Catchpole Brent: Credit Contracts and Consumer Finance Bill — In Committee 
Catchpole Brent: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8700] 
BRENT CATCHPOLE (NZ First) 
: 
 The first point I would like to raise with the Minister has to do with the commencement date. The Commerce Committee heard a large number of submissions from the banking industry the finance industry and all sorts of major industries in this country to the effect that the commencement date needs to be extended for 2 years minimum so that they can get their software installed and their systems in place and so be able to handle these changes. I hope that the way this bill is written means that the Order in Council will allow a 2-year delay. 
Mark Peck 
: Have you read the Supplementary Order Paper? The Supplementary Order Paper actually does it. 
BRENT CATCHPOLE 
: That is wonderful. I thank the member. It sounds like we might be doing that but I am just making the point that—[ 
Interruption 
] I will not take his word for it at this point. I am making the point that a delay of at least 2 years is needed to allow the finance industry to bring in these changes. 
The next part I would like to refer to is the definition of credit contract. For some reason that definition has been removed from the definitions clause and put into a new clause—clause 6A. This clause precedes clause 6B which defines buy-back transactions. Why these two definitions were separated from the definitions clause and put into separate clauses I am not quite sure. I would like the Minister to clarify that for us. It seems a rather odd way of doing it but I hope the Minister will take a call and give us an explanation. 
I refer now to the definition of cash price. Cash price as stated in the bill is the lowest price at which a person could have bought property or services had he or she paid cash or if a person could not pay cash it is the fair market value. We all know how cash deals can be discounted but a fair market value is something that could be disputed. A clearer description should have been given. Also we have heard quite a lot about compliance costs. This bill does require quite a lot of compliance costs but I think that the way the legislation is going to handle a number of very serious credit issues is good. Therefore compliance costs will probably be balanced out with fewer loans being forfeited. 
 I have been searching through this bill and I find that there is one more issue that has not been raised—that is loans to students. Student loans are not covered in this bill and surely students should have the interest rate on their loans explained to them right upfront. Many of them are paying off the interest and are not getting anywhere with the loan itself. That is a huge millstone around students’ necks. It is something that I think should have been incorporated in this bill so it is made very clear to students how much their loans will cost them in the long term. We heard some extensive figures from Paul Adams. I am not quite sure that those figures are correct but certainly I know that the figures in relation to student loans mean that students are left paying off just their interest for a long time before starting to get on top of their actual loan. That is a huge disincentive for them to stay in this country and to continue to work here. 
So I summarise by saying that this part of the bill could have had a few improvements made to it. If those improvements had been made the bill would have been a lot better. However I am glad that the meaning of the buy-back scheme is covered because that is an important and a serious part of the bill.