Motor Vehicle Sales Bill — In Committee Third Reading 
Motor Vehicle Sales Bill — In Committee Third Reading 
[Volume:607;Page:4777] 
Tuesday 1 April 2003 
( 
continued on Thursday 3 April 2003 
) 
Motor Vehicle Sales Bill 
In Committee 
Debate resumed. 
Part 2 Motor vehicle trading ( 
continued 
)  
DEBORAH CODDINGTON (ACT NZ) 
: 
 It is good to see the real Minister of Transport the Hon Harry Duynhoven in the chair. We might get some good amendments passed today with him there. Last evening when the Committee rose I was debating Part 2 and was just about to talk about clause 25 “Power to exempt persons from requirement to register by Order in Council”. The five exemption clauses are curious because a person can apply to be exempted from the new register of motor vehicle dealers. The register was originally to be run by the Ministry of Economic Development but it is not quite clear in the bill where it will be run from now. Maybe it will be the Ministry of Commerce. 
A person can apply to be exempted from registering but as one would expect a number of things must be taken into account when he or she makes the application. People apply to the Minister via the prescribed form stating why they want to be exempted from all the regulations imposed on them for being motor vehicle dealers. Under clause 28 “Process for making recommendation for exemption” subclause (1)(a) states that the Minister must consult with persons or representatives whom he or she thinks will be substantially affected by the exemption and the Minister can then go to the Governor-General for an Order in Council. 
MARK PECK (NZ Labour—Invercargill) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Noes 48 
Motion agreed to.The question was put that the amendments set out on Supplementary Order Paper 30 in the name of the Hon Judith Tizard to Part 2 be agreed to. 
Labour 52; Green Party 9; United Future 8. 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 96 
Noes 21 
Part 2 as amended agreed to. 
Labour 52; New Zealand National 27; Green Party 9; United Future 8. 
New Zealand First 13; ACT New Zealand 8. 
Part 3 Registration of motor vehicle traders 
SANDRA GOUDIE (NZ National—Coromandel) 
: 
 I would like to carry on from the very fine presentations made by my colleagues last night. They were making such a wonderful contribution to this bill that most of the Labour Party members came down to the Chamber to take some notice of them. 
Part 3 is about the registration of motor vehicle traders and covers the procedures involved. It is interesting to note that a large amount of motor vehicle trading probably takes place on the streets. If we look at the  
Trade and Exchange 
 we see that an inordinate amount of vehicle trading results from advertisements placed in that paper and I imagine that a large proportion of those sellers would not be registered. The number of vehicles that a private individual may trade without having to register as a trader has now been increased to six. It was three vehicles. 
Hon Harry Duynhoven 
: It’s been six for a long time. 
SANDRA GOUDIE 
: I thought it was three. I stand corrected and I thank the Minister for that. It would be marvellous if he took a call. 
Hon Harry Duynhoven 
: Is the member yielding? 
SANDRA GOUDIE 
: No absolutely not—I could not possibly do that. But we would certainly welcome and appreciate some comments from the Minister. Within his comments he might like to cover what the cost will be of the levy that is to be imposed on registered motor vehicle dealers. There is a prescribed application fee but a levy is to be imposed as well. It would be interesting to know what the ballparkfigure for that levy will be and also what the definite intention for using it will be. No evidence has been given that motor vehicle dealers have been spoken to about the levy. The levy has come as somewhat of a surprise to them and my colleagues have canvassed that issue substantially. 
There is an application fee and now there is to be a levy. Those are some of the substantial costs that are to be imposed on motor vehicle dealers who register. I am sure that the Minister is aware that there is an absence of a compliance cost report. He may care to take a call on that and tell us why no compliance cost report was done in respect of the levy particularly when the traders are paying a registration fee. Those matters are of considerable concern to National and we already have a major concern about the increased compliance costs for businesses under the Labour regime. We would like the Minister to take a call and perhaps give us a precis of the compliance cost report as he may have it in his head given that we did not get it in any form of paperwork in association with this bill. 
In looking at the registration of motor vehicle traders one of the calls from United Future was for the need for greater enforcement. Judith Tizard in her presentation on the bill when it was read a first time in the House—between knitting dropping stitches and whatnot; and we still do not know whether that garment was ever finished— 
Brent Catchpole 
: She was still working on it last night. 
SANDRA GOUDIE 
: I actually saw it being continued last night by another member of the Committee Dianne Yates. I have now been sidetracked by knitting so members can see what an influence knitting in the Chamber has been and how it has detracted somewhat seriously from the processes of the House. I am talking about Subpart 1 in Part 3. 
Hon Dr Michael Cullen 
: What’s this about? 
SANDRA GOUDIE 
: We are debating Part 3 “Registration of motor vehicle traders”. We are talking about compliance costs and the enforcement that goes with that—the enforcement to ensure that people dealing in more than six cars a year become registered traders. Those provisions are being put in place to ensure that people register as traders if they sell more than six cars a year. The Hon Judith Tizard the great knitter of the Chamber said that enforcement was a very important aspect of this process. 
BRENT CATCHPOLE (NZ First) 
: 
 On behalf of New Zealand First I rise to speak to Part 3. Before I get into that I would like to thank the Hon Harry Duynhoven the Associate Minister of Transport for getting up last night to give us some explanations on this bill. It was sadly lacking from the Minister who had been in the chair at the time. We are very grateful to Harry Duynhoven for clearing up some of those issues that we had last night. This bill is very complex and it is one that New Zealand First was not on the select committee to look into. Therefore we were very grateful to the Hon Harry Duynhoven for clearing up some of those points. 
The difficulty we have in this part is that there are no means of compliance checks and therefore when there is a registered or deregistered member then there is no way that he or she intends to go back to be registered. There are no teeth or incentives in this bill for somebody to become registered and therefore why would he or she bother? People can sell out of the backyard or under the guise of somebody else’s registration or licence under what is termed a harbouring association. Once people are in that situation they can sell as many cars as they like. They will not report how many cars they have sold. To put in the bill that they have to be registered if they sell more than six cars is a waste of time. They will not disclose what they are doing out of the backyard or under the table. There is no incentive for them to become registered. It certainly does not protect consumers because they will just walk away from the licence they are working from and leave it. There is no comeback to the original licence holder. Why should anybody become registered under this situation? 
New Zealand First has a real concern that this bill lacks teeth. The purpose of the bill is quite good and reasonable but it lacks teeth it is disorganised it does not have the coordination and thankfully the Hon Harry Duynhoven got up here last night and explained some of the situation. One jumps from one end of the bill to other. It is a pity that the real Minister the Hon Paul Swain who is supposed to be handling this bill was not able to stand up to do that for us. He sat in the chair and said absolutely nothing. 
Peter Brown 
: He asked us what we thought it achieved. 
BRENT CATCHPOLE 
: That is right. He asked us whether we thought it achieved what he wanted it to do. I do not think he really knew what he wanted to do with this bill so he had to ask us. Why did he not ask the Hon Harry Duynhoven? He was there and he has the knowledge. Why did the Minister not ask him? He would have told him that this bill has some major problems. The Hon Harry Duynhoven cleared that up last night and made it quite clear to us that those problems exist. 
There is one issue that I would like to go back to: I would like the Hon Harry Duynhoven to explain to us when we have a situation where people can go to Japan and get the details of the odometer readings why that paperwork does not follow the vehicle back all the way into New Zealand. This bill does not insist that it do so. If it did then a lot of the problems with odometer readings and winding them back would be solved. But no that paperwork does not follow the vehicle and it does not give us the checks that we require. I ask Mr Duynhoven to explain this to the Committee. 
PAUL ADAMS (United Future) 
: 
 In some ways this part is probably the whole crunch of why the industry is so pleased that this bill is going through. For many years dealers have been operating on an uneven playing field where traders have been operating and selling cars from their backyards through auction houses and car fairs. I agree that the policing of it has been non-existent. Comments have been made that no longer because our society’s foundations have been breaking down can we rely on the goodness of people to operate within the laws we make. We expect the police to have to operate and to keep all laws. That is an absolute impossibility. A substantial amount—I would estimate probably about one-third of the vehicles that are bought and sold in this country on a day-by-day basis—would be bought and sold by unlicensed traders. It will interesting to see whether those who deal in that realm register or indeed are capable of being registered. 
Personally I think the criterion for the registration of a vehicle trader under this bill is a good criterion. It is a fair criterion. It is in enough detail for anybody who has a brain to read it to understand how it works. It will be interesting to see how many of the unlicensed traders become registered. 
Last night my colleagues in National asked why this legislation needs a review within 2 years. This is one of the reasons it will need a review within 2 years. Currently to be a licensed motor vehicle dealer requires a substantial investment of capital. Therefore dealers are very aware that if their licence is taken from them then they will not have the ability to trade whereas under the new regime it will cost very little to get a licence. Therefore an unscrupulous trader when he or she does get prosecuted and loses his or her licence to trade will not have lost anywhere near as much. But likewise United Future also believes that enterprise is well capable of looking after itself. 
I believe that what we will find over this 2-year period is that the good dealers will again group together. They will make sure that there are the criteria of a code of ethics for the people who are within their group as they buy and sell motor vehicles. In 2 years’ time we will find again that there is a massive gap between the genuine motor vehicle dealer and those who have just taken a licence because it has been cheap to get. We will find going through the disputes tribunal a massive difference in the quality. 
I also notice in the legislation that there is the ability to charge different levies to different types of dealers. That is very wise because those who are continually in the tribunal will be able to be levied at a higher rate and those who are not at a lesser rate. That is great. United Future is pleased to support this legislation. I really hope that all those who are dealing illegally in motor vehicles take this good opportunity that has been given to them to register to clean up their act to operate within the laws of the nation and to keep up the great reputation that the motor vehicle dealer industry has. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 It is interesting that this bill is described as something that will protect consumers. I see that the National and ACT members of the select committee which I was not a part of made the comment that the registrar should have the power to require audits of motor vehicle traders especially when he or she believes that a motor vehicle trader may be insolvent. It could stop an insolvent trader carrying on business losing more and more for his or her creditors. When that was rejected it was one of the things that could have protected consumers. Government members rejected that recommendation. That would have been a way in which they could have been protected. Currently this legislation has virtually no teeth. 
I turn to clause 29. It is here that we are first introducing the reference in the Supplementary Order Paper to section 130A which relates to somebody applying for registration as a motor vehicle trader or he or she has to pay this levy. Nothing in section 130A says that if one trader is taken to the disputes tribunal more often than another trader the levy will go up or down commensurately with how good or bad a trader he or she is. It prescribes different levies for different classes of motor vehicle traders not for different levels of integrity of motor vehicle traders. 
I come back to my point that it is absolutely despicable that this Government—and it should be ashamed of itself—is passing yet more taxes for businesses out there. Why does it keep singling out the poor old motorists and whacking them every time? We have had petrol tax go up and road-user charges go up. We have had accident compensation levies go up and licensing costs go up. The member from United Future talked about a level playing field. What is “level playing field” about socking it to the poor old motorist or the car dealer? It is easy to sock car dealers because everybody holds them in contempt anyway—or that is what this elitist spa-pool neo-socialist Government thinks. 
The other point about this Supplementary Order Paper is the fact that it is being sneaked through. It never went to a select committee; motor vehicle dealers were never given a chance to have their input. They are writing back to me and I got another letter this morning that said: “Thank you for your advice regarding Ms Tizard’s clever little stab in our sides. Nothing the Labour Government does surprises me any more. Their electorate seems to be lower-income people and beneficiaries so the only way to keep themselves in office is to tax their perceived rich taxpayers to keep the poorer voters happy. As a motor vehicle importer and retailer I feel we have had enough. The cost of compliance in order to bring a vehicle into the country has risen dramatically over the last 4 years. I wish you well fighting this tax. Your yells will no doubt fall on deaf ears because the ones that vote these wankers into power have an insatiable appetite for taxpayer money and they have got to get it from somewhere.” It is a matter of tax and spend and I come back to the latest OECD report— 
The CHAIRPERSON (Ann Hartley) 
: The member used an unparliamentary term. Would she please withdraw. 
DEBORAH CODDINGTON 
: Yes I withdraw and apologise. But to help me can you tell me what that was? 
The CHAIRPERSON (Ann Hartley) 
: The member is well aware of what was said. Please continue. 
DEBORAH CODDINGTON 
: I come back to what taxing and spending does. The latest OECD survey shows that the average tax bill for the average worker with a spouse and two children in New Zealand makes that worker the second-worst-off in the world—in just one place above the Czech Republic. That is shameful and this new tax on motor vehicle dealers will put us probably below the Czech Republic. The average working couple now is $1400 worse off a year in real terms. I say to this Government that that is shameful and I say to United Future that if it would support my Supplementary Order Paper which deletes this reference to section 130A from this bill then we would be left with legislation that vehicle dealers do want and that would clean up the system a bit for them. I think it is far too regulatory and singles them out for issues like: why have a disputes tribunal anyway for motor vehicle dealers when they can go through the ordinary courts? 
The question was put that the amendments set out on Supplementary Order Paper 30 in the name of the Hon Judith Tizard to Part 3 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 96 
Noes 21 
Amendments agreed to and Part 3 as amended agreed to. 
Labour 52; New Zealand National 27; Green Party 9; United Future 8. 
New Zealand First 13; ACT New Zealand 8. 
Part 4Enforcement. 
SIMON POWER (NZ National—Rangitikei) 
: 
 It gives me some pleasure to be speaking on Part 4. In particular late last night at about 20 to 12 I was raising questions relating to the issue of tampering with odometers. I raised the question in the Committee: if one was a banned person or a person who tampered with odometers—so what? What would happen under Part 2 to that person if those offences occurred? Part 4 contains some of those provisions that relate to enforcement. It is worth making the point that I personally do not think that this way of drafting legislation is satisfactory at all whereby there is an offending provision in one part of the bill and an enforcement provision further on. There is not even the actual penalty on conviction in the same part as the section that dealt with creating the offence. So in fact there are three sections that relate to the prohibition on tampering with odometers. 
Then one must go to clause 89 for the creation of the offence of tampering with the odometer but to find out what happens to an offender if it is an offence—before anybody who infringes those sections knows what the penalty is—one must go to clause 106. So first of all we are told in clause 13 that a person must not tamper with a vehicle’s odometer then we are told at clause 89 that it is an offence to tamper with an odometer—well what is the difference between being told one must not tamper with an odometer in clause 13 and being told in clause 89 that it is an offence to tamper with an odometer—but we do not even know what the penalty for tampering with an odometer is until we get to clause 106. 
I say that that type of drafting is sloppy at best. There should be one clause that states that it is an offence to tamper with an odometer and here is what happens if one offends that provision—one would be jailed or fined. It should all be in one tidy clause. Looking through this document during the course of last night and early this morning I have to say that it is pretty sloppy stuff in my view. 
Again I raise the point that has been raised by other members during the course of this debate: if this legislation is so necessary so tight and so well drafted why does it have a 2-year review clause in it? Why does it have a sunset clause? It is sloppy lawmaking. There are three different clauses all relating to the one offence and we have a review at the end of 2 years. I say that it is just not good enough for this Parliament to be producing legislation that is set out and configured in such a difficult way to follow. This Parliament should be about providing clear and concise laws for the people of New Zealand with the old “plain English” approach to legal interpretation. In this bill we have some sloppy work with three different clauses relating to one issue of interference with odometers and if we are not worried about that then we will just review the whole thing after 2 years! The Government should be thinking seriously about the processes being followed when that type of drafting is becoming the norm. 
Turning to a specific point in Part 4 I read that now the District Court is to consider whether a person is fit and proper to participate in a business of motor vehicle sales and I note at clause 65(2) that every application to a District Court must be by way of an originating application. That actually means one has to pay court filing fees and have supporting affidavits and originating applications. That will become a costly business. I would be interested in hearing from the Minister about whether the costs incurred by an originating application in a District Court differ from the current costs to gain a motor vehicle dealer’s licence if so by how much and what her estimate is for whether that is necessarily a good or bad thing. 
One further point has come to my attention on which I want to wind up my short contribution to Part 4: what happens to those cases currently before the fidelity fund? That is a very interesting question and I think it is worth asking the Minister— 
Peter Brown 
: There is a transitional— 
SIMON POWER 
: I am sure there is a transitional clause. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I would like to outline a set of circumstances that I believe do from time to time occur in this country with regard to imported second-hand cars. I would appreciate the Minister taking a call to explain whether I am correct in the first instance and if I am correct what this bill will do about the matter. 
As I understand it some importers go to Japan and buy an allocation of cars in a block and the Japanese dealer says: “If you take this amount of cars we’ll give you these cars for free.” They are the lower-level cars that in normal circumstances the dealer would have to dispose of at some cost. So he would be keen enough to give them away if the New Zealand importer is prepared to buy a certain lot of what I call “acceptable” cars. These lower-level cars are known I believe as “sewer” cars because they are about to be dispensed with. They come into this country and I am of the understanding over past years that quite frequently they have their odometers “clocked” or wound back and are sold to unsuspecting members of the public. 
We have to remember that the New Zealand dealer does not have any equity in these cars; he is selling a car in the circumstances I have illustrated that he has not bought but has been given and he has “clocked” or wound back the odometer. I want to know how the rules in Part 4 will be imposed in respect of that band of motor vehicle dealers who are not toeing the line. New Zealand First was not on the Commerce Committee and I have read this bill to try to find the answer. Now I would appreciate the Minister taking a call and answering that question. I believe that practice has occurred and I have no reason to believe that it is not occurring right now. 
The honourable member from United Future earlier spoke of all motor vehicle dealers being people of integrity but I notice this morning he has moved somewhat from that view. He said this bill will open the door to anybody to enter the trade. That possibility is a major concern to New Zealand First. If that happens and this bill opens the door to anybody then somebody will pay the price financially or possibly with an unsafe car. I do not want to extend my statement any further than is necessary but I would appreciate the Minister addressing that question. If she does not know the answer I respectfully suggest she speak to her colleague the Hon Harry Duynhoven because he can verify that what I am saying has occurred. He has immense knowledge of the motor vehicle industry. Indeed when he spoke last night he was the first Government member with due respect to Paul Adams who threw some sensible light on what this bill is all about. He has made New Zealand First rethink this bill to some limited degree. We say that it is flawed and we say that the issue I have just illustrated indicates there is a major flaw because it will not address this issue. If the Minister cannot see her way clear to talk to the Hon Harry Duynhoven perhaps she would talk to the officials sitting behind her and then give us a genuine answer to that concern. 
PAUL ADAMS (United Future) 
: 
 The speedometer issue comes up regularly in our conversations on this bill but can I assure the Committee that “clocking” is a used-car problem not an imported-car problem. Throughout history people have realised that the lower the mileage is the higher the price of the vehicle. The fact that a car has been registered “new” in New Zealand does not necessarily mean that that car has an accurate speedometer. I remember in the early days trading Falcons and finding holes behind the ashtray because people would turn off the electronic speedo when they were going on a trip. So let us get the facts right: the altering of mileage is a used-car problem not necessarily an imported-car problem. 
This enforcement clause has been of great concern to United Future and I have appreciated the efforts of Judith Tizard and the officials as we have worked to close that major loophole in the used-car industry. However because that issue crosses a couple of bills we have not been able to do that in the time allowed so I look forward in this 2-year period to working to close that gap. We talk about levies being a cost to dealers but unlicensed trading is also a huge cost to dealers. United Future has been concerned—just as the industry has been concerned—about the huge hole between when a car is cleared by the Customs Service as it comes across the wharf to when it enters the Land Transport Safety Authority registration system. Under existing regulations there is no requirement that one has to be a licensed motor vehicle dealer to import cars from overseas. The only criterion is that those cars must be sold to a licensed motor vehicle dealer. They cannot be sold direct to the public unless the seller is licensed. Of course that regulation is blatantly ignored. The people who import cars into the country have their money invested in those cars; they cannot sell them to a dealer for one reason or another and they blatantly sell them through car fairs auctions or whatever. United Future would like to see the regulations amended so that only licensed motor vehicle dealers can import cars into the country and hold them until they comply with an MR2A—in other words until they are identified from the Customs Service to the Land Transport Safety Authority. 
We would not be opposed to people bringing in cars for their own private use—that is obvious in the market we are in—but we would insist that if a vehicle were imported by a private person that person would have to register the vehicle in the name of the person who imported it at the time that the vehicle went through the compliance process. If that regulation were brought in it would close a huge loophole that is costing the Government millions of dollars in money not collected through GST from those unlicensed traders. It would create a nice link between the Customs Service and the Land Transport Safety Authority and it would tidy up a lot of the concerns that people have been dealing with. 
My second point deals with the sale price of cars and the cost that those levies will impose. Surprisingly enough in a free-trade environment such as we have car dealers do not set the price they sell their used cars at. The public sets the price. If we try to get too much for a car it will not sell. In a competitive industry such as we are in we learn very quickly what price the public will pay for a certain make and model. Our overheads or costs have absolutely nothing to do with the sale price of the motor vehicle. As regulations come in which the industry does welcome a segment of traders will stand out above the others. I welcome that because the public are not silly. They will soon realise where they can buy a car in safety or where they can buy a car that might be cheaper but has a huge risk attached to it. That is the same for anything we buy and sell. 
I look forward to this bill being passed. As I have said United Future is supportive of it. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I am going to say something positive about Part 4—the enforcement part of the bill. 
Hon Member 
: That is a change. 
DEBORAH CODDINGTON 
: No I have not changed; I am often positive about things. I am positive about this list of banned persons. It is a good idea to have a list of banned persons to be kept by the registrar. This part of the bill has been very well-thought-out and carefully drafted. The list will be electronic it will comply with the Privacy Act and it will not breach the New Zealand Bill of Rights Act. Hopefully this part of the legislation will set a precedent in respect of people who prey on vulnerable members of the public. The public will be able to access the list on the register see the history of those people see whether they are legitimate car dealers and armed with that information make up their own minds about what they want to do. 
So I congratulate the Minister on having this provision in the bill but I would ask her to take a call and explain what happens—because the Crown can be exempted from some of the clauses in this bill—when a dealer is banned from trading in vehicles and the Customs Service has seized imported cars. Contrary to Paul Adams’ statement that “clocking” is not an imported-car problem it is an imported-car problem. If it is not why is the Customs Service still seizing up to 1000 cars a year because it suspects that the odometers have been tampered with? Those are cars coming across the wharf. When I last went to school that meant they were imported. Now the Customs Service sells those cars and takes the money and the importer does not get anything back. What happens to that importer? I presume the importer is listed on that list of dodgy dealers. The cars are seized because they are suspected of being unsafe so we would expect that they would then be broken up and sold for parts or that the importer would be ordered to cover the cost of sending them back to the country from which they came. But that is not actually what happens—they do get passed on to the unsuspecting public. The first time they are passed on it will be with a history of possibly having a “clocked” odometer but that is as far as it goes. The Crown passes on liability to the first dealer who takes those cars after the Crown has seized them. It exempts itself from any liability that might arise when some unsuspecting person buys a car as the second or third purchaser and finds it has done a lot more mileage than he or she suspected. 
I would like to query something else. Two-thirds of car sales in this country do not go through dealers. Under this bill an individual is entitled to sell up to six cars a year before having to be registered. Does that mean that a family of six could sell 30 cars a year without being registered as a dealer? 
Paul Adams 
: Not if they make a profit. 
DEBORAH CODDINGTON 
: How do we prove that? They are not registered so we will not know what they are doing. How do we know whether they are making a profit? Those are two things that I call on the Minister to answer. 
As I said I congratulate her on the banned persons list. I think it is a good idea. Hopefully it is a precedent for other lists that might come before this House of people who should not be trusted in respect of the vulnerable public—especially those who are under age. I ask her to answer those two questions about what happens when the Customs Service passes on the cars to the public and how we tell whether unlicensed traders who can sell up to six cars a year are making a profit? 
The question was put that the following amendment and the amendments set out on Supplementary Order Paper 30 in the name of Hon Judith Tizard to Part 4 be agreed to: 
to omit from subclause 4(b) of clause 65 the words “period of”. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 96 
Noes 21 
Amendments agreed to. 
Labour 52; New Zealand National 27; Green Party 9; United Future 8. 
New Zealand First 13; ACT New Zealand 8. 
Part 4 as amended agreed to. 
Part 5 Miscellaneous provisions 
SANDRA GOUDIE (NZ National—Coromandel) 
: 
 I would like to talk a bit about Part 5 “Miscellaneous provisions”. The first provision is an exemption for car auctioneers which looks eminently sensible. The car auctioneer is exempt from the general auctioneers licensing requirement but has to comply as a registered motor vehicle dealer. 
I see that the levy regulations are in Part 5. That is quite a substantial amendment to the bill and many speeches have remarked on it. Members will recall the compliance cost comments that have already been made. In looking at the bill maybe for the second time the Minister is perhaps taking some cognisance of the fact that there is no compliance cost report. Perhaps she would like to take a call and give us her assessment of the compliance costs that this levy will impose on motor vehicle dealers. We know that 85 percent of businesses in this country employ five people or fewer which is a substantial part of business in this country and we are now putting an added cost on to them. What will be the result of that? Will we have less registration and therefore even more unregistered dealers? United Future is claiming that one-third of those dealing in motor vehicles are unregistered and ACT is claiming two-thirds so we have rather a discrepancy. With the cost to business of the imposed levy the number of unregistered dealers will increase and the absence of a compliance cost report indicates that no analysis of that has been done. There has been no analysis whatsoever of what impact the levy and cost impositions will have on registered motor vehicle dealers. Clearly the one-third and two-third figures suggest a substantial impact and the two-thirds figure is huge. Clearly without a compliance report we know that this Government has not taken any cognisance of that. The effect on consumers will be considerable and their opportunity for redress against unregistered persons dealing in the sale of motor vehicles will be significantly reduced. 
In clause 131 we are also looking at the prescribed fees payable under this Act. If the number of motor vehicle dealers registering is reduced and the disputes tribunal is to be paid for the levy will rise commensurately because we will not have the numbers to be able to afford to continue with that tribunal. 
Jill Pettis 
: Talking about numbers how is it going? 
SANDRA GOUDIE 
: The member is asking me? She should know how it is going but because her Government does not have a compliance cost report it has no idea how it is going. The Government has no idea of business. It will resort to any measures to try to bolster its own ego but in this instance it has not done a compliance cost report. It has not even assessed the impacts on the industry of the increased cost it has imposed on these people. They are just general mums and dads—the average Joe Bloggs and his wife—trying to run a business and they are being undermined by the increased costs imposed by this Government. The Government has put through this levy in an amendment with no submissions on it. It is a major amendment to the bill and no reports have been done on the impacts of it. I believe that to be a serious omission. 
BRENT CATCHPOLE (NZ First) 
: 
 In going through the Supplementary Order Paper we discover that an additional clause has been added to Part 5—Clause 130A “Regulations may impose levy”. This Government stated during the election campaign that it would not add any more costs to businesses and it would not increase taxes. But what has it done in this particular Supplementary Order Paper which has not been discussed at any select committee whatsoever but just brought up in this debate? It has added a tax a levy an additional compliance cost or whatever one likes to call it. The Government has gone and added it without any consultation with the industry or with anybody else. It certainly was not discussed with members on this side of the Chamber. The amendment was just dropped on to the table in a very large Supplementary Order Paper to add an additional cost. 
So what happened to the promise that Labour members made during the election that they would not increase costs add levies or add taxes? This is another tax by any other name. They like to call it a levy but it is still a tax and it is still a compliance cost. The Supplementary Order Paper goes against the whole spirit of the bill. 
Clause 142 deals with the transitional provisions for the fund. I see that the fund will be wiped out after 12 months. What is the point of wiping out the fund when clause 143 “Claims against Fund” states: “(1) No person is entitled to make any claim against the Fund for any act or thing done or omitted to be done after the commencement of this Act. (2) No person is entitled to make any claim against the Fund for any act or thing done or omitted to be done before the commencement of this Act ...”? In other words if something happens before or after the Act that fund cannot be accessed. So the fund is basically wiped immediately the bill comes into effect yet the Government is trying to say that it will be there for another 12 months after this bill comes into effect. What is the point? It is being wiped out in the next clause. The fund should either be disbanded immediately or kept until the Act is reviewed to make sure that it supports the consumer because the consumer has been completely left out in the cold by this Act. 
The Supplementary Order Paper adds another clause to the bill—clause 146 “Review of operation of Act”. Why would the Government want to review the Act so soon after it comes in? It is because it is uncertain of its ability to achieve what it sets out to do. I know that the industry is calling for legislation that will sort the industry out but this Government has put forward a bill that it has suddenly realised will not work. It has no confidence in it so it has put in an extra clause under the Supplementary Order Paper to provide for a review of it. But what will happen when that review is done? There is nothing in the clause in the Supplementary Order Paper that states what has to be done once it has been reviewed. The Government could review it then sit there and do nothing even though it may find some major problems with it. There is nothing in the legislation to insist that it does anything about the review once it has been done. It could just do the review and ignore it as it does with most things. 
With this Supplementary Order Paper the Government has ignored the select committee process. It did not allow any consultation on the Supplementary Order Paper. It has dropped huge new parts into the bill and additional clauses that did not go through the consultation process. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 I have come down to the Chamber particularly to talk about this part because it is one of those parts that puts Parliament into disrepute. Here we are in urgency putting through a stealth tax. Let us be frank about what the Government did. It went out and talked to the registered vehicle salespeople about a new piece of legislation. The Government introduced the legislation into Parliament and it invited the industry to make submissions to a select committee. At no time did the Minister or any Labour member of the select committee say to the car dealers: “Oh by the way after we have heard all your submissions—after you have gone to the trouble of coming to Parliament—we will put in what is called a Supplementary Order Paper which will not go to the select committee and we will include a provision whereby we can particularly tax just car dealers.” 
I know that this Government has contempt for car dealers because it jokes about them. I say that the car dealers in New Zealand do a good job. Motor vehicle dealers in this country compare very favourably with motor vehicle dealers around the world. When we look at the problems that people have buying cars they are very rarely from a registered motor vehicle dealer. Is that not right? 
Paul Adams 
: That’s true. 
Hon RICHARD PREBBLE 
: I now have a member of the profession who is prepared to confirm that. I ask a serious question. When I look at the registered motor vehicle dealers in this country I think that they serve the country well. But this Government thinks that they are just sheep to be shorn and it has the contempt to introduce a tax on them without allowing it to go to a select committee. I say that for just that reason alone we ought to reject this whole bill. It is the style of lawmaking that an arrogant Labour Government has gone in for and this particular Minister the Hon Judith Tizard is known for her arrogance. She treats people with contempt. I doubt whether she knows any car dealers. Certainly none vote for her or that is what she thinks—and they will not after this bill. I ask the Government and the members of United Future how they can support this type of legislation. 
Deborah Coddington sent out a letter to a number of registered car dealers and asked them what they thought about that proposal. The Committee will not be surprised to know although the Minister does not care that they were outraged. They could not credit that a Government could treat them in that way. We have a Government passing legislation to protect the public from car dealers but what we actually need to do is to pass some legislation to protect car dealers from the Government. [ 
Interruption 
] The Government is treating car dealers in a way that would make the member jump up and down and say was an outrage. It is like selling someone a car getting the cheque then at the last minute saying: “Oh by the way I forgot to mention that there are a whole lot of extra taxes owing on this car and you now have to pay them.” I ask the Minister in the chair the Hon Judith Tizard when did she say to car dealers that she was intending to put in this Supplementary Order Paper? She is very silent. Does she not remember or is she too embarrassed to admit that she always intended to do this? Did she? If she did not why did she suddenly have this new idea? 
Paul Adams 
: It was in January 2001. 
Hon RICHARD PREBBLE 
: That is very interesting. Is the United Future party going to support this measure? [ 
Interruption 
] The United Future party tells me that the Minister has known about this secret proposal since January 2001 and that it is now going to vote for it. I thought that the United Future party was interested in lifting moral standards. Is this bill not immoral? Is it not immoral to go out and ask the industry to make submissions to gather them all in to listen to them all then only after the submissions have closed introduce a secret tax? Is that not immoral? 
Hon Judith Tizard 
: What’s the tax for? 
Hon RICHARD PREBBLE 
: Hello the Minister is prepared to say something. Let us stop. Oh no it has passed. For a moment I thought the Minister was going to contribute. She has forgotten that her whole strategy is to put this through as a stealth tax. Of course it is not a stealth tax if one talks about it so the Minister does not want to tell us why she has done it. 
PAUL ADAMS (United Future) 
: 
 I was not going to speak on this part but young Richard Prebble fires away in his normal exuberant style which I admire. It is always interesting when we hear one side of the story without hearing the other side. To be honest the industry was aware of this in a consultation paper in January 2001 where the levy was mentioned and the levy was supported by the industry. Motor vehicle dealers are a group of people who do like to solve problems quickly. As I said previously in the long run the longer disputes go on the more it costs the dealer. 
The motor industry will have to pay a levy of $127 per dealer. That will give motor vehicle dealers access to a tribunal that will be able to sort out any disputes at a very quick rate. Personally I am thankful that I have had very few disputes with a customer but I would not like to have to wait to go through the court process of this nation while the whole thing was held up. If I have to pay $127 on each of my licences I will be very pleased to pay the $127 so that disputes can be sorted out quickly and resolved. I for one as with most other dealers in this country do appreciate our customers; we do want to do things in a correct and a right order. Even in this Chamber we have disputes between people and there are always two sides to a story. If it costs me $127 a year to have access to a tribunal to sort it out I and I believe most other dealers in this country welcome it. 
DEBORAH CODDINGTON (ACT NZ) 
: 
 It is interesting is it not— 
Peter Brown 
: I raise a point of order Madam Chairperson. Paul Adams just referred to a document. It would have been most helpful if the Minister had told us that this document existed. I seek leave for the member to table that document so we might— 
The CHAIRPERSON (Ann Hartley) 
: The member knows that is a point of debate. 
DEBORAH CODDINGTON 
: It is interesting is it not that when one person is prepared to pay a tax he or she is happy to force that tax on to everybody else. There is nothing in the income tax legislation that precludes people from paying extra taxes as they want to voluntarily and I am sure Treasury would not be embarrassed by a surfeit of cheques. That is typical of the arrogance of people who want higher taxes. They say that they are prepared to pay it so everybody else should. That is what we are getting under this levy regulation clause 130A. 
Car dealers already pay taxes. They already pay a huge amount of GST and company taxes. Part of that goes towards the justice system. Why should car dealers be singled out for another tax that they did not know about? If Paul Adams has a paper from as far back as January 2001—which he and the Minister knew about; obviously he was well prepared before he came into Parliament—let him table it so we all know what it is about so all the car dealers out there know what it is about. Peter Brown is sitting there and he does not know what it is about. He is “Mr Transport” in the New Zealand First Party. If he does not know what it is about I doubt whether the car dealers know about it. 
I wrote to 2250 motor vehicle dealers in this country. That was a week ago. That is the response so far. Those letters are from people who are outraged and did not know about this levy. 
Peter Brown 
: Give us a sample of the letters. 
DEBORAH CODDINGTON 
: I can give members a sample but most of it is unparliamentary language—as I have already discovered. They knew that they would not have to register on a compulsory basis with the Motor Vehicle Dealers Institute and they welcomed that. That is another issue with the fidelity fund. What will happen to the $2 million in the fidelity fund? This legislation says that if one goes to the disputes tribunal it is not backdated—so what is the point of it? I say we do not know what this tax is for. I ask the Minister to stand up now. Now is her chance to explain to all those motor vehicle dealers out there who are listening and want to know why they are being singled out for this levy. Now is the Minister’s chance to stand up and share with all of them—this is a very caring sharing Government—why they should be singled out for this tax. 
All that this tax will do is to encourage Internet dealing backyard dealing and all of those things in respect of which the Government thinks this legislation will close all the loopholes. There is nothing in this legislation that would encourage anyone to register as a car dealer. In fact that is what the dodgy dealers out there are already saying. They have looked at the legislation and at the levy regulations which can be changed overnight. We do not even know what they are. There is no limit to them despite Paul Adams saying the levy is $127 a year. There is nothing in here that sets the maximum amount. It is all very loose. It can be changed by Order in Council specifying the criteria. This Government just gives with one hand and takes away with the other. 
I ask the Minister now to stand and tell us why she thinks this is such a good tax. People will remember that when we discussed this bill in the House last time the Minister was too busy knitting to explain to car dealers and motor vehicle dealers why this levy was needed. Now is her chance to stand up and explain. The dealers do not know about it and they are outraged about it. Many of them have said as Richard Prebble just commented that this levy makes it worth opposing this whole bill on account of clause 130A. I have tabled an amendment to remove that clause altogether and let those businesses get on with their lives let them get their compliance costs down and let them be successful entrepreneurs and contribute to this country instead of being constantly harassed and whacked just because they are motor vehicle dealers and drive and sell cars. Of course car transporters are something that these people here loathe. 
Hon JUDITH TIZARD (Associate Minister of Transport) 
: 
 I am very happy to advise the Committee that in relation to motor vehicle sales a proposed regulatory regime document was issued in January 2001. Members will find on page 30 7.1.3: “The tribunal will be partly funded through a registration levy paid by motor vehicle vendors and also through user charges. The fees paid by applicants will be on a similar scale and operate on a similar basis to that of the ordinary disputes tribunal.” That document was available. In fact we had two submissions on it from motor vehicle dealers both of whom said they were very happy to pay it. 
Hon Richard Prebble 
: Two submissions! 
Hon JUDITH TIZARD 
: Only two in spite of the hundreds of those documents that went out. So I am very happy having discussed this with the Motor Vehicle Dealers Institute that this very small levy is seen as an excellent benefit for both the dealers and the car-buying public. If we are going to be sure about buying a major item like a motor vehicle we need to be sure that if something is wrong it will be put right. I congratulate Paul Adams from United Future on his excellent advocacy for the car industry but also for car buyers. That is what this very small reasonable levy is about. 
I am delighted that ACT members are making such idiots of themselves because I have had a pile of letters and messages from motor vehicle dealers asking what on earth is this hysterical nonsense from Deborah Coddington. 
Hon Richard Prebble 
: I raise a point of order Madam Chairperson. Can I ask the Minister having described my party in unparliamentary language— 
Hon JUDITH TIZARD 
: Who did? 
Hon Richard Prebble 
:I can tell the Minister that it is out of order to call people idiots in this Chamber. But having done that and having made the claim that she has a pile of letters to her asking what is ACT doing I challenge her to table them. To make sure that I mean this challenge I say the Minister has not got one. 
The CHAIRPERSON (Ann Hartley) 
: Whether the Minister tables them is the Minister’s prerogative. 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 Let me make this statement. I say to the Committee— 
The CHAIRPERSON (Ann Hartley) 
: Is the member raising a point of order? 
Hon RICHARD PREBBLE 
: No I am taking a call. I say to the Committee following that contribution from the Minister who said and I quote that she has a pile of letters from car dealers— 
Hon Judith Tizard 
: Messages I said. 
Hon RICHARD PREBBLE 
: It has now become messages. She says she has a pile of messages from car dealers asking what on earth the ACT party is on about. I say to the Minister that I do not believe her. I do not think there is a member of the Committee who believes her. It is a question of credibility. The Minister can table them. Deborah Coddington has a pile of messages right here. Let me pull some of them out. I have just pulled some of those messages out and had a look and I shall read them to the Committee: “Dear Deborah Thank you for taking the time to contact me with the rather alarming news that a Supplementary Order Paper has been added to the impending Motor Vehicle Sales Bill.” Here is another one: “Attention Deborah Coddington: Any tax that Ms Tizard wants to slip into the Motor Vehicle Sales Bill will be most unwanted.” I am reading the messages straight out to the Minister. Here is another one: “Dear Deborah I think a tax or a levy stinks.” Here is another one: “We wish to thank you for your letter re the Motor Vehicle Sales Bill. It is very surprising that an MP can slip in a Supplementary Order Paper without those concerned having the opportunity to express opposition to the proposed levy.” 
I could read out another one. Here is the Minister who told the Committee that she has a pile of messages saying that the ACT party is wrong. I am saying that she does not have one. It is very very easy for the Minister to contradict me. I am reading out these messages to the Committee and I hope no one suggests that I am making them up: “Dear Deborah Thank you for your letter dated 19 March re Motor Vehicle Sales Bill. I am surprised and dismayed to hear Judith Tizard has slipped in a Supplementary Order Paper which allows a levy to be imposed on the vehicle industry.” Here is another one: “Dear Deborah We have just received your letter dated 19 March 2003 addressed to the motor vehicle dealers. Turner Fleet Ltd is a wholly owned subsidiary of Turners Auctions Ltd. My response like you I’m alarmed astonished and disturbed at what appears to be an underhanded attempt.” Here we are: “Dear Deborah re levy I would like to voice strong opposition to this open-ended levy. Thank you for bringing it to my attention. I am not in favour of any new taxes.” I could keep going. I ask the Minister whether anyone in the Chamber doubts that Deborah Coddington’s letters are genuine. 
Murray Smith 
: No. 
Hon RICHARD PREBBLE 
: I want to have this clear. Is Mr Smith saying that these letters are not genuine? 
Murray Smith 
: The ones she wrote might not be. 
Hon RICHARD PREBBLE 
: That is very interesting. He is accusing an ACT member of not having written a genuine letter. It is interesting that all those people can reply to a letter that apparently Mr Smith said may not have been sent. I ask Mr Smith whether he believes that the Minister has a pile of messages. He is prepared to believe that. Has he seen them? 
Murray Smith 
: No. 
Hon RICHARD PREBBLE 
: No he has not seen them. Does he think it is interesting that the Minister who has been challenged and basically told by me that what she is saying to the Committee is not true has not replied to that? Is the Minister’s behaviour the sort of behaviour that we want from a Minister of the Crown? Of course it is not. Do we as a Parliament want to support a Minister who is prepared to slip in a Supplementary Order Paper and then say that clause 7(b)(ii) had a little sentence in it and two car dealers in the country saw it 2 years ago? I say to the Minister that if she intended to have a levy why was it not in the original bill? 
I believe that we as a Parliament should vote against this bill to indicate our strong opposition to this Minister’s style. I have contempt for MPs who get up in the Chamber and claim that they have a pile of messages but when they are challenged cannot produce that pile. I say to the Minister that her credibility is zilch anyway but if she wants to protect it at all she ought to be able to produce at least 100 messages from 100 different car dealers. 
NANAIA MAHUTA (NZ Labour—Tainui) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
Noes 48 
Motion agreed to. 
Labour 52; Green Party 9; United Future 8. 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
The question was put that the following amendment in the name of Deborah Coddington to the amendment set out on Supplementary Order Paper 30 in the name of the Hon Judith Tizard be agreed to: 
to omit new clause 130A. 
A party vote was called for on the question  
That the amendment to the amendment be agreed to. 
Ayes 48 
Noes 69 
Amendment to the amendment not agreed to. 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Labour 52; Green Party 9; United Future 8. 
The question was put that the following amendment and the amendments set out on Supplementary Order Paper 30 in the name of the Hon Judith Tizard to Part 5 be agreed to: 
to amend subclause 141(c) by omitting the words “section 22(d)” and substituting the words “sections 22(d) to (e) and 23(ab)”. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 69 
Noes 48 
Amendments agreed to. 
Labour 52; Green Party 9; United Future 8. 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
A party vote was called for on the question  
That Part 5 as amended be agreed to. 
Ayes 69 
Noes 48 
Part 5 as amended agreed to. 
Labour 52; Green Party 9; United Future 8. 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8. 
Schedules 
JOHN KEY (NZ National—Helensville) 
: 
 I do not intend to take very long to discuss the schedules but I do want to draw the Committee’s attention to a couple of matters contained in them. Those who have had an opportunity to review and reflect on the bill will know that the schedules discuss in some depth the hearings and the manner in which the disputes tribunal may conduct those hearings. In particular I want to take a moment to talk about the rights of people to appear at hearings. 
Clause 7A in schedule 2 spells out the rights of anybody who wants to appear before a hearing. In particular it states: “At any hearing of an application or claim before a Disputes Tribunal any party to the proceedings is entitled to attend and be heard.” It then goes on to discuss whether representation is acceptable within those hearings stating at some length that people cannot be represented—except under some conditions outlined later on—by a barrister or a lawyer. I understand the reasons that that would be the case. In other words it is to reduce the cost and delay to hearings by making them less expensive and arduous. But I make the point that it is the right of an individual who wants to appear before a hearing to determine whether he or she wants representation from a lawyer or barrister. 
There will be people who have a very good reason for being there and who feel that they cannot adequately represent themselves. Even if the amount is under the $50000 limit for an individual or $200000 for a company those people may feel very much that they are unable to put their cases forward appropriately. I do not believe it is the place of Parliament to determine whether individuals spend their own money on seeking representation in a hearing. So I just draw the Committee’s attention to that point. 
I also draw to the Committee’s attention the issue that if one of the parties does want representation and the adjudicator approves that representation then the other party is entitled to have it as well. Again I draw the Committee’s attention to that issue because I believe that if we are to have standards whereby we argue that people do not require representation through a legal professional and then argue that because one party has representation the other party should have it just as of right that seems a little illogical to me. 
I want to talk for a moment on clause 9 “Duties of assessor” in schedule 2. In particular subclause (1)(b) talks about the duty being to “act in all respects”. The assessor must sit with the tribunal and that makes a great deal of sense. Clearly the assessor is providing technical knowledge on behalf of the tribunal. But in particular subclause (1)(b) states that the assessor acts in all respects as an extra member of the disputes tribunal. That is quite an interesting point in the sense that the kinds of people who can act within the disputes tribunal are discussed at some length in Part 4 of the bill and also the length of time that someone can be an adjudicator of the disputes tribunal. Two terms of 5 years each is the maximum. Those are quite rigorous memberships. To argue all of a sudden that an assessor can become an extra member but not go through such a rigorous process of assessment is in my view one of the failings of the schedules. 
I commend to the Committee clause 10 of schedule 2 concerning the immunity of witnesses. Clearly in these cases it is often very important that witnesses feel they have the security of that immunity. It is the only way that we will encourage people to come forward and put their case for the benefit of those who bring a dispute before the tribunal. On that basis I congratulate the Committee on having that provision. 
I also refer to clause 11 in schedule 2 which talks about the way that the decisions of the disputes tribunal need to be communicated. In particular it states that decisions must be given in writing. It is obviously very logical to have that requirement. Oral findings by the tribunal would probably not be worth the words they are spoken with. But in particular I am intrigued that under subclause (2)(b) every decision of the disputes tribunal has to contain the reasons for the decision. This is a rather wordy bill in my opinion. It has gone down to a level of minutiae that we have not seen in a lot of legislation in New Zealand. 
Hon Harry Duynhoven 
: Check the original bill. 
JOHN KEY 
: I am sure the original bill was also very lengthy and I fully support what this legislation will do for the industry. 
Hon Harry Duynhoven 
: I said check the original bill. 
JOHN KEY 
: We are replacing the original bill so if we are unhappy with it we have the opportunity through this bill to put new legislation in place. I simply make the point that it virtually goes without saying I would have thought that if a ruling on a dispute is being given in writing the reasons that the ruling has been made would have to be given. It seems rather superfluous to have that measure in the legislation.. 
Hon Harry Duynhoven 
: You obviously haven’t been to a disputes tribunal hearing. 
JOHN KEY 
: No I have not been to the disputes tribunal. 
The question was put that the amendments set out on Supplementary Order Paper 30 in the name of the Hon Judith Tizard to the schedules be agreed to. 
Amendments agreed to. 
Schedules as amended agreed to. 
Bill reported with amendment. 
Third Reading 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: 
 I move  
That the Motor Vehicle Sales Bill be now read a third time 
. This bill introduces a new regime for motor vehicle trading and replaces the Motor Vehicle Dealers Act of 1975. Many things have changed since 1975. This bill has been widely welcomed and extremely widely consulted on with motor vehicle dealers and people interested in the trade. This legislation protects and promotes the interests of consumers. It creates a new registration regime for persons involved in the business of motor vehicle trading and allows for the removal of unsuitable participants from the trade. It revamps the Motor Vehicle Disputes Tribunal provides for car information through a revised window card and provides for much stronger enforcement which will be undertaken by the enforcement team at the Ministry of Economic Development. 
The Commerce Committee has scrutinised this bill and recommended a number of changes to improve the workings of the bill. Most notable have been the changes to improve the operation of the Motor Vehicle Disputes Tribunal and the strengthening of the banning provisions. I have introduced a Supplementary Order Paper that has made technical changes to the bill including making provision for a levy to pay for the Motor Vehicle Disputes Tribunal in part. Those changes include new clauses 18A and 18B which create a duty on motor vehicle traders who sell a vehicle on behalf of someone to account for the proceeds of the sale. The Supplementary Order Paper also clarifies the regulation-making powers enabling a levy to provide additional funding for the Motor Vehicle Disputes Tribunal. The tribunal benefits traders as well as consumers and it is unquestionable that all parties should contribute to its running. I am also very grateful for the full support for that levy that I have had from the Motor Vehicle Dealers Institute and the Motor Trade Association following the extensive consultation on this matter starting with the discussion paper in 2001. 
I thank all of those who have contributed to this legislation—the people in the organisations who made submissions the members of the select committee and in particular the former chair David Cunliffe who carefully considered the bill and recommended changes to fine tune it. I acknowledge my predecessor Laila Harré who introduced this legislation and all members of the House particularly Paul Adams from United Future New Zealand who has contributed in an extremely positive and energetic way on behalf of the interests of car dealers but I acknowledge him much more for his concern for consumers for whom a car is often a very major purchase. I commend this bill to the House. 
GERRY BROWNLEE (NZ National—Ilam) 
: 
 We are deep into the second day of urgency and about to pass the Motor Vehicle Sales Bill that is urgently needed by the industry. That industry has been waiting 4 years for this bill but here we are today finally and urgently passing it. 
John Carter 
: After 4 years 
GERRY BROWNLEE 
: After 4 years the Minister Harry Duynhoven has finally got around to getting the bill to the House. I suppose I should start by congratulating him on such a fine display of the work ethic. 
This bill is also interesting because it is a step to the right for the Labour Government. Essentially the bill removes some compliance and a lot of regulation gets rid of a whole lot of red tape and simplifies the way in which motor vehicle dealers are able to operate. That is good and that is why we are supporting it. But as is always the case with the Labour Government it is one step to the right and then a quick shuffle back to the left. At the last minute after 4 years of consideration—4 long years of wondering whether this bill would be passed and then finally deciding to do it urgently—we find that a Supplementary Order Paper has been dropped on the table. 
John Carter 
: What is wrong with that? 
GERRY BROWNLEE 
: Members might ask what is wrong with that. In fact we have just discovered that on page 5 of the Supplementary Order Paper under new clause 130A the Labour Government is introducing a sales tax. This is the Labour Government that said “No new taxes.”—unless one earns a lot of money. The Minister of Transport is sneaking in a sales tax in the guise of a levy. New clause 130A states: “Regulations may impose levy”. When we are trying to simplify the process for motor vehicle salespeople and when the House is trying to recognise the way in which cars are bought and sold in this country nowadays one would have to ask why there is to be a sales tax on vehicles that commercial traders sell. That is quite alarming for us and it would have been nice if we could have had an answer from the Minister during the Committee stage about why that is necessary. 
It appears that the Minister is still thinking about how big that sales tax will be. The legislation provides that the Governor-General may by Order in Council made on the recommendation of the Minister make regulations prescribing different levies for different classes of motor vehicle traders. So we will have a truck sales tax a tractor sales tax a four-wheel drive sales tax a people-carriers sales tax—all those seven-seater vehicles that mums throughout the country buy in order to take the kids from schools to all those events around the countryside that they need to get to. I would like the Minister to tell us how much consultation he had with Paul Adams from United Future. I understand that that particular gentleman knows a little bit about selling motorcars as well as driving them. 
Hundreds of emails have come in in the last couple of hours complaining about that levy. It is not at all fair that after 4 years of consultation with the industry suddenly there is an urgent decision to pass the bill to get a bit more tax from honest traders in this country. It is quite ridiculous. We are told that the Minister did not consult the industry and that the industry did not know the levy was coming. It was simply a backhanded way of stealthily applying a little more tax burden on the community. 
As we have said there are one or two good things in the bill. It deals with the activities of people who line cars up and down the sides of various motorways on the weekends and parade them as a car fair. In essence that is an entrepreneurial activity and this country does not need to impinge in any way on the activities of those who act in an entrepreneurial spirit. I want to know whether the Minister will now go to the Minister of Finance to seek an appropriation so that he can have car-fair police out there every weekend applying the new levy to New Zealanders who decide to sell their cars privately. If the levy applies only to licensed motor vehicle dealers—or whatever they will be described as as a result of the passing of this legislation—then surely that is another business-unfriendly attack by this Government on honest traders. 
There is of course a controversial element in the bill and that is the removal of the fidelity guarantee fund. The fund did cost a lot of money and was added into the cost of every car. The Minister might be able to say that the levy will not alter the cost of buying a motor car on the lot but that is only because the levy will be offset by what the car dealer used to have to pay into the fidelity guarantee fund. The difference now is that it is the Minister who collects the money and the poor old consumer is left without the protection the fidelity guarantee fund once gave. There are some good reasons for that. Car prices have fallen considerably in the last few years. The value of the vehicle fleet these days although greatly expanded is on average a little less than it used to be. Of course the vehicles being sold these days are so much more reliable. I remember that the first car I bought was 20 years old and compared to other cars on the road it looked well out of date. These days a person could not buy a 20-year-old car because they are simply not on the roads. More likely he or she would be buying a 10-year-old car and that car would still look reasonably stylish and up to the minute. 
We cannot underestimate the effect that this stealth tax will have on the industry. We cannot underestimate the cost it will put upon those people who are buying cars. We should be sounding that caution because although we are supporting this bill we have concerns about that. We are pleased to see that there will be a registrar of operators that will cover a much wider group including auctioneers fairs and Internet car sales. The question that goes unanswered is whether those sorts of individual traders will be stuck with the new sales tax that the Government has introduced today. 
PAUL ADAMS (United Future) 
: 
 On behalf of the industry we welcome this new legislation. It is interesting hearing some of my colleagues speaking and I hope that I do not develop the art of taking something that is really so simple and making it so incredibly complex. If one sits in this place for long enough I guess it is an art that one develops very quickly and some members seem to be absolutely expert at it. That is very strange to me because in the motor industry we try to keep things simple. 
Once this legislation is passed I can see that cars sold on the side of the road will possibly be a problem for councils. The bill removes the criterion of having to have a site from which to sell one’s vehicles. To an extent we welcome that because as we have heard the Internet is a good avenue for selling all products not just cars. If a large number of new traders do not have premises or anywhere to display their cars—because to sell something one does have to display it—it will have to be seen whether they feed them through car fairs or go through auction houses. However I am concerned that the councils will be dealing with a large problem of cars on the side of the road and in public places with “For Sale” notices on them. 
The industry welcomes this legislation. As I have said previously our concern is that the standard and entry level for being a licensed motor vehicle dealer has been lowered substantially. It is now very easy to become a dealer—as long as that dealer does not have a police record or any bad marks against him or her by already being in the industry. The industry has had to put up with policing its own regulations. As with any law this law will only be as effective as the policing of it. My concern—and that of most other dealers—is that it be policed correctly otherwise we will find ourselves competing against far more traders who are perhaps a little unscrupulous in conforming to the standards that the industry is setting for itself. Who will police that? 
We talk about a levy on dealers to pay for this tribunal but look at the levy that the dealers themselves have had to pay under the current regime to police unlicensed dealing. It has cost the industry absolutely thousands and thousands of dollars. The industry has worked very hard and I commend those who have been policing that unlicensed dealing but let us hope that it does not happen under this legislation because self-policing an industry is something that we do not want to do. If we have to pay a small levy for a tribunal and everything gets sorted out correctly—that is everybody who is a licensed trader operates under the rules or is dealt with accordingly—then this legislation will work and work well. 
I know that we will see two standards of dealers in the days that lie ahead. We will definitely see dealers networking together and working with integrity a good code of ethics and looking after their customers. But sadly I think that we will see a lower level of dealer operating. Those dealers might be cheaper but it is the same old story—one always gets what one pays for. 
United Future is pleased that we have been able to get this legislation through under urgency. I know that it will be well received by current motor vehicle dealers and that they will thank us for it. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I have to express real concern about much of that member’s speech. The Minister complimented him on his advocacy of the motor vehicle dealers industry and he referred to two standards of dealers. He recognised that the threshold will become lower and that more unscrupulous dealers will come into the market but the purpose of this bill is to promote and protect the interests of consumers in relation to motor vehicle sales. What has United Future done for them? Nothing. 
New Zealand First supports the intent of this bill but we could support little more than the title. At one point we supported only the title until the Hon Harry Duynhoven at least gave reasonable explanations of some of the content of the bill and tied together some of the thought processes that went into it. The bill is not well set out. One part refers to odometer tampering but the penalties associated with that are somewhere else. Unless one scrutinises the whole bill one misses them quite easily because there are no cross-references. That is not the way to pass legislation. Only one speech from a Government member carried any merit and weight at all and that was from the Hon Harry Duynhoven. The Minister made one short call towards the end and added more confusion than clarification to the whole debate. Very few people spoke in defence of the bill. Even the National Party which is supporting the bill spent most of its time ripping it apart. 
This bill misses the mark by a long way. The legislation will open the door for the public to be ripped off by whoever wants to call himself a motor vehicle dealer. In many cases it will be a case of buyer be very very aware. I put a scenario to the Minister and she refused to answer it. I think that Mr Duynhoven will take a call shortly and perhaps he will answer it. I understand that some importers go to Japan to buy an allocation—a block—of first-rate cars and they are given second-grade cars which are known I understand as “sewer cars”. They are virtually given away. Far too frequently the odometers of those “sewer cars” are wound back and they are sold to the unsuspecting public in this country. Because Harry Duynhoven is an expert in vehicles and vehicle sales matters I would appreciate him telling me whether I am correct in my assertions whether this bill will address that issue and how. 
As I said we wanted to support the intent of this bill but we believe that it has missed the mark considerably. The question that comes to our minds is: does the public need protection from motor vehicle dealers from time to time if at all? The answer to that question is generally yes because a car is the second-largest expense that most people incur. 
David Benson-Pope 
: The member should be supporting the bill. 
PETER BROWN 
: The member says I should be supporting the bill but this bill does not protect consumers. You have heard Paul Adams— 
Mr SPEAKER 
: I have not heard it. 
PETER BROWN 
: Oh you missed a good speech. 
Mr SPEAKER 
: Yes I know but it is a Standing Order. 
PETER BROWN 
: Mr Adams has been a very good advocate for motor vehicle traders but he has said nothing in favour of consumers. If we believe that the public needs protection does this bill deliver that protection? No it does not. It will allow unscrupulous people to enter the industry and somebody will suffer either financially or by buying a car that is less than safe. They might even pay for it with their lives. When the Government reviews this legislation in 2 years’ time I hope Mr Paul Adams takes a close look at what has happened in that 2 years because he has been a firm advocate for the motor vehicle industry. 
I believe that this bill will to some extent result in fewer safe cars coming on to our roads. Will greater numbers of the public pay more than is fair and reasonable for a car as a result of this legislation? I believe they will. Is that compatible with the purpose of this bill? The answer must be no. New Zealand First was not represented on the Commerce Committee but we approached this bill with an open mind. We believe it to be flawed and therefore we will not be supporting it. 
Hon HARRY DUYNHOVEN (Associate Minister of Transport) 
: 
 I want to comment on a few things that have been said during the course of this bill’s passage and the first thing I will comment on is Deborah Coddington who accused me of all people of hating cars. Perhaps she does not know me very well yet. Cars have been my life-long interest and I guess my wife is occasionally annoyed at the number of them that we have at home. 
Gerry Brownlee 
: That happens! 
Hon HARRY DUYNHOVEN 
: Yes it is called an addiction. My interest has always been with the buyers—the consumers. There is clearly not an even playing field between buyer and seller. I really became interested in this issue when New Plymouth Women’s Refuge was ripped off defrauded and cheated by Saevue Autos in New Plymouth a company that operated in a way that led everyone to believe it was extremely trustworthy and very sadly it was not. 
The Motor Vehicle Disputes Tribunal which for the benefit of Mr Key who spoke about it earlier but clearly has never been to a dispute and admitted such recognised that that vehicle had been “clocked” and that that was a considerable cost to the women’s refuge. The issue is whether people could have faith in the Motor Vehicle Dealers Institute and the conflict that the institute found itself in when those importing cars and wanting to make a quick buck by clocking them began to get more and more control of the Motor Vehicle Dealers Institute. The vast number of dealers in this country were appalled at what happened over the running of the Motor Vehicle Dealers Institute in recent years. Honest dealers tried very hard not to be members of that compulsory organisation and not pay the levies. 
Mr Prebble commented on the levies and this new $127 levy to fund the disputes tribunal. He ranted about the new levy. I tell him that currently the licence fee just to belong to the compulsory Motor Vehicle Dealers Institute is $140. On top of that there are various occasional amounts that have to be paid to the motor vehicle dealers levy fund. The last amount paid in February this year was $506 but it has been $675 an occasional $500 and so on. 
I have probably been personally responsible for some of the reasons that that money had to be forked out because of the court cases I have taken against crooks in the motor vehicle industry. I think I am the only member of Parliament ever to have taken a constituent through that process. 
Gerry Brownlee 
: What about the sales tax? 
Hon HARRY DUYNHOVEN 
: It would be very helpful if Mr Brownlee were to keep his mouth shut and listen for a while. 
Mr SPEAKER 
: Some comment can be made but that is out of order. The member will withdraw that comment and carry on with the debate. 
Hon HARRY DUYNHOVEN 
: I withdraw the comment. I tell Mr Brownlee that it might help him if he were to be quiet and to listen. The original motor vehicle dealers legislation set a dual responsibility for the Motor Vehicle Dealers Institute. The original 1975 Act was to make better provision for the licensing and disciplining of motor vehicle dealers and their staff and to reform the law relating to contracts for the sale of motor vehicles by dealers—and here is the key point—in order to promote and protect the interests of consumers. The Motor Vehicle Dealers Institute was charged with the statutory duty of operating in the interests of consumers and of disciplining dealers but at the same time it was shanghaied and derailed into protecting the interests of motor vehicle dealers even when they were committing fraud. 
One of the reasons that the levy from the fidelity fund has been so high in recent years is that on some occasions the Motor Vehicle Dealers Institute has applied to the licensing board to have a dealer struck off on the basis of evidence provided. In cases where the struck-off dealer has been smart enough to have all of his or her assets in trusts and everything else the money cannot be clawed back and the dealer has been able to avoid paying. It is then that the fidelity fund becomes responsible and the lawyers in the Motor Vehicle Dealers Institute then object to the same evidence they used to take the licence in the court to try to avoid a payment being made from the fidelity fund. If members look at the expenses of the fidelity fund in recent years I am sure they will find that most of the fund has been spent on legal fees. 
The original Act had a very powerful section which was section 42(3). Notwithstanding any other law that section enabled a crooked dealer to be pursued. I am very pleased that this bill gives the registrar the right to strike off crooked dealers and provides that there will be a review in 2 years to see whether this bill is working well. I am looking forward to that review. I am pleased to have played a part in this. I know I have not been terribly popular with my colleagues but I can tell from the number of good honest dealers who have come up to me and said “Harry good on you for keeping on this because these “clocked” cars are killing us.” that they really appreciate the work that has been done to try to make this legislation work. 
Finally for the benefit of those who do not believe that “clocked” cars are still a problem I suggest that they look at a Japanese website to see what the average mileage there is and then compare that with the average mileage on cars at their local car yard. I think people will be amazed by the difference between those figures. We still seem to have a problem with the reduction of mileage in vehicles crossing the sea particularly with regard to diesel vehicles. There are many good dealers and I want to see them protected. 
Debate interrupted.