Consumer Law Reform Bill — In CommitteeText is incorporated into the Bound VolumeConsumer Law Reform Bill — In Committee[Sitting date: 03 December 2013. Volume:695;Page:15173. Text is incorporated into the Bound Volume.]Consumer Law Reform BillIn CommitteeTIM MACINDOE (Junior Whip—National): I seek leave for the Committee to take the parts schedules and clauses of the Consumer Law Reform Bill as one question.The CHAIRPERSON (Lindsay Tisch): Leave is sought for there to be one question on the Consumer Law Reform Bill. Is there any objection? There is no objection.Parts 1 and 2 schedules 1 2 and 3 and clauses 1 and 2CAROL BEAUMONT (Labour): It is a pleasure to finally be making some progress on this Consumer Law Reform Bill. Along with my colleagues I will be explaining why we support this bill. It is an important piece of legislation to get passed into law and it is very disappointing that it has taken so long to get this far. In supporting this bill we are looking forward to its passing because the essential proposition is that it updates and modernises our consumer legislation including giving us greater alignment with our colleagues across the Tasman. But despite the importance of doing this and of modernising our consumer legislation so that it better reflects the reality of the modern environment that consumers now consume in and provides greater protection for those consumers this bill has languished on the Order Paper for an indecent amount of time.It seems that the Minister of Consumer Affairs has a bit of difficulty getting his legislation through because we had exactly the same situation with the consumer credit legislation. Again that dragged on for a number of years despite being a really important and essential piece of legislation that we are now considering in the select committee. This bill itself and the consumer credit legislation are particularly important for New Zealand consumers at a time when many many families are struggling to make ends meet. The consequences of poor consumer decisions the consequences of rip-offs and the consequences of false advertising—all of those things are actually significant. Families do not have significant amounts of spare money. They need to be able to spend wisely and not be ripped off. But consumers have not been a priority for this National Government.Finally we are getting some progress and that is partly because there was a campaign. There actually had to be a campaign led by Consumer New Zealand to get this legislation moving. As it said in its magazine in February last year legislation was expected to be introduced into Parliament by the end of 2010 to align our consumer laws more closely with Australia’s. That did not happen. Consumer New Zealand went on in a piece this year where it started urging its members to put pressure on the Government to actually do something with this legislation. It said: “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.”Having strong and relevant consumer legislation is important for not only consumers but also businesses so that everybody knows what the framework is that they are operating in. When this legislation was drafted after a review of our consumer legislation the Government touted it as legislation catching up with developments in consumer trends. Well the irony here is that it has languished for so long that it is probably out of date before it has even been passed because we know that this is an area where things do change fairly rapidly. If I again draw a link to the consumer credit legislation during the time that that has languished we have seen an absolute explosion of pay-day lenders a greater profile for mobile shops and truck shops and so on—since the time when there was the first review of the Credit Contracts and Consumer Finance Act. Things move quickly except for the legislation to protect consumers.The outcome of the Ministry of Consumer Affairs review has been a long time coming but we are pleased to say that there is progress being made with this bill. It has been a relatively robust process and there are good changes in there. But I just want to outline the time lines specifically because they are interesting. In 2009 the review wasinitiated. In June 2010 a discussion document was released. In April 2011 a bill was introduced in Parliament. In February 2012 there was its first reading. In October 2012 the bill was reported back from the Commerce Committee. In December of that year was the second reading. Now—almost a year later—we are doing the Committee stage. That must be some sort of record. It is incredible. It shows how bad the situation is. Almost a year has passed since the bill’s second reading.What does this bill do? Let us get on to this. The Consumer Law Reform Bill is an omnibus bill that amends 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. It repeals the Auctioneers Act the Door to Door Sales Act and the Layby Sales Act as well as the Unsolicited Goods and Services Act.The legislation is a major reform and will touch on a very broad range of businesses so obviously there will need to be some good clear information put out once we do get this legislation passed to ensure that both businesses and consumers are aware of these changes. Essentially some of the key changes are the introduction of new prohibitions on unfair contract terms and standard form consumer contracts under the Fair Trading Act an extension of the criteria before businesses may contract out of the Fair Trading Act and the Consumer Guarantee Act in business to business transactions the addition of a power for the Commerce Commission to compel individuals to attend interviews to provide evidence about possible fair trading offending—hopefully leading to greater compliance—and a provision making suppliers responsible under the Consumer Guarantees Act for goods that are sent by courier up to when the goods are delivered to the consumer. I am sure that my colleague Clare Curran will talk quite a bit about online trading so I am not going to go into that stage.Unfortunately I was not a member of the Commerce Committee but I know that it scrutinised this legislation very carefully and made a quite substantial number of changes in the legislation that I am sure we will talk about during the course of the Committee stage. We are dealing with the bill as one question but there are two parts in this legislation. The significant one is Part 1 which amends the various consumer laws that I have talked about. Part 2 provides for new auctioneers legislation.This legislation is important and it is long overdue but the other thing that I would like to really test here is the commitment to making this work. It is all very well to improve protections and rights for consumers but how are we going to make sure that people understand what those rights are? Also are we going to really put a lot of effort into assisting consumers with their rights?I would like to acknowledge at this point in my speech the work that is done by people like the citizens advice bureaux and budget advisory services because actually they end up being the de facto advocates for consumers in this country. There are many consumers who have no idea at all about their rights under our consumer legislation. In some ways if you have rights and you do not know about them it is almost the same as not having them. So there is a really important role here to ensure that with the passing of this legislation—when we finally get to that point—we put a lot of time and effort into widely disseminating information in an easily understandable form that tells consumers what their rights are under this legislation.It is in my mind worth thinking about whether there is more we could do to assist those consumers who may be particularly vulnerable. I would perhaps include in that group people for whom English is not their first language—and obviously a lot of the materials are produced in English. I would include in that group younger people perhaps and older people and people with mental health issues. There are many consumers who are actively ripped off perhaps more so in the consumer credit area. Iknow from being on the select committee that is currently looking at that legislation that certainly we are having many many examples being given to us of absolutely appalling behaviour. None the less for those vulnerable consumers generally it would be worth considering how we could better serve their needs. Certainly in the UK consumer advocates are specifically established as part of Government agencies to actively work with consumers. I think that that is something we should work on here as well.In conclusion for my contribution this time I do just want to—Hon CLAYTON COSGROVE (Labour): As my colleague Carol Beaumont has said we will be supporting this legislation the Consumer Law Reform Bill. She touched on a very important point that was brought to the attention of the Commerce Committee which was that we can implement any sort of regulation or legislation that we like but if there is not a high degree of financial literacy or consumer literacy—in this case it goes hand in hand—and people are not aware of their rights and are not aware of the protections contained within this legislation then it does not provide much protection at all. So I would be interested to know from the Minister in the chair the Attorney-General whether there are plans afoot from the Government to provide an educative programme—not just a couple of slick pamphlets that we might dish out to those wonderful people at the citizens advice bureaux and budget advisory services or whatever and sort of contract it out to them but a concerted education programme to promote this legislation and the rights and the responsibilities contained within it.Consumer protection law is imperative if one wants to maintain the economic confidence of purchasers buyers and sellers alike and if consumers are to believe that when they are entering into contractual arrangements they are going to be treated in a just way and that those who may try to walk around those contractual arrangements will be dealt to. I note that there is an increase in the maximum penalties for breaches of the Fair Trading Act from $60000 to $200000 for individuals and from $200000 to $600000 for bodies corporate. I think that is a substantial amount of money and it brings penalties in to line with the nature of the offences.I would note with interest though the section of the commentary in respect of unconscionable conduct. I note that it says in the commentary that “Unconscionability 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.” I am sure that the Attorney-General whom we are lucky enough to have in the seat tonight and who is an eminent barrister solicitor or both—probably all of the above—could probably give us a dissertation for hours and I would actually be one who would appreciate that in terms of the detail in respect of this clause. Others in the Chamber may not appreciate it but I not being a lawyer would be gratified for his expertise—Hon Maryan Street: In Latin.Hon CLAYTON COSGROVE: Well no I was not in the top class at school so we did not get to do Latin. English would be preferable.I do note that even though the Australian cousins have similar provisions in place the select committee chose to wait until they had bedded in and until there was a substantial body of common law and precedent that we could learn from. But I would be interested actually in terms of the definition of unconscionable conduct. For instance we note that in this place the former Minister for Small Business the Hon John Archibald Banks is in some difficulty as we speak although we cannot go into the grave detail of that given the nature of the court proceedings that are yet to come to fruition. But I would be interested in the point of view of the Attorney-General who has been a lawyer in private practice and a senior partner as to whether that in itself given the nature of the oppressive contractual arrangements—a willing buyer and a willingseller money changing hands brown bags and other things—would fit within the definition of unconscionable conduct. It would be interesting to note and I am sure that the body politic in this place would be very very interested to know whether the conduct of the Hon John Archibald Banks who is guilty of one crime already in his political career convicted in a court of law and in some difficulty now would be considered unconscionable.I know that that is a legal term. As I say not being a lawyer myself I would be interested if the Attorney-General would turn his mind to it and dust off the precedent books. I am sure that he has represented and has either prosecuted or defended people in Mr Banks’ situation over the years or has provided learned legal advice. Perhaps he could shine some light for those in this Chamber and also for those consumers who are listening on whether if anybody else was to get into a similar set of difficulties that would be considered unconscionable conduct under the Act. We know of course that there was an exchange of money there was a willing buyer and a willing seller and there was a verbal contract I assume for services rendered—we presume or it will be proved—and I would like to know whether that would fall under the definition. It is a fair question I think. There are other precedents in this Chamber—not as colourful or as graphic as that of the Hon John Archibald Banks—where this definition may come into play.Moving on from that I would also note Ms Beaumont’s comments in terms of the time frame to implement this legislation. This legislation is at its essence about protecting consumer rights—basic folk who go out and purchase goods and services or enter into contracts and who in many cases are probably not aware that they are contracts as such. They are just as I say willing buyers and willing sellers—people getting on with their lives—and they are exposed from time to time to the reprehensible conduct of others.I would note for the record the time line. There is a bit of a pattern with this Minister of Consumer Affairs Mr Foss. It seems that he is unlike the Attorney-General who manages to punch through in rapid fire Treaty settlements and I compliment him on that. He has beaten me to it; he has complimented himself—he was nodding. I tried to get in quickly but he has beaten me to it. As I say in all seriousness—and it is not often that we compliment each other in this place—he does get through his legislation his Treaty settlements in rapid fire and in record time.That is in stark contrast to his colleague Mr Foss and I believe to his predecessor Mr Bridges who sort of began this tawdry pace way back in 2009. Then we had appropriately of course discussion papers in 2010. The bill was introduced on 20 April 2011 which was some time ago. The first reading was in 2012 and the time line went onward and onward and onward until we get to this point. In the dying days of this parliamentary year with 4 sitting days to go we are at the Committee stage of this bill and it has sort of been dragged along as if it has had an anchor attached to it. This is important legislation and that time line speaks a lot I think to the priorities or the lack of priorities of this Government. What is more important to the Government? Asset sales are very important to it and it has botched a few of those in the last few weeks but consumer protection law is not so important. This bill has been hanging around since 2009.I am advised that the Australians—my colleague will correct me if I am wrong—managed to get their consumer reform legislation through in pretty efficient time. I cannot blame the officials and I do not blame the officials for this because officials work to the time frames of Ministers. Ministers set the agenda Ministers say what is important to them and what they want officials to push through and officials—being the honourable folks they are—obey their Ministers. So it seems to us that even thoughthis legislation is very well intentioned—and we will support it because it is very very important—it would have been good to see this come through earlier given some of the other pieces of peripheral and minor legislation we have had to deal with under urgency at other times in this last parliamentary year so that we did not have to drag back to 2009 which is some years ago to actually transact this piece of legislation. It is very important.I had some experience as an Associate Minister of Justice in terms of consumer protection legislation with regard to the real estate industry. There were different sets of parameters but the principles were exactly the same. Those eminent men and women—most of them or 90 percent of them; there are about 10 percent who are sharks—had to change their whole industry. They were forced to do that by this Parliament. I believe that National voted against that legislation and said that it would repeal it but when it became the Government it did not do anything about it because it is a good piece of legislation. That has changed the nature of that industry and that has given protection to people who are engaged in possibly the biggest transaction of their lives—that is the purchase or sale of a property or of commercial premises.We got that legislation through actually in record time—within 12 months I think—because it was important and because there was a groundswell of support from people. The evidence came literally in bags into my office in terms of mail from people who felt they were being dealt to and were vulnerable. This legislation reflects the vulnerability of consumers—ordinary folk as I say; honest folk—who are just trying to transact their business to make purchases and to engage in services or purchase services and they deserve that protection.I end on this note. I would ask the Attorney-General whether he could ask his officials what the process post this legislation will be in terms of providing education to the public.MOJO MATHERS (Green): I am extremely pleased that finally the Consumer Law Reform Bill is coming before the Committee. It is a bill that is long overdue to modernise consumer protection law in New Zealand. It would be fantastic if it could get passed before Christmas especially when so much spending is going on in New Zealand.The Green Party is particularly pleased to see the unsubstantiated representation clause in the bill. At the moment we have lots of products that are increasingly trying to jump on the “greenwash” bandwagon and that make all sorts of claims about how they will be clean and green reduce the impact on the environment be environmentally responsible and so on. By and large consumers are very trusting. If a company makes that claim about its product then consumers will often believe that that is the case—that that product is better than other products on the market and will have a lower environmental footprint—and therefore if they care about these issues as many do they will choose to buy that product. It is extremely difficult to prove that those companies are making a false claim and it can be costly and ineffective so not many of them actually get taken to task for making such a claim even though they are profiting from making these claims especially when they are unsubstantiated. So it is fantastic to see that the bill has a clause that will finally address that by placing the onus of proof on the company making the claim to prove that it has some evidence to back that claim that it is making. It is a very simple straightforward expectation that you do not make a claim unless you actually have some evidence for that claim.Consumer New Zealand gave a very powerful submission to the Commerce Committee. It tests a lot of products for their claims and it gave the example of a vacuum cleaner system where a $3000 vacuum cleaner was advertised as being a world-class indoor environment management system that reduces asthma and allergies.When Consumer New Zealand actually tested it it found that it performed no better than the $100 product on the market. So people were paying basically $2900 more for a product on the basis of its claims which were found to be unsubstantiated and unproved. That is the kind of thing we do not want to see happening. It puts honest traders honest companies at a severe disadvantage. It is fantastic that finally we have a law that places the onus of proof to back the claim on to the company making the claim.It was quite extraordinary at the select committee to see the number of large companies submitting against this bill. The committee came under a lot of pressure. Power companies wine-growing companies all sorts of companies said: “No no no don’t make us prove that our claims are actually based on fact.” I want to congratulate the select committee members on withstanding that fairly obvious hypocrisy on staying on the side of consumers and consumers’ rights to be protected and on retaining that clause. However the select committee did recognise that there is a case where sometimes claims are made that are so fanciful that they are obviously untrue and that this is just a sort of marketing ploy that could be used to say: “Oh if you consume this product it will make you a superhero.” or something like that and suggested a clause in the bill that allows obviously exaggerated claims to continue to be made.We are also very glad that the Commerce Commission has got additional powers to enforce notices—investigation powers. One of the concerns that I did have after the select committee hearing was that there is no clause in the bill to allow substantiation notices such as they have in Australia. So we wrote to the Commerce Commission to ask whether it would find having powers to issue substantiation notices helpful in enforcing the clause around unsubstantiated representation. It wrote back saying that it had originally sought these provisions but it now thinks that the substantiation provisions in this bill are actually going to be workable because they are simpler they are more easily enforceable and they provide a better education tool. The commission is confident that it has sufficient powers under this bill as it stands particularly in conjunction with the information-gathering powers it has. Because of this letter from the Commerce Commission we are hopeful that this bill will work as intended and that it does have the powers to enforce unsubstantiated representation effectively.The other part of the bill that we are incredibly pleased to see is the fact that for the first time online traders will be required to identify themselves as such. In the past very often if you were on an auction site such as TradeMe and so on it was not always clear whether the person selling the product was in trade or not. Of course it is only when someone is in trade that the protections of the Consumer Guarantees Act come into play. It is incredibly important from the consumer perspective that they know when someone is in trade when they are purchasing something from someone. Again this was a clause that was strongly resisted by a lot of groups and auctioneers in particular—traders who use the online website for auctions. I am very pleased to see that this has been retained because people do not realise the difference when they are going online. It is fantastic to see that consumers are now going to be properly protected whenever they are purchasing from a trader whether that is online or off-line at any kinds of venue. They will be protected under the Consumer Guarantees Act and that is a great move forward.Dr DAVID CLARK (Labour—Dunedin North): I rise to speak to the Consumer Law Reform Bill. I note from the start that Labour will be supporting this bill through the House. We are looking forward to it passing and we are wondering why it has taken so long. We are scratching our heads. We are still waiting for that bit of advice from the Attorney-General that Mr Cosgrove sought and we might be waiting for some time by the look of things.Hon Clayton Cosgrove: Another 4 years.Dr DAVID CLARK: It may be another 4 years before he gets back to us. And who knows how long this bill will languish on the Order Paper before it makes its way through its stages.There is no doubt that we need strong consumer law in New Zealand. We need protections in place. Mojo Mathers has just referred to the example of the vacuum cleaner. We heard other examples earlier in the debate. There have been several in my local situation that I have heard of recently. TheOtago Daily Timesrecently reported a scam in Central Otago involving workmen coming to lay driveway entries doing incredibly poor workmanship overcharging and then disappearing into the mist. This is all too common sadly. In Brockville in my electorate—Hon Clayton Cosgrove: Where?Dr DAVID CLARK: Brockville. It is a great suburb in Dunedin North. I invite the member Clayton Cosgrove to come to visit Brockville. It is a fantastic suburb in the Dunedin North electorate. It is a very wise suburb that knows how to cast its votes in the right direction. There are excellent constituents in that suburb I would have to say. One unfortunate thing that seems to be happening there to one or two families as was reported to me recently when I attended the opening of the community orchard is that pay-day lenders are making their way into that suburb. They have specific families that they visit that they pick on. They wait outside until the family member whom they are trying to enforce a debt with comes home.That kind of behaviour should never be allowed. It happens because of slack law in New Zealand. It happens because this Government has not prioritised consumer protection. Quite frankly it is a disgrace. That kind of abuse that kind of lending that is allowed in New Zealand that is permitted that kind of scamming that goes on is something that the Labour Party stands up against very strongly. It is often those who are the most vulnerable who are picked on. They are at their wit’s end. They are caught off guard by a knock at the door when they are trying to manage children. They are trying to work out where the next dollar is coming from and they are caught in a vulnerable moment with a product that looks attractive at first blush. They are sold on that product and then taken advantage of. They do not have the representation they might have to represent their interests and the law is not strong enough to give them an easy response.I want to ask a few questions about the nature of unconscionable conduct which my colleague Clayton Cosgrove raised. He noted that unconscionability applies when courts consider it unfair or inequitable or against good conscience to allow a party to enforce its contractual rights against a party who is detrimentally affected by an impressive bargain. He raised the question really of whether and where it might exactly apply. He raised the issue of John Archibald Banks and the ability to apply it in a legal case. Of course he did not discuss the matters about which Mr Banks is appearing before the courts because that is something that cannot be discussed in this House. His previous prosecution can be but not the current one. I was wondering to what extent it applies and whether if a party negotiated a deal where they had themselves over a barrel—for example they purchased a product and negotiated that the product was to supply a service and that service was not delivered properly but they had got rid of all the comebacks they might have—that would be unconscionable conduct and could be enforced.I guess I am thinking here of the example of the Skycity deal the casino deal which has been debated often in this House where the Government put itself over a barrel and got itself into a situation where Skycity was the only bidder involved. The Government made political promises that it felt it must deliver on and essentially gave Skycity an open cheque in that it said: “We will not have any comeback if the facility is not runproperly. We won’t have any compensation for GDP loss. We won’t have any compensation for loss of income tax. We will open up the cheque book if it runs over in the planning stages and looks like it’s going to cost a whole lot more. We’ll pay for the whole thing off the back of problem gambling and we will have only 18 jobs for New Zealand as a consequence.” That is the Skycity deal the casino deal that this Government has done. Is the law enforceable in a way that the Government can then ask whether it is protected after putting itself in such a stupid position in the first place? Can the Government ask whether it has negotiated itself into a position where consumer law ought to protect it? I do not think that it can in the case of this law. I do not think that this law is designed to protect Governments from their own stupid decisions. If it only could that would be a good thing.It is exactly the kind of thing we see played out on a grand scale. We saw the Government give $30 million out to Rio Tinto and get absolutely nothing for that. We would have thought that it might ask for a jobs guarantee or some kind of future certainty. Maybe it got a little tilt in the price of the asset sales deal it was trying to get through as a result of shelling out $30 million to a corporate in New Zealand. Likewise with the Skycity deal maybe that got the political promise over the line. But again the Government has put taxpayers in such a devastatingly poor position that you have got to wonder whether it has some rights having put itself in a position where a contract ought not to be able to be applied in good conscience because it is such a bad deal for the Crown.This bill is making its way through the House as I have said incredibly slowly. Inequalities in New Zealand continue to widen. This Government has overseen the greatest level of inequality that New Zealand has had since records began. We had tax cuts in 2010 that saw the wealthiest 10 percent get 40 percent of the value of those tax cuts and the—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: —most hard-up 20 percent get just—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: —2 percent of the value of those tax cuts. The kind of inequality that has gone on is something that this bill is trying to protect against. It is trying to make sure that those who are most vulnerable are protected and we compliment the Government for the small measure that is being taken here. It often seems so distracted by ideological agendas asset sales and the interests of the big end of town. Here we have some consumer law.Paul Goldsmith: Repetitive.Dr DAVID CLARK: It is going through very slowly but at least it is offering some protections for those people. I petition Mr Goldsmith at the back there to try to do what he can as a now highly rankedTrans Tasman MP to make sure that he is also looking out for the little guy. He tells me that—Hon Clayton Cosgrove: Who? Lindsay?Dr DAVID CLARK: No no Mr Goldsmith at the back there. He tells me that he is very interested in right-wing politics but I petition him to—Hon Clayton Cosgrove: Wasn’t he John Banks’ biographer?Dr DAVID CLARK: He was John Banks’ biographer and you remind me of the unconscionable conduct earlier but—Phil Twyford: Hagiographer please.Dr DAVID CLARK: We are not on hagiography yet I do not think.Paul Goldsmith: I take no responsibility for the subject.Dr DAVID CLARK: Well let us not get into that debate. Let us move away from that and come back to the debate at hand. I petition Mr Goldsmith to do what he can tomake sure that markets are fair in New Zealand and do not advantage just the big players through unlevel playing fields.This legislation which does take some steps forward for the average consumer is a bill that is really a major win for Consumer New Zealand. Consumer New Zealand and itsConsumer magazine highlighted in February last year that delays in consumer reform were really leaving Kiwis a lot worse off than the Aussies who have progressed their legislation much more rapidly. That petitioning together with work from Labour and public support from Labour has meant that this bill has wriggled along a little bit but we would really strongly implore the people who sit opposite us in Government to up the pace at this stage. A snail’s pace is not good enough for consumer protections. We actually need to get this legislation through to make sure that those who are most vulnerable are protected and that we have sensible laws so that people know when they are investing in a product that it is what it should be and that they have a fair comeback if it is not what it should be or what it claims to be.ANDREW WILLIAMS (NZ First): I take a call on the Consumer Law Reform Bill on behalf of New Zealand First. New Zealand First is supporting this legislation as we have through its other readings in this House. We are fully supportive of any measures that go towards protecting the New Zealand consumer and beefing up legislation to protect New Zealand citizens and residents.We note that this is also bringing New Zealand consumer law into line with Australian consumer law which we are also very supportive of as so many of our transactions cross the Tasman with so many goods and services going to and from both countries. Therefore it is appropriate that our consumer laws very much line up with theirs. I note however that in the last week we passed an Act in terms of covered bonds. In this House we brought in a 10 percent covered bond regime for the Reserve Bank whereas Australia has an 8 percent regime and that we highlighted last week was an inconsistency. Why would New Zealand adopt a higher threshold than Australia’s? In these areas I think it would be far more advantageous for New Zealand to have far more alignment with many of Australia’s laws rather than going along on our own.In terms of this bill it amends a number of Acts: the Fair Trading Act 1986 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. It also repeals the Auctioneers Act the Door to Door Sales Act 1967 the Layby Sales Act 1971 and the Unsolicited Goods and Services Act 1975. So quite a number of Acts are either amended or repealed as a result of the Consumer Law Reform Bill which means that a lot of this legislation—some of which was enacted well before the age of the internet before emails and before mobile phones—is being brought into the modern era where so much is now being done electronically.The bill particularly means that online traders who are transacting over the internet will be required to be identified as online traders. Again that is a good move to protect consumers because so often they are not absolutely sure whether the person whom they are dealing with is a private individual or somebody who is actually in a regular online trading activity.The bill ensures that goods are received properly and in good order. Again that will give great relief to the many consumers who always wonder if they are buying over the internet via television offers or whatever it is whether the goods and services that they will receive will be exactly as advertised or shown or promoted to them. So again under this bill the sender is responsible for the goods until the recipient signs that the goods have been received in good order. Again that is good law.It also brings into line standard contract forms to prevent unfair contract terms. That is also modelled on Australian law. It means that there will be much more standardisation of contract forms for consumers so that again they do not end up signing up for things that are on forms that are perhaps not that appropriate or that they do not fully understand. In that respect it is often the most vulnerable in our society the people who can least afford to lose their money or be affected by the loss of the well-earned funds that they have—this will help those innocent consumers who otherwise could be greatly out of pocket and who cannot afford to be in that position.New Zealand First is also pleased to see that penalties will be increased in the case of individuals from $60000 to $200000 and in the case of companies and bodies corporate etc. from $200000 to $600000. Again that sends the right message to people who go into this area and are operating unlawfully or are certainly not honouring what they should be providing to consumers that they do stand a much higher level of penalty for that.The bill also provides for more protection in terms of misleading representation. Again we often purchase what we are not seeing or handling ourselves and then we find that it is not how it was represented. That can be very very disappointing and costly to consumers. So in terms of tidying up all the false or misleading representation again the bill sends the right message that there will be greater protection for the people of New Zealand.It also includes the ability for compulsory product recalls if the Minister of Consumer Affairs steps in and determines that a product should be recalled. Again that is a good move. Quite often we hear of instances where products should have been recalled and the manufacturer or the supplier is reluctant to do so. In that respect it is good that there are greater ministerial powers to step in where consumers or the public are at risk and to provide for compulsory product recalls where appropriate.So in closing New Zealand First supports this bill. We think it is long overdue. We are disappointed that it first came into the House in February 2012 when the Minister was the Hon Chris Tremain. I think there have been one or two Ministers in the seat since then. It is a shame that this area of legislation which protects everyday New Zealanders and everyday citizens has taken the best part of a year and a half to get to the Committee stage and then hopefully to the third reading. It is disappointing that it has taken so long because I think that in this area where the internet is moving so quickly where electronic transactions are moving so quickly and where goods and services in a consumer society are moving at a far more rapid pace it is a shame that the parliamentary pace of this legislation has been so much slower. It should have been quickened up to protect New Zealand consumers. New Zealand First supports this legislation.CLARE CURRAN (Labour—Dunedin South): I would also like to echo what has been said tonight about the Consumer Law Reform Bill being an important piece of legislation that is ultimately about trying to provide more of a fair go for consumers. You would think that in this Parliament priority would be given to passing this sort of legislation as quickly as possible especially when it comes back from a select committee and when there has been such a lot of work done at the select committee on it.A number of substantial changes were made to this piece of legislation that were agreed to by the Commerce Committee in consultation with the officials. I would like to acknowledge the work done by the officials on this bill. Pretty much all of the work that has been done in the consumer area has a lot of solidity behind it and there is a lot of thought that has gone into it. It is not perfect obviously and we have had criticisms particularly when it comes to pay-day lenders loan sharks etc. But with regard to thisparticular piece of legislation there was a lot of good work that went into it and it should have come back to this House well before it did. It should have gone through and become law well before now. Basically I am echoing everybody on this side of the Chamber on that particular issue tonight.Before I get into the substantive area that I want to cover tonight I would just like to say that one of the substantial changes that was made at the Commerce Committee was to the penalties being imposed for breaches of the Fair Trading Act. I just want to mention those penalties because they are quite substantial. The fines went from $60000 to $200000 for individuals and from $200000 to $600000 for bodies corporate. The figure of $60000 might sound like a lot of money but actually in order to prevent those breaches of the Fair Trading Act the increase in those penalties was important and I think it is a substantial part of this bill.I would also like to turn to one of the pieces of work in this area that has been mentioned a couple of times tonight. It is still yet to be dealt with in the legislation because we are waiting until Australia has developed a body of authoritative case law on the matter. That matter is very pertinent on a number of issues particularly at the moment and it is around the concept of unconscionable conduct.I am treating this area very seriously. The commentary states: “Unconscionability applies where the 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.” Well there are many examples of this that could be used right now but one of the most pertinent examples is in the area of Chorus and the Government. The question that has to be asked is whether an inept contract is an oppressive bargain. I think that is a pretty pertinent question right now because it appears pretty much as if there is some sort of issue and that somebody is to blame here. There are so many questions and this issue seems to be changing day to day but I certainly think that underpinning it is this concept of unconscionable conduct.It is a pity I put it to you tonight in the Chamber that this issue is not included in the bill because then we might have actually had the ability to apply a remedy from another piece of legislation to try to address the debacle that has occurred right now. Is Chorus the problem or is it the Government—Hon Clayton Cosgrove: Both.CLARE CURRAN: —and who is telling the truth? Or is it both? But if it is both then where is the unconscionable conduct? Is it in the way that the contract was developed or is it in the way that the contract is being carried out? Or is it the fact that 2½ years ago when the relevant telecommunications legislation was written by the previous Minister for Communications and Information Technology Steven Joyce who pushed through that legislation it included a provision that everybody else in the industry seemed to know about which was going to be reviewing—[Bell rung] Speaking to the unconscionable conduct aspect of this piece of legislation everybody else seemed to know about the review of the copper pricing that was going to happen except for the Government. We know that Chorus knew about it because it was in the first prospectus that it put out. In fact it was also in the regulatory impact statement—The CHAIRPERSON (Lindsay Tisch): Order! You are not talking to the bill.CLARE CURRAN: It was in the regulatory impact statement in that piece of legislation and it certainly has got relevance to unconscionable conduct because the question that has to be asked is what has gone wrong with this contract? What has gone wrong between the Government and the contracting company? Who knew what who knew what when and who knew whether Chorus was going to go broke? I put it to you that this is an extremely important issue which would have been addressed in this pieceof legislation potentially of whether Chorus is going to go broke or whether it is not going to go broke.Chorus said that it is not going to go broke but the Prime Minister said that it could possibly go broke. The issue is whether the Government was planning to legislate to override the Commerce Commission or whether it was not planning to legislate despite the fact that the Minister has actually put out a review document—The CHAIRPERSON (Lindsay Tisch): Order! This is not a debate about Chorus.Hon Clayton Cosgrove: I raise a point of order Mr Chairperson. I understand your point. However it is within a member’s right to use an example to illustrate a point within the legislation. Prior to your taking the Chair a number of members have used examples.The CHAIRPERSON (Lindsay Tisch): I hear the member. Using examples is fine but this is not a debate on Chorus. The member must come back to the substantive matter of the bill.Hon Clayton Cosgrove: I raise a point of order Mr Chairperson. If you will just bear with me I think the point that was being made is that if you look at the piece of legislation that is being referred to there are two parties to a transaction and you can illustrate the point around that—The CHAIRPERSON (Lindsay Tisch): I thank the member. I have made the ruling. The member must refer back to the substantive matter of the bill and what this bill is about. It is not a 5-minute talk or a speech on Chorus.CLARE CURRAN: Thank you Mr Chair. In the part of the commentary on the bill relating to unconscionable conduct it says that “The Australian Consumer Law includes unconscionable conduct protections” but that those protections “have encountered some technical problems.” The Commerce Committee agreed that it would be prudent to wait until Australia has developed a body of authoritative case law on the matter—as I started off by saying in my speech tonight—before following suit. That was because the Commerce Committee considered that implementing unconscionability provisions “could lead to a period of uncertainty while the provisions were tested by the courts in Australia and New Zealand.”I put it to you tonight that there is a period of uncertainty happening right now that affects consumers in this country. It is about whether their internet prices are going to stay up high or whether they are going to drop which is what the Commerce Commission has recommended they do and the commission has actually put out a final decision that they should drop. That is a fair trading issue that is a consumer issue and there is a period of uncertainty now.There are now two judicial reviews happening. One judicial review is the Minister for Communications and Information Technology’s own review in which she has three options each of which requires legislation. The other judicial review is that of Chorus which is taking the Commerce Commission’s final decision to court. If that is not a period of uncertainty that is affecting consumers then I do not know what is.There is unconscionable conduct that has occurred. The questions are where has that unconscionable conduct occurred who is to blame who knew what when and why is it that the consumers of New Zealand are going to end up paying? If Chorus is going to have to be bailed out by this Government then it is the consumers who are going to have to bail it out ultimately. That is the essence of that issue and that is why in this piece of legislation which is all about consumer law reform there is this disconnect that seems to be occurring where you have got a piece of legislation that sits on the Order Paper for 2 years and does not go through the House and you have a Government that is basically coming up with one idea after another to try to bail out a private companyand its shareholders in order to protect the dividends of that company. That is unfair. It is an unjust situation and it is the consumers of New Zealand who are losing out.Hon CLAYTON COSGROVE (Labour): I just want to take a brief call again on the theme which a number of us have spoken on this evening of unconscionable conduct. Within the commentary on the Consumer Law Reform Bill as I referred to before it talks about unconscionable conduct applying where courts consider it is “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.” In case the Chair may think that I am wandering away from the bill the words I want to concentrate on directly for a moment are “oppressive bargain”. I am going to illustrate the point by another Government decision two parties to which—and you may have been distracted Mr Chairperson. I am referring directly to the words “oppressive bargain” in the commentary and I am going to illustrate that with an example.The example is one of Rio Tinto. There were two parties to a transaction a contractual arrangement yet one party negligently stupidly negotiated a deal paid a lot of money gave away a number of components and got nothing back for it. The question I would have for the Minister in the chair the Minister for the Environment because she is a lawyer and she will know far better than me is whether that would be considered enforceable given that Rio Tinto—not through any nefarious means but simply through good management good negotiation and smarts—worked out that the Government had nailed itself to a time frame to sell Meridian Energy and therefore waited waited and waited until that time line was almost going to be breached and it sprung the trap.The deal as I am sure you and others will know was that there was going to be job protection and all sorts of other things—benefits to Southland and New Zealand—were going to rain from the sky and the deal was done. The deal was a halving of the notice period a decrease in the power price for Rio Tinto and 30 million bucks thrown in for good measure. That was the deal. The question is whether that could have been deemed to be an oppressive bargain given that one side got everything and the other side got nothing. And we know that before the ink was dry on the $30 million cheque Rio Tinto had through theSouthland Times indicated that maintenance jobs were going. We know now that there was no guarantee of those jobs encompassed in the deal and further we know that the Minister negotiating the deal Mr English never asked for a guarantee. That is the detail of a transaction—Dr David Clark: Never asked for it?Hon CLAYTON COSGROVE: Never asked for it. So the question I would have for the Minister in the chair is whether this consumer concept of unconscionable conduct where a bargain could be considered oppressive applies to this particular transaction. It seems to me it would because one side gave away not just the kitchen sink but the kitchen and the lot—the whole house—and got back zero. That party could have been stupid negligent or incompetent or all of the above.I have never seen a transaction or a deal done where one side gives so much and gets nothing—absolutely nothing—back in return unless you count the fact that the Government managed to do the deal and tried to pump up the price of the Meridian Energy float so that it could get it away. I suppose you could say the Government got that out of it. It cleared the decks on that. But for 30 million bucks a decrease in the power price no jobs guarantee and a halving of the notice period the question I would have is what we the Parliament on behalf of the taxpayers got for that. I would call that an oppressive bargain. I do not blame Rio Tinto because Rio Tinto’s job is to get the best deal that it can for its shareholders and to quote the Prime Minister if it is “dealing with a bunch of muppets” which it was through the Minister of Finance andnegotiators then so be it. But I would like to know from the Minister whether that particular transaction 30 million bucks would constitute an oppressive bargain and in doing so unconscionable conduct.JAMI-LEE ROSS (Junior Whip—National): I moveThat the question be now put.Motion agreed to.The question was put that the amendments set out on Supplementary Order Papers 273 and 404 in the name of the Hon Craig Foss be agreed to.Amendments agreed to.Parts 1 and 2 schedules 1 to 3 and clauses 1 and 2 as amended agreed to.The Committee divided the bill into 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 Billpursuant to Supplementary Order Paper 405.