Motor Vehicle Sales Bill — Third Reading 
Motor Vehicle Sales Bill — Third Reading 
[Volume:607;Page:4799] 
Motor Vehicle Sales Bill 
Third Reading 
Debate resumed. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I speak on behalf of the ACT party in the final reading of this legislation. The ACT party now opposes this legislation and will vote against it. As I said originally we were going to give it our guarded support when it was sent to the select committee because my colleague Owen Jennings recognised the need for an overhaul of the 1975 Act. But when this bill came back from the select committee a Supplementary Order Paper was sneaked in which singles out motor vehicle dealers as being deserving of some sort of special tax. As Richard Prebble told the House earlier this morning that brings the whole of Parliament into disrepute. That is not a minor Supplementary Order Paper with just technical changes as the Minister asserts. We are told that it brings in a levy to fund a disputes tribunal in part but there is no assurance that the levy will not end up in the consolidated account. 
The Minister says that in January 2001 a discussion paper was circulated which is what she calls “extensive consultation”. From her own words we know that there are two submissions on that discussion paper. If it was such a good idea to have a levy why was it not put in the original bill so that it could go to the select committee allowing motor vehicle dealers to have an input into it? Why treat motor vehicle dealers with such contempt? We know why: it is because they are easy to sting. They are the line of least resistance. One of the points of taxation is representation—or at least that is the case in a liberal democracy. That is not what we are seeing in this case. As I said that Supplementary Order Paper should have gone to a select committee. 
People have been saying that motor vehicle dealers were consulted but from my perspective the only consultation they had was when I sent out a letter to 2250 of them last week and they started to reply. They said things like: “I am supportive of any action that raises awareness of the potential problem of the good guys subsidising the bad guys. I am alarmed over the industry levy proposed by Labour.” That is from a national executive member of the Motor Vehicle Dealers Institute. 
The whole point of the levy is to fund the tribunal. It is penalising the good dealers as opposed to the bad dealers. I notice in the schedules that there is provision in the legislation for the tribunal to award costs against vexatious litigants or people who refuse to mediate before cases come before the tribunal. If there is the ability to award costs why do we need a levy to support the tribunal in the first case? Yet here we are in urgency and the bill will go through. The levy will be sneaked in with regulations that impose how much what for and where to. Motor vehicle dealers already pay considerable taxes through their GST and through high company taxes. They do not want to nor should they pay an extra tax without knowing anything about it. 
It is interesting that the discussion document the Minister talked about went out in January which is a good time to put something out to the industry! How many people are taking care with their mail in January or noticing things that the Government might be doing? It is holiday time. Again it just shows the disregard that this Government has for corporates companies and entrepreneurs out there. If they knew this levy was coming why are they so outraged about it now? 
I also see in the schedules that the assessors who sit on the disputes tribunal will be paid out of the consolidated account. There is another reason for us to query why we need the tax. I am very suspicious of where the levy will go. Nothing in this legislation assures us that it will in fact be used to fund the disputes tribunal. To me it looks suspiciously as if the Government will get its clammy hands on what was the fidelity fund which was the property right of the Motor Vehicle Dealers Institute. 
I concede that the dealers welcomed the demise of the fidelity fund. Harry Duynhoven is right when he says that dealers wanted to get rid of it. But what has the Government done? After getting rid of that it will set up its own little fidelity fund. Sometimes we cannot protect people from themselves—much as Governments would like to be able to do so. Sometimes people make silly mistakes and bad decisions. People have a right to be wrong—the Government cannot be there to hold their hands every step of the way. 
Most members of this House have overlooked the fact that every day in this country two-thirds of all car sales are done without the benefit or involvement of a licensed regulated dealer. This legislation will ensure that 100 percent of all those cars that change hands will be do so without the benefit or involvement of a licensed and regulated dealer because this bill will drive motor vehicle dealers away from registering. Nothing in this legislation that would tempt them to register and to comply with the law. Why should they bother? The levy is another nail in the coffin for them in addition to the growth in Internet and private sales with an individual being able to sell up to six cars a year without registering. There is nothing to stop people from banding together. For instance a family of six could band together and sell six cars each. 
As I said during the Committee stage we welcome the end of car dealers compulsorily having to join the Motor Vehicle Dealers Institute. That is a good move. If an industry organisation is good and acts well on behalf of its members then there is no need for it to be compulsory to join. I look forward to the Government applying the same attitude to student unions law societies and all other closed-shop unions and professions where it is compulsory to join. 
The only reason that the industry is protected by legislation and is compulsory of course is that without such legislation they might fall over. We see creeping compulsion coming back into unions too and I look forward to the Government applying that same attitude to those areas. 
I would like to finish by drawing the House’s attention to another area that this legislation has missed out—that is where the New Zealand Customs seizes imported cars for safety reasons when it suspects that the odometers have been tampered with. Any normal person would think it would follow that if those cars were unsafe then they should not be allowed on the road. They could be broken up and sold for parts or they could be sent back to where they came from. 
But no they get sold. The Crown sells them and keeps the money. The Crown is exempt as a car dealer under this Act so the people who purchase those cars from the Crown without knowing that the odometers had been wound back will have no redress because the Crown will not be liable—and this is a bill that is meant to be about protecting consumers. As Richard Prebble said if car dealers were doing to the public what this Government is doing to car dealers there would be an outcry. I repeat: we should be passing a law to protect motor vehicle dealers. In fact all entrepreneurs and all wealth creators in this country should be passing a law to protect themselves from this Government. ACT is not supporting this bill. 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: 
 I am delighted to rise to support the Motor Vehicle Sales Bill. I notice that despite all the criticism of it the one member of the House who knows most about the actual industry of car sales Mr Paul Adams supports the deal; and that the member of the House who knows most about cars Mr Harry Duynhoven also supports the bill. 
I just want to make two points. The first is that last night we saw something that I have not seen in my 22 years in Parliament. We saw members of a party get up and say: “We support the title of the bill but we do not support anything else about it.” As Leader of the House I was sorely tempted to say: “Right we’ll vote with you and we’ll send out to motor vehicle dealers the new Motor Vehicle Sales Bill courtesy of Winston Peters consisting of a title and then a blank sheet.” The dealers would really be baffled and wondering what it was all about and we would have to explain that Mr Peters was probably somewhere in Courtenay Place at the time resulting in the bill ending up in that particular form. 
Then we have listened to all that whingeing from National and ACT members who have been saying: “Labour Governments always do something that is called ‘sneaky’.” 
Gerry Brownlee 
: That’s right! 
Hon Dr MICHAEL CULLEN 
: The member learnt to say that from Roger Sowry. When he has more experience he can be leader of the National Party because we have learnt that the only reason he is not the leader of the National Party is that he does not have enough experience. That is what his leader actually said. Those members said that a Supplementary Order Paper imposing a levy had been sneaked into the House. 
Gerry Brownlee 
: That’s right! 
Hon Dr MICHAEL CULLEN 
: “That’s right!” the member says. I heard him say this morning that he had just discovered on page 5 of the Supplementary Order Paper that a levy is being imposed. If he looks at the front page of that document he will see that it was tabled on 19 November 2002. This lazy inexperienced wannabe leader of the National Party MP has taken 4½ months to discover the most important bit on that Supplementary Order Paper. National members have just discovered the levy in the amendments on the Supplementary Order Paper after 4½ months. Where were they all that time? Were they going around their used-car dealers asking them about the Supplementary Order Paper? They were too busy counting the numbers in caucus to go and do their work as an Opposition. 
BRENT CATCHPOLE (NZ First) 
: 
 Firstly I would just like to thank Harry Duynhoven for getting up and clarifying a few more points this morning because I was disappointed that the Minister would not take the call and clarify them. Whether she would not take the call or could not take it I do not know but Harry Duynhoven’s explanations were very much appreciated. He was able to clarify a number of points for us. 
New Zealand First is concerned about the lack of compliance in this bill. It does not have any teeth. It does not provide the mechanisms to make sure that unregistered dealers will want to become registered. Because it does not require them to be registered or does not provide the teeth to make them register why should they bother to be registered? They can work out of backyards and if necessary use the licence of another registered dealer under the terms of harbouring. This leaves the consumer without any recourse because the dealer’s licence being used is not the one under which the vehicle is being sold. The person selling the vehicle therefore does not have to front up and be accountable for the sale. He or she just uses the name and the dealer and walks away from any deals. 
Under the bill backyard dealers can sell up to six vehicles but if they do not disclose how many they sell they continue selling vehicles without reporting their sale. 
Last night we had an explanation from Mr Duynhoven on the subject of odometer tampering. He said that the paperwork of cars purchased in Japan clearly documents odometer readings and therefore if that paperwork were transferred with the vehicles to New Zealand dealers and the buyers in this country could identify those vehicles that come in with “clocked” odometers and we would not have this problem. If this bill insisted that those documents travel with the vehicle then we would not have an odometer-clocking problem. 
Paul Adams claims that it is a used-car problem. Well a large number of the used cars on the roads in New Zealand are imported from Japan and many of the vehicles whose paperwork has been separated from them are found to have been “clocked”. Mr Cullen got up and with great glee stated that New Zealand First intended to support only the title of the bill. Well I tell him that if the bill had had the content it was intended to have we could have supported the whole bill. We can support only the title because the rest of the bill is so fragmented and disjointed. It is not properly cross-referenced so one does not know what a penalty refers to and what the circumstances are. 
 So if that had been properly drafted and if the bill had all the proper content then we would have been able to support it. We support the idea and the intent of the bill and so does the industry. The Minister was unable to explain any of the bill. He had to leave it to one other member of his party to explain. The Minister did not really know what the bill was all about so we have come up with a drafted bill that has no real substance and no real content. That is the reason we could not support the rest of the bill. 
The Supplementary Order Paper clearly states “19 November”. That was after the second reading and it was also after the select committee process. Nobody in the industry was given an opportunity to put his or her views. Deborah Coddington of ACT has a pile of papers from the industry which is horrified that it was not consulted. I really have some doubt about the Minister’s claim that she was consulted about this. A continual stream of letters are coming in in reply to a letter that went out from Deborah Coddington asking the industry what it thought about the bill. The industry is horrified. It was not consulted and not given the opportunity to talk about this through the select committee process and to provide its submissions. 
With regard to the removal of the fidelity fund it is extraordinary that we throw open the industry to new players and players who will not necessarily have the integrity that Mr Adams claimed that the rest of the industry has. He has admitted that to us and he is a member of the Government. He has also admitted to us that there will be another level of car dealer in this country—that is dealers who will not have the integrity of the rest of the industry. To remove the fidelity fund without providing it with another mechanism as a safeguard will leave a lot of consumers with a huge potential for the unscrupulous ones to leave them with a dud car “clocked” odometers and no recourse. 
When we look back at the Supplementary Order Paper we find that right at the very end of it is an additional clause: clause 146 “Review of operation of Act” which states that it is to be no later than 2 years. That indicates that this Government suddenly realised that this bill did not have the substance and it certainly did not have the confidence of the Government. If the Government had had the confidence it would not have needed this particular clause so why have a clause that basically will review the whole thing and say that this could be a total disaster? I hope that once the Government does the review it actually looks at the review and does something about it because nothing in this bill requires the Government to action that review and do anything about it. It states that the Government has to do a review within 2 years but if anything is found that is amiss in the review then there is no requirement by the Government to do anything about it. 
This bill lacks substance it certainly lacks integrity and it certainly lacks any compliance and teeth. That is the reason that we were unable to support it any further than the title. 
A party vote was called for on the question  
That the Motor Vehicle Sales Bill be now read a third time. 
Ayes 96 
Noes 20 
Motion agreed to. 
Labour 52; New Zealand National 27; Green Party 9; United Future 8. 
New Zealand First 13; ACT New Zealand 7.