Northern Territory Second Reading Speeches

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ADMINISTRATION AND PROBATE AMENDMENT BILL 2001


Madam Speaker, I move that the bills be now read a second time.

The main purpose of these bills is to implement reforms identified as a consequence of the National Competition Policy Review of the Public Trustee Act and the Public Trustee Amendment Act 1998. In April 1995 the Commonwealth, states and territories signed three inter-governmental agreements that comprised the National Competition Policy Reform Package. Compliance with agreed national competition policy reforms is a prerequisite for a series of competition payments to the Territory from the Commonwealth. These payments have been estimated at over $7m per annum from 2001-02.

One of the national competition policy agreements, namely the Competition Principles Agreement, obliges the Territory along with the states to examine all legislation that may contain provisions that are anti-competitive. Within the context of the Competition Principles Agreement, a very broad approach is taken as to what provisions are anti-competitive. A provision may be anti-competitive if it does any of the following:

1 governs the entry or exit of firms or individuals into or out of the markets;

2 controls prices or production levels;

3 restricts the quality, level or location of goods and services available;

4 restricts advertising and promotional opportunities;

5 restricts price or type of input used in the production process;

6 is likely to confer significant costs on business or; 7 provides advantages to some firms over others by, for example, shielding some activities from pressures of competition.

It can be seen that a provision is anti-competitive if it has the effect of imposing costs on business. This examination requires that the objectives of the legislation be identified and confirmed as to their current application. It then requires that each restriction on competition be assessed to determine if it is in the net public interest. Thus, it is claimed that the competition policy does not require the removal of all provisions that may be anti-competitive. Rather, it requires that all state and territory governments reach a judgment as to whether an anti-competitive provision can be justified as being in the public interest after regard is had to the costs and the benefits of the restriction.

In summary, the guiding principle underpinning each review is that legislation should not restrict competition unless it can be demonstrated that: (1) the benefits to the community as a whole outweigh the costs of the restriction; and (2) the objectives of the legislation can only be achieved by restricting competition.

The Public Trustee Act was identified as possibly containing anti-competitive provisions. This act as proposed to be amended by the not yet commenced Public Trustee Amendment Act 1998 has been reviewed by a team comprising representatives from the Northern Territory departments of the Attorney-General, Treasury, Industries and Business and Chief Minister. The review team released an issues paper in the Year 2000 and provided a report to the previous government in June 2001.

The review team identified the following objectives as being current for the Public Trustee they are:

1 to provide a manager, administrator, executor or trustee of an estate or of a property of last resort incorporating various community service obligations; 2 to provide an alternative trustee or executor service to the public; and

3 to establish common funds for general investment purposes.

The review team recommended that these objectives be set out in the act. The government accepts these recommendations. We are committed to a strong office of the Public Trustee that is committed to ensuring that there is a confident trustee and executor service available to all of the citizens of the Northern Territory. The review team identified a number of provisions of the Public Trustee Act that are anti-competitive. In the main, these are provisions operating so as to provide the Public Trustee with minor cost advantages over competitors when administrating small estates. These provisions include those that permit the Public Trustee to administer estates of small value without the need to obtain the approval of the Supreme Court. Other provisions include those that give the Public Trustee the right to obtain information about estates and to take various measures designed to minimise unnecessary levels of disputation. The review team recommended that most of these operational advantages will be retained but that they will be extended so as to apply to other professional personal representatives. The government accepts these recommendations.

Consequently, the bills provide for a repeal of numerous sections of the Public Trustee Act and the re-enactment of the provisions in the Administration and Probate Act. These provisions as rewritten will mean that all professional personal representatives will operate on a level playing field in respect of the administration of estates and trusts. For the purpose of the Administration and Probate Act, a professional personal representation will be a person who is one or the other of the following: (1) the Public Trustee; (2) a corporation approved under the Companies (Trustees and Personal Representatives) Act; or (3) a legal practitioner. This definition describes the current group of persons who can lawfully administer estates for the payment of a fee.

A second area of provisions that maybe anti-competitive are those dealing with government support of the business operations of the Public Trustee. Currently, section 28 provides an indemnity in respect of the operations of the common funds administered by the Public Trustee and the Public Trustee Investment Board. Section 97 provides for protection of Public Trustee employees and agents from personal liabilities. The main potential problem of these provisions is that they could be administered so there is not competitive neutrality between the Public Trustee and its private sector competitors.

The review team recommended that the provisions be amended so that the Public Trustee in setting the levy provided for in the Public Trustee Amendment Act 1998 must take into account advice from the Northern Territory Treasurer as to the value of the indemnity and guarantees provided to the Public Trustee. The government accepts these recommendations.

The review team also recommended removal of the provision in the act which states that the Public Trustee is not required to have an auctioneer’s licence. The government accepts that recommendation. The Auctioneer’s Act has all of the appropriate controls, including certain exemptions for government bodies.

The bills also provide for certain other reforms and revisions, these include:

1 the imposition on the Public Trustee of a duty to provide appropriate information to beneficiaries or their representatives; 2 the imposition on the Public Trustee of a duty on application of a person with a relevant interest in the estate or trust to provide a detailed account of the position of the estate or trust;

3 the reduction in size of the Public Trustee Investment Board as contemplated by the Public Trustee Amendment Act 1998 so that the Board is to comprise three rather seven members;

4 a review of the penalties in the Public Trustee Act and the conversion of them so that they are stated in terms of penalty units rather than in monetary amounts;

5 minor revisions to remove sexist use of language; and

6 transitional matters designed to ensure that the changes proposed by the bills do not affect the current administration of the states, except where this is made plain in the drafting of the bills.

I commend the bills to the House.

 

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