Motor Vehicle Sales Bill

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?

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.

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.

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.

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.

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?

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.

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.

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.

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 2,250 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.

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.

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!

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—

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.

Let me make this statement. I say to the Committee—

The CHAIRPERSON (Ann Hartley): Is the member raising a point of order?

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.

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.

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.

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.

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.

I move, That the question be now put.