Hague Kevin: Consumer Law Reform Bill — First Reading 
Hague Kevin: Consumer Law Reform Bill — First Reading 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
KEVIN HAGUE (Green) 
: 
 I begin by congratulating you Mr Assistant Speaker Tisch on your reappointment. I also congratulate Minister Tremain on his first piece of legislation before this House in his ministerial capacity. I rise to speak in support of the Consumer Law Reform Bill today for the Green Party in place of my colleague Mojo Mathers who will lead the Green Party’s further work on this bill. But sadly the technology is not yet in place to allow her to participate fully in this debate. That is a matter for regret and hopefully rapid remedy. We support the general intent clearly of a bill like this to modernise and rationalise legislation and introduce things like standard definitions covering sales processes that were not even conceived of at the time that some of this legislation was put in place—credit cards internet sales and various of those things. I think Lianne Dalziel mentioned the fact that some of the legislation this replaces is almost a century old. The Auctioneers Act 1928 probably is overdue for a bit of an overhaul. 
 We support the new provisions being included related to unsubstantiated representations. We think it is very important that consumers should get the full facts and we draw attention to a particular use of the new provisions in relation to “greenwash” and we hope that this bill when enacted will see a reduction of that pernicious practice. There are far too many examples of people seeking to benefit from association with the qualities of environmental friendliness or ethical value without the expense involved in making their claims real. I am not sure whether this legislation will extend to political parties in that regard but certainly that might be a matter the select committee could consider. 
We also support in particular the aims of the legislation regarding product safety. The Ministry of Consumer Affairs warned the Minister of Consumer Affairs back in 2009 that these product safety risks were on the increase and that there was an international consensus requiring some more effective action. In 2007 the United States Consumer Product Safety Commission oversaw the largest annual number of voluntary product recalls in the last decade. At the same time the European Commission saw a 47 percent increase in notifications of products posing serious risks to consumers with half of those products originating in China a country with which we now have a free-trade agreement and a burgeoning import trade. 
The Ministry’s report said New Zealand’s current model was “skewed toward rapid reaction to incidents rather than taking a more proactive approach to emerging risks.” Well with this legislation I do not think we could accuse it of being a rapid response or rapid reaction but at least it is finally in the House. Consumers have a right to know that the goods that they are purchasing are safe and that they and their families will not be injured through dodgy appliances or products. 
We also support the strengthening of rules around direct sales. We are pleased that legislation is finally tackling the scourge of the uninvited salesperson. The legislation sets out rules for uninvited direct sales and repeals the Door to Door Sales Act 1967. 
We also believe that consumers deserve protection from unfair contract terms and I was very interested in the Minister’s comments about that. I am very pleased to see that he is intending and directing the select committee to take a look at re-inclusion of those provisions in the bill. It is a great shame that the Government did not do that in the bill that we are considering today because protection from unfair contract terms buried in small print is one of the principal problems that in fact consumers face. New Zealand’s biggest consumer advocate group Consumer New Zealand has been particularly critical of the decision to omit that provision from this bill. The Government’s reasons for omitting that are far from clear and certainly the Minister and Mr McClay when speaking to the bill today did not make it clear why those provisions had been dropped. We believe there is certainly a strong case for following Australia’s lead and making it easier for consumers to challenge those unfair contract terms in standard agreements for things like car rentals and gym memberships which are some of the examples that have recently been in the news media. We do not suggest that New Zealand should slavishly follow Australia’s lead but this does seem to be an area where harmonisation would benefit New Zealanders. 
The terms in contracts are typically contained in pre-written standard-form contracts often in dense fine print which the previous Minister of Consumer Affairs accepted was sometimes one-sided and usually signed by consumers without reading. Sometimes those contracts are signed by some of the most vulnerable in our community perhaps like those with poor English language skills the elderly or the disabled. It is a great shame that provisions protecting those groups have not been included in the bill at this time but as I say it is good that the Minister is intending that they will be considered by the select committee. 
I note with interest that the Direct Selling Association of New Zealand vigorously opposed including an unfair contracts provision in its submission to the Ministry of Consumer Affairs on the discussion paper and I do hope that that was not the submission that swayed the Government to exclude those terms. The reasons the Direct Selling Association gave were that such provisions would add to compliance laws and that existing laws were already adequate and I think that is probably something we have heard on a number of occasions. I think most New Zealanders would disagree with that statement and certainly the ongoing popularity of the  
Fair Go 
 television show would indicate otherwise. 
We also share TradeMe’s concerns that professional traders are not forced by this bill to disclose themselves as such and I would hope that the select committee will also look at that matter. It seems a missed opportunity that the Ministry of Consumer Affairs considered including a requirement for professional traders to disclose that fact but it has been excluded. Traders who identify themselves as professionals could then more easily be held to legal obligations including the requirement to offer refunds on shonky goods and to pay tax on their profits. The Arthur Daleys of this world are no longer selling second-hand motors in brown leather jackets from lock-ups; they are now online and TradeMe’s recommendation I think should be taken very seriously. 
The previous Minister of Consumer Affairs John Boscawen said the issue of identifying professional traders could be looked at again at the select committee and I urge the current Minister Mr Tremain to do so. 
The fact is that most businesses are fundamentally concerned with profit maximisation; indeed probably all should be. One maximises profit by maximising sales and minimising costs. At the same time that profit motivation is probably universal amongst businesses the ethical standards that go with that are not necessarily universal. Although some businesses may have a business model that relies on long-term relationships with customers and repeat sales others have a business model that relies on one-off sales. The temptation to take shortcuts and to mislead consumers if they believe they will get away with it is one that many businesses are shown to often take. I think it is very important that this bill does protect consumers from that. I was very heartened to hear the Minister’s comment about the Government’s commitment to improve the quality of regulation in this field and in others I hope.