Mr BAILEY - 1995-05-25
The minister has told Territory travel agents that he will impose on them a compulsory travel compensation fund, commencing on 1 July, only 5 weeks away. Will he confirm that the government is in such disarray that it is unable to tell the House details of how that scheme will work? Will he confirm that he has convened a meeting with travel agents for next Wednesday to try to explain to them how the scheme will operate, and will he give a commitment that agents will not have to pay an additional external audit fee of as much as $2000 to $4000, as the minister proposes currently?
ANSWER
Mr Speaker, it is correct that, for some years ...
Mr Coulter: Four years.
Mr FINCH: Four years, in fact, the Northern Territory has had in its legislation a requirement for travel agents both to be registered and to participate in a compensation fund to safeguard the interests of the travelling consumer. I am a little alarmed that, of all people, the spokesman for the Labor Party should challenge why Territorian consumers should have such protection.
Mr Bailey: We were not asking you that. What are the details?
Mr FINCH: The scheme is in place. The member knows that because I wrote a comprehensive letter explaining to him that the national compensation scheme applies everywhere in the country, with the exception of the Northern Territory.
Mr Bailey interjecting.
Mr FINCH: The reason that it has not been implemented is that the industry asked whether it could try to find an alternative scheme because it lacked confidence in the national scheme. I accept that its reluctance is partly legitimate and partly not.
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What we have been offered under the national scheme is that, if our travel agents are registered by 1 July this year, the entrance fee to the scheme will reduce from $5000 to $1000. Thus, there would be a $4000 saving for our people if they were to join the national scheme now, thereby locking this last component in this country into the national uniform system. As a member of the scheme, a travel agent has to meet certain criteria. Amongst them is the financial criterion that they run a pretty tight ship. We do not want people participating in a compensation scheme if they are likely to go under, if they are likely to be scallywags, or if they lack the financial credibility that would be expected of anyone who is holding the travelling public's money virtually in trust. Many of those agents hold $200 000 to $300 000 or more of the travelling public's money before the tickets are issued. In itself, that is something of a worry. Indeed, I would think that it would be a worry to the member.
Mr Bailey: It is.
Mr FINCH: As he knows, because I gave him copies of all of the letters, the meeting that is proposed for next Wednesday was arranged on the initiative, if you like, of the local industry, which understands now that this scheme involves only travel agents - those people holding money on behalf of the travelling public and booking for other providers, not themselves alone. It is not about tourism operators.
Mr Bailey: Yes, I am aware of all of this.
Mr FINCH: He is aware of all of that. Therefore, it is pretty clear who ought to belong, and they all know that now.
They are saying that they are still worried about the national scheme and think that they can participate in a self-insurer scheme more easily and more cheaply. I said to the industry 3 weeks or more ago that it had had the opportunity to look at this. It went right through that proposal some 18 months ago, examined it with the TIO etc, and decided that it was not viable. Now it wants to take another look at the scheme. I say that that is fine, but we do not have much time left because 1 July is looming. The other threat in relation to the national scheme is that, if the Territory agents are not part of it by 1 July, Territory travellers may end up without cover and risk being exposed to the failure of a wholesaler etc interstate. I am not sure about the legitimacy of that threat, but it exists and I think that it is pretty much a worry.
We have a very short time to examine proposals, all of which ought to have been put forward to Consumer Affairs by now, to enable us to meet with the industry next Wednesday to resolve, once and for all, who needs to be registered, who needs to be covered under the compensation scheme and how. If they do not have a viable scheme, that will safeguard the travelling public, then they will have no option but to enter the national compensation scheme which exists already and applies throughout the rest of the country. It is a simple story, not a great drama.
Page 608
ANSWER
Mr Speaker, it is correct that, for some years ...
Mr Coulter: Four years.
Mr FINCH: Four years, in fact, the Northern Territory has had in its legislation a requirement for travel agents both to be registered and to participate in a compensation fund to safeguard the interests of the travelling consumer. I am a little alarmed that, of all people, the spokesman for the Labor Party should challenge why Territorian consumers should have such protection.
Mr Bailey: We were not asking you that. What are the details?
Mr FINCH: The scheme is in place. The member knows that because I wrote a comprehensive letter explaining to him that the national compensation scheme applies everywhere in the country, with the exception of the Northern Territory.
Mr Bailey interjecting.
Mr FINCH: The reason that it has not been implemented is that the industry asked whether it could try to find an alternative scheme because it lacked confidence in the national scheme. I accept that its reluctance is partly legitimate and partly not.
Page 607
What we have been offered under the national scheme is that, if our travel agents are registered by 1 July this year, the entrance fee to the scheme will reduce from $5000 to $1000. Thus, there would be a $4000 saving for our people if they were to join the national scheme now, thereby locking this last component in this country into the national uniform system. As a member of the scheme, a travel agent has to meet certain criteria. Amongst them is the financial criterion that they run a pretty tight ship. We do not want people participating in a compensation scheme if they are likely to go under, if they are likely to be scallywags, or if they lack the financial credibility that would be expected of anyone who is holding the travelling public's money virtually in trust. Many of those agents hold $200 000 to $300 000 or more of the travelling public's money before the tickets are issued. In itself, that is something of a worry. Indeed, I would think that it would be a worry to the member.
Mr Bailey: It is.
Mr FINCH: As he knows, because I gave him copies of all of the letters, the meeting that is proposed for next Wednesday was arranged on the initiative, if you like, of the local industry, which understands now that this scheme involves only travel agents - those people holding money on behalf of the travelling public and booking for other providers, not themselves alone. It is not about tourism operators.
Mr Bailey: Yes, I am aware of all of this.
Mr FINCH: He is aware of all of that. Therefore, it is pretty clear who ought to belong, and they all know that now.
They are saying that they are still worried about the national scheme and think that they can participate in a self-insurer scheme more easily and more cheaply. I said to the industry 3 weeks or more ago that it had had the opportunity to look at this. It went right through that proposal some 18 months ago, examined it with the TIO etc, and decided that it was not viable. Now it wants to take another look at the scheme. I say that that is fine, but we do not have much time left because 1 July is looming. The other threat in relation to the national scheme is that, if the Territory agents are not part of it by 1 July, Territory travellers may end up without cover and risk being exposed to the failure of a wholesaler etc interstate. I am not sure about the legitimacy of that threat, but it exists and I think that it is pretty much a worry.
We have a very short time to examine proposals, all of which ought to have been put forward to Consumer Affairs by now, to enable us to meet with the industry next Wednesday to resolve, once and for all, who needs to be registered, who needs to be covered under the compensation scheme and how. If they do not have a viable scheme, that will safeguard the travelling public, then they will have no option but to enter the national compensation scheme which exists already and applies throughout the rest of the country. It is a simple story, not a great drama.
Page 608
Last updated: 09 Aug 2016