Cosgrove Clayton: Consumer Law Reform Bill — First Reading 
Text is incorporated into the Bound Volume 
Cosgrove Clayton: Consumer Law Reform Bill — First Reading 
[Sitting date: 09 February 2012. Volume:677;Page:289. Text is incorporated into the Bound Volume.] 
Hon CLAYTON COSGROVE (Labour) 
: 
 I follow colleagues Mr McClay and my parliamentary colleague Lianne Dalziel in supporting the Consumer Law Reform Bill. I think it is probably one of those pieces of legislation where there is not a lot of argument. I agree with Mr McClay that our respective offices and most of the colleagues would be inundated by people who went into transactions—whether it was to buy a washing machine or whatever second-hand or new—in good faith because there was a time of course in New Zealand when deals were done on handshakes consumers paid the debt on time and if the goods sold to the consumer broke down the seller would go and repair them and sort it out. You did not need vast amounts of legislation.  
Sadly those times have changed. I think what both parties to a transaction seek ultimately both the consumer and the seller if you will is openness transparency and accountability in essence so the good or service does what it says it is going to do—it performs—and if it does not it is remedied and people can get redress.  
I recall—and I know it is slightly off the edge Mr Deputy Speaker but I am sure you will indulge me briefly—my time in Government when we dealt with reasonably controversially the real estate agents sector. Before I start getting phone calls emails and death threats let me say that in all sectors including politics—you know one bad politician and we are all a pack of so-and-sos—you are judged by the lowest common denominator.  
Many good people in the real estate industry were judged by those in the industry who bluntly ripped consumers off. It is an interesting example actually which I think is germane to this whereby an industry—and I believe that industries can self-regulate when they do it right better than Governments can actually; that is my own personal view from a commercial background—was given a number of opportunities to reform itself and provide accountability transparency and openness whereby consumers were dealt with fairly and consumers could get redress and accountability when people behaved inappropriately in the industry.  
That industry had railed against that for years rejected it then at that point public pressure built to a point where the Government—the Government I was a part of—had to step in. I do not think we want to get to that point. The place is littered with the metaphorical bodies of people who were done over by sharks in that industry and there was very little in the end that we could do retrospectively about that. So I think this legislation is good in that we move forward. It is sad that we have to put in regulation what was the old Kiwi handshake. Times have changed sadly; technology has changed; and people act—some very few—in nefarious ways.  
The other point I want to make in respect of this legislation is that it is also necessary I think because—and I mean no disrespect to the communities when I say this—we do have a difficulty with basic financial literacy. Many folk do not have the confidence to be able to weave their way through the provisions—certainly with legislation like this some of us who are not lawyers struggle each day with it—knowing their rights knowing that they can execute those rights and knowing what their responsibilities are and also business folk knowing what their responsibilities are.  
Financial literacy is passion of mine and I think we have to do something serious about that so that people do have better financial literacy and do have more confidence when they are dealing with that—you know whether it be a flash transaction or sorting out your credit card arrangements. People need to know what it means if they are going to get into debt and know what the implications of a hire purchase are. As a country we do like spending money and knowing the ramifications of debt hire purchase and those sorts of things and knowing what you can do to protect yourself so you are not ripped off is I think ambulance at the top of the cliff stuff. It gives people confidence when they are entering into even basic transactions like as I say putting the fridge on hire purchase because they know what the ramifications of that are and they know they have some redress.  
This bill brings us into line of course substantially with Australia. Given that Australia is one of our biggest markets and also our closest neighbour in terms of the commerciality let alone the culture this is a good and sound piece of legislation. I would note in passing Lianne Dalziel’s point that this has sat around for a while; it has got a couple of inches of dust on it over the years. One of my colleagues over there said that National has a 120-point action plan. Well I think this bill should have been in the upper part of the 120 points. I would love to see them if a member wants to send me the whole 120 points. It would be a cracker to read over the cocoa tonight and go through but this is important legislation.  
There are some people who yawn at this sort of stuff. They are generally those people who have as I say a high degree of financial experience or those who have a certain amount of resource behind them and can get independent advice and can get the confidence to engage in these transactions. But for the vast majority of our community you know it is a serious deal when you are spending money and consumer protection has to be paramount in this.  
We need to look further I think perhaps at our banking industry and perhaps at those who provide finance to consumers given that there are two sides to it. We need to increase our financial literacy but people also have a responsibility if they get into debt to meet their obligations in terms of payments. However there is also I think a counter-obligation—that the provider of that debt finance has actually got to be very open and transparent about the interest rates and the penalties and all those sorts of things.  
There are a number of issues dealt with here in terms of the consumer. But I think we actually have to have a look at maybe the banks at some of the bigger issues especially around credit cards and a few things like that where it is not an issue of saying that somebody is bad for non-disclosure or for disclosing in a certain way called fine print but is more about saying: “OK we will educate people.” But we have also got to ensure that those providing for instance finance are very very open about the ramifications of providing that finance and the responsibility you take on when you go into debt.  
So we support this piece of legislation. We think it is good. There will need to be I think a fair bit of work once it is implemented around marketing it to people and assisting for instance business folk. We have just done a tax bill; now this thing. These are good measures but of course for small businesses especially it is another thing they have to read another hour in the day when they have got to come to grips with the requirements on this and for every hour they are spending doing the work of the Crown if you will it is as I said in the last bill another hour that they are not spending behind the counter growing the business and selling the product so they can employ more people etc. etc. 
 So I think the Government needs to commit to providing a fair bit of resource around assisting consumers to come to grips with their new protections and rights but also around assisting those business people to make it easier for them to implement and comply—because most if not nearly all will—with the requirements and responsibilities within this legislation.  
It is nice in the first week of Parliament that we deal with some bipartisan if you will legislation—I am sure that we will get to the gritty stuff in the next few weeks. But this is an important bill. It is not something that a certain commentator should yawn at. I am sure that it will not get the high media profile that other more colourful times in this Parliament had but it should as it is very important legislation. I was not part of the select committee when this was dealt with but I commend the committee for its work and we look forward to the bill’s passage and scrutiny through the parliamentary process.