Yang Jian: Electronic Transactions (Contract Formation) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeYang Jian: Electronic Transactions (Contract Formation) Amendment Bill — Second Reading[Sitting date: 19 February 2014. Volume:696;Page:16133. Text is incorporated into the Bound Volume.]Dr JIAN YANG (National): It is a great pleasure to speak on the second reading and in support of the Electronic Transactions (Contract Formation) Amendment Bill. This bill is in the name of my good colleague National MP Paul Goldsmith and I would like to thank him for bringing this member’s bill to the House.This bill amends the Electronic Transactions Act 2002 and clarifies the legal position on the time in which a contract is formed if acceptance of an offer is sent by electronic communication. This bill is a simple but good bill. It will tidy up uncertainty and offer New Zealanders peace of mind as well as increasing the flow of business. Businesses and consumers are now living in the internet age and our legislation needs to keep up with changing technology to ensure that we have consistency.The internet has already impacted the economy in a range of ways such as investment in internet-related infrastructure and creating an industry that provides goods and services that enable the internet. In 2009 Statistics New Zealand valued the net capital stock held in the telecommunications internet and library services industries at $14.7 billion or 2.6 percent of New Zealand’s total capital stock. Since then the Government has agreed to invest $1.65 billion in the ultra-fast broadband or “UFB” roll-out through to 2019. In 2009 the internet service industry contributed $4.2 billion towards GDP or 2.3 percent of GDP.The Boston Consulting Group estimated in 2012 that the internet economy contributed US$2.3 trillion towards the G20 economies in 2010 and projected that itwould reach US$4.2 trillion by 2016. It is believed that broadband will deliver $32.8 billion in benefits to New Zealand end-users over the next 20 years.The New Zealand Institute of Economic Research completed a report on the role of the internet in the New Zealand economy in 2012. The report emphasises and it is quite a long quote but a very important one that “Economists see the institutions (‘rules of the game’)—such as the legal status of different types of transactions—in an economy as vital determinants to the way it functions. The structures and frameworks must ‘suit’ (match and support) the type of economic activities that are taking place. So the wider rules of society such as laws enforcement provisions and other policies outside the internet play a role in determining its effect on the level of structural change or innovation in an economy. This suggests that for the internet to maximise its impact complementary policy and institutional settings need to be correctly set and kept up to date.”Under the current legislation when the contract is accepted by post a rule applies and it means that the contract has been formed as soon as the acceptance was placed in the post. However this rule does not cover contracts accepted electronically namely by email. So if someone accepts a job by email then there is no legal certainty over when that contract was formed.The National-led Government is focused on building a more competitive and productive economy—hence we are rolling out ultra-fast broadband and we are working hard to ensure our public services utilise online services. This bill recognises that we live in an internet age. The Commerce Committee has recommended that the postal acceptance rule be applied to electronic communications. This bill is as simple as that.I would like to talk a bit about the amendments. Firstly in the original member’s bill clause 5 which relates to contract formation proposed inserting new section 32A which clearly stated that an offer submitted electronically would be deemed to be accepted at the time of receipt of acceptance by theofferor. However the Commerce Committee felt that this could create a misapprehension that an offer can be deemed to be accepted electronically only at the time of receipt. Therefore the committee has proposed amending clause 5 by inserting new section 13A instead of the original section 32A to clarify that this is by no means a rigid approach but instead a default rule that would allow flexibility. This amendment would ensure that the time of receipt referred to in section 11 of the Act would be applied to acceptances of contract offers that are communicated electronically.The National-led Government is committed to making better online services for New Zealanders. We believe that ultra-fast broadband is vital and that it will promote innovation create jobs and grow the New Zealand economy. This is why we are investing $1.65 billion to deliver ultra-fast broadband to 97.8 percent of all New Zealanders by 2025. It will bring us closer to the rest of the world and increase our competitiveness.There are now more than 363000 end-users connected to ultra-fast broadband in New Zealand. The Rural Broadband Initiative has connected over 179000 rural homes and businesses to fast wireless broadband and over 2000 schools are now connected to fibre. Ultra-fast broadband has revolutionised the way that many businesses schools health care providers and communities operate.The impact that the internet has on us is far-reaching. It is believed that the changes that the internet has already caused could be the tip of the iceberg. Many types of commercial and social contacts are possible on the web. It is also noted that the internet’s transformational impact is not limited just to who produces what and how and where; the internet has already created new wants and the products and the markets to meet them.From day one National has been firmly focused on the issues that matter to our economy to our community and to all New Zealanders: a strong economy more jobs better front-line health and education services a safer New Zealand and rebuilding Christchurch. We have a Business Growth Agenda with hundreds of initiatives to improve the productivity and competitiveness of the economy.To conclude clear and predictable laws governing commerce are some of the foundations of the success of the modern economy upon which our prosperity depends. Clarity and certainty lead to confidence and confidence leads to greater investment so our laws need to be consistently maintained and adapted to respond to changing technologies. This bill tidies up one small area of uncertainty and will go some way to increasing the flow of business. I commend the bill to the House. Thank you.