Ms JODIE HARRISON (Charlestown—Minister for Women, Minister for Seniors, and Minister for the Prevention of Domestic Violence and Sexual Assault) (13:16): I speak in support of the Strata Managing Agents Legislation Amendment Bill 2024. More than 1.2 million people live in strata communities across New South Wales, as has already been said during the debate. That is nearly 15 per cent of the State's population. That number is set to rise as the housing mix across the State changes. I am proud to be part of a government that is tackling the housing affordability crisis head on with a comprehensive plan to build quality homes of many different types. As the Minister said in his second reading speech, critical to the success of that plan is public confidence in strata living.

The reforms included in the bill are aimed at achieving precisely that. By strengthening the disclosure obligations of strata managing agents, increasing transparency for strata owners and improving on Fair Trading's compliance and enforcement powers, the bill provides a new level of clarity and confidence in the administration of strata. In my electorate of Charlestown, where a number of train stations have been identified as part of the Government's groundbreaking transport oriented development strategy, strata living—which is already a fact of life for many of my constituents—will become more common. I am so proud to stand behind our housing strategy in my role as both a local member and Minister. I have seen firsthand the impact of the protracted housing crisis, which those opposite allowed to fester during 12 long years in government.

With this bill, the Government is taking the necessary steps to ensure that strata living becomes an attractive option for many across the State, including in Charlestown. The bill brings much-needed reform to the State's strata laws. We know why those reforms are necessary. TheFour Corners report aired on Monday 9 September exposed the deep flaws in the way the strata industry is managed. It is important to make clear that the Government's action in this space was not motivated by that broadcast. The proposals outlined in the bill were first announced back in June.

The Government's action has been motivated by nearly a thousand complaints over a five-year period relating to the actions of strata managers. It is important to make clear that the vast majority of strata managers are upstanding professionals who deliver for their clients. This legislation is aimed at helping managers to achieve higher levels of effectiveness, efficiency and transparency. This legislation will strengthen trust in the strata system and resolve problems. As the Minister said in his second reading speech, "To solve the housing crisis, we need people to have confidence to invest and live in higher density housing that relies on strata schemes." I acknowledge the many stakeholders who had input on this bill, who have already been identified in previous contributions to this debate. The level of engagement reflects the importance of the legislation and the willingness of all stakeholders to produce practical solutions. That is reflective of this Government's commitment to hear from all interested parties.

I turn my attention to the provisions of the bill and what they will mean. Crucially, the bill will benefit not only future residents but also those currently living in strata and community land schemes. The bill represents another step forward in the Government's work to modernise our State's housing system. The bill will make strata and community land laws fit for purpose in 2024 and bring the system into line with community expectations by filling in accountability gaps. By strengthening enforcement against those who breach their obligations, the bill will limit wrongdoing in the sector and help ensure that those impacted by any wrongdoing are properly redressed.

As I have mentioned, one of the key elements of the bill is an increase in transparency for owners' corporations. The existing disclosure requirements are not adequate to equip owners' corporations with the information they need to make informed decisions about the management of their schemes. The proposed amendment to section 60 of the Strata Schemes Management Act will go some way to address those concerns, requiring agents to disclose more relevant information more often. For example, under certain circumstances, the strata managing agent will have to give written notice to the owners' corporation about perceived conflicts of interest before entering into a contract for the purchase of goods or services.

The bill also adjusts the Strata Schemes Management Regulation 2022 to expand the definition of who connected persons are for the purposes of perceived or actual conflicts of interest. Section 7 of the Act sets out who is considered to be connected with whom for the purposes of the Act, including parent companies and related entities. The bill will also require agents to give written notices to the owners' corporation as soon as possible after they learn of a connection or that they might benefit from a direct or indirect pecuniary interest in the strata scheme. All told, the reforms mean that owners' corporations will have more up-to-date disclosures about an agent, including where there is a connection with the original owner of the strata or a connection with a supplier of goods or services to the scheme.

Under the provisions of the Property and Stock Agents Regulation 2022, agents are obligated to refuse an appointment to act for a client if their interests conflict with their client's. As we know, interests change over time. To reflect that, the obligation extends to any conflicts that may emerge over the course of a relationship between client and agent. Should a conflict of interest emerge, the agent must not continue to act for their client. The bill will make agents acting for owners' corporations actively consider their obligations and make positive determinations about whether or not they are acting properly. Agents will also be required to consolidate and report all of the information captured by the reforms I outlined previously at the strata scheme's annual general meeting, including the identification of connections that formed over the course of the preceding 12 months.

The provisions make clear the purpose of this bill: the empowerment of strata residents, the clarification of agents' responsibilities and the strengthening of trust between the parties involved in a strata scheme. Under the bill, the strengthening of trust starts even before the appointment of the strata manager. The decision of who should act as strata manager is one of the most important an owners' corporation will make. That decision, as the Minister said, holds significant implications for owners' corporations and the financial health of residents. The proposed amendments to section 71 require prospective agents to provide more relevant information before appointment, including their connections with suppliers with whom they have prior relationships.

One particular important area that strata managers have a great deal of control over is the purchasing of insurance. We have seen owners' corporations charged excessive fees when securing needed insurance, with agents at times being induced to purchase certain products over others with the promise of commissions. To address this, the bill implements higher disclosure standards for insurance quotes that agents source for owners' corporations. An agent is required to source three insurance quotes or supply a written reason to the owners' corporation why this could not be achieved. The bill requires the quotes to include specific information breaking down the cost of the policy, including the premium separate to any commission; the commission; and any broker fees. Crucially, the quotes will also need to show where the commission and broker fees are actually going and disclose if the agent is connected to the provider of the quote. Tightening disclosure requirements allows owners' corporations to make better, more informed decisions, and the revised framework in the bill ensures that the regulator has the capacity to effectively enforce the Act.

The bill adjusts the maximum penalty for breaches of the disclosure obligations in the Strata Schemes Management Act and the Community Land Management Act to 500 penalty units for a corporation and 100 penalty units in any other case. That is necessary because the current penalty amounts have fallen far below market value, encouraging bad actors to potentially factor in penalties as the cost of doing business. The penalty infringement notice amounts are also doubling to $2,200 for corporations and $1,100 for individuals, allowing Fair Trading to issue on-the-spot fines. The higher penalties will be complemented by stronger enforcement powers for NSW Fair Trading to investigate and respond to identified noncompliance. In all, that will create a strong disincentive against misconduct and send a powerful message to strata residents that the New South Wales Government has their backs. I am pleased to be part of a government delivering real change for more than a million residents across the State, and I know that this legislation will have positive benefits for more and more of my constituents in years to come. I commend the bill to the House.