Ryall Tony: Credit Contracts and Consumer Finance Bill — In Committee 
Ryall Tony: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8726] 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 It is very clear from the debate from the Opposition side that we are mightily concerned about the compliance costs associated with this bill. Our concern is that compliance costs will add to the cost of finance for consumers—and it is quite clear that it always will as Mrs Collins said. The issue revolves around requiring extra burdens on lenders in terms of what they must be prepared to carry with legal sanction scrutiny from the Commerce Commission as proposed in this part or actions from other parties. All carry an element of risk and an element of cost. That cost will always be passed on to the consumer and that is the point the National Party in Opposition has been making throughout this debate. Compliance cost is a very big issue. 
Part of the Government’s claim that it is dealing with compliance cost issues is the regulatory impact and compliance cost statement that formed part of the explanatory note of the original Consumer Credit Bill as tabled in the House. I have to say to the Minister that that was a very poor exposition of the costs and benefits associated with this bill because not one figure is provided of either the financial costs or the financial benefits of this deal—not one figure. In the whole provision only one number is mentioned and that is in respect of the $250000 in the definition of what a commercial contract amount would be in terms of the level of disclosure. That is the only figure mentioned. If the Government seriously believes that Parliament should take notice of the compliance cost and regulatory impact statement provided to it then Parliament should be treated with respect and the Government seek to quantify those costs. 
Opposition members have taken quite a lot of time in the last few weeks to go and talk to a large number of these consumer lenders. They are not just the major banks which the Ministers might wine and dine; they are a whole lot of people who run small localised finance companies that provide credit to New Zealanders. The average amount that those people lend might be $3000 to $5000. They might employ two or three staff. The capital is essentially the owner’s plus some— 
Hon Chris Carter 
: This is exciting stuff. 
Hon TONY RYALL 
: It is exciting because it is quite an important point. It should be exciting for the Government because we are saying to the Government that we should get the full costs and benefits in this bill. 
The issue is that we have talked to a whole lot of consumer finance companies around New Zealand and it is quite clear from them that there will be significant costs associated with this bill. I suspect that is the reason the Government has not provided any figures in this legislation. Some of the costs associated with this part will require additional forms to be printed additional staff training to be undertaken and additional compliance regimes to be implemented by the various businesses. All that costs money. 
People who run a finance company have to take into account a whole lot of risk. One of the risks that Opposition members of the Committee are not happy with is that the Commerce Commission might be able to take a class action against all lenders. We think that the Commerce Commission should have to act on the specific offenders. It is clear that the Government is seeking to target unscrupulous moneylenders. It is going to target what I would refer to as the second-tier moneylenders. The “pay-day Charlies” who stand at the gate to the factory and collect the loan repayments on pay day are not going to be controlled by this legislation.