The Federal Government tomorrow will urge the States to develop a nationally consistent approach to deal with property investment marketing hustlers.
The Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said consumers needed increased protection from marketers of seminars offering finance and property packages with the lure of excessively high yields and capital gains.
"There are some high pressure promoters exploiting the property boom with hype about how investors can become overnight millionaires, then selling them property at inflated prices with loans from a related party," he said.
"It is a problem requiring an urgent and united approach by the States and Territories. The regulation of the real estate industry is their responsibility - they licence agents and collect stamp duties. The Commonwealth will lend whatever support it can to help them develop and implement a common regulatory remedy, but it clearly remains their primary responsibility."
He said the 2002 Financial Services Reform Act, which introduced a uniform licensing, conduct and disclosure regime for providers of financial services such as stockbrokers, investment advisers and financial planners, could form the basis of a regulatory model for the States and Territories to tackle the problem.
Senator Campbell wrote to all consumer affairs and fair trading ministers earlier this month urging them to agree to a nationally consistent approach at tomorrow's Ministerial Council for Consumer Affairs meeting in Sydney. Senator Campbell is the Commonwealth representative on the council.
He said the Queensland Minister for Fair Trading, Merri Rose, had sought Federal Government support last December for national regulation of property investment advisers.
"I suggested at the time that the most appropriate course of action would be to put the issue at the top of the next Ministerial Council meeting agenda so the nature and extent to the problem can be ascertained and a remedy found," he said.
"Some of these marketers are operating in different States yet each jurisdiction has varying laws about how to deal with them. We now have the opportunity to agree on a common approach to get on top of this problem."
Senator Campbell said a report by the Australian Securities and Investments Commission three years ago recommended that States and Territories should take action to curb property market spruikers. Only Queensland had brought in legislation to cover their activities.
"Consumers are entitled to have appropriate protection when receiving property investment advice," he said.
"They should have confidence that the person giving that advice is competent, that there is full disclosure of any commissions or other benefits and that they have redress if they suffer any loss because of bad advice."
SYDNEY
31 July 2003
Contact: Wayne Grant 08 9421 1755 or 0407 845280