Third Readings —Text is incorporated into the Bound VolumeThird Readings —[Sitting date: 10 December 2013. Volume:695;Page:15389. Text is incorporated into the Bound Volume.]Third ReadingsHon MICHAEL WOODHOUSE (Minister of Immigration)on behalf of theMinister of Consumer Affairs: I moveThat the Fair Trading Amendment Bill the Consumer Guarantees Amendment Bill the Weights and Measures Amendment Bill the Secondhand Dealers and Pawnbrokers Amendment Bill the Carriage of Goods Amendment Bill and the Auctioneers Bill be now read a third time.The bills amend the Fair Trading Act the Consumer Guarantees Act and the Weights and Measures Act. In addition the Door to Door Sales Act theLayby Sales Act and the Unsolicited Goods and Services Act will be repealed and their content incorporated into the Fair Trading Act. A new Auctioneers Act will replace auctioneers licensing with a new auctioneers registration regime. I want to thank the House and the Commerce Committee for the unanimous support these bills have received. The support reflects robust consultation and a shared view that we are delivering positive outcomes. Businesses will understand their rights and obligations and consumers will be protected if there is an issue with the goods or services they purchase. Thanks are also due to the former Ministers of Consumer Affairs who have also guided this work to officials and to the parties who submitted on the bills.The aims of these bills are to offer better protection to both consumers and businesses to bring consumer laws in line with the business practices of our times to ensure compliance with the laws is much more straightforward and to make enforcing the laws more efficient and more effective. These changes represent best practice in regulatory reform and will drive competition innovation and growth in our economy. Content has been updated across all consumer laws to keep pace with changes in the way businesses and consumers transact. Less well-known legislation has been consolidated into the Fair Trading Act where it will be more accessible to businesses and consumers. The laws will take into account typical day-to-day transactions such as making purchases from businesses online and self-service shopping which had not been considered when the laws were originally designed. The changes will also better align our laws with Australian consumer laws reflecting further progress on the single economic market agenda.New principles will ensure that ethical businesses are not disadvantaged when they compete with businesses that cut corners. For instance a new provision will requiretraders to be able to substantiate any claims they make as opposed to the Commerce Commission having to test the claim. New disclosure rules will also come into force around extended warranties so consumers know what sort of extra warranty they are buying over and above what they are entitled to under the Consumer Guarantees Act. These provisions not only protect consumers but also support honest business practices by ensuring that businesses compete on a level playing field.Businesses that are transparent about their claims and in their dealings with the public will not be disadvantaged. Thanks to the Fair Trading Act and the Consumer Guarantees Act consumers already know that they can rely on traders not to be misleading or dishonest and to supply goods that are safe and of acceptable quality. The Weights and Measures Act also has fundamental protections about receiving the right quantity of goods. By modernising and improving protections we will make the laws more accessible and improve consumer confidence. When consumers know understand and exercise their consumer rights competition thrives. This level of informed consumer confidence drives a healthy market place. Consumer confidence also supports innovation new products and new entrants into a market. We all take a risk when we buy something new or from an untried supplier. Our consumer laws help manage that risk for us so that we might be more inclined to buy a cutting edge product or trust information about new products.Business costs are also reduced when the law is accessible and compliance is easier to understand. As part of this process I acknowledge that legislation does not have all the answers. The bills resulting from the Consumer Law Reform Bill are underpinned by broad principles and by having principles-based law we avoid the need for specific rules for every type of transaction imaginable. The benefits of principles-based legislation will be enhanced by providing suitable and accessible guidance for consumers and for businesses. For example under the new laws traders will be required to identify themselves as traders when completing sales online. The law has broad definitions of “business” and “trade” but guidance information will clarify that anyone selling personal used consumer goods is not a trader and guidance will set out indicators for those who may be unsure. If you buy goods online in order to onsell them if you meet tax criteria or if you are required to register as a second-hand dealer you probably are a trader.Similarly the acceptable quality guarantee in the Consumer Guarantees Act remains principles-based. We cannot set different and detailed requirements for every type of good. In known grey areas such as reasonable expectations for the quality of second-hand vehicles guidance will be updated. What has changed is that the Consumer Guarantees Act will apply to all transactions when the bill is passed including online auctions. This closes a loophole where any good sold by traders to consumers in any bidding process has been exempt from the Consumer Guarantees Act. The change clarifies and simplifies the law and brings it up to date with modern trading practices.The majority of the changes that may affect the way businesses operate will take effect 6 months after Royal assent to give businesses time to review their practices if necessary. The new provisions on unfair contract terms have an even longer lead-in time of 15 months as businesses may wish to review their standard form contracts. Plain English communications public information and business guidance will be released by the Ministry of Business Innovation and Employment and by the Commerce Commission when the bill has been passed. General information about the changes is already readily available for consumers and businesses. I am confident that the agencies are ready to support the implementation of this bill and I commend it to the House.CAROL BEAUMONT (Labour): I rise to speak in support as we have done throughout of the consumer law reform process. The Consumer Law Reform Bill hasbeen split into six separate bills. I ask the question: why are consumers not a priority for this Government? Why are consumer rights not a priority? Why is protecting consumers not a priority? The time taken to update our consumer legislation is an absolute outrage but it is absolutely consistent with other Government behaviour that shows how out of touch it is with the life and the reality of the majority of New Zealanders who are doing it tough. It is hard out there and in tough economic times making sure that we have sound consumer legislation that protects consumers—that makes sure that they are not being ripped off by unscrupulous traders—is more important than ever. What has the Government done? It has sat on its hands for this legislation. It has been just unbelievable. It has actually taken a campaign to get this legislation through the House and we have supported it throughout. In fact I think every party in this House has supported this legislation. It should have been dealt with sooner.This is at a time when we know now that 265000 children are living in poverty—that is 25 percent of our children. Ten percent of them are living in extreme poverty and 40 percent of them are living in households with at least one working adult. Times are tough. Consumer legislation is important to make sure that people do not waste their money and that they are not ripped off yet this Government has taken so long to get this legislation through. In fact I could even talk about the consumer credit legislation in a very similar manner because that has also taken a completely unreasonable amount of time to get through this House—abject failure by the Minister of Consumer Affairs and abject failure by this Government.I just thought it would be good to get on the record what Consumer New Zealand said. This is a letter to the Hon Craig Foss the Minister of Consumer Affairs: “What has happened to promised new consumer protections? New Zealand consumers deserve better. Once we had some of the best consumer laws in the world. But they are now outdated and there are significant gaps in consumer protection. Consumers are being disadvantaged every day the Consumer Law Reform Bill is not passed. Traders can avoid the Consumer Guarantees Act by auctioning goods online or pretending to sell by competitive tender. Crucially the Bill will increase protections for people buying online and regulate extended warranties. It will also ban unfair contract terms outlaw unsubstantiated product claims and deliver much needed protections for door-to-door sales where unscrupulous businesses take advantage of consumers. Consumers have waited years for this reform. The Bill is supported by all parties in Parliament. Australia passed legislation to improve its consumer laws more than two years ago. Why is it taking so long here?”. Well that is a very very good question.Consumer New Zealand even went as far as asking whether there were vested interests that were delaying the passing of this legislation. I do not know whether there were or not but what I do know is that it just shows that ordinary New Zealanders families who are struggling are not the priority of this Government.Just to be clear about the time line there was a review initiated in 2009 and a discussion document introduced in June 2010. The Consumer Law Reform Bill was introduced to Parliament in April 2011 and its first reading was getting on for a year later in February 2012. In October 2012 it was reported back from the Commerce Committee. Just to note here that there was very good work done by that select committee—no question about that. It worked hard it made changes and it was getting good advice from officials. So that process went quite well. And then the bill languished for some time. So we had the report back from the select committee and the second reading—that was quite prompt—but then it languished for almost a year until we had the Committee stage last week. We cooperated with that. We said that yes we would cooperate with that as long as this legislation got through Parliament this year—hence here we are for the third readings in the second to last sitting day of this year. Buthonestly it is a disgrace to have a piece of legislation that is really important languish when our consumer law is out of date and does not reflect the reality of so many trading situations that consumers are now in particularly online trading and when you have support of everybody in the House and you do not get the legislation through. I have no words really to describe how appalled I am by that.It does provide protections and a number of them have been mentioned but I will give just a bit of detail. This legislation amends a number of Acts. The oldest of those is actually the Sale of Goods Act 1908 but also the Fair Trading Act 1986 the Consumer Guarantees Act 1993 the Weights and Measures Act 1987 the Carriage of Goods Act 1979 and the Secondhand Dealers and Pawnbrokers Act 2004. It also repeals a few Acts—the Auctioneers Act 1928 the Door to Door Sales Act 1967 theLayby Sales Act 1971 and the Unsolicited Goods and Services Act 1975—and incorporates them into the Fair Trading Act and the new Auctioneers Act. So it is a substantial piece of work—no question about that—and the protections it provides are really positive. As others have mentioned this is principles-based legislation which is sensible. It means that we do not have to regulate every particular circumstance.Some of the new rules that I do particularly want to mention are auction protection. Goods sold by traders at auction will now be covered by the Consumer Guarantees Act. That is the Act that says that goods have to be of acceptable quality and fit for purpose. Online traders will also be required to tell consumers that they are in trade. There will be clarity around extended warranties. That is particularly important. So many people end up unnecessarily getting and paying for extended warranties that merely repeat the protections they have in the Consumer Guarantees Act. There will be delivery protection. A seller will now be responsible for goods until they are delivered to the customer so they would have to replace a product damaged en route for example.In respect of proof of claims a company will have to demonstrate that it has proof before making advertising claims about its products. There will be stricter regulation of door-to-door sales. Shill bidding placing bids on your own auction to inflate the price—something I actually had not heard of before—will be an offence. The important thing—the really important thing—is that the Consumer Guarantees Act which is important will apply to all transactions between trades and consumers whether that be in a shop whether it be online or whether it be at a market. Those are some of the protections that are in this legislation and that is very positive.I do however want to say just a few more comments about why this is important. Apart from consumer protection having good robust consumer law is actually good for business as well. It is good because ethical traders—people who follow the rules—will not be disadvantaged by those online traders—The ASSISTANT SPEAKER (Lindsay Tisch): Sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.CAROL BEAUMONT: As I was saying before the dinner break the legislation is not just going to provide protection for consumers important as that is; it is also going to mean that ethical traders—good employers and good business people who do the right thing—will not be undermined and disadvantaged by those who do not. That is a problem at the moment where people are slipping outside consumer regulation. So that is another important reason why we need this legislation.It also has the benefit of greater alignment with our Australian neighbours in terms of our consumer law and that is important. It has been a relatively close working relationship generally in the area of consumer law. So there is a number of reasons why this is positive legislation and I have outlined some of the major provisions. Once againI would ask though why consumers have not been a priority for this Government. Why has it taken so long? I ask absolutely the same question in relation to consumer credit law reform which has languished even longer. We first started looking at that in 2007-08. The Government deprioritised it supposedly to allow this legislation to be prioritised and then this has languished on the Order Paper as well. I think it speaks volumes about the priorities that the Government gives to consumers.My last point really is to say that to do this properly we need to make sure that people both businesses and consumers will be well-informed about the changes and it is important that we have material available in many languages. Thank you.JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand and speak on the third reading of the legislation arising from the Consumer Law Reform Bill. This is legislation that is bringing considerable change to this whole space. It would have to be known and recognised that consumers have probably had the best deal under any Government in these last 5 years when you think about the cost of imports you think about the cost of interest rates and such like. It has been a good time for consumers and perhaps a more difficult time for exporters even though our exports in this country have seen considerable increases particularly up into China bringing some great prosperity to this nation.The Consumer Law Reform Bill heard 93 submissions which we understand were heard not only here in Wellington but also in Auckland. It has brought about a significant change in a number of Acts. Those are of course the Fair Trading Act the Consumer Guarantees Act the Weights and Measures Act the Carriage of Goods Act the Sale of Goods Act and the Secondhand Dealers and Pawnbrokers Act. We have also repealed the Auctioneers Act the Door to Door Sales Act theLayby Sales Act and the Unsolicited Goods and Services Act with considerable changes in that first list of Acts that I read out. So the review of these consumer laws which commenced a number of years ago under the then Minister of Consumer Affairs presented proposals to consumer and industry representatives for the modernisation and reduction in a number of consumer laws. This review has been through a process that has not happened for about 20 years. So the changes that have taken place are very timely and very significant.One of the areas that we looked at is the term of an unfair contract and how that affects people in their dealings with business. A term is an unfair contract term only if it is declared to be such by the High Court or a District Court on the application of the Commerce Commission. This process would ensure that the Commerce Commission was given control of the enforcement of unfair contract terms. It is most likely that the Commerce Commission would be talking to firms out there that may be using unfair contract terms and see them comply prior to a declaration by the court. However it is good to see that the Commerce Commission has this area of jurisdiction because there have been in the past numbers of unfair contracts. For example a rent-to-own scheme included terms and conditions in its contracts to the effect that the consumer did not purchase the property but was granted a right to occupy the property under a 30-year instalment agreement. There were a number of contractual terms that would have been likely to have been regarded as unfair—for example the occupiers had to pay for any repairs that the investor company said needed doing and if the occupiers failed to meet a payment at any time in the 30-year period the agreement would be terminated. This is an example of an unfair contract. So this is one particular area in the consumer law reform measures that these bills and the series of Acts address that is going to bring a far better situation for consumers in our society.There is much to be said but I think I have said enough. This is great legislation it is going to bring some great benefits to consumers in New Zealand and I am very happy to commend it to the House. Thank you.Hon CLAYTON COSGROVE (Labour): Like my colleague Carol Beaumont has said we will be supporting this legislation arising from the Consumer Law Reform Bill. Consumer protection legislation is generally supported in a non-partisan way in this House. I know Mr Lotu-Iiga is nodding his head. He represents an area where like many parts of New Zealand there are particular vulnerabilities for consumers when dealing with others. I can recall as I said in a speech last week that when in my capacity as Associate Minister of Justice we reformed the whole of the real estate industry because like many industries 90 percent of those people are exceptionally good folks but in terms of consumer protection there was a percentage of those in that industry who preyed on the vulnerable. That is the case and this legislation deals with a whole series of sectors in a generic way in a number of pieces of legislation. It is important that consumers are protected.I did raise and note during the Committee stage that with consumer protection legislation it does not matter how many laws you actually pass there are certain folks in our communities who need an upgrade of financial literacy and an educative process that not only promotes the legislation but advises the most vulnerable folks in our community of what their rights are and of course of what their obligations are—but specifically their rights. I recall that we did not get an answer from the Minister—I think it was Mr Finlayson who was in the chair at the time who also happens to be the Attorney-General—during the Committee stage as to what process promotion and education programmes would be put in place once this legislation is put through. To date I think the record now would be that we have not got an answer.So I say to the Government that it simply would not be good enough to pass this legislation bang it up on a variety of websites and ask those good folks at the Citizens Advice Bureaux and budget advice services and other agencies to do the work for the Government. The Government through its agencies needs to go out and promote this legislation educate the masses as to what protections are contained within this legislation and how they are implemented and advise what rights people have and how they can use this legislation to protect their position because as I say there is no point in passing it if we do not promote it and educate and advise people of their rights.I make a couple of observations. The last speaker Jonathan Young talked about the legislation and its impact on unfair contracts. I recall in looking at the legislation in the Committee stage—and the previous speakers were going way back to some years ago when Lianne Dalziel was speaking on this—that there is the issue that has not been dealt with in this legislation in respect of unconscionable conduct. In the commentary to the legislation as per the Committee stage it was noted that although the Australians had implemented unconscionable conduct laws it was felt that in this legislation it would be omitted until such time as I understand it that a body of case law built up around the said unconscionable conduct and its definition. I note in the commentary on the then legislation that unconscionable conduct “applies where courts consider it unfair or inequitable (or ‘against good conscience’) to allow a party to enforce its contractual rights against another party who is detrimentally affected by an oppressive bargain.”—an oppressive bargain—“The Minister of Consumer Affairs invited the Commerce Committee and those making submissions on the bill to consider whether protections regarding unconscionable conduct should be added …” and it was felt as I say that it be omitted until a body of precedent was drawn up in Australia.But it also talked about oppressive contracts—about whether a contract was oppressive and therefore could be inflicted on another. I did ask the Minister in thechair in the Committee stage and it is worth repeating for the record—you may have been in the Chair Mr Deputy Speaker at the time—whether unconscionable conduct would include for instance the conduct of say one Hon John Archibald Banks. I know—before I am pulled up by you Mr Deputy Speaker or others—that we cannot talk about the detail of the grave grave and graphic difficulties that the Hon John Archibald Banks is in because he is before the courts but we do know the facts. It is interesting as to whether that is an oppressive contract where you have a “willing buyer willing seller” situation perhaps or whether a situation where money is offered to another and accepted—brown paper bags aside but not talking about any specific case—would be considered unconscionable conduct.Peseta Sam Lotu-Iiga: Come on.Hon CLAYTON COSGROVE: Sam Lotu-Iiga is a lawyer and so is far more qualified than my good self to commentate on this. I know that he is scratching away in the law books on the laptop as we speak looking up case precedent in the Commonwealth courts—or if he is not he should be—and I wonder whether he could advise us whether that example of conduct which we cannot talk about would be considered unconscionable and therefore where a contractual relationship exists and money is changing hands whether that could be considered oppressive. I would argue that in relation to the Hon John Archibald Banks we will know whether it is oppressive once the learned court has rendered a verdict.He may well be able to write a dissertation or Mr Goldsmith you know through striped sunshine might be able to add to volume one of Mr Banks’ autobiography with volume two. I am told that the Lord “Sir” Jeffrey Archer—the Lord “Sir” Jeffrey Archer—penned many a volume of literary works from within Her Majesty’s prisons over a number of years so we could be in line for another series of literary works from the Hon John Archibald Banks one who has been convicted of two crimes prior to the one that we talk about now. So that member may indeed want to consult this legislation in terms of consumer protection. Indeed Mr Dotcom might wish to consult this legislation to determine whether he has any consumer protection or rights that could be aided and abetted by this learned legislation.But to get back to the more substantive part given that we have traversed that little episode I note and other speakers have noted—and again I talked in the last piece of legislation earlier today with regard to taxation—this Government’s priorities. We note that this legislation was initiated after a review in 2009. In June 2010 there was a discussion document. These are all good processes. The bill was introduced into Parliament in 2011. Its first reading was in 2012 in February. It was reported back in October—blah blah blah—and here we are. These are all appropriate processes for a piece of legislation to go through. The message though that I have for this Government is that it has taken it an inordinate amount of time to get this legislation to the third readings which we are on today—an inordinate amount of time. Minister Foss and I believe Minister Bridges before him that well-known—Dr David Clark: Clamper.Hon CLAYTON COSGROVE: Clamper did you say Mr Clark? Yes Minister Bridges’ claim to fame was wheel clamping when he was an Associate Minister of Transport. With those two Ministers there is a pattern. Getting legislation through takes an inordinate amount of time with Minister Foss and the question is simply this: what is more important than providing people with rights and protections as they go about their daily business engaging in transactions? These people are often the most vulnerable. Many of us in the House have been around a bit—for some over there longer than for others. We have had a bit of life experience. We know what smells bad and what doesnot in terms of basic transactions. Other people do not have that benefit. Other people do not have—Hon Member: Give us an example.Hon CLAYTON COSGROVE: I was not including Mr Banks in that life experience I say to my colleague. But other people do not have that benefit. They are vulnerable and they need assistance and they rely on this Parliament to give assistance. So it has taken a number of years to get relatively straightforward legislation through and you have got to ask yourself: is it asset sales or is it consumer legislation? Is it deals with RioTinto—which could itself be called unconscionable because the taxpayer of course got nothing for the 30 million bucks? But that aside what is more important and where are the Government’s priorities?The Government is great of course at laying down the law for others but when it comes to consumer protection and critical pieces of legislation it can just toddle on wheedle its way down the path and take its time going through the process in Parliament. I submit that this is very important legislation. We will be supporting this legislation and there are probably other ideas that will flow from this. I hope that Ministers Foss and Bridges and others will lift their game and ensure that when there is the next round of consumer protection legislation it will be expedited and not dragged kicking and screaming through the parliamentary process.MOJO MATHERS (Green): I am pleased to be able to speak in support of the consumer law reform legislation. I think that it is extremely timely that this is one of the last pieces of legislation that we will pass in 2013 in the House before Christmas and that this law will be in effect by then—a law that will give greater protection to consumers. Several speakers before me have commented on the inordinate length of time that it has taken for this legislation to come through the House so we are very pleased to see it here.When I have spoken previously about this legislation I have spoken about the very strong support that we have for the fact that this legislation despite substantial opposition from major businesses has retained the unsubstantiated representation clause. I have talked about “greenwash” and about health claims and about all sorts of other claims that are being made about products without facts to back up these claims. I was just going through some of the submissions that the big businesses and so on have made against this clause and it struck me just how many had opposed this clause. They were arguing that they should not have to have evidence to back their claims. These were companies like Meridian Energy and Contact Energy banks such ANZ and Westpac and the Direct Selling Association of New Zealand the Association of New Zealand Advertisers Business New Zealand New Zealand Winegrowers and the New Zealand Food and Grocery Council. All of those really lobbied the Commerce Committee arguing that the current law provided adequate protection.The kinds of comments that they were making included saying that basically it would not take consumers much effort to go and look up whether their claims were true for themselves. It is absolutely ridiculous that consumers should have to go away and try to find out or work out for themselves whether claims on a product are true or not. It is just patently not fair on consumers to be expected to do that kind of extensive research. I would really struggle to do that for many of the claims that are made. Like many consumers I would like to be able to believe that when a company makes a claim on a product—when it makes a claim that it might be more effective at cleaning the carpet for example—you would expect that claim to be true. It is not actually physically possible to test some of these claims on your own account unless you rely on other groups that have done that research such as Consumer New Zealand and those sorts of groups.But I do want to single out that there were also strong submissions made supporting that clause on behalf of consumers. But at least one company did actually support retaining the clause on unsubstantiated claims and that was Mighty River Power. I would like to quote from its submission because I thought that it showed a very high level of corporate responsibility. It said: “Mighty River Power supports the proposed prohibition on unsubstantiated claims. We take great care to ensure that all of our claims can be substantiated. It is important to us from both a legal and a marketing perspective that consumers trust the claims that we make.” Fantastic—I just wish that all of the other companies had been as positive and as proactive about their statements as Mighty River Power was because that showed corporate responsibility.I was dismayed at all of the other submissions that were made by so many other companies arguing against that clause. I very much respected the Commerce Committee for withstanding that lobbying by all of those different companies and for leaving the clause in the legislation although we have amended it so that obviously untrue and exaggerated claims can still be made such as that a product might make you fly or something like that. There is now a straightforward simple expectation that you do not make a claim on a product unless you have some evidence to back that claim. And why is that so important? Because the status quo prior to this was that it has been up to the Commerce Commission to provide evidence that a claim is false. That is costly and time-consuming. Reversing the onus on to the company to provide evidence that its claim is true saves a lot of time and effort on the part of the Commerce Commission that would ultimately be a cost for the taxpayer. The Commerce Commission cannot investigate every claim and produce the level of evidence that is required to take it to court when claims are false. So by reversing the onus of proof it makes it much more straightforward. It is not like it is going to be a huge compliance cost—just do not make the claim. Do not make it if you do not have evidence for that claim.We were concerned that the Commerce Commission was not given the power it needed to be able to enforce unsubstantiated representation effectively. So we wrote to the commission and asked it whether the legislation contained sufficient powers for it to be able to enforce it. The commission wrote back and it said that yes it considered that it effectively does have sufficient powers—particularly since it can now request written evidence. The commission has information-gathering powers in the legislation that will give it assistance. We are hopeful that this legislation will work as it should on this clause. If it does not then we will obviously have to reflect on that further down the track as a body of case evidence appears.The other thing that it is very important to realise about this legislation is that it gives protection to consumers wherever they purchase a product whether that is online or offline. As we move into an age of more information technology it is incredibly important that consumers have that protection everywhere. Thank you.Peseta SAM LOTU-IIGA (National—Maungakiekie): It is a pleasure to take a call on this third reading of the legislation arising from the Consumer Law Reform Bill. This legislation reinforces the top priority of this National Government in the 5 years that it has held the Treasury benches. Economic growth jobs and prosperity are our No. 1 priority and this legislation supports that. Over 2.235 million people are employed in this country—more than ever in our history—and this legislation supports that growth and supports that prosperity by making out for fair trading in our work environment. It is about effective competition. It is about having the relationship between consumers and businesses—businesses that sell goods and services to consumers—and having a level playing field so that consumers are not abused by what are unethical practices by some businesses. We know that businesses create jobs and we know that they create economic growth but this legislation supports vulnerable consumers as my colleagueshave already pointed out tonight. It supports New Zealanders who need to be protected from unscrupulous businesses.What this legislation really does is update consumer law. For over 20 years it has been outdated and this Government has put in place reforms to modernise those trading practices. As we know online business and commerce has become almost the norm in today’s modern business world. These bills update a lot of the online transactions and online auctions legislation so that it better reflects the trading practices today.The legislation is also about giving consumers information in order for them to make informed decisions around their purchasing of goods and services. It really reinforces consumer rights it simplifies business compliance and it ensures protections are clear and accessible for all New Zealanders. That is why this legislation supports our economic agenda and that is why it supports common New Zealanders out there. That is why I support this legislation in this third reading.ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First. This is the third readings debate of what was originally the Consumer Law Reform Bill now split into a number of bills: the Fair Trading Amendment Bill the Consumer Guarantees Amendment Bill the Weights and Measures Amendment Bill the Secondhand Dealers and Pawnbrokers Amendment Bill the Carriage of Goods Amendment Bill and the Auctioneers Bill. There are now a number of bills that have split out from that Consumer Law Reform Bill. What better party than New Zealand First to stand in support of consumers? It is a party that has been in existence for 20 years standing up for consumers’ rights and the rights of New Zealand citizens and residents in terms of what they are rightfully owed. In this respect we do support this legislation. We have supported it throughout because they are bills that do ensure the rights of consumers—particularly vulnerable consumers consumers who may otherwise be put at risk. It ensures they are protected.In terms of the Consumer Guarantees Amendment Bill we note that it includes a surety around delivering guarantees so that particularly in the case of people buying over the internet—and increasingly more purchasing is being done via electronic means—there is a delivery guarantee and the recipients are not liable until they have actually received the goods and have signed for them. That is a good thing. It also means that in terms of quality there are rights of recall here. The Minister of Consumer Affairs can have compulsory recalls on products. Again that is a worthy inclusion because increasingly there is questionable quality of products as we are seeing more and more products coming on the market of questionable source of questionable quality and of questionable longevity in terms of their reliability. Again it is good that we have this option where the Minister can have compulsory recalls on products that may not be up to standard.I also note that in the Consumer Guarantees Amendment Bill it includes gas and electricity supply—so a guarantee that there will be an acceptable quality of supply of gas and electricity. It goes into all the various aspects of that to ensure consumers are provided with that basic provision in life—electricity and gas—that meets a quality supply situation.It is interesting in regard to that and I wonder how long it will take for many areas of New Zealand to have moreundergrounding of power. So many communities around New Zealand continue to have power supplied by overhead wires. Increasingly every time we have a major storm in this country we seem to see more and more power lines toppled by trees or other natural causes. More and more consumers are increasingly out of power for considerable periods of time in this country which is now quite different from areas in Europe and other sophisticated places such as the United States where power is increasingly underground and less susceptible to the elements.Some of the other parts of the Fair Trading Amendment Bill include provisions about false and misleading representation of goods and services. Again with goods being offered so often now over the internet and by electronic means we are not necessarily shopping physically and handling the goods. So this legislation does bring in a greater liability on the part of suppliers to not provide false or misleading representation about the goods. Also for unsolicited goods and services the responsibility lies with the supplier. If any goods and services are supplied that are not asked for by the recipient again the recipient has the right to return those if they are unsolicited. Also in terms of contracts this legislation tidies up some aspects of consumer contracts where in the past there had been a proliferation of all sorts of variations on consumer contracts. The legislation provides for the tightening up of consumer contracts to ensure that consumers are not subject to unwarranted and perhaps dubious forms of contracts.Also in terms of disclosure of trader status on the internet too often we do not know who the people offering products on the internet are. Often they are actually acting commercially but put themselves up as private individuals. Again they are perhaps moving goods through and not necessarily doing that with the right intent. Under provisions in this legislation there will be a requirement to disclose trader status. Unsafe goods are covered under the legislation as well so there will be greater certainty about goods that are provided. It will ensure that they are safe and not subject to any unknown problems when the person puts them on the internet or sells them through retail.It is also interesting to note that this legislation includes the Auctioneers Bill which is a little bit out on a limb in terms of this whole thing. In terms of auctioneering increasingly there are all sorts of things being auctioned and sold via the auction method. The Auctioneers Bill as a part of this legislation includes registration of auctioneers and tightening up of aspects of auctioneers—such as that they can be struck off and removed as auctioneers if they are not meeting the required standards. There is also a requirement for auction records to be kept by auctioneers for a period of 3 years to ensure that the records are obtainable and can be audited to ensure that the auctions were conducted correctly. The bill also includes aspects of vendor bidding. We are seeing increasingly more vendor bidding in many auctions. This bill tightens up areas of that so that vendor bidding must be disclosed and must be known to those who are participating particularly if vendors are bidding prior to any reserve being reached in the case of a property auction.Again those are all sensible things to bring into legislation. It tightens up a great many areas. If you look at all the bills there is a huge number and I have mentioned only a number of aspects of these various bills. But it is all to do with protecting the consumer providing greater protection in terms of their rights and ensuring that New Zealand residents and citizens are given far greater protection and that increasingly we are not being ripped off in our daily lives by unscrupulous traders vendors and others who would gladly take the money off you.So in that respect New Zealand First stands by this legislation. As we have said time and time again in this Parliament we are a party that stands by good policy that supports New Zealanders. In this case we see nothing at all wrong with any of the aspects of these bills. They are in support of good New Zealanders who are wanting to live a law-abiding lifestyle and be protected by the Government of this country. Therefore New Zealand First will be supporting this legislation.KANWALJIT SINGH BAKSHI (National): I thank you for the opportunity to speak on the third reading of the legislation arising from the Consumer Law Reform Bill. In reforming the legislation our primary objectives are to strengthen consumers’ rights to simplify business compliance and to make consumer legislation up to dateand more accessible and understandable for both consumers and businesses. There is little doubt in the mind of this National Government that this reform will help promote confident and well-informed consumers who demand high quality and make good choices. Each step that we take is good for everyone as reform drives competition innovation and growth along with jobs and the Kiwi lifestyle. It is my pleasure to stand and support this legislation.Dr DAVID CLARK (Labour—Dunedin North): Labour will be supporting the third readings of this legislation arising from the Consumer Law Reform Bill. We are glad to see it passing and we are glad that it has finally made its way through the House.I want to take up a point that was raised by Mojo Mathers in her contribution. She said that it was logical that the onus of proof should sit with the company that is making claims to consumers. I agree with the contribution she made in that respect. I want to expand upon it a little and talk about the concept of rational ignorance because that is one of the principles that underlie those consumer protections. Economists use the term rational ignorance to refer to the advantage that lies in being a consumer who does not have to research every single aspect of every single product that is consumed.It is far more efficient for the consumer and for society as a whole when common-sense rules apply and a consumer can rely on what is called rational ignorance. That is ignorance that is entered into in a rational way knowing that it is an efficient way of going about things and that is a wider good for the economy. When a product is claimed by a company to do a certain thing—I guess at the extreme end it might be a pharmaceutical product that claims to provide a particular remedy—it should not be the responsibility of every citizen to necessarily go and test whether that product provides that remedy or not. There are extensive trials that are undertaken on most drugs that are available today and it would indeed be almost impossible for any ordinary citizen to carry out the kind of testing that might give them full consumer knowledge of the impacts of any particular given drug.So in one respect even where there are substantiated claims that are researched by an individual consumer it is only up to a certain point that the consumer can be expected to understand and learn about a product. Generally most of us go about our day-to-day business relying upon the claims that are made for products and effectively understanding and rightly expecting that they will be true. So it is good that this law that we are passing today strengthens those provisions and makes sure that consumers can trust that the claims that are made are in fact substantiated and correct and that they can go about their business in a most efficient way.It is the same of course as what happens with Governments. Consumers—or in this case voters—vote a party into Government based on the claims that it makes and they trust that the Government will get on with what it is supposed to do or what it has said it will do. It is right that voters should expect that to be the case. And in fact we see that when Governments of differentilks do not live up to the claims they make then they of course get voted out. That is the mechanism that applies in that circumstance. But often too in terms of policy development Governments do things that were not signalled in advance. An obvious example that springs to mind is the increase of GST by this Government. That was not signalled in advance; it was something that the Government did once it was elected. People tended to react badly to that because it was not a claim that was clear and transparent beforehand.Iain Lees-Galloway: They said something quite different.Dr DAVID CLARK: I am sure that that will have consequences in due course for the Government. People will lose faith in it. Indeed as my colleague points out National did say something quite different. John Key said that he would not put up GST but then did.Another example would be retirement savings policy. Most ordinary citizens do not research every single aspect of retirement savings. They generally trust that the Government will plan ahead for their future. They elect people to make decisions on their behalf and they expect that they will be able to get their superannuation one day. We know though—those of us who have looked into the area more thoroughly—that in fact that is not possible under current settings. That is why in the Labour Party we are looking to have a consideration of whether the retirement age should go up. We are looking to ensure that KiwiSaver becomes universal so that people actually have full retirement savings policies. We would resume of course funds going to the Cullen fund to make sure that there is a fund there that can support the kind of retirement that Kiwis expect otherwise further down the track the New Zealand consumers of politicians’ actions are going to be very disappointed with what has happened over the years.I think that as politicians we are elected to make substantiated claims to make defensible claims and to allow ordinary citizens to apply what economists call rational ignorance—a sense of trust in the decisions that we make trusting that we will make the right decisions upon their behalf. So that more general principle that we are approving and supporting in this legislation should I think also be applied to the broader decisions that politicians make. I am arguing in that particular instance that we should have more rational policy around superannuation because that is what the voters expect. They expect to be able to have a dignified retirement but the current settings do not allow for that.Coming back to the principles in this legislation I guess the other thing that we are frustrated about is the amount of time it took to pass through. This legislation was initiated in 2009—4 years ago—and it is only now coming to its final stage. The Government has seemed more intent on getting on with other things like selling off assets than getting on with putting consumer protections in place or indeed collecting tax. We have just learnt this week that $8 billion is the amount of outstanding tax which is twice the value of the Government’s asset sales programme. This Government has been slow to repair the Inland Revenue Department’s tax systems. The Inland Revenue Department itself is a department under pressure and we see the effects of that as ordinary New Zealanders begin to wonder whether the Government really has a fair attitude to collecting taxation.Again with the slow passage of this legislation consumers could be wondering whether the Government really has it as a priority to look after them—to look after the ordinary man and woman in the street and their interests—or whether it is far more interested in doing deals selling off assets building casinos off the back of problem gambling and bailing out corporates like Chorus or RioTinto and asking very little in return. This Government does seem to be distracted. It does seem to be increasingly arrogant as to the will of the voters who put it there and of course we on this side of the House are picking up a different mood. New Zealanders are frustrated at the widening inequality. Although we are pleased that this legislation will do some small things in terms of putting a little plug in the dyke it is growth in inequality that will continue unabated even with bits of legislation like this in train.I guess Consumer New Zealand could claim a victory out of this legislation. It put pressure together with the Labour Party to make sure that this legislation was expedited to minimise ongoing harm. It did get there in the end. It did get there in the end albeit on a very slow path that saw it go through its various stages from 2009 to being passed only now. Substantial changes were made at the Commerce Committee and so the select committee must be congratulated on its hard work along the way. There were a number of details that were amended: clarification of the prohibition ofunsubstantiated representations prohibition of the use of unfair terms in standard form consumer contracts the requirement that contracting out of any Consumer Guarantees Act provisions be fair and reasonable increasing maximum penalties for breaches of the Fair Trading Act enhanced enforcement powers for the Commerce Commission and the removal of changes relating the Carriage of Goods Act to name but a few.There was also a wait-and-see approach adopted to unconscionable conduct. My colleague Clayton Cosgrove drew a link between that and some of the accusations against John Banks. I will not explore them here but all in all the legislation seems to be a step in the right direction albeit a very slow and belated one. Thank you.Dr JIAN YANG (National): I rise to take a very brief call on the third readings of legislation arising from the Consumer Law Reform Bill. Consumer laws in New Zealand are over 25 years old and have had few changes since they were enacted. This legislation is the Government’s effort to bring consumer law up to date with modern trading practices such as internet banking internet trading and self-service checkouts. The legislation represents the most significant change to New Zealand’s consumer law in more than 20 years. It will help promote confident well-informed consumers who demand high quality and good choices. This in turn will drive competition innovation and growth. I commend the legislation to the House. Thank you.Su’a WILLIAM SIO (Labour—Māngere): It is said that consumer legislation is an important contributor to building consumer confidence and ensuring that successful consumers are participating successfully in our market place and as consumers feel that confidence and are able to interact in the market place they are then able to contribute to a more productive and innovative economy whether it be that they are dealing with goods or services. That is the basis for why we need to have good consumer legislation.I have to say that this Government has failed on so many fronts to be able to provide that confidence to our communities. Well let me just give the other side some examples. This Government has presided over the worst ever economic period. It has presided over the worst economic record in 50 years the doubling of unemployment since 2008 the increasing numbers of Kiwis who have migrated one-way to Australia and we have a continual number—about 40 percent as recently released statistics show—of people working harder and longer but still having to face poverty. That is the result of this Government failing to provide consumer protection and failing to provide confidence to consumers throughout New Zealand.I think that in the last 5 years under this Government our communities—New Zealanders from the far north to the deep south—have continually been screaming at this Government and rightfully so demanding from this lot that they honour their promises made about mana-enhancing legislation their promises of creating 170000 jobs and their promises of providing a brighter future for all New Zealanders they said. Well sadly those demands those calls from our communities the calls for jobs the calls for a living income the calls for affordable homes and the calls for a better quality of life for all have seriously fallen on deaf ears. That is because the people’s issues—New Zealanders’ issues—have not been the priority for this Government. Its priority has always been big business its mates who—Dr Rajen Prasad: Crony capitalism.Su’a WILLIAM SIO: Yes crony capitalism is what my colleague here has said. Its big-business mates have demanded of this Government free unbridled growth and profits. This Government has not put people and the quality of living for all our citizens as its priority. It continues to look after itself and its mates at the expense of Kiwis and it has stopped listening to New Zealanders. It has become arrogant and out of touch.An example is really the series of bills that we are now debating at their third reading. Since this Government came into power the protection of consumers has notbeen its priority. The Government has sat on this legislation for a very long time—in fact from the beginning. What the Government did in the beginning though was to raise this legislation and attempt to pacify the calls from our community for better protection. But the facts remain. The Government has gone through several Ministers of Consumer Affairs to get to this particular point and by my own calculations it has had five Ministers of Consumer Affairs. That is a Minister every year. That is an indication that the consumer affairs portfolio has never been the priority for this Government.So yes it is about time that the Government brought this legislation to the House but sadly for many of the consumers who had huge expectations of this Government right from the start they are quite sorely saddened by the way that the Government has taken its time as an indication that the protection of consumers giving consumers confidence in the market place has never been its priority from the get-go. The Government’s priority has always been its big-business mates. Although my colleagues who have been on the Commerce Committee say that we do need to support this legislation and that there are some good things in the series of bills that is before the House I suspect that the truth of how this legislation provides protection or not to our citizens will depend on how those citizens receive these pieces of legislation.Let me remind the House that very recently—this week—there have been numerous media reports. I want to share with the House one report titled “Loan sharks rob desperate Kiwis. It says: “The head of the country’s biggest credit union has taken a swipe at loan sharks who he says are carrying out ‘legitimised robbery’ of unsuspecting clients. Gavin Earle chief executive of NZCUBaywide said loan sharks were causing despair among the vulnerable desperate and unwary in the community. Mr Earle who is based in Hastings said one lender was openly advertising a daily interest rate of 1.3 per cent per day. ‘That doesn’t sound like much but this equates to an actual rate of 475 per cent per annum. Even worse should you default on your repayments you’re hit with an additional penalty rate of 75 per cent per annum.’ Mr Earle said those rates were ‘fantastic’ if you were the lender but crippling if the borrower.”I do not know whether this piece of legislation is going to give confidence to our consumers to our communities particularly leading up to the Christmas period that there is protection. Some on the other side—I do not know—will hopefully be able to recognise that there are some serious problems that were raised by the community from day one in 2008. I do not know but if they were genuine and serious about taking consumer rights and consumer protection seriously then hopefully their piece of legislation is going to provide some of that protection as raised by Mr Gavin Earle of NZCUBaywide.A woman from Whangarei who got $4000 worth of electrical equipment on credit in 2009 has since paid more than $12000 for the goods and she still owes about $2700. This is an example of how people are getting themselves into debt and it has seen a huge increase in demand for budgeting advice services—not just in Whangarei but right through the length and breadth of this country of ours. I have to say that constantly we hear these stories and the Government has heard these stories from 2008 and 2009. The community will have every right to question whether the pieces of legislation that the Government has put before the House today are going to provide the kind of protection as raised by this particular report and provide confidence to our citizens out in the wider community.May I just finish off by saying that members on the other side laughed when I said that in the last 5 years things have worsened for many many communities. I want to say to them that the inequality has worsened and they have presided over that worsening period for people who have no choice and who are forced to try to make some of the most difficult decisions on the meagre incomes that they are earning. That is just notavailable to them through their lack of knowledge through their lack of resources through their lack of jobs and through their lack of income. I would point the finger directly at their Government. That is the Government that is responsible for the struggles that communities are encountering today.Bills read a third time.