Real Estate Agents Bill

I do not want to labour the process, because I know that National Party members are very keen to debate the bill. They have sought to debate this bill; it is the one they will fight every inch on. It is a bill that is inherently about consumer protection, but I feel it is incumbent on me to address some points that have been made, and will continue to be made as we move through the parts of the bill.

I would like to make this point. One of the charges against me personally and against the Government is that somehow, in putting forward robust consumer legislation to protect consumers, as a representative of the Government I have labelled and sprayed the entire real estate industry as a bunch of land sharks. Well, I will say just two things. I invite members to get my press statements, from the first one that I put out right through to the latest. I invite them also to listen to this. On 7 June 2007 Murray Cleland, the National President of the Real Estate Institute, said in that wonderful journal of our time, the Papakura Courier: “We want to get rid of unethical operators as much as the Minister does because they damage the industry’s reputation and do a great disservice to all the good,”—and I invite members to listen to this—“hard-working people in the industry who, as the Minister acknowledges, are the very great majority.” Despite the fact that the National Party has continued to perpetrate the myth that this Government, in the form of myself, has labelled everybody in the real estate movement as a shark, as a deadbeat, and as dishonest, the fact is, as reported in many papers and as acknowledged by the president of the institute on 7 June 2007, the vast majority of this industry are good honourable folk. In fact I appointed one of them, Mr Murray Giera of Christchurch—I know that Ms Wilkinson did not like this—to the Real Estate Agents Licensing Board.

But real estate folk, who are also the victims, have said to me that they have had a gutsful of being tarred by the same brush as members of their industry who, through their actions, bring the reputation of all of them to the floor. Murray Giera said that to me at a function the other night. He is a good honest person, as many real estate agents are, but all occupations are judged by the lowest common denominator.

I will also comment on a couple of other points that have been raised. I found it exceptionally interesting that Mr Finlayson said that the time frame and the transition period for this bill were OK. Members should bear in mind that the time frame for the lawyers and conveyancers legislation—a massive piece of work—was 2 years, but the time frame for this bill is 14 months. Mr Worth had risen 5 minutes before him and said that it was not OK, that it was far too short. I invite those members to get their act together.

Part 2 provides robust legislative protection for consumers. I have been asked, and I will continue to be asked—I am told that Mr Tisch said he would be asking the question continually—what the mischief is that we are trying to solve. Those members are typical Tories. They listen to one side of the argument. They have not quoted one consumer who has had problems. They have not quoted one victim who has had problems. Those members stare into the stratosphere and ask us to please provide them with some answers, to please tell them where the problem is that we are trying to solve. Well, let me illustrate it. Caitlin and John Ottaway estimate that they lost $35,000 because their agent, Shaun Cosgrave—who is no relation to me, I say for the record; it is a different spelling; it is from a different part of Ireland—did not tell them that an apartment complex was planned for the site right next to their doorstep. Shaun Cosgrave was fined $750. I believe he was warned by some of our agencies about his conduct. Then what happened?

💬 Christopher Finlayson: I raise a point of order, Mr Chairperson. Could the Minister tell us which aspect of Part 2 he is addressing? Part 2 deals with the Real Estate Agents Authority. He took no part in the debate on Part 1. His first intervention this afternoon has been to comment on clause 2, the commencement clause, which we can deal with later on. He seems to be all over the place. It is quite entertaining to watch him, because it is like watching feeding time at the zoo. If he could confine himself to Part 2, it would be very helpful.

The CHAIRPERSON (H V Ross Robertson): Thank you, Mr Finlayson. I am sure the Minister is aware of the situation, and I ask him to come to Part 2.

I am talking to Part 2, “Real Estate Agents Authority”, and the authority is charged—as the member may know, given that he is a learned lawyer—with protecting consumers. To illustrate the need for an authority to look after consumers, and also to address some of the points that have been made, I will quote another case. But first I will just add that Mr Cosgrave was then given the Harcourts gold award for customer service.

The second case I will quote also illustrates the need for an authority such as the one in Part 2. [Interruption] Yes, because there is a need for an authority to stop these cases from happening again. Bronwyn Hilbron died after waiting almost 3 years for the Real Estate Institute to deal with her complaint over the sale of her house. She claimed that an agent had undersold it by $88,000. She chose the existing legislative route, which was the institute.

An honest agent said to me that there is a need for a Real Estate Agents Authority. He has had a vexatious claim—in his view—taken against him, and he has waited for years and years for the legislative body to deal with his case. The authority is not just for those who are selling and buying property; we need an authority to expedite cases, so that honest, honourable real estate folk do not have the sword of Damocles hanging over them for years. To use the popular phrase that Ms Wilkinson uses, justice delayed is justice denied. That also applies to the real estate agents who cannot get cases against them heard, because there are delays in the system.

Real estate agents have said to me that they need an independent authority because the system does not work. I believe that it was the Chief Executive Officer of Harcourts, Mr Bryan Thomson, who said that even if his people are innocent, even if they are good honourable folk, if they go before a body that is perceived to be in-house—the industry policing the industry—and that body declares them to be innocent folk, because they are honourable people, then no one believes it. We hear bleating from the guy opposite who did not quite make it to Queen’s Counsel level; he says he is a lawyer, but he has not cited one case. I find it interesting that National Party members have not cited one case or given one example of a constituent coming to them with a problem with this industry. They probably do not go to them because it would be a waste of time. I think the setting up of an authority will provide a wonderful opportunity to get rid of the bad guys in the industry. Those good honest souls, like Murray Giera and others, who toil away and do a damn good job of representing their clients and their profession, will have their reputations restored, and the profession’s reputation will be restored.

As we go through this debate, I will count how many times members opposite cite a case relating to any victim. If we listened to them, we would think that there was no problem—absolutely no problem at all—and that we do not need any consumer protection. Well, I invite them to talk to Sue Chetwin of Consumer New Zealand. I invite them to lift up a few pages from the newspapers and look at the research work done by the fourth estate—no friends of ours, from time to time—that highlights the need for legislation to protect victims. The victims also include the honourable, honest real estate folk who get done over because they cannot have their cases heard.

We hear a lot of posturing from National members, and they are digging in, but what are they digging in over? A basic piece of consumer protection legislation. The security guard people asked us to license them. Why? Because they wanted to get the rogues out of the system. Builders did the same. They wanted to get the bad guys out of the system, because their reputations were being tarnished. I say to Mr Brownlee that I gave the Real Estate Institute two opportunities. And I said publicly that I believe in self-regulation, because often it is tighter than what Parliament can do. But what the institute wanted to do was to up a few fines, twist a few penalties, but leave the process non-transparent, non-independent, and non-accountable. I think that would do a disservice to the many honourable folk in the real estate industry.

This is good legislation. The authority that we are setting up in this part of the bill will deal to the bad guys, will reinforce the good honest folk who work in the industry, and will ensure, I hope, that cases like that of Bronwyn Hilbron, who died and whose estate now has to take up the cudgels to try to recover what was rightfully hers, do not happen again. It would be really nice, it would be really wonderful, to hear some sort of sympathy from Opposition members for some of the people—the many hundreds of people—who have been done over, who have had bad experiences in this industry. But we will not hear those members say that, and do members know why I say that? Because Opposition members voted against the amendments on Supplementary Order Paper 243 to Part 1, after saying that they supported them. They are all over the place.

I wonder whether the Minister in the chair, the Hon Clayton Cosgrove, might tell us why there is no fidelity fund attached to this authority. Why is he so confident that—[Interruption] Well, he is the honourable member of Parliament one minute, and has a tattered career the next. That is how it happens: an honourable member one minute and a tattered career the next. That is how it goes.

The CHAIRPERSON (H V Ross Robertson): Get to the bill.

I am not surprised that the Minister of Foreign Affairs is in the Chamber taking a great interest in the real estate bill, because after the election he is likely to have to get a job selling real estate.

💬 Rt Hon Winston Peters: I raise a point of order, Mr Chairperson. This Parliament has put up for long enough with this member getting up, disregarding Standing Orders and Speakers’ Rulings day in, day out, and acting like a prize buffoon. I only raise this because there are some young people in the gallery today and they should not be subjected to this nonsense.

The CHAIRPERSON (H V Ross Robertson): Thank you, Mr Peters.

Speaking to the point of order, I want to apologise to this Chamber, and to members like Mr Peters, for any concerns they might have. I would note, though, that today, in evidence to the Privileges Committee—

The CHAIRPERSON (H V Ross Robertson): Both members will be seated. I just remind members that when there is a point of order it is supposed to be heard in silence. In both cases there was chipping by both members. I take it that it is one all, at the moment.

💬 Rt Hon Winston Peters: I raise a point of order, Mr Chairperson. You just saw what has become the practice by this member. He sits on a very august authority as an arbiter and a neutral judge. He walks into this Chamber on the very day that he is meant to be a jurist somewhere else and he now wants to tell you about the evidence. That is my complaint about this kangaroo court that he is making of it. Not only is he just about to infringe Standing Orders on the Privileges Committee procedures, which apparently this morning were very, very big in his mind, but now he wants to offend against the rules of this Chamber as well. I ask you to bring him to order or to stop him speaking.

The CHAIRPERSON (H V Ross Robertson): I just say there was an exchange and I was listening very carefully. I ask the member now to address the bill.

I will, but I expect that there will therefore be no further reference to Gerry Brownlee, Crown prosecutor, or, for that matter, the “Rt Hon” Gerry Brownlee—which I do not mind, in actual fact.

💬 Rt Hon Winston Peters: I raise a point of order, Mr Chairperson. You were asked by Mr Finlayson to bring the Minister to order—wrongly, of course, because he was addressing the issue before the Committee. Now Mr Brownlee is now trying to raise an interjection, under the Standing Orders, that he finds offensive. Frankly, if he cannot take an interjection—if the kitchen is too hot—

The ASSISTANT SPEAKER (H V Ross Robertson): I have a yellow card in my pocket. It is just about to come out.

That would be the last thing I would want to cause you to have to do. [Interruption] I beg your pardon? Yeah, right!

The CHAIRPERSON (H V Ross Robertson): Can we get on with the debate. We have had our fun.

It is serious. It is a serious point, and Mr Cosgrove, the Minister, was quite right to say there should be concerns about people getting ripped off in real estate transactions. He pointed out the very case that I believe was the genesis of this legislation in the first place: the extraordinary situation of one real estate agent in one of our northern cities who was given a real estate agent of the year award through an agency and then later was found to be quite corrupt in his practice. [Interruption] The Minister says that perhaps it stopped short of that. Certainly his practices were not acceptable in normal business practice, and people got burnt as a result of it. Indeed, the Minister himself outlined a number of cases where people got badly burnt.

But I think simply putting together an authority to manage aspects of real estate agency functions, with the authority entirely appointed by the Minister, with practices developed only with the Minister’s approval, and with ethical standards and statements of responsibility only according to what the Minister is prepared to approve, does little if there is not some sort of fidelity fund attached to it. New Zealanders pay some of the highest real estate agency fees in the world, and I would have thought that if the Government was so keen to establish yet another bureaucracy that comes under the purview of a Minister, then there might well have been a case for a fidelity fund to be established. I will lay this bet: that subsequent to the passing of this bill, and subsequent to the establishment of the Real Estate Agents Authority, the Minister himself will not accept any liability where there is bad dealing by those people.

I think that makes the whole thing just a little bit thin. It makes it slightly a sham and it tends to indicate that the costs associated with this legislation, loaded on to the costs of selling—and ultimately purchasing—property will simply increase without any greater protection than is in place at the present time. It would be interesting for the Minister to take a call and say exactly what will come out of the new authority that will give people any greater surety about their dealings with real estate agents than they have at the present time. That would be an interesting answer from him.

We do not doubt the sincerity with which he has brought this bill to the House; we do not doubt that. We know that everyone in this House is concerned about those cases that he raised. But each of us in our constituencies would observe that hundreds of houses are sold in a year, possibly even in a month, without the sorts of difficulties he outlined earlier. So we are a little perplexed by the need to set up this particular authority, and are even more perplexed that the authority’s seven members are apparently all going to be appointed by the Minister, according to normal appointment practice.

💬 Christopher Finlayson: Normal Labour practice.

My colleague makes a comment that I will not dwell on, because we have had more of those appointments today.

Again, there is a particular clause in Part 2 that I want to discuss. It is clause 17, “Membership of Authority”. I want the Minister in the chair, the Hon Clayton Cosgrove, to confirm that he must name members of the authority within a couple of days of this legislation receiving Royal assent. If that is the case, then I say to the member he should have done some homework now as to whom he is going to appoint as the seven members of the authority. I think the Minister should rise and tell us who they are. I am suspicious that we will see a repeat of what we saw at the weekend when the Minister of Conservation appointed 52 Labour lackeys to the conservation boards around the country.

💬 Hon Dr Michael Cullen: Ha!

The Deputy Prime Minister laughs, but there is a history of this. We had a member here; nobody knew her name, and I had to ask the Parliamentary Library what it was. Her name was Dianne Yates. She got shunted out of Parliament at the whim of the Prime Minister and got about three or four prize appointments.

💬 Hon Maurice Williamson: Four.

Four appointments. Well, one thing is for sure. She is too busy to be a member of this authority. [Interruption] I am talking about clause 17. I want to know who the members are. We know that two of them will be experienced people, as licensees or former licensees, but that leaves the appointment of five others. I want the Minister to confirm that when we talk about the member who must have “not less than 7 years’ legal experience”, that is one Russell Fairbrother. He was the member of Parliament who was told he was not allowed to go on the list, and does not have a show of winning the Napier seat from our excellent candidate Chris Tremain.

So three slots are now filled—there are four left. I want to know whether the Minister himself would consider whether he would have a conflict of interest if, in fact, his name were to be advanced. I notice that he is well down the list that came out the other day, at No. 18. Against Kate Wilkinson in Waimakariri, he will not be back as a member of Parliament, so will he fill the first of the four vacancies still remaining on the membership of the authority? Then I want to know who the others are. Charles Chauvel, No. 27—

💬 Hon Maurice Williamson: Who?

Charles Chauvel. He has not been here long, and he certainly has not done much to contribute. He is standing in the seat of Ōhariu, so he does not have a show there and he knows it. He has been put down at No. 27.

💬 Rt Hon Winston Peters: I raise a point of order, Mr Chairperson. With respect, this member has been here some considerable time. One would think he might have learnt something in that time about the Standing Orders. This is a narrow debate, yet here he is, speculating on all the people who will not be on the authority under the pretence that he wants to know who will be. That was his opening gambit. Frankly, this is a lazy, indolent way of conducting a debate. It is typical of him, and we could expect better. I want you to make sure he does do better.

The CHAIRPERSON (H V Ross Robertson): I ask the member to continue. I had actually indicated to the member a couple of times—

Mr Chairperson, I know you waved your hands, but the point I make is that within 2 days of this legislation receiving Royal assent, seven members of this authority are to be named. That is in the legislation. Now that we know the date for the election is 10 weeks away, there is a longstanding convention in this House that there will be consultation between at least the parties in this Parliament on the appointments—

💬 Christopher Finlayson: There was a convention.

There used to be a convention? Well, I would hope that this Minister, despite his bullying, belligerent, and arrogant attitude, would actually stick to the convention. I therefore think we have every right to know what plans he has for consulting members of the National Party about appointments to this authority.

The authority will have a very important job to do. It will deal with these hundreds of cowboys and land sharks who Mr Clayton Cosgrove says are in the industry.

💬 Hon Clayton Cosgrove: That’s right.

He agrees now! Only 5 minutes ago he took a call to say that there are not many of them, yet he now says there are hundreds of them.

So the authority will have a lot to do, and I want to make sure that it is not stacked with Labour Party lackeys and members of Parliament who know that they are in the last few weeks of sitting in this House, because they have been put down on that Labour list well and truly towards the unwinnable positions. I think it is a very fair question for us to be asking.

💬 Hon Maurice Williamson: Lesley Soper?

What is happening to Lesley Soper? She would probably be all right on this. But I think we have a very fair question to ask about the process for appointment—what work has been done so far to find who those seven members are, and, most important, whether the Minister is prepared to consult before those appointments are made. They are very clear questions, and I look forward to the Minister taking a call and answering them.

I draw to the Committee’s attention a string of amendments that I have moved to various clauses in Parts 2, 3, and 6 of the Real Estate Agents Bill. The amendments are designed to achieve two principal objectives. There are amendments to clause 16(3), to clause 19(c), to insert new clause 34A, and to omit clause 155(a) because of the provision in new clause 34A relating to industry training procedures. Those amendments are designed to ensure that the industry training organisation for the real estate sector is actually consistent with all other industry training organisations in the tertiary sector in terms of the way that it operates.

One of the amendments, for instance—that to clause 19(c)—proposes the radical suggestion that “The authority must consult with the industry training organisation for the real estate industry.” It is very hard to see how that will be opposed, but I suspect the Government and the Minister in the chair, the Hon Clayton Cosgrove, who gave my original amendments not even cursory consideration because he is so committed to the future of this industry, will find a way to oppose it. He will also find a way to oppose my amendment to clause 16(3), which omits the words “subsection (1)” and substitutes “this Act”, because that is clearly subversive. Those amendments are in the best interests of making this unworkable legislation more workable than it could ever hope to be as it stands at the moment. I have also included amendments to three provisions in clause 34, relating to consumer protection.

I would have thought the Minister and this Government would relish these amendments, because—as we have heard right throughout this debate—this is a consumer protection bill. It just imposes more costs on consumers and it will not work, but according to the Minister it is a consumer protection bill. So anything that is in the interests of consumer protection, I would have expected this Minister, who clearly knows all and understands all, to be supportive of. I would have expected the Minister to embrace my amendment to clause 34(1)(c), which inserts the words “in the interests of the public”. That is what he says this bill is all about.

I submit those amendments for the consideration of the House, and I make the observation that the Minister, who professes such concern about consumers, is actually engaged in a political vendetta. I have heard the cases that he has cited as evidence. The trouble is that they are the same cases I have heard cited for the nearly 18 months that this bill has been on the drawing board. In my 24 years as a member of Parliament, I have not had one case involving a real estate agent drawn to my attention.

💬 Hon Clayton Cosgrove: Doesn’t that say something about you?

The member says that says something about me. Well, that is actually a wonderful summary of what this member actually believes that this legislation is all about. The issue—

💬 Hon Clayton Cosgrove: You’ve dished it out for the last 2 days, so don’t get holier-than-thou.

The Minister is indulging in all sorts of petty abuse, when he should actually be indulging in making this bill workable.

The Minister has presided over complete disruption: a regime that is unworkable, and a bill that will have to be amended, irrespective of whatever happens in this Committee, because of the bull-at-a-gate way in which he has gone about it. If he wants to say to the homeowners of New Zealand that that is the standard he seeks, that is well and good. If he wants to say to the real estate industry of New Zealand that he does not care what it thinks, that is well and good. But let him be up front in the House and say those are his motivations, not resort to crocodile tears about a few, a handful of, cases that have been drawn to his attention. Earlier on, when this bill was around in its early stages, I made a criticism of the Minister, and I received one public response in support of him—one public response that supported his stand.

There is a need to tidy up the legislation. I think we all accept that. But this bill does not do that. The amendments I am proposing will actually make an unworkable piece of legislation workable. If the Minister was serious in his intent he would adopt them, but I bet that he will not.

I put on the record that National will be supporting the amendments of Mr Dunne because they are sensible. We want good consumer protection legislation, but this is not it. I rise to take a call in relation to Part 2, which relates to the Real Estate Agents Authority, but I would like to just mention a couple of things that the Minister in the chair, the Hon Clayton Cosgrove, has said. First of all, he said I did not like the appointment of Murray Giera on the board. The Minister might like to recollect that actually I was approached by the Christchurch real estate agents wondering what the delay was in making the ministerial appointment on the board in the first place. It was not until my office contacted the Minister’s office that that board appointment was actually made. So I think it is a little trite of the Minister to suggest that I did not like it.

Then he challenged the National members to come up with one case—just one case. Well, I will come up with two, and if he cares to read them, rather than just quoting some populist bylines, he might know more about the industry and might learn more about the industry. Those cases were Sime and Lethbridge in 2002—both High Court cases. In both those cases the High Court noted that the alleged misconduct was insufficiently serious to meet the high statutory criteria for suspension and cancellation, and would have been more properly dealt with by the regional disciplinary committee if it had been operating.

One can ask why we do not have a regional disciplinary committee. The reason is that the Government did not appoint one. It was its responsibility but it did not appoint one. In fact, I see that it has not appointed one for 10 years. So the delay that has been referred to by the Minister is a delay of his own making and not a delay by the Real Estate Institute.

The answer was “because they had other priorities”. In fact, 4 years ago—even then, 4 years ago—Dr Worth asked the question: “Is it correct that there is a review of the Real Estate Agents Act 1976 in progress, and if so, what is the status of that review?”. That was 4 years ago. The response was: “The review was suspended at the start of the 2004/2005 financial year due to other legislative and policy priorities.” So any question of delay is certainly not due to the Real Estate Institute of New Zealand. It is due to the Minister’s own department.

In fact, we talk about the fees, fines, and small quantum of fines that are provided for under the old Real Estate Agents Act. I will come to that issue later, but I have corroboration that there were 4 approaches—officially—in the last 10 years when the respective Minister responsible had been approached to increase those fines. So any suggestion of delays on behalf of the Real Estate Institute is frankly quite fatuous.

Turning to the Real Estate Agents Authority that is to be established as a Crown entity under Part 2 of the Real Estate Agents Bill, I say that we support measures to have good consumer protection legislation. But this is not it. As Mr Dunne has rightly said, if the Minister in the chair had bothered to set up regional disciplinary committees, and had bothered to increase the fines, we would have had some workable legislation, but instead he has taken a huge sledgehammer to what is just a nut.

The authority’s functions are set out in clause 16, and it is really rather interesting, because throughout the bill it talks about a registrar. This shows the incompetence of the Minister in the chair, to be honest, because throughout the bill it talks about the registrar, but it had no provision whatsoever as to who that registrar was, and how that registrar was to be appointed. That had to be amended at the Justice and Electorate Committee.

I would like the Minister in the chair to seek the call. He did not seek the call in relation to my queries on Part 1 as to what exactly real estate agency work was, what the definition of residential property was—whether it did or did not include lifestyle properties—and what the definition of transaction was, so I would imagine that he will not seek a call on this question either, which is in relation to the membership of the authority. As has already been pointed out by my colleague the Hon David Carter, the authority is to have a membership of no more than seven members. Members will recall that in the original draft of the bill there was going to be no industry representation on this authority whatsoever. Nobody with any knowledge whatsoever of the real estate business was going to be a member of this authority, and when we think of what the authority’s function will be, which is to administer the whole regime for the agents, we see it as totally negligent to have even thought about having an authority appointed by the Minister, with no industry representation. Admittedly, there now is industry representation, and the Minister must appoint at least two members who are licensees or former licensees. So at least now there will be some industry representation on that authority.

I would like to ask the Minister what he means in his Supplementary Order Paper when he is amending clause 17 to say that the Minister must consult with the Real Estate Institute when making the first appointment of licensees or former licensees. Why just the first appointment? I would like the Minister in the chair to answer that. Why just the first one? Surely the consultation should also apply to the second appointment, and the third and subsequent ones. Why just the first appointment? That question may be too difficult for the Minister in the chair, but we still hope that perhaps he will take this matter seriously.

The other issue I would like to raise is in relation to the practice rules. Clause 20 in Part 2 states: “Practice rules are made by the Authority with the approval of the Minister . . . ”. If it is anything like the code of ethics and conduct under the Lawyers and Conveyancers Act, I suspect there will be considerable delays in the Minister approving even those. Under the Lawyers and Conveyancers Act it took over 6 months for the code to come off the Minister’s desk with some sort of approval. If that is the sort of expeditious treatment that this Minister will seriously give the real estate industry, then I suggest that perhaps he should take another look at it.

Clause 24 also relates to the prescription of fees that the authority can impose. There are fees payable from time to time. There is then an operational levy to fund the costs of the authority, and a disciplinary levy. That is three different types of fees. The question that has to be asked is what sort of quantum of levy and fee the Minister envisages, because with the bureaucracy he has built into this real estate agent regime, which is similar to what he built into the housing and building regime, we might expect a somewhat hefty operational levy, disciplinary levy, and fee. As we know, those fees will be handed down and passed on to the consumer. At the end of the day it will be the consumer, not the industry, who will be paying for this legislation. If this bill is being enacted for the protection of the consumer—to give the consumer confidence in the real estate industry, to promote public confidence in the performance of real estate work, and to protect the interests of consumers—then it seems to me that one of the striking things this legislation will do is increase the costs to that consumer. I wonder whether it is the consumer the Minister has in mind or whether it is just more political posturing.

As somebody who has had considerable experience of working with the legislation and the real estate industry over a long period of time, I thought the Committee and the public should be alerted to the kind of debate that is taking place today on Part 2 of the Real Estate Agents Bill. I am hearing from the National Party that everything is fine out there and nothing needs to be done. But I cannot find anybody in the real estate industry with any experience who says that. I cannot find anybody who says everything is fine and nothing needs to be done, but I have just heard a procession of National Party members illustrate the fact that they understand nothing about business in New Zealand and claim that everything is fine and above board right now. They cannot point to anybody associated with the industry who would argue that nothing needs to be done, but nevertheless they say their idea is to do nothing, which is their policy on everything, really.

💬 Hon Clayton Cosgrove: Carter said that.

Mr Carter said that; Kate Wilkinson said that. She did not get to talk about KiwiSaver, but I want to know whether she had a clearance from John Key to say what she did say.

Let us be honest. Here we have a circumstance—

💬 Hon David Carter: Where did the cheque go?

I will tell the member what the cheque did not do, and that is dodge GST. That is a criminal offence, and the GST has still not been paid. That is what the cheque did not do. But, to come back to the point here—

💬 Hon David Carter: Just pay up.

My argument to the member is to look in the mirror and just pay the GST, or else to keep quiet. How Mr Carter has made the front bench is a matter of bewilderment to all his colleagues. It must be because of something else, like patronage of the party.

Members are concerned about who will make up the seven people on the so-called authority. Who suggested that there should be people from the real estate industry with substantial and requisite experience on the authority? It was New Zealand First that argued for that; I am sure the Minister will not argue against that. That is what we did. We sought the opinion of the industry and tried to get some balance put into legislation that seeks to protect the consumer.

After all, it was Adam Smith who said that men of business seldom meet for food or entertainment without their conversation soon turning to a conspiracy against the public. And that, in the case of this industry, has happened far too many times. Oh, I know why Gerry Brownlee is shaking his head. That is all he knows.

💬 Gerry Brownlee: Where’s the fidelity fund?

Where’s the fidelity fund?

💬 Gerry Brownlee: Yeah—not there.

Well, here we go; is this not wonderful? The member shouts out that. He is meant to be the spokesperson from National on this bill, but he does not know what its provisions are—or are not—and now he is asking me about them. That is typical of Gerry.

The CHAIRPERSON (H V Ross Robertson): The member should keep to the debate. This is a narrow debate.

One has to wonder how someone like that could get promoted so far up the ranks in what used to be a great party, when he acts like an absolute buffoon, knows nothing about the law or legislation, and thinks noise means volume. Well, I tell Mr Brownlee that it does not mean that. Substance, in the end, is what matters around here, not just a bombastic display of Billy Bunter-ism. It will not work any more, and that is a fact.

I come back to the point, which is—

💬 Gerry Brownlee: Tell us about the fidelity fund. Who gets the fidelity fund? It’s not in there.

I am talking about the membership of the board. Does the member mind if I just get through that first?

It is rather critical that we have people who, when they come to a tribunal situation, understand the requirements of the industry, and, I tell Mr Brownlee, it is important that those people are not biased, are not prejudiced, and have not made up their minds before they hear a case. It is important that they are prepared to wait until all the facts before them are heard before they make up their minds. As Mr Finlayson will tell members, that is how good tribunal people show responsibility, rather than acting like those with so much arrogance—a quality I have seen Mr Brownlee display—that they make up their minds before they hear any of the evidence. We do not want that sort of person to be on the Real Estate Agents Authority.

The authority should have people on it who are neutral, independent, but experienced enough to ask, on behalf of the consumer and on behalf of the real estate person against whom the complaint has been lodged, what the facts are and where the truth possibly lies—but who first of all ask to hear all the facts, all the provisions, that relate to the case. That is rather important, because it is no use to have an authority if we put people on it who walk in and, before the case is half heard, rush out, go to the media, and start to say something else.

💬 Christopher Finlayson: I raise a point of order, Mr Chairperson. I am sorry to interrupt the right honourable member, but he is concentrating on Part 4. He is talking about the bodies that will adjudicate on complaints. There are two types of committees: there is the complaints assessment committee, and the actual disciplinary tribunal. The authority appoints those bodies, which then adjudicate. So the member really has to come back to Part 2. It would be quite a novelty to hear him say something about Part 2.

The CHAIRPERSON (H V Ross Robertson): Thank you, Mr Finlayson. Actually, the member’s time is just about up.

I have just heard Mr Finlayson, “QC (Failed)”, with his argument. It is not correct, of course, because all of the other authorities arise from the Real Estate Agents Authority.

I will take up a couple of issues in Part 2 of the Real Estate Agents Bill.

The first is subclause (3) of clause 16, “Authority’s functions”. It talks about the industry training organisation, and raises the spectre in my mind that we will have two very strong, competing bodies. I would like the Minister to explain to me what the relationship will be like between the Real Estate Authority and the industry training organisation. Clause 16(1) runs through the various functions of the authority. It will set up a register to register licensees: “(b) ensure that the register of licensees is established, kept, and maintained;”. It will develop rules, it will develop consumer information, and it will “(f) develop and provide consumer information on matters relating to the provision of real estate services, including providing the public with information on how to make a complaint;”. There is a list of provisions.

I come to a provision pertaining to the amendments on the Supplementary Order Paper of the Hon Peter Dunne, which National will be supporting. Subclause (3) states: “For the avoidance of doubt, nothing in subsection (1) affects the role of an industry training organisation for the time being recognised under the Industry Training Act 1992 as an industry training organisation for the real estate industry.” That is the first point on which I want some clarification. Is there an intention to move the industry training organisation to the Real Estate Agents Authority? If we read that provision carefully, we see that it states “the role of an industry training organisation for the time being …”. I would like the Minister to clarify what he intends there.

Secondly, I would like the Minister to tell me whether he heard any complaints from the Real Estate Institute of New Zealand about recognition of qualifications obtained in Australia. When I visited the institute in Auckland, I heard a lot about the inequity in terms of the qualification that agents require to be registered in Australia. Effectively, what was happening was that a lot of people would go from New Zealand across to Australia for a course of about a week, and when they came back they would be recognised as fully fledged, qualified real estate agents. The second question I would like the Minister to address is whether, while he was developing this bill, he took that matter into consideration, or was it, in actual fact, outside the scope of the bill?

When we turn to clause 19 and read of the continuing education function of the authority, we can understand the confusion and concern that exist among the industry training organisation. Clause 19, “Continuing education”, states: “The Authority may, by notice in the Gazette, make practice rules …”, and it talks about continuing education. That is professional development, and it will require qualifications to be designed and signed off. There will be tremendous friction within the industry unless action is taken immediately to make sure there is seamlessness between the authority and the industry training organisation. Qualifications will have to be developed, and the authority is being empowered to do that, but I do not see any ability to bridge that issue.

We go on to clause 21, “Criteria in relation to approval of practice rules by Minister”. The provision talks about the authority’s relationship with the Minister. It talks about principles, and I say to the Minister that paragraph (c) talks about “the consistency of the rules with New Zealand’s international obligations:”. I know that it might be drawing a long bow, but I would like to think that serious consideration was given to the need for equal qualifications between Australia and New Zealand.

I want to ask the Minister a couple of questions about Part 2, several clauses of which, as the Hon David Carter said, will come into effect the day after the date on which the legislation receives the Royal assent. That particularly relates to the establishment of the authority to which members have been referring, with the exception of the Rt Hon Winston Peters, who was really addressing the organisations in Part 4.

I want to make one point immediately, and that is that the Supplementary Order Paper of Mr Dunne raises a very sensible point, which I believe the Committee should adopt. It involves an insertion into clause 17 of subclause (3B), which I will come to in a minute. Once the authority is set up, clause 16 provides that one of its functions will be to set professional standards for agents, and the Committee inserted a subclause (3) into clause 16 that made it clear that the industry training organisation currently in existence would continue to have a role. That is a very important point, because when we come over to clause 19, there is a new provision that deals with continuing education. And I suggest to the Committee that that is a very good suggestion, because all industries and professions should have mandatory continuing education.

This is where clause 17 is so important. If there is to be mandatory continuing education, then it makes sense that the industry training organisations, which are charged with the training required before one can enter the real estate industry, should continue to have a role in the area of continuing education. That is why it is important for the Minister to have a duty to consult with the industry training organisations when making the first appointment of licensees or former licensees. The proposal of Mr Dunne makes a lot of sense about the industry training organisations.

The second point follows on from what Mr Carter said. Immediately after this legislation comes into force, the authority will be established. It is to consist of no more than seven members. It will immediately have a role to undertake, and given that this legislation could receive the Royal assent very quickly if it is passed, I think we are entitled to know the sorts of persons the Minister is proposing to appoint and whether there will be consultation. Are we going to have a repeat of what has been going on with the conservation board, the New Zealand Symphony Orchestra, Creative New Zealand, Te Waka Toi, and the Human Rights Commission? All sorts of appointments are being made without any reference to the National Party whatsoever. Will we see Ann Hartley, Mike Williams, Eamon Daly, Georgina Beyer—well, probably not Georgina Beyer, because she has outlived her usefulness to the Labour Party, and it has not done anything for her—or Gary Moore, the former Mayor of Christchurch, in this position? Are these the sorts of people who will be appointed to this authority? I think we are entitled to know, and we are also entitled to know whether there will be consultation.

The next issue I want to touch on is that of fees and levies. It was addressed in a preliminary way by Ms Wilkinson, because, as she said, clauses 24, 25, and 26 deal with certain types of fees and levies, and the Real Estate Agents Authority will be in a position to prescribe fees. As we have said all along, the National Party has concerns about the bureaucratic nature of what is being set up under this legislation, and we are concerned that fees and levies could be enormous, especially in the preliminary stages as the authority, the complaints assessment committees, and the disciplinary tribunal are set up. I would like to have some kind of indication as to whether the Minister has received any general advice on the sort of levy or fee that would be payable, because one can rest assured that those fees ultimately will end up being borne by the consumer. Indeed, one of the issues that was raised, which was the subject of a submission to the select committee, was that of consultation over fees and levels of fees. What sorts of levels does the Minister think are acceptable? Should there be consultation?

In rising to address Part 2, I say that it is a bit of a concern for National that there are some glaring omissions within legislation that is meant to provide good consumer protection. The exclusion of property managers from the regime is a matter of some concern, because it creates inequities within this bill. I would like an explanation from the Minister in the chair, the Hon Clayton Cosgrove, as to why that is the case, if this is such a good piece of consumer protection from the cowboys and the land sharks—so-called by the Minister on a number of occasions. It is interesting. In my travels throughout New Zealand, I frequently pop in and out of real estate agents’ offices, and they say things about the Minister that are never very complimentary. They ask me about that man—

💬 Hon Member: The angry man.

—the angry man—who will lose his seat at the next election, and why is he going to lose it—

💬 Hon David Carter: Which one?

Clayton Cosgrove. I will restrict my comments to the Minister in question, Clayton Cosgrove. He is the man who is hated by every real estate agent I come across—probably every real estate agent in the land. Why do they hate him? Who wants to be called a land shark? Who wants to be called a cowboy by a Minister of the Crown? And what does this Minister do to fix these land sharks and cowboys? He brings forward to the House the Real Estate Agents Bill. The trouble with the bill is that it has some glaring omissions. It does not even address the issue of property managers.

I did not sit in on the submissions, but I understand that a number of very strong submissions were made to the select committee about the inequities in not making provision for property managers within this bill. Those of us who have children going out into the world and becoming tenants in properties, or flatting if they are students, or going into the workforce, know that they are the very vulnerable young people who have to come into contact with property managers. It seems to me to be a glaring omission on the part of this Government, which touts itself as the champion of consumer protection, to turn a blind eye to those very people within this Real Estate Agents Bill.

This bill is not worth much if it does not address the real issues being faced particularly by young people who have to deal with property managers. The submitters to this bill did not consider that the provisions for property management in the Residential Tenancies Act 1986—which, of course, relate primarily to relationships between parties as tenants, owners, and property managers—are sufficient to ensure that consumers are protected in property management transactions. So what does the Minister propose to do about it? He proposes to conduct a review. Well, that does not provide much comfort to those people who deal on a day-to-day basis with property managers. National’s view is that this bill should include property managers within it, and without doing that the Minister’s fine words about cowboys and land sharks remain very pertinent.

The Hon Peter Dunne really hit the nail on the head when he said the Minister was indulging in petty abuse. That is what he has been doing, and that is what he has been doing out in the electorates all around New Zealand. Well, I say to the Minister that the real estate agents have heard him, they have made up their minds about him, and they have no faith in this bill that the Government is putting forward. There are glaring omissions in the bill, and just one of those is the exclusion of property managers. This is not a good consumer protection bill. National supports good consumer protection legislation, but this is not it.

I move, That the question be now put.