A Sad Example Of “Industry Consultation”

We continue our expose of the REIV’s use of the media and political lobbying strategies to prevent changes to real estate licensing laws.

(For a detailed examination of corruption through political lobbying see Pigs at the Trough(Crown Publishers, NY, 2003) by Arianna Huffingtons.)

What happened to SA’s wonderful new laws?
(An article from the Jenman website)

John Rau must be one of the most frustrated politicians in the country. Four years ago the dedicated Labor backbencher began his fight to protect South Australian property consumers.

But he didn’t make allowances for the nation’s most stalling consumers affairs minister, Karlene Maywald.

The saga of SA’s mooted legislation reads like an episode of the British TV comedy, Yes Minister.

Rau, a Labor backbencher, held his own inquiry into real estate in 2002. By the end of that year the State Government had his report, which recommended new laws to protect consumers.

But instead of feeding Rau’s suggestions into the law-drafting process, they did what pollies always do – they formed a committee. By mid-2003 the Committee had recommended the new laws.

Cabinet approved most of the suggestions and the State Government called a press conference to announce new legislation. In September 2003, we reported that, thanks to John Rau, South Australia “could soon have the best protection in Australia for real estate consumers”.

Then came a Cabinet re-shuffle. And a new minister, Karlene Maywald. Cabinet had already said yes to the new laws. All Maywald had to do was hand it to the bureaucrats. But no, Maywald said she had to – wait for it – “consult with the industry”.

Instead of listening to consumers or to John Rau, she went off to speak to the agents whose behaviour created the need for new laws, who had already been consulted extensively and who had opposed many of the best consumer protection changes.

It’s now 2006 and Karlene Maywald still hasn’t delivered draft laws to Parliament. The problem is South Australia is ruled by a minority Labor Government and Maywald is a National Party member. Her loyalties lie with the business community.

Says Rau: “I am extremely disappointed that this area of reform still has not even been introduced into the Parliament. The changes have got stuck in the system and I have been unable to dislodge them.”

Rau says “The public is in the worst possible situation where they think the problem has been fixed but it hasn’t – so they haven’t got their antennae up when dealing with agents.”

Rau says agents still lodge caveats on people’s homes to force the owners to pay disputed commissions or marketing expenses. A caveat on a property prevents it from being sold. Rau says this is illegal but agents get away with it.

“Whether the agent is entitled to the money or not, they get it,” he says. “These caveats are illegal, every one of them, but many people don’t realise – or, if they are in the process of selling their home, they are under immense pressure and don’t have time to go through the legal process of getting rid of the caveat.

“It’s extortion. I took this issue to the Minister and she said: ‘I don’t think I want to interfere with that process’.” Yes, Minister. The agents are cheering you on.

Minister Maywald now says SA will have new legislation by the middle of this year. Given that a State election looms in March, it’s anyone’s guess when SA consumers will be protected, if ever.

Three years ago, John Rau’s new real estate laws looked likely to give South Australians the best real estate protection in the nation.

And then along came Karlene Maywald.

In 2006, South Australia’s property consumers are the worst protected in the nation

To post your comment on this item, please return to