Ryall Tony: Fair Trading Amendment Bill (No 3) — Third Reading 
Ryall Tony: Fair Trading Amendment Bill (No 3) — Third Reading 
[Volume:609;Page:6909] 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: Mr Speaker I can report to you that the Minister spoke more words during that third reading speech than she did during the entire 2½ hours of the Committee stage on this bill. I have to admit the frustration of the Opposition given that we were supporting the Government on this bill and were seeking to make some positive improvements to it that the Minister sat there and said nothing. If the Government does want to receive some support from the Opposition to pass bills speedily then surely Ministers should do Opposition members the courtesy of responding to their legitimate concerns rather just giving a few throw-away lines in the third reading speech. 
During the Committee stage the National Party raised a number of important concerns about this bill. I will just recap those because they are issues that will have to be revisited in this House. We think that the fines have been increased in an ad hoc non-comparative way. There is some existing legislation where the maximum fine is $100000 for quite serious offending in the commercial world but for matters much less comparable with those offences the maximum fines in this bill will now be $200000. We say that the Government should undertake a review of all the penalties in the commercial area. We are opposed to removing the 3-year criminal limitation period to make it apply from the date of discovery of a breach. We have warned the Government that that will have unintended consequences and will lead to the creation of significant contingencies by various New Zealand companies. We do oppose the Commerce Commission being exempted from the consequences of its decisions in respect of seeking interim injunctions and we alert the House— 
Stephen Franks 
: Then why vote for it? 
Hon TONY RYALL 
: I say to Mr Franks that he should wait and see. We do say to this House that we are opposed to the increased compliance costs associated with the Commerce Commission demanding from companies certain information and documents that do not exist. This bill was introduced and considered by the Commerce Committee with no regulatory impact statement and no compliance cost statement even though Cabinet papers require those statements. The Government has broken its own guidelines. 
I turn to the fines. Since the 1986 Act the consumer price index has increased by 54 percent yet these fines are to be doubled—in reference to what though? That is what we ask. In reference to what has the level of the fines been set? It has been done on a completely ad hoc basis with no reference to any other penalties in the commercial law. There have been no proposals from the Government to look at alternatives to a penalties regime such as improved education programmes for businesses and consumers. The Government told Parliament that one of the reasons it wanted to double the fines was that the judges were not using the full range of current penalties. We provided the Government with the opportunity to vote for the very wording that is in the Sentencing Act designed to make judges use the full scale of available sentences and this Government voted that amendment down. 
 We are concerned about the criminal limitation period running for three years from the date a breach is discovered or ought to have been discovered during which breaches of the legislation will be subject to litigation and scrutiny by the Commerce Commission. We say that has an air of lacking an understanding of commercial reality. An aggrieved consumer could raise issues with regard to old advertising that might have been a genuine error some years after it actually happened but within the new 3-year limitation period. That means business will have to carry a significant contingent liability resulting from actions like advertising. That is a cost on business. 
There is a basic right in New Zealand that people should be able to seek redress for suffering damages as a result of somebody else’s action but not with regard to this legislation. If the Commerce Commission seeks an interim injunction to stop a business from trading and that injunction was unwarranted the commission does not need to compensate the company for any loss of reputation profit or turnover. That is unfair to business. What happens if an injunction leads to a significant commercial loss? What happens if the Commerce Commission’s staff are overzealous? What penalty or sanction is there on the Commerce Commission for its mistreatment of commercial interests in New Zealand? Not one. This Government is to wipe that sanction. It is to wipe the basic right of redress for New Zealand business that suffers damages at the hands of the Commerce Commission. 
We are also opposed to the provisions in this bill that give the Commerce Commission substantial new powers to require information and documents that do not exist. The Commerce Commission already has substantial powers to enter premises and to seize and demand information and documents. But this Government wants to give the Commerce Commission the power to require companies to provide documents and information that do not exist. Is it common sense to require companies to provide documents that do not exist? Business New Zealand advises that there was a recent case where a company had to produce reports that were not in the accounting system or in the records of the company. Although it completed those requirements at a considerable cost in terms of time and money the commission found that there was no case to answer. The company was not compensated for that. 
This is appalling legislation. Sure there is a small amendment that will widen the scope of the Commerce Commission’s ability to deal with pyramid schemes but it cannot be very urgent. This bill has been hanging around in the Commerce Committee for years so that amendment cannot be very urgent. 
Hon Member 
: The lazy Opposition would not do it. 
Hon TONY RYALL 
: Oh did members hear that? Actually Opposition members were the people who made the running on this bill in the select committee by trying to get some information. That obviously did not come from any of the Government members who did not understand in the least what was going on. This bill does propose some additional amendments to apply to companies involved in pyramid selling. Those are to be supported— 
Richard Worth 
: Commended even! 
Hon TONY RYALL 
: —and commended. But we simply cannot support a Government that is not even prepared to listen to positive suggestions that would have improved this legislation. 
The National Party in Opposition wants to make it clear that when we return to power in 2005— 
Richard Worth 
: —Or before! 
Hon TONY RYALL 
: —or before then there are significant parts of this bill that will be repealed. We will return the right to companies to seek compensation for interim injunctions taken by the Commerce Commission that were unwarranted. We will not allow the Commerce Commission to require documents that do not exist to be taken with no payment. We will not allow a criminal limitation period that allows someone to take an action or lay a complaint about an advertisement 10 years after it was printed or broadcast. We will have a significant review and make all the different fines that apply across the commercial legislation comparable with one another. That has to be done. The National Party is clear that there is some sensible stuff in this bill but there is a lot that needs to be amended. We provided the Government with an opportunity to fix it. Our team of very thoughtful speakers provided lucid arguments about why the Government should change the bill. We pleaded with the Minister and her officials to take on board those criticisms adopt those changes improve the bill and enjoy our support but the Government just decided to ignore that. I think that that is bad for lawmaking in New Zealand.