Brownlee Gerry: Credit Contracts and Consumer Finance Bill — Third Reading 
Brownlee Gerry: Credit Contracts and Consumer Finance Bill — Third Reading 
[Volume:612;Page:8890] 
GERRY BROWNLEE (NZ National—Ilam) 
: 
 There is unfortunately a growing trend developing within the current Government that sees legislation such as this pushed through the House fairly quickly subjected to a Committee stage that has absolutely no relevance or meaning—where the legitimate concerns of members of Parliament are raised with Ministers and rejected—only for the legislation to be passed and then a short time later subjected to change through the statutes amendment process. So far this year we have seen bills like the Crown Minerals Amendment Bill passed where the Opposition stated there was a clear problem with some of the definitions and the Ministers rejected that but now just 3 months later that legislation is subject to a statutes amendment change. 
The Hon Tony Ryall in his speech outlined a very serious flaw in this bill: if someone is to arrange a loan that is subject to a brokerage fee there need be no disclosure of that fee. This bill allows finance houses to reorganise themselves from agencies into brokerages and a person taking out a loan to be none the wiser about the overall costs of that loan. I predict as did Mr Ryall that in a couple of months we will see the Government quietly sidling up to members of the Opposition and saying it sees there is a problem here and wants to slip an amendment into the “Statutes Amendment Bill (No 1) 2004”. I say to the Minister and everybody else involved that they should not bother knocking on our door because it will require a full bill to be brought to this House to sort that out. 
One of the interesting things about this bill is that it is designed to let those New Zealanders who borrow money know the full cost of that. We have just been through the exercise of explaining that they may not know the cost in all cases but let us assume that everybody plays the game fairly. It will be a good thing that those New Zealanders who are borrowing money understand the costs involved. But it may be interesting to consider for a minute why so many New Zealanders need to get the sort of consumer credit we are talking about—why so many New Zealanders need to load up their credit cards to the gunwales and why so many retailers in this country cannot move stock unless it is with some sort of a “payday may” or some other interest-free arrangement that effectively entices customers through the door under a credit contract. The reality is that the vast majority of retail sales in the household lines—whiteware appliances furniture and various other electronic appliances—are done through a consumer credit contract. I think the reason for that is that in the last 4 years New Zealanders’ incomes have become extremely squeezed. 
The Government is out there saying how wonderful it is skiting about its massive surplus of $5.6 billion— 
Hon Tony Ryall 
: Overtaxing the people. 
GERRY BROWNLEE 
: —and overtaxing poor workers in order to achieve that $5.6 billion surplus. We read in the newspapers that the average income of New Zealanders rose recently to a point—and this is nothing to skite about—where income from wages and salaries is now set at some $332 a week! 
Jill Pettis 
: Because we want everything and our parents went without. 
GERRY BROWNLEE 
: I heard the junior Government whip say that people are too greedy—that workers want too much and that they expect everything. 
Jill Pettis 
: We don’t say that. 
GERRY BROWNLEE 
: When people are earning $332 a week and the Government is saying they are well off I do not blame them for getting a bit keen to have one or two extra things in their life to make it slightly more comfortable. We have a Government that identifies problems out there—like the buy-back schemes that have affected so many Maori families— 
Hon John Tamihere 
: Don Brash doesn’t agree with that. 
GERRY BROWNLEE 
: —and have the Hon John Tamihere all hot under the collar yet he is going out there and he is going to pass this bill which makes the conditions of buy-back schemes much clearer. He says that that is good for Maori. I tell him that $332 a week as an average wage and salary income for New Zealanders is not good for Maori or for anybody else. [ 
Interruption 
] What we get— 
Mr SPEAKER 
: I am sorry to interrupt the member who does handle interjections but the member who is interjecting will not do so again during this speech. She has been interjecting in the second person and I am not to be brought into the debate. 
GERRY BROWNLEE 
: Well we will have to turn the heaters on because we will all be shivering after the heat we have been subjected to from that member in the last couple of minutes. 
I make it clear that the problem with this bill is that while it does some good things—while it tidies up a whole lot of aspects of credit information for consumers and while it does do some good things in creating a definition of what buy-back schemes are and how they should operate—it fundamentally misses the point that New Zealanders do not earn big incomes and that is why they borrow so much. It is a disgrace that a Government can say to New Zealanders their incomes have gone up the average wage and salary income is now $332 a week and they are well off and the Government will put in place some consumer credit legislation so that when they have to borrow for the kids’ uniforms to get the bikes to get them to school to get the family car or to fund the mortgage etc. then the rules around that are to be a whole lot better for them—and is this not a good Government! That misses the point that a Government should be looking to increase the disposable income of families in this country and this Government is not doing that. 
I want to comment about the legislation itself and about a concern I have. Much of the interpretation of this legislation will be open to the courts. I do not have a problem with the courts enforcing the law. But I am worried about the courts giving an interpretation of it because one of the key points in this bill particularly with regard to the buy-back schemes that have caused so many families so much angst is the issue of whether the activities of the lender are oppressive. The bill states that if the credit contract consumer lease or buy-back transaction is oppressive then that contract lease or transaction can be reopened by the court and conditions can be reapplied. Clause 93(b) provides that a matter may be reopened if “a party has exercised or intends to exercise a right or power conferred by the contract lease or transaction in an oppressive manner;”. We now have an idea of what an oppressive approach would be but we are leaving it up to a court to decide exactly what that is. That will make it very difficult for some minor credit contracts to be exercised by legitimate finance houses which will be uncertain about what “oppressive” may mean. It may be oppressive to even ask for a payment from someone who is living on a benefit for example. A loan may be oppressive if someone claims that he or she simply cannot afford to repay it and a court could instruct that the loan need not be repaid. 
So whilst there is much gloss being applied by the Government in respect of this bill there is a murky underside. I want to restate the proposition I laid down earlier: one can make all the rules one likes about credit but if people do not have enough money to live on—and New Zealanders whose average wage and salary income has just gone up to some $332 a week are struggling—then we will see more and more of them going into debt because of this Government’s policies.