10. Question No. 10—Commerce and Consumer AffairsDAMIEN SMITH (ACT) to the Minister of Commerce and Consumer AffairsQuestion No. 10—Commerce and Consumer Affairs10. DAMIEN SMITH (ACT) to the Minister of Commerce and Consumer Affairs: What impact if any does he believe the recent amendments to the Credit Contracts and Consumer Finance Act are having on the ability of New Zealanders to access finance and is he concerned about the wider impact of this legislation on the New Zealand economy?Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): The banks the Opposition—and I acknowledge ACT in this—and the Government are all on the same page when it comes to supporting the intention of the Credit Contracts and Consumer Finance Act (CCCFA). We want to stop vulnerable people from finding themselves in unaffordable debt. I've followed the concerns raised by consumers closely and that's why I have asked the Council of Financial Regulators to review whether the reported outcomes of the CCCFA are either attributable to the Act's intended protections whether they've come from unintended consequences or whether they are attributable to external factors like the global economic situation. As for the economy I'm sure the member will have read as I did with great enthusiasm the Minister of Finance's good news from earlier this morning: the economy overall remains strong and resilient. It grew 4.9 percent over the last year and outperformed most of the countries we compare ourselves with. Unemployment is at record lows and wages are rising.Damien Smith: What does he say to ASB chief executive Vittoria Shortt who said we are seeing an impact of around 7% of customers that we would have liked to lend to but have not been able to given these changes."?Hon Dr DAVID CLARK: We have put the review in place sooner rather than later. These are significant changes voted for by the ACT Party by the National Party by the Labour Party by the Green Party and by Te Paati Māori. These are changes that the whole Parliament voted into existence. We acted early because we want to be sure the Act is working as it should be and we're not seeing unintended consequences. What I would note is that the lending dropped in December as it does every December—that's a seasonal variation. The lending in the most recent December period was still higher than the lending in December 2017 December 2018 and December 2019. We do want to make sure that the Act is working as it should and that's what the review is there to do.Damien Smith: Does he believe that a $1000 credit card or a $1 million home loan have the same loan risk; and if not why are banks having to go through the same checks for two completely different risks according to the chief executive of the ASB bank?Hon Dr DAVID CLARK: A 2019 review into the financial sector found that around 18 percent of New Zealanders found themselves in either moderate hardship on an everyday level or severe hardship on an everyday level as a result of lending that was unaffordable for them—a significant problem. And I expect that is why the whole Parliament voted in these changes because we wanted to make sure that vulnerable lenders are protected.Nicola Willis: Supplementary question.DEPUTY SPEAKER: I'm sorry National don't have any more supplementaries.Damien Smith: What does he say to the man who applied to have his credit limit increased by $500 and was confronted with 15 pages of forms despite never having missed a payment in the seven years he'd had that card?Hon Dr DAVID CLARK: I can't obviously speak to that individual's circumstances nor to the individual bank's policies on this matter. What I would have said is that different banks are putting different responses in place as you'd expect in a competitive market and members are free to shop around and look for a bank that better meets their needs.Damien Smith: Does he agree with the observation from CoreLogic that new lending rules seem to be keeping first-home buyers out of the property market as well?Hon Dr DAVID CLARK: What I would note is that first-home buyer lending is up under this Government. I think that's pretty critical to the question the member's raising and it should be noted that lending commitments usually fall in December as I've previously noted and that total lending commitments for December 2021 were higher than they were in December 2017 December 2018 and December 2019. I would also note that interest.co.nz recently acknowledged that while lending commitments dropped in December from November as you'd expect according to the season and compared to the previous year the number of mortgages approved by first-home buyers expressed as a percentage of residential sales was 38.8 percent in December 2021 up from 34.4 percent in November last year and 35 percent in the December prior.Damien Smith: Does the Minister really believe it's reasonable for New Zealanders to wait six months for the Government to review the impact of this legislation and the deterioration in the funding market place?Hon Dr DAVID CLARK: I'm not sure where the member gets six months from. This review started within a few weeks. It is true that Australia took a couple of years to work through their changes until they settled and this review began within a couple of weeks of issues appearing in the media—admittedly a lot of those media articles referred to loan-to-value ratio restrictions. None the less we want to make sure that this legislation is working as it was intended when National ACT and every other party in this Parliament supported it through."