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ECONOMICS REFERENCES COMMITTEE—PROPOSED REFERENCE

Senator Milne, pursuant to notice, moved business of the Senate notice of motion no. 3—That the following matters be referred to the Economics References Committee for inquiry and report by 31 March 2010:

 (a) a reconsideration of the committee's findings in relation to Australia's Mandatory Last Resort Home Warranty Insurance Scheme, in light of:

  (i) the 2008 Federal Ombudsman's report that demonstrated that last resort home warranty insurance is the worst performing insurance in the nation,

  (ii) the Essential Services Commission's review of the Victorian Domestic Insurance Scheme which demonstrates that there is virtually no benefit to anyone other than the insurers and their brokers of this insurance product,

  (iii) evidence to these inquiries which demonstrate that the Senate's conclusions were based on information now shown to be wrong, including the fact that the Senate estimated that less than 10 per cent of builders provided securities whereas 44 per cent of those in Victoria have done so since 2002,

  (iv) the lack of competition in the market which is now down to three insurers, and

  (v) the questionable legality of the deeds of indemnity, bank guarantees and securities demanded by insurers as a condition of eligibility for warranty insurance;

 (b) any reforms which may lead to appropriate consumer and builder protection and improved housing affordability; and

 (c) any related matters.

Debate ensued.

Question put.

The Senate divided—

AYES,6


Senators—
Brown, BobLudlamSiewert (Teller)Xenophon
Hanson-YoungMilne

NOES, 32


Senators—
Adams (Teller)EgglestonKrogerPratt
BernardiFeeneyLundyRyan
BilykFergusonMarshallStephens
BirminghamForshawMcEwenSterle
CameronFurnerNashTroeth
CashHurleyParryTrood
ConroyHutchinsPayneWilliams
CrossinJoycePolleyWortley

Question negatived.