Mr ALEX GREENWICH (Sydney) (12:08): My question is directed to the Minister for Better Regulation and Fair Trading. Strata communities are suffering from rising costs for services and insurance. Will the Minister legislate, in this term of government, the Productivity and Equality Commission's March recommendation to end strata manager commissions?
Mr ANOULACK CHANTHIVONG (Macquarie Fields—Minister for Better Regulation and Fair Trading, Minister for Industry and Trade, Minister for Innovation, Science and Technology, Minister for Building, and Minister for Corrections) (12:08): I thank the member for Sydney for his question. He has been a staunch supporter of the Government's strata reforms to modernise our strata laws over the past 3½ years. The Government has worked collaboratively with the member for Sydney—and I thank him for that—on all four strata bills that it has passed through this Parliament. I acknowledge the member also for his advocacy on behalf strata owners when it comes to conflicted remunerations like commissions.
Last year I tasked the NSW Productivity and Equality Commissioner to complete a review of the market impacts of prohibiting strata managing agents from accepting commissions or other conflicted payments. The existence of those commissions has led to a number of concerns, including inflated costs for owners corporations, a reduction in competition, an erosion of trust between owners and strata managing agents, and a compromised ability of owners corporations to make informed financial decisions. Those concerns are quite serious. The Government has listened to the concerns, and that is why I asked the commissioner to carefully consider whether banning commissions to strata managing agents would lead to better value for money, higher quality of services, lower costs and simpler arrangements for strata owners.
Let us not forget that more than 1.2 million people live in strata, with over 90,000 strata schemes across New South Wales. Over the next decade or so, more than half the people in Greater Sydney will be living in strata. The reform that the Government has done is really important, and the Government is considering more reform. We can all agree that a regulatory environment that stops strata managers from being incentivised to act in their own interests rather than in the best interests of owners is important reform, and the Government continues to consider it. The Government also needs to make sure that any unintended consequences of the ban on commissions, particularly those that could adversely affect strata owners, are properly considered and examined.
The commissioner's report presents a range of options to address the very real concerns whilst seeking to protect consumers and improve outcomes. The Government is carefully considering the commissioner's findings and will continue to examine the potential impacts on owners, strata managers and the broader industry. The Government has clear plans to modernise strata laws, and people can trust us to keep working to give them confidence when living in strata. It would be remiss of me not to inform the House of the significant steps that the Government is taking to protect people who live in apartments. Agents now have to be up-front with owners about any kickbacks or conflicts of interest and disclose any real connections with suppliers and developers. [Extension of time]
They must give detailed breakdowns of insurance quotes, commissions and broker fees, and report in real time new connections that arise. The enhanced disclosure requirements give strata owners the confidence they need to make informed decisions. Managers who fail to meet those obligations may face penalties of up to $110,000. We know that there is more work to do, and we will continue the reform agenda to ensure that our strata laws meet the needs of our growing strata community.
