Connell Brian: Credit Contracts and Consumer Finance Bill — In Committee 
Connell Brian: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8730] 
BRIAN CONNELL (NZ National—Rakaia) 
: 
 I would like to speak to clause 93 which deals with the reopening of credit contracts and consumer leases. [ 
Interruption 
] Now that I have Mr Chris Carter’s attention let me continue. The clause states that the court may reopen a credit contract or a consumer lease if in any proceedings it considers that the contract or lease is oppressive. What does that mean? That opens the floodgates! The Government had advice from a number of submitters that it should not go down this track but did it listen? 
Richard Worth 
: No. 
BRIAN CONNELL 
: Can it listen? No. 
Richard Worth 
: Excellent advice ignored. 
BRIAN CONNELL 
: Excellent advice was ignored. The Ministry of Consumer Affairs told the Government that it should not do this. An article in the  
Independent 
 refers to these as radical hardship provisions. I think they are just stupid provisions. They will create uncertainty in the marketplace undermine the confidence of lenders who will increase costs by pricing for risk because they do not know whether they will get their money back and undermine shareholders’ confidence in the company and the people who most want the money will be priced out of the marketplace. The  
Independent 
 article that I referred to stated: “This could adversely affect a creditor’s ability to raise funds by selling the receivables generated by the consumer credit arrangements.” That is simply because they have been factored out. 
Richard Worth 
: Could the member read that again? It is a telling comment. 
BRIAN CONNELL 
: I certainly can. It is an extremely telling comment: “This could adversely affect a creditor’s ability to raise funds by selling the receivables generated by the consumer credit arrangements.” This is the worst type of nanny State socialism I have seen in some time. Mr Carter knows that I am right. That is why he has stopped yelling out. He is hanging his head in shame. He does not want to be associated with this type of nanny State nonsense nor do any other people in the Committee which is why it has suddenly gone quiet. 
The  
Independent 
 articles goes on to state that the provisions may increase costs. Let me make it perfectly clear: they will increase costs; they will increase compliance costs and increase them hugely. The article states: “They may allow debtors to frustrate legitimate creditors’ actions taken to enforce credit contracts and”—another telling comment—“unscrupulous debtors could try to take unfair advantage of these provisions to extend contracts for their own benefit.” It will be:“I have had a bad hair day. I do not like the contract any more. I want to get out of it.” 
The provisions get down to specifying relationships. If someone’s relationship has gone sour suddenly he or she does not have to front up to face up to his or her liabilities. What utter nonsense! It will do huge damage to the marketplace as security starts to dwindle. I have said it before and I will say it again: this will result in some institutions the decision makers in those institutions becoming risk adverse. They will simply say that no they would rather not take the risk than be exposed to this type of nanny State socialist nonsense. 
R Doug Woolerton 
: Sounds like a Clayton’s bill to me. 
BRIAN CONNELL 
: It is worse than that. I think the Government thinks it is doing the right thing; it is an issue of absolute ignorance. The Government could not be told. A number of submitters went to the select committee and said “Don’t do it!” but the Government ignored them. I have asked the Minister in the chair before and it would only be magnanimous of me to suggest again that we suspend this debate for a day or maybe 2 days while the Government gets its head around this issue and fixes up what is clearly an anomaly. I do not think the Government meant to do it. I think it is an oversight in drafting. Do members really think it is creditable that one gets down to saying that the Credit Contracts Act will deal with relationships that have gone sour?