and advised many people on them. Essentially, the ultimate thing that is good about the bill is that there is a firm set of rules that everyone—the buyer, the operator, and the seller—has to follow. If all the rules have been complied with, no one can come back and say: “Why didn’t you tell me such-and-such?”. Nowadays, an agreement for someone to move into a retirement village will include all the things that are referred to in this legislation, in one way or another. It will go on for about 40 pages. All that most members of the public want to know, when they walk into a lawyer’s office carrying a bundle of 40 pages, is where to sign. They do not want the lawyer to take an hour and a half to explain the documentation to them, at a cost of $300 to $400 an hour. All they want to know is where to sign, and that is the problem lawyers have today. One cannot blame people for saying: “We don’t want to spend $600 or $700 on you; we don’t want to pay for your building. We just want to get into our nice retirement village unit.”

This bill imposes a mandatory provision for all concerned. The procedure must be met. Whoever gives advice to the buyer must go through a certain procedure, and must certify it, as required by this legislation. There is protection for everyone. As someone who has been involved in the industry, I see that as the most important aspect of this legislation. There should be certainty in the future.

I immediately refer to the clause I raised earlier, clause 29A, “Occupation right agreement voidable”. A bit of conflict is created here. It provides that an occupation right agreement entered into in contravention of certain sections only can be voidable. Care has to be taken in giving advice on this particular legislation in so far as that matter is concerned. I commend the officials, as I did in my speech in the Committee stage, and the Minister. They have tried to improve clause 29A. I was not happy with that clause. The amendment makes it much more satisfactory, but I still think it will make a lot of money for lawyers as the matter goes to court and efforts are made to define, for example, the meaning of: “For the purposes of this section, a contravention of a particular provision is a contravention of that provision in a substantial respect if—” paragraphs (a), (b), or (c) take place. Unfortunately, there can be a great deal of nit-picking in this area.

I have expressed my concern and disappointment at being confronted by the 15 pages of Supplementary Order Paper 157, dated Thursday, 16 October 2003. Here we are, still on 21 October according to the calendar, and debating this issue, when most of us would have seen this Supplementary Order Paper probably only on Tuesday of this week. As an Opposition, we now have to try to have a good look at all these various amendments to see whether we should agree with them. Generally, this is a satisfactory bill, and we know there is a good intention behind all these amendments, but I have been critical of them in the Committee stage, as I have already mentioned.

I am critical of the fact that a Registrar of Retirement Villages is to be appointed at this late juncture, without proper discussion in the select committee. I am concerned that this bill will increase compliance costs in many ways. It will increase bureaucracy, and there is the aspect that here we have, again, the appointment of a registrar for the benefit of a Minister. As the explanatory note states: “The position of Registrar of Retirement Villages will initially be held by the Registrar of Companies but the location of that office will be able to be changed to a different department of State, if that is considered desirable:”. Who knows what sort of department of State this particular Government may set up? After all, it has abolished the right of appeal to the Privy Council, on a vote of 63. What can it do that is as bad as that? Well, I suppose it can keep on trying for the next couple of years. I can see the Government appointing one of its friends to be the Registrar of Retirement Villages, if it possibly can.

Generally, we all hope that people who move into retirement villages benefit from this legislation, and there is an opportunity for that to happen. I wish everyone who is moving into retirement villages the best. I understand that people of Mr Darren Hughes’ age probably will be looking to do that when they are about 95 or 100, because they might live to be 115. I dread the thought, but that is something Mr Hughes can look forward to in the future.

The benefits of this bill will become evident to a number of people quite promptly. There will be an improvement in disclosure, I am quite sure. There will be some improvement in the standardisation. There will be someone whose business it is to try to ensure that codes are comparable, and I have no doubt at all that there will be a broader consensus developed within the industry on the way in which a standard agreement goes and what the variants on it might be.

It may also be the case that there will be individual complainants who will find the new disputes procedure very helpful. There may be operators who wonder why they did not have a formal disputes procedure in place before, because they find it works with common sense. There may well be people who find they will get a more prompt, courteous, and fully cooperative treatment from the operators when they try to sell out, because there is now a more clear sanction where operators are dragging their heels and not advancing the exit of a resident who wants to go.

I believe there will be intending residents who will benefit from the certification by having their lawyers realise that describing the patterns of rights and responsibilities in an occupation right agreement is a technical matter. There will be lawyers who have thought they could do it in the past, who in future will say: “This is a matter for specialists. This is an area that now requires a formal certification. You had better go off and get someone else to do it or go to the specialist in our firm.”, and that may all be sensible and beneficial. It may well be that there are people who are saved from making a mistake by the cooling-off period if they sign up, then talk to their families, realise that it does not suit, and pull out within the stipulated 15-day period. All of these things are helpful, or potentially helpful.

It is possible that the proposed increases in ongoing disclosure, with the right to be informed, or the consultation requirements, will help. It may be that the registrar of retirement villages—this new quango that is being established without any prior examination or any justification for it in terms of a policy background—will do something to stop some fraudulent or foolish statutory supervisor, disputes panel operator, or other participant in the future.

All of these things are possible, but I say to members that all these things come at a cost. Most of them could have been achieved without the size of cost that this bill will impose on the elderly of this country. Most of them could have been achieved by standardising descriptions and by providing a code that required operators to clearly identify when they were departing from it, so that the intelligence of elderly people was not insulted. People would still be left with a choice whether they wanted the gold-plated regime that a politician might think they ought to want, and they would still be left with the possibility of patronising a scheme proposed by the local amateur. Ultimately all the regulation in the world does hardly anything in terms of increasing human happiness in these areas, compared with anxious promoters and operators who are trying to grow their businesses in a competitive market. They need to keep thinking of better ways to satisfy the customers. They need to keep thinking of better ways to find a niche of new groups who they can help into this kind of collective living.

Unlike the Greens, I believe this kind of monoculture—as they described it—is, if it is chosen, exactly what people like living in. If elderly people want to live with others of their kind, of their age, and of their range of interests, it should not be confined, as the officials set out to confine it, to the top 4 percent in assets and income of our elderly. It should be available to just about anyone, because, quite frankly, the retirement village concept should be cheaper to live in, when all costs are taken into account, than the current arrangements for many people who are trying to keep up houses that are too big for them and trying to maintain themselves, often using public services, with visiting nurses and others who have to come and look after them, or at least look over their shoulders.

Retirement village living should not be confined simply to those who have more than modest means. I think that the most disgraceful part of this bill was the Minister’s mockery of the idea that when she approves the code she should have to take account of the desirability of removing barriers to entry and ensuring that the code does not become a set of drawbridges to be pulled up in order to keep out everyone other than the rich.

The disclosure requirements did not need to be mandatory. The code of residents’ rights does not need to be the product of those who are already the insiders in the industry. There are many elderly who, by themselves or with advisers, are fully competent to decide whether they want to go into a village that does not necessarily have all the bells and whistles that someone will decide ought to be in a code of residents’ rights. This bill says that there will clearly be two classes: those who can afford the gold-plated version, and those standing outside the security gate who are in their own homes probably with no security, no comfortable neighbours, and no ensured services simply because they cannot bridge that difference between, say, the $150,000 and $160,000, or between the $100 a fortnight and $130 a fortnight, that might be the effect of this bill. It might well be that we see this bill in hindsight as the bill that tailed off and capped the rate of growth of retirement villages.

It is sad to be forced into the position of voting against a bill that has so many fine objectives, so much thought, and so many provisions that could have been admirable, but I have to vote against it, essentially to record that this Parliament should not proceed to legislate on matters it knows virtually nothing about. It should not be legislating to hand a rule-writing power to the insiders in the top half of the industry. It should not be empowering or requiring a Minister to respond to political pressure when we have a market here that is far more likely to satisfy the needs of New Zealanders than any amount of top-down prescription.

When I look at what this might have been and what we have ended up with, I am reminded of why ACT and people like myself come to Parliament. I have seen the way regulations are used for purposes opposite to those intended. I know that the officials and the Minister were contemptuous of the idea that older people were best serviced by having a whole range of people trying to get into this industry—seeing a quick buck and trying to get in—because it is that kind of pressure that makes sure the incumbents cannot exploit super profit.

It is that kind of pressure—

💬 Hon Lianne Dalziel: Oh, leave the officials alone.

I say to the Minister that it is either she or the officials. A 10-page Supplementary Order Paper coming out with a whole lot of provisions that the select committee had already looked at says that either the Minister suddenly changed her mind or the officials had not given the bill proper concern during the really dragged-out consideration we had. The officials took a view that they were not there as the committee’s officials, which is proper. They were the Minister’s officials, and they were unable to explain quite a few of the things they were doing.

💬 Hon Lianne Dalziel: That’s right. Blame me.

I say that you should have appeared—

💬 Mr SPEAKER: Not me. The Minister should have appeared.

With respect, the Minister should have appeared and not left it to the officials.

This bill takes choices away from old people. It patronises old people. The retiring elderly are the only class of adult New Zealanders who cannot choose what kind of property rights they want to buy.

United Future is very pleased to see the passing of this bill, and its third reading today. We want to thank the Government for responding to our call that the bill be given urgency during this urgency period so that it could go through the Committee stage and the third reading and be sent on its way, to come into force in the quickest possible time. I am disappointed that the ACT party is the only party unable to support the bill. I hear what Mr Franks says—he made very valuable contributions during the select committee process—and I hear some of the dangers he talks about. However, very clearly, on balance this is a very good bill. It provides a balance between market forces and the necessary statutory control.

Retirees and their families are often in a vulnerable position. Retirees investing in their final homes are often in a difficult situation. It is an emotional situation for families, and a situation where larger villages in particular have a power imbalance and are able, potentially, to rip off retirees and their families, just because of their greater knowledge of the situation and because of the unique situation and construct that retirement villages provide, as compared to ownership of one’s own house.

Formerly, the protections provided were really through the Securities Act, and as a lawyer I know the huge amount of paperwork that used to be involved concerning retirement villages. I tried to wade through the paperwork, and then explain to potential residents just what was involved. It was not always clear and transparent. This bill will provide far more clarity and transparency, specifically directed at the retirement village situation rather than at the broader securities regime that exists currently.

The balance between market forces and statutory controls is necessary. In my second reading speech, for the benefit particularly of Mr Jones, who had not heard of any cowboy operators, I referred to a retirement village in Petone that I have been directly involved with, known as Jackson Mews. In my second reading speech I made reference to the fact that the residents had had extraordinary difficulty in getting the operator, Mr John Gilbert, even to respond to the queries they had. I promised in that speech to report back to the House what happened, particularly following Mr Gilbert’s promise that he would respond to queries within 7 days and would meet with the residents. I am pleased to say that at least he met with the residents. There was a strong turn-out of residents, who expressed their strong disgust at the way that he was operating. Unfortunately, it appears that Mr Gilbert cannot see beyond the dollars involved in his investment, and he is unable to understand the residents’ point of view. For him, this is his village that he developed, and effectively he seems to see the residents as guests. He cannot understand why they should be making waves, including making waves publicly, about the running of the village, because all it does is undermine everybody’s investment. We hope that with the passing of this bill, and the appointment of a statutory supervisor, he will be forced to come to the position of having to address these issues, and address them through the disputes regime that is there.

The statute will provide a framework—and only a framework—within which retirement villages will operate. I guess one of the cautions about the bill is that a huge amount of ministerial discretion is provided for the village, through Orders in Council and other regulations. There is considerable scope here for a very interventionist approach, which I think would be both unwise and unnecessary. There needs to be a balance between control and the allowance of some flexibility within the market. Mr Franks has referred to the danger of over-intervention by the Government and over-control of this sector, which I think would be to its detriment.

There are two matters particularly that come to my mind in respect of this level of control. One is the new provision in the Supplementary Order Paper for the statutory supervisor to enter into a deed of participation with the operator, and the other is that the requirements of the deed of participation will be set out by regulation. It seems to me that statutory supervisors know what they are doing, and if they have to be appointed, and the operator has to appoint them, the statutory supervisors will provide deeds that will adequately enable them to fulfil their responsibilities. I question whether the Government needs to tell statutory supervisors what ought to be in their deeds. Maybe there is some room for standardisation, but I would have thought that that would have developed through the market anyway, as statutory supervisors colluded to compare notes and come up with what they needed. They are experienced in the field. That is just one example of a signal that the Government may want to be too hands-on here.

I was also critical in the select committee, and continue to be critical, of the provisions of clause 26, which require lawyers to certify that they have explained to residents the general effect of the agreement and its implications. As a lawyer, I almost took offence at the provision stating that the explanation required to be given must be given in a manner and language that is appropriate to the age and understanding of the intending residents. I see that as an insult to the legal profession, because lawyers already do that. That is their job and their trade, and to be told in legislation, when there is no evidence whatsoever that lawyers are falling down on the job in any respect in this regard, is a little like telling them how to suck eggs. Nevertheless, the provision is there, and I do not think it needs to be there to do the job.

I referred to exemptions during the Committee stage. The danger is that exemptions will backfire on residents by putting them in the situation where, if they are in an exempted retirement village, they can be faced with being threatened that if they stir up trouble, that will effectively mean the exemption will be lost, at extra cost to the village and extra cost to all the residents. I can see a situation where an operator could put pressure on residents by saying that if they make a complaint, then all their fellow residents would have to pay the cost of it. I hope that when the Minister draws up the criteria for exemptions under clause 75B, they are very tightly controlled. I think she could include some provisions to provide more balance. One might be for the registrar of retirement villages to chair the annual general meeting—or provide someone to chair the annual general meeting—where an exemption is granted, so that an independent person can get a feel as to whether residents are being heard and whether there are some genuine complaints, without having to go through a formal process of complaint. Certainly I think the registrar would have to take a greater interest in villages with exemptions than in those with a statutory supervisor appointed, which is really what this provision is getting at.

Possibly the bill should also be used in a transitional fashion. Some smaller villages should be encouraged to amalgamate with other villages—it could happen where a church ran a number of villages—to get that economy of size, so maybe exemptions can be looked at as a transitional measure to ease villages into a more satisfactory set-up. Mr Franks was certainly concerned about the impact that the bill might have on lower-level operators, and that if it is too draconian and standards are set too high, then the whole industry will effectively be left to the major players, and small people will not be able to get into it. I think it is a danger that the Minister needs to weigh very carefully, and be conscious of.

It will be nearly a year before the full regime is in place. It will be interesting to see how it develops. Anything new has to have a settling-down period, but generally it is a good bill. The officials have spent a lot of time on it. The select committee spent a very constructive period of time listening to submissions and developing the issues, and have obviously made a lot of changes that I think have been very positive. I think we have had the advantage of a Minister who is knowledgable, and is concerned to weigh up competing interests and provide some sort of balance. Many aspects of the bill will provide a far better environment. United Future is very pleased to see the bill go through its the third reading and finally come into force as law.