Please note: This is an extract from Hansard only. Hansard extracts are reproduced with permission from the Parliament of Tasmania.

PREPAID FUNDERALS BILL 2004 (No. 5)

Second Reading

[2.56 p.m.]

Mrs JACKSON (Denison - Minister for Justice and Industrial Relations - 2R) - Madam Deputy Speaker, I move -

That the bill be now read the second time.

Funeral businesses often hold large amounts of money in prepaid funeral funds and there is no existing regulation of the manner in which these funds are deposited or invested. It is estimated that in excess of $16 million is held by funeral businesses in Tasmania. Existing accounting and record keeping processes are varied and it may be difficult to identify contributor's funds in the event of insolvency. The bill requires that all prepaid funeral agreements be in writing and contain certain pre-contractual disclosure information. This pre-contractual disclosure information is to include: details of the parties to an agreement, the name of the relevant prepaid funeral trust into which funds will be deposited, and details of the type of funeral service to be supplied and associated costs.

Where a person conducting a funeral business receives prepaid funeral funds, they must establish a funeral trust into which all funds are deposited. A custodian must be appointed to act for the funeral trust and to manage investments in accordance with the Trustees Act 1898. Each funeral trust must be approved by the Director of Consumer Affairs and Fair Trading and the director must maintain a register of all approved trusts.

There are currently no rules for the cancellation of agreements and the bill prescribes the circumstances under which agreements can be cancelled. For example, a contributor may terminate an agreement where the recipient has ceased to be ordinarily resident in Tasmania or where their relationship status has changed. Where agreements are terminated, the bill establishes clear rules for the refund of payments and for the transfer of obligations to other funeral businesses.

The bill requires a report each year on the amount held in each trust fund and an estimate of the assets and liabilities of each fund. At the request of the director of Consumer Affairs and Fair Trading the custodian must provide an actuarial report on the actual liabilities of the trust.

In the event that concerns arise about the management of a fund, the director may restrict payment from the trust until investigation of the concern has been completed. In the event of a dispute, a magistrate may make orders directing that appropriate payments be made in relation to the dispute.

This bill has been prepared following extensive consultation with industry stakeholders and is supported by the Tasmanian Chapter of the Australian Funeral Directors' Association. It will impose additional costs on the industry but these costs will ensure better security for consumers and more confidence in the funeral industry.

A number of consumers in Tasmania contribute funds to Friendly Society funeral plans. Some funeral directors direct all of their prepaid business through these plans. These arrangements are regulated by the Australian Prudential Regulation Authority and the Australian Securities and Investment Commission. Generally, the products are insurance products and are also regulated under the Commonwealth Life Insurance Act 1995.

This bill is not intended to duplicate either existing regulation or the prudential supervision of friendly societies. Consequently, friendly societies will be exempted from most provisions of the act under the regulation-making power of clause 28. Madam Deputy Speaker, I commend the bill to the House.

[3.00 p.m.]

Mr MICHAEL HODGMAN (Denison) - Madam Deputy Speaker, it is a very good thing I guess that we do not celebrate every day of the week the one hundredth anniversary of the first Labor Government in the history of the world. But if the Attorney will listen carefully on this occasion the Opposition is actually congratulating her for pulling this very bad piece of legislation out of the Parliament in October last year and giving time for proper consultation. Because unfortunately, at that time the arrogant Bacon Labor Government, of which the Attorney was the minister responsible for this legislation, claimed there had been full consultation with stakeholders.

Member - There hadn't, had there?

Mr MICHAEL HODGMAN - You are quite right. That statement was just not true. Because when the stakeholders read in the paper that the Attorney-General had brought this legislation, the Prepaid Funerals Bill 2003, into the Parliament and it had been claimed that there had been full consultation with the stakeholders, the stakeholders said that was just not true. One of them is Mr Stephen Parry who as everybody in the House knows, is a hard working, very dedicated Liberal candidate for the Senate in the next Federal election. I would suggest he is very likely to be elected to the Senate and he will be an outstanding senator.

Mr McKim - What number is he?

Mr MICHAEL HODGMAN - He is in a winning position, have no doubt about that. In the words of a former premier of Queensland, don't you worry about that. You can pull Christine out of retirement. We are out once again, the old war horse. We are out once again and I am telling you that Stephen Parry will have my money on his back and he will be a magnificent senator for Tasmania. He was accompanied by Mr Andrew Finney.

Mrs Jackson - Never heard of him.

Mr MICHAEL HODGMAN - You have never heard of him?

Mr McKim - He can't be any further up than number three.

Mr MICHAEL HODGMAN - The Attorney-General has not heard of Mr Stephen Parry. He is an outstanding Liberal candidate for the Senate. He will do very well. And he was accompanied by Mr Andrew Finney. I know that the minister, Jim Cox, is sitting there acutely embarrassed because he thinks the Attorney is about to say she has not heard of Mr Finney either. But Mr Andrew Finney is a very fine young man from a very great family which has given great service to the people of Launceston and northern Tasmania for many years.

I rose in the Parliament and pointed out that Her Majesty's Attorney-General had misled the Parliament and the people by saying there had been full consultation and the Bacon Labor Government, still arrogant, said that was true, they had not. And they pulled it out.

Mrs Jackson - When did you say that Michael?

Mr MICHAEL HODGMAN - That was on 27 October last year.

Mrs Jackson - I didn't hear you.

Mr MICHAEL HODGMAN - Madam, you are about the only person in the world who did not. On 27 October last year I said that, contrary to the untruthful claims, there had been full consultation with stakeholders in relations to the Prepaid Funerals Bill, that was not true. And it not being true that the bill had been prepared as a result of full consultation, the Opposition called on the Government to withdraw it and to consult fully. I went on to say that Mr Stephen Parry and Mr Andrew Finney had made a rush trip to Parliament House, which they did. I criticised the Attorney-General and said that what she had said was not true and as a result of that the bill did not proceed. So if you did not hear me saying that you must be the only person in Tasmania who did not. However, she went away and she did consult and I am prepared to accept now that there has been full consultation and that all stakeholders agree with it and support it. Not just Mr Stephen Parry, our outstanding Liberal candidate for the Senate - he will be Senator Parry after the next Federal election - not just Mr Andrew Finney, but also my undertakers.

Mrs Jackson - I'm putting my money on Christine Milne.

Mr MICHAEL HODGMAN - I am sure the Attorney-General will be delighted to know that I have already appointed my undertakers because, unlike her, I am getting a State funeral -

Mrs Jackson laughing .

Mr Cox - When will that be, Michael?

Mr MICHAEL HODGMAN - because of my time as a Federal minister.

Mr Cox - Did you know that, Will?

Mr MICHAEL HODGMAN - Yes, the family knows; they do not have to pay a cent. It is paid for by Canberra.

Mr Cox - We don't have to go, do we?

Mr MICHAEL HODGMAN - I have appointed Millingtons, and I must say that Mr Peter Fuglsang, Mr Chris Fuglsang and the stunning Miss Bridget Fuglsang, their eyes all light up when they see me coming because I have said to them, 'Don't hold back on the expense'.

Mrs Jackson - Who pays for this?

Mr MICHAEL HODGMAN - The Commonwealth.

Mrs Jackson - Oh, that's all right then.

Mr MICHAEL HODGMAN - I would have a tiny little funeral if you were paying for it, Attorney.

Mrs Jackson - I'll say you would. You're dead right there.

Mr MICHAEL HODGMAN - You would arrange for me to be cremated in the middle of the night with a can of kerosene.

Mrs Jackson - No, I wouldn't, I wouldn't arrange anything.

Mr MICHAEL HODGMAN - I might put it on the record that when I became aware that, as a former Federal minister I was entitled to a State funeral, I said to myself, because of my naval involvement -

Mrs Jackson - You don't have to accept a State funeral, you know.

Mr MICHAEL HODGMAN - Oh, I have accepted it; it is going to be a ripper.

Mrs Jackson - Most people don't.

Mr MICHAEL HODGMAN - I beg your pardon, that is not correct.

Mr Cox - What stage of the day will it be, morning or afternoon? Tell us a bit about it.

Mr MICHAEL HODGMAN - Well, I had planned, Minister - because you are much more constructive in this; your colleague, the Attorney, is not well today - that I would like to be buried at sea, because of my involvement with the Royal Australian Navy. In fact, they said, 'Where would you like to be dropped?' and I said, 'I'd like to be dropped off the north end of Bruny Island. I would like to do my little bit to help the crayfish industry'. However, this State Government has brought in legislation, which you are administering, Attorney, whereby burials at sea, I am now told, have to be done 20 kilometres east of Port Arthur. That is a hell of a long trip.

Mr Cox - It won't worry you.

Mr MICHAEL HODGMAN - It is going to be expensive for the Royal Australian Navy, though. Worse than that, they strap you to a stretcher with wire netting.

Mrs Jackson - Did you fight in Vietnam in the navy?

Mr MICHAEL HODGMAN - I did not, I was the wrong age.

Mrs Jackson - I thought you did. You are not the wrong age, you're only 62.

Mr MICHAEL HODGMAN - I beg to tell you, unfortunately I was not able to, but I did volunteer for the Gulf War.

Mrs Jackson - Too old to volunteer for the navy, were you?

Mr MICHAEL HODGMAN - Excuse me, Ma'am, this is the old days of the white feather.

Mrs Jackson - No, I am just interested why you are so involved in the navy. I thought you were a Vietnam veteran, but you weren't.

Mr MICHAEL HODGMAN - The Attorney is really twitty - if I can use that expression politely - she is right off the planet today. I understand John Christian Watson's centenary was celebrated last evening very well but, having said that -

Mrs Jackson - I thought I was pretty on the ball, Mr Hodgman. Did you volunteer for Vietnam? Why didn't you?

Mr MICHAEL HODGMAN - I am very proud of the fact that I did volunteer for active service in the Gulf War.

Mrs Jackson - I am going to pursue this further. You're a fraud - a total fraud.

Mr MICHAEL HODGMAN - Your hatred of me is only exceeded by your hatred of one person on this earth, that I am aware of. I must say to you that I did volunteer and I was considered and my offer to serve voluntarily was declined.

Mrs Jackson - Really. What, on medical grounds?

Mr MICHAEL HODGMAN - But having said that, the fact of the matter is that I am entitled to a State funeral, so naturally I consulted with Mr Christopher Fuglsang. He said, 'Yes, this time the Attorney has consulted and the Government has consulted and the Tasmanian chapter of the Australian Funeral Directors Association support it'. I also have to say one other thing in relation to this matter: if the situation is as the Attorney has said in her second reading speech, why had it taken so long for this legislation to come before the Parliament? The delay from October last year to March this year, we accept; we called for it. That was reasonable. But why did it take you so long to bring the legislation forward? I am told that the figure of $16 million is in fact correct, that it has been a very high figure for a long period of time and I am also told that there are responsible people within the funeral profession who have been very concerned about a few small operators. I am just wondering if the Attorney-General would be good enough to tell us when she first became aware of this problem and why it took so long for her and this Government to act.

She gets upset if I say lazy and slothful but I will simply say on this matter this Government has moved with the speed of a semi-comatose snail, and if that is flattering the Government and being hard on snails, then I do apologise.

Having said that, Madam Deputy Chair, Her Majesty's loyal Opposition has been through this bill carefully. We find no area of complaint in it. It is very hard to speak to consumer representatives on things such as funerals, as you will appreciate, because the customers are not about to tell us.

Mr McKim - They're not in a position to complain.

Mr MICHAEL HODGMAN - They may be in a position to complain, Mr McKim, but it is to a much higher court. On the face of it the provisions are in accordance with those which are normally applicable in relation to trustees duties when administering a trust and we note the importation into this legislation of the provisions and principles laid down in the Trustees Act 1898.

We also note a double watchdog provision here. Firstly, each funeral trust must be approved by the director of Consumer Affairs and Fair Trading. Secondly, we also note that for those who are involved in contributing funds to Friendly Society funeral plans, that in the case of such plans some funeral directors have directed that all of their prepaid business will go through these plans. These arrangements are regulated by the Australian Prudential Regulation Authority and the Australian Securities and Investment Commission. Consequently there is a double watchdog approach.

The one matter that has occurred to me and on which I just want confirmation from the Attorney-General is that in relation to pre-existing prepaid funeral agreements there is no basis on which the family can be called upon to pay any increased costs which are said to have become payable in the time between the commencement of the agreement and the death of the person about whom the agreement has been made. I am aware that some people who have engaged in these prepaid funeral arrangements are still worried about what happens if costs at the crematorium and at the burial ground are increased. My reading is that once the agreement has been entered into that is it; there is no escalation clause at all that I can see and there is nothing within the legislation that I can see that would justify an increase. I ask the Attorney-General to be good enough to confirm that is so because if it were not so then people who act in good faith, believing that at the end of the day their families will not be up for any additional payment, might suddenly find that after their departure the family is suddenly confronted with a very large bill.

I do not need to go into the detail but it is fair to say that the cost of funerals is quite significant and I think it is appropriate that with payments of such a substantial amount there should be a proper legislative basis for it.

Mr Gutwein - And they're often held for a long period of time.

Mr MICHAEL HODGMAN - I was about to say that and I am not mean enough to suggest there should be any windfall provisions where there is an additional payment received in relation to investment made but I again ask the Attorney the question that Mr McKim and I raised with her. I do not expect it is going to impose an enormously increased workload on Mr Roy Ormerod and his hardworking staff but I seek your assurance, Attorney, that the resources to administer this bill will be met by your Government.

I might conclude by saying I do recall not too long ago that it was standard practice for good governments to report to the Parliament whether every bill was revenue neutral, whether the State made a profit out of it, or whether the State would be involved in more expenditure and additional resources were going to be required. We do not get that information now. We seem to have gone backwards, Mr Gutwein.

Having said that I would be grateful if the Attorney would confirm that the resources will be there to properly administer this legislation. As I said, the persons for whose ultimate benefit the legislation is established are not going to be around to argue their cause. Unfortunately, their widows and dependants are the ones who may have to argue the cause and that could become a very expensive, onerous and emotionally distressing operation.

Quorum formed.

[3.17 p.m.]

Mr McKIM (Franklin) - I indicate to the House, that the Greens will be supporting with pleasure the Prepaid Funerals Bill 2004.

I take note, as the Greens always do, of the minister's second reading speech. I think she has provided a reasonable summary of the provisions of the bill in that speech. I have a couple of matters I would like to raise. It might be that the minister can answer them in response to the debate or it might be that we will need to go to the clauses to get a response.

If I could say as a preamble to my raising those slightly more minor matters, of course it is necessary that this bill be passed by this House. It does protect consumers, which is obviously why the provisions -

Mr Michael Hodgman - Madam Deputy Speaker, I am sorry to say so soon after to again draw your attention to the state of the House. It is quite contemptible that people should come in and then walk straight out. This is a very important piece of legislation.

Mr Cox - Michael, you should know by now that you wait until the sand has gone through the hour glass before you call it again otherwise they cannot stop them.

Mr Michael Hodgman - That is not true either.

Mr Cox - It is true.

Mr Michael Hodgman -No, it is not.

Quorum formed.

[3.20 p.m.]

Mr McKIM (Franklin) - Madam Deputy Speaker, as I was saying, obviously the provisions of this bill involve the Office of Consumer Affairs and Fair Trading, and rightly so. Some of the matters which I would like the relevant minister - in this case, the Attorney-General - to clarify include the somewhat unusual provision in clause 7 that the agreements must be in writing no smaller than font size 10. I assume that is because many people who might have to deal with these agreements from the side of the contributor may have impaired vision, but that actually raises an interesting point as to whether all such agreements that are required in any bill that is passed by this House ought not to involve a requirement that the writing be no smaller than font size 10. Let us be quite clear about it; we have all heard of the trap of 'fine print', and it seems to me to be a pretty reasonable thing to point out. Just for the record, I notice that I am not wearing glasses but the two government ministers are.

Mrs Jackson - No, but I don't use them to read.

Mr McKIM - Mr Hodgman, I notice, has just removed his. I do make the point that it seems to be an entirely sensible provision and I wonder whether it might not be something that Parliamentary Counsel might consider when drafting other pieces of legislation which are before this House, in order that people with impaired eyesight can actually read the agreements which are created under the bills.

I have another matter I would like to raise in relation to that clause, and it is a matter I have raised on a number of other bills that have come before this House. It is about a flier with information from government to particular groups of people. I understand that the funeral directors have given their support to this bill and I ask the Attorney how she intends to notify funeral directors that this law has been passed so that they can be made exactly aware of what their obligations are under this bill should it become law.

I would also ask, given that this bill also provides for a contributor to a scheme to be given a copy of the agreement within 14 days, did it occur to the drafters of this bill to require that a notice be put up in funeral parlours informing contributors of their rights under this bill? It is one thing to legislate; it is quite another thing for people out there - who, as citizens in the twenty-first century, are inundated with information, advertising and so on - to know exactly what their rights are under legislation such as this. I am a big fan of governments communicating with interest groups and citizens so that people can be made very clearly aware of their rights and obligations under particular pieces of law. Members would know that ignorance is of course no defence in a court of law, and neither should it be, but that does not mean that the Government of the day does not have an obligation.

Mr Gutwein - It holds up in this Parliament quite well on occasions.

Mr McKIM - Mr Gutwein, by interjection, quite rightly points out that ignorance does hold up on the Government's side quite well as a defence. However, as he would be aware I am sure, I was speaking on matters which occur within the legal system. I do make the point that there is an onus on governments, in my view, when passing laws such as this, to inform interest groups such as the group representing funeral directors but also to inform consumers of services provided under this bill of their rights. For example, they have a right to receive a written copy in font size 10 or greater within 14 days. I would be indebted if the Attorney could explain that to me.

Mr Hodgman raised an interesting point in relation to any interest that might be earned by a business that provides funerals. As he quite rightly pointed out some people do contribute for a long time and I wonder whether consideration was given to setting up a scheme similar to the requirement for people who have paid a bond to rent a house, whereby it is my understanding that the landlord, at the expiry of the lease, is required to return the bond plus interest to the tenant.

Mrs Jackson - Not interest.

Mr McKIM - Is that not right? I thought that is the case, or maybe I have just been lucky and run into a few good landlords over the years.

Mrs Jackson - I reckon.

Mr McKIM - Maybe the Attorney could explain whether she has considered introducing a law that looks after the rights of tenants, because I know the Attorney, being the social reformer that she is, and as I have said a number of times -

Mrs Jackson - Flattery will not really get you anywhere.

Mr McKIM - It has worked in the past. She is a reformist Attorney-General and she might like to look at protecting the rights of tenants and of contributors to schemes under the Prepaid Funerals Bill 2004 in order that equity is provided to them. Might I add that I actually do not share the opinion of the member for Denison, Mr Hodgman, that the Attorney will be out of a job by the end of the year. I actually do not think she will be.

Mrs Jackson - I have had a reprieve.

Mr Michael Hodgman - She will be.

Mr McKIM - No, to be quite clear, I probably would have agreed with you more in the middle of last year.

Mrs Jackson - Yes, I probably would have too.

Members laughing .

Mr McKIM - She is agreeing with me now, Madam Deputy Speaker, but I have a funny feeling that she may still be in the job as Attorney-General at the end of this year, despite the fact that she has a couple of bills coming up about which at least that the Greens might have a little bit to say.

Mr Sturges - She will do the marathon.

Mr McKIM - I think you will find, Mr Sturges, that she will. She is receiving support from her colleagues. That is the main thing, Attorney.

It is not my intention to take up any more time in the House in relation to this. I would be indebted for the duration of this debate if the Attorney could provide me with the information I have requested and we may or may not go into the clauses.

[3.29 p.m.]

Mrs JACKSON (Denison - Attorney-General) - This debate is going to conclude in a minute but I will have those answers tomorrow. I thank all the members for their support of this legislation. It has taken some time and it is a concern that we did not have this legislation in Tasmania before I was made aware of it when I first came to this job.

Time expired.