Curran Clare: Consumer Law Reform Bill — In CommitteeText is incorporated into the Bound VolumeCurran Clare: Consumer Law Reform Bill — In Committee[Sitting date: 03 December 2013. Volume:695;Page:15183. Text is incorporated into the Bound Volume.]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.