Secondhand Dealers and Pawnbrokers Bill

I move, That the Secondhand Dealers and Pawnbrokers Bill be now read a first time. Later I will refer this bill to the Law and Order Committee.

This bill replaces the Secondhand Dealers Act of 1936 and the Pawnbrokers Act of 1908. Both Acts are now well out of date. This bill is part of a package of measures, implemented by Government, that is designed to combat property crime. It has two main objectives: firstly, to make it harder for criminals to dispose of stolen goods through second-hand dealers and pawnbrokers; and, secondly, to make it easier for the police to recover stolen goods and solve property crimes.

The bill considerably increases penalties for offences, compared with the Secondhand Dealers Act and the Pawnbrokers Act. Currently, penalties fail to provide any adequate deterrent for offending under the provisions of these Acts. The maximum penalty under this bill for acting either as an unlicensed second-hand dealer or as an unlicensed pawnbroker is now set at $20,000, compared with $200 and $100 under the present Acts.

The integrity of the licensing system will be improved in a variety of ways. First, as well as dealers and pawnbrokers requiring licences, staff accepting goods on behalf of the business, or supervising people who accept goods on behalf of the business, will be required to have certificates indicating that they do not have convictions for dishonesty. Second, in place of the present lifetime licences for second-hand dealers, there will be relicensing and recertificating every 5 years. Applicants will be assessed against objective criteria, in place of the present subjective criteria, with the focus being on excluding applicants with convictions for dishonesty. Third, licences and certificates will be in a photo ID form. This will aid identification of licensees and certificate holders. Finally, fourth, the objective is to make it easier to establish who is licensed or certificated and for police to contact them, and that will be done by having a centralised electronic register in place of the present paper-based system. In the case of second-hand dealers, the present paper-based system has largely broken down and is ineffectual.

Under the bill, second-hand dealers and pawnbrokers will be required to sight an approved ID from a person selling or pledging goods to them, to record how that person was identified, and to ask that person to provide contact details as well as his or her signature. Many businesses currently do this voluntarily, but many do not. The legislation will increase the risk for people knowingly trying to pass on stolen goods. It will also help the police to trace where people, who are unknowingly passing on stolen goods, obtained those goods.

Under the bill, second-hand dealers and pawnbrokers will be required to comply with various record-keeping and labelling requirements. Significant changes are made to obtaining ID details and to a requirement that a record be kept showing the name and contact details of employees. Currently, second-hand dealers are required to retain certain goods for a minimum of 1 month. This is so that goods at risk of being stolen remain with the dealer long enough for there to be a good chance that they will be detected either by the dealer, by the police carrying out an inspection, or by a customer.

The schedule listing these goods has been unchanged since 1963. It contains gramophones and fur coats. It does not contain videos and computers. Therefore we need a new schedule, and all the goods listed in the new schedule are regarded by the police as being at risk of being stolen. To reduce compliance costs the retention period has been shortened to 2 weeks. An exception is made for goods sold on behalf of a client. They can be sold within 2 weeks, but the dealer will need to get ID and contact details from the buyer so that police can trace the goods if it appears that they may have been stolen.

Under the bill, people carrying on a business running markets or fairs will be required to keep records showing where and when they operated, who was selling second-hand articles or scrap metal, or who acted as a pawnbroker at that market or fair. This new requirement, however, will not be onerous.

Under the bill, the police must be permitted access to records. They must also be allowed to inspect any or all goods held by licensed second-hand dealers and pawnbrokers. The bill requires that licensing decisions made subject to the Act will be the responsibility of a registrar of second-hand dealers and pawnbrokers, appointed and serviced by the Government. This replaces the present decentralised system where licences are issued by the various district courts. The new system will be much more efficient.

The regulation powers under the bill are quite broad. This is necessary because of the many and diverse kinds of transactions that can occur, and because of the rapidly changing commercial environment. The procedures for obtaining ID and for record keeping and labelling need to be appropriate to the type of business and the type of transaction. Transitional provisions, too, have been designed to minimise disruption to businesses as the move is made to the new regime.

People who hold a licence under the Secondhand Dealers Act, the Pawnbrokers Act, or the Auctioneers Act will be deemed to hold a licence under the new Secondhand Dealers and Pawnbrokers Act for the first year after the new Act comes into force. After that they will be required to get a new licence if they wish to carry on business as a second-hand dealer or pawnbroker. People will be able to hold auctioneers’ licences under both the new Secondhand Dealers and Pawnbrokers Act and the existing Auctioneers Act.

In conclusion, in carrying out the review that led to this bill, officials consulted widely with private sector stakeholders. These included the New Zealand Licensed Traders Association, individual second-hand dealers and pawnbrokers, the Boating Industries Association of New Zealand, the Scrap Metal Recycling Association of New Zealand, the Auctioneers Association of New Zealand, the Insurance Council, and the Consumers Institute of New Zealand. Overwhelmingly these bodies were supportive of the change recommended. I wish to thank them and their organisations for their input, and look forward to their submissions to the select committee.

I expect that every party and member of this House would support this legislation. It represents a significant advance in the campaign against property crime, which this Government is committed to. I commend this bill to the House.

As the previous speaker correctly surmised. National supports the bill. I am always comforted when Mr Goff reads from prepared material, because I know that it will be inherently accurate. I have been hugely comforted tonight, as he read, at rapid-fire rate, this material fashioned by third parties, that we can have confidence that there has been an accurate summary.

There are, however, some significant issues in this legislation that we should not ignore. I would like to start, if I may, by noting for members of this crowded House tonight the fact that in ancient times three gold balls was the sign of the pawnbroker. For the desperate, whose bank account cannot stand another cheque or an Eftpos withdrawal, a trip to the pawnbroker can be the answer. I say that because it is a quick and uncomplicated system, unburdened by copious form filling. As others have said: “They can be in and out of here with money in their hands as quick as using an ATM machine.” That comment came from a local pawnbroker in this city of Wellington.

Of course, if someone pawns something he or she might get a lower price than selling it second hand but there is a chance of buying the stuff back, at a price. But, at least, if it is something that the person values, it can, of course, be taken home again.

It works this way. A pawnbroker puts a value on the goods and offers cash. He holds the goods, but they remain the customer’s property and can be reclaimed by repaying the original loan plus interest. As I understand the law, if the items are not redeemed—within 3 months for clothes, or 6 months for other goods—then the law says they must be auctioned and any money received from the sale, over and above the principal, and the interest due at the time of the sale, minus the handling cost, belongs to the person who pawned the item.

There are, of course, many reasons that people pawn. Usually they need cash to tide them over for hassle-free bridging finance. No credit checks are needed. An inability to buy back their goods means they lose the item, but there is no bad credit rating. Sometimes people pawn and re-pawn the same thing. About 20 percent of goods, I understand, go unclaimed under the Pawnbrokers Act of 1908—and that is the first point I would like to make: this is old legislation. There are not too many pieces of legislation that date back to that great year of 1908, when so much law was consolidated.

I mentioned the three balls being the traditional symbol of the pawnbroker. Members of this House—listening attentively, as I know they are—will know that the traditional three balls are said to be from the crest of the Medici family in Italy, who, with the Lombards in England were moneylenders in Europe in the Middle Ages. Legend has it that one of the Medicis in the employ of Emperor Charles the Great slew a giant, using three sacks of rocks, and these eventually appeared on the family crest. So it is from those three sacks of rocks that the symbol of the three balls arose.

As the MP for Epsom, I hesitate to offer issues of history relating to Wellington, but I am very much aware that the symbol of the three balls was last displayed in Wellington in the 1970s, when the Willis Street pawn and second-hand shop owned by Israel Triester closed.

I now turn to the substance of the legislation, against the background of the very helpful summary that the Minister read at such rapid-fire speed. Before I do that I should probably say that “pawn” comes from the Latin patinum, meaning clothing. In earlier centuries, the principal assets people had were their clothes, and they borrowed money by pawning their clothing.

But I come back to the legislation. Having made the preliminary point that the Pawnbrokers Act is very old legislation, I point out that this bill provides for the replacement of the Secondhand Dealers Act and the Pawnbrokers Act. In this legislation we see two things. First of all, there is the regulation of second-hand dealers and pawnbrokers, and individuals acting either as directors or as agents of second-hand dealers and pawnbrokers. We see also the specification of record-keeping requirements for promoters of markets and fairs, with regard to second-hand dealers and pawnbrokers who operate at those markets and fairs, and the requirement that promoters allow the police to inspect those records.

None of us in this House would be oblivious to the fact that if we could control what goes on in the markets touching on second-hand dealers and pawnbrokers, we would put a large number of burglars out of business. There is absolutely no doubt that if we closed down the fencing or receiving industry that flourishes in New Zealand, many burglars and thieves would not find the business of theft worthwhile. That is why National supports this legislation. If we close down the extent of fencing and receiving, maybe—although I doubt it, under this Government—we will be doing something in terms of dealing with those significant issues.

It is a tragedy, as we all know, that right throughout New Zealand there are people active in our communities and neighbourhoods who are determined to pursue criminal activities by nefarious means, with no consideration for their neighbours, at all. The need to support one’s neighbours, I suggest, has never ever been more critical. If one looks at the legislation helpfully contained within the contents provision that Mr Goff has seen fit to include, one notes that there are a number of parts, no fewer than four, and also a schedule. Those parts deal, I would say unromantically, with some preliminary provisions. In Part 2 we look at issues relating to licences and certificates. Part 3 deals with obligations of licence holders and promoters. Part 4 deals with the Registrar of Secondhand Dealers and Pawnbrokers, and certain miscellaneous provisions are included. Then, finally, in the schedule are some forms of what I suggest are of no great interest to members of this House.

In conclusion, it is all very well having these highly prescriptive arrangements that assume that commerce is transacted in person or perhaps by correspondence, but the reality today is very much that a lot of trading in second-hand goods occurs on the Internet. I would like to say that trading in the area of websites needs to be more significantly considered than it is in this bill. What does this bill do about that issue? Absolutely nothing! So we have websites like www.trademe.co.nz and www.ebay.com presented by backyard unlicensed dealers, and such trading is rife. I hope that the bill will be extended to deal with this.

I am not so enamoured with the sound of my own voice, so I will come to the point. This bill, introduced by the Government, has the support of United Future. New Zealand presently has one of the highest rates of property theft in the world, the bulk of which is disposed of through second-hand dealers and pawnbrokers. As such, United Future is proud to support a bill whose purpose is to make it harder for criminals to dispose of stolen goods by creating a tighter goods tracking regime for the second-hand dealers and pawnbrokers industry. This, as the Minister has pointed out, will therefore make it easier for the police to track stolen goods, apprehend offenders, and recover such goods accordingly.

The present legislation is now well outdated, ranging between 40 and 95 years in operation, with the police complaining that both pieces of legislation are antiquated and toothless. This new legislation has been developed in consultation with the industry and, as a result, it has the support of the Licensed Traders Association, which, I am informed, has been pushing for it for years. I also note that although the association has an excellent record in honest practice, it itself acknowledges that there are some rogue dealers out there who need a tighter regime enforced upon them. As such, I thank them for their contribution to the bill. The police are also satisfied that this bill ought to make a difference. I note the recent comments made by Sergeant Rhys Johnston of the Wellington Burglary Squad that police were battling an increase in break-ins. The first 3 months of this year saw a 48 percent increase in reported burglaries compared with the same period last year. That is why this bill is needed.

I want to make one or two comments on some aspects that the Minister raised. We are pleased to see the penalties for dealing without a licence being increased from $200 to $20,000. The old amount barely warranted consideration, and it certainly did not deter any of the less reputable from bothering to become licensed. There are some matters that, to my knowledge, the bill presently is unclear or remains silent on, and I am sure that United Future will be keen to make a contribution on these matters at the select committee stage. They are not huge issues, but they merit a mention, anyway.

It is pleasing to see that dealer licences are now no longer issued in perpetuity and that they are to be renewed and certified every 5 years, However, if the emphasis of relicensing, as the Minister points out, is to weed out applicants with convictions for dishonesty and the like upon application, then maybe there ought to be opportunity for members of the public to object to a dealer being relicensed if they are aware of any significant malpractice, or more commonly, shonky business by the dealer in question.

Also—as in Western Australia, a jurisdiction that has a relatively new second-hand dealers and pawnbrokers statute—perhaps dealers ought not to be allowed to deal with anyone under the age of 18, and, further, not with anyone who appears to be affected by drugs or alcohol. Such measures might appear draconian. However, when one pauses to consider that the effect of the Western Australia statute on second-hand dealers and pawnbrokers has been a 30 percent drop in house burglaries in that State, it starts to sound like, perhaps, a good idea. With such a reduction not only does property become safer but the cost of it becomes cheaper as insurance premiums decrease. If we are serious about cracking down on property theft and its aftermarket, then I put it to the House that perhaps those are some of the matters that ought to be considered, and no doubt we will be raising those points during the select committee process.

I would also like to pick up on another change the Minister touched on, and it is an eminently sensible one. Under the previous statute, a list was made of goods that were recognised as being more likely to be stolen, and those goods were therefore required to be held by dealers for a month. Drafted in 1963, it presently remains in law that gramophones, travelling rugs, and typewriters are our most at-risk goods. It is surely time for revision. United Future is therefore pleased to see that the new schedule involves an excellent compromise, whereby the hold-over period is reduced to 2 weeks. However, the police may categorise any goods as being at risk, and therefore provide for a flexible schedule that may move with the times as technology evolves and as new consumer products are invented. I commend this bill to the House.

On behalf of New Zealand First, I rise to support this bill. In many parts there are no substantial changes to the legislation that currently governs the group. As outlined in the explanatory note of the bill—and New Zealand First agrees with it—due to the increasing rate of crime in our communities, it is timely to ensure that those people who are, and who want to be, second-hand dealers and pawnbrokers are subject to far more scrutiny in order to ensure that the unscrupulous dealers in this whole sector are followed up on. There are already challenges within this sector, and if some existing dealers will not meet the requirements for the issue of certificates with this new legislation, some of that group will be disqualified from holding a certificate, and quite rightly so. New Zealand First believes that, initially, there will be a great deal of work for the registrar to follow up on in the licensing area.

💬 Richard Worth: Why?

Because of the number of people who will be required to be licensed. Although we support the issue of certificates for pawnbrokers and second-hand dealers, we query the availability of police resources to carry out the checks as recommended in the bill. In clause 23, “Police check on every applicant” we see that the police must check on everyone who applies for a certificate. There is a shortage of police officers throughout the country, and one has to question whether the resources that are currently available will be sufficient.

💬 Jill Pettis: The police have never had more money then they’ve got now.

But we need more of them. Because of our increasing population, the police require an increased number of officers to carry out the work they currently do, and this checking of applicants will be an additional task for them. However, we do know that the police regularly contact and visit the various second-hand dealers within their towns, so they do know who they are. Due to the legislation we pass through this House, it appears that, every day, the police are getting an increasing number of jobs that are not front-line policing. There is a big anomaly, because we do not see any action at all on increasing police numbers so that the front-line policing role can be adequately carried out. They are stretched now, and we keep wanting them to do more. The bottom line is that we really do not want to see our valuable police service further stressed by a totally unmanageable workload.

Second-hand dealers support a police check on every applicant as they know that a percentage of the people operating in that industry deal in property from a questionable source. The police themselves can already identify those people. A second-hand dealer whom I was speaking to yesterday was proposing a check-sheet system, similar to that used by the Auctioneers Association, to assist the police to check the goods. He said that a mandatory requirement to forward a completed form to the police on a regular basis would ensure that the police have a very good idea as to the goods that were being brought in for sale and by whom. He proposed that the police enter the list of goods into the computer, so that there is in existence a list of the goods that have been brought in to be sold. He thought that such a list would help the police and give them extra time to do the functions that they should be carrying out.

💬 Opposition Member: What a good idea!

It is a good idea, but not so good for the overworked police who have to maintain the record. The owner of the business also commented upon the length of time that the goods were to be stored—14 days. [Interruption] Yes. He was quite pleased with the 14 days, I must tell members. But he did not like the fact that the number of goods on the schedule was quite vast—it had increased vastly from what was already there. He wondered what on earth he was going to do with the goods he had to store. It was good to see that ordinary whiteware goods like fridges, washing machines, clothes dryers, dishwashers, and stoves—which lots of New Zealanders go into second-hand shops to buy—are exempted from storage. We were quite amazed that the list specifically mentioned sunglasses. We wonder about the logic of that when one considers the number of sunglasses that are on sale, and the fact they are the same in every way. During the select committee stage, hopefully the second-hand dealers will review that schedule, because, as the Minister has pointed out, it is far more extensive than that currently in existence.

New Zealand First queries the working of the bill with regard to the increasing number of professional traders that are now selling goods on market days all around the country. We see them in every town and every city. There is no way that the second-hand goods that are on sale on those market days can be tracked. Yet many of those market traders have the same goods that are listed on the schedule attached to the bill. The amount of second-hand goods that are available on market days is really similar to that of second-hand shops and pawnbrokers. The bottom line is that they are highly mobile second-hand shops with the same people and the same types of goods appearing at the various market days around New Zealand. We realise that there are requirements on the people organising the market days to note down the stallholders’ names and addresses, but that does not focus on the second-hand goods being sold, at all. We do not want to see two separate classes of second-hand dealers and pawnbrokers: one group that is highly regulated and works within the bill, and a second group that is highly mobile and is apparently above the scope of any bill such as this.

New Zealand First also queries whether appliance dealers who use second-hand whiteware as trade-ins on new appliances will also be subject to the provisions of the bill. At this point in time many retailers do not consider themselves to be second-hand dealers, yet the definition contained within the bill does include them, despite their protestations to the contrary. New Zealand First hopes that that issue will be clarified by the Law and Order Committee. New Zealand First supports this legislation being referred to the select committee.

I am happy to support the Secondhand Dealers and Pawnbrokers Bill. The bill will make it harder for criminals to dispose of stolen goods, and it will make it easier for the police to recover stolen goods and solve property crimes. We are tired of the second-hand speeches from the other side of the House. We should get on and make life hard for the criminals out there.

On behalf of the ACT party, I welcome a bill that carries out a mechanical, sensible, and practical tidy-up of earlier legislation without beginning with a whole lot of ideological clap-trap and claiming to be rebalancing the scales between consumers and suppliers—the kind of nonsense that we see in legislation that governs similar transactions, like consumer credit. I welcome the fact that at least the Secondhand Dealers and Pawnbrokers Bill seems to be practically oriented. It has a compliance cost analysis that is understandable and has the headings that one would expect from a reasonable attempt to make a tradesmanlike job of updating the existing legislation.

I am, of course, a little concerned that the bill states that compliance costs will rise for almost all second-hand dealers and pawnbrokers who comply with the requirements of the proposed regime, because there are no free lunches. If the regulated industry has an increase in cost, we can assume that the competing alternatives, such as frequent garage sales, the Trade and Exchange, and all the other ways of disposing of second-hand goods quietly, may increase in attractiveness. One of the things I hope the Law and Order Committee will look at very closely is just what commitment there is to enforcement. If this bill has a rigorous enforcement regime, it will increase the need and the pressure on the police to look at the alternatives in order to make sure that this bill does not simply squeeze fencing and criminal activity out of the authorised industry and into those other avenues, which also include pub sales and fake raffles. There is nothing that can give us much confidence that the police will be able to give it the sort of priority it requires.

This bill is expected to be enforced by the police. There is a curious statement in the paragraph headed “Key compliance cost issues identified during consultation” in the explanatory note. It states: “During consultation it became apparent that many persons who should currently be licensed and complying with the requirements of being a licensed secondhand dealer or pawnbroker were not licensed.” I would like the Minister or his officials to explain to the select committee just why that should be when the police have apparently equipped United Future and the Labour Party with information about the extent of trading in stolen goods through second-hand dealers yet appear to be saying that that obvious avenue for tackling receiving has not even received enough attention from the police to make sure that all those who should currently be licensed under the existing law, defective though it may be, are licensed. What can we hope for from a new law, however bold and brave it is and however glossy its provisions, if there is no commitment to enforcement?

What a waste of time it is for Parliament to give its attention to technical detail and matters that are desirable but that, in comparison with the will and commitment to enforcement, are next to nothing! A far better priority for Parliament would be to debate the many areas in which the current will to enforcement is lacking and in which the old Labour tradition of regarding criminals as victims of the class struggle seems to ensure that Government members feel happy leaving them in a continued happy criminal career.

I found the bill interesting to look through just for the quality of the thinking that has gone into it. Quite apart from the compliance cost statement and the bland mention of the level of non-compliance with the existing law, there are some rather curious mentions of compliance costs associated with the various duties of licensed second-hand dealers and pawnbrokers. There is an indication that it is expected that compliance costs, other than the cost of licensing, certification, and, presumably, record-keeping, will increase, as mentioned in the illustrative compliance costs comparison table. A true assessment of the real value of this legislation should have required a very clear statement in the compliance cost summary of just what those compliance costs are that concern was expressed about.

I looked through the provisions of the bill and found, for example, that a certificate holder or licence holder is required to advise the registrar of every change of address. That will probably be a little difficult, and will probably be overlooked. It might have been better to have looked at that in terms of the object of that provision. Do we really need the current address very often, when the real purpose is simply to make sure the person being dealt with is the person who is named and has his or her photograph on the licence? Another one is the requirement, where the sale is on the owner’s behalf, for a 14-day holding period that is waived if the vendor’s details are taken down. I cannot understand why that difference exists, and it does seem likely to increase the frequency of sales on the owner’s behalf, or notionally on the owner’s behalf, which might act against the interests of vendors—people who want to come in, get their money, and be gone, and who are perfectly honest, are willing to provide all their details, can be readily verified through their authentication, but cannot get their money because the dealer does not want to have to pay when the goods have to be held for 2 weeks. That seems, perhaps, an unnecessary compliance cost, and it certainly has not been calculated in the compliance cost statement.

Another provision is the requirement for the minimum age of a licence holder to be 18 years. If we really want to be a mercantile and entrepreneurial country, we should be encouraging younger people to be involved—under supervision, as is required for a certificate holder—in that industry. I cannot think of any better apprenticeship for learning the skills of trading that this country so desperately needs than being able to work with a second-hand dealer for a while. We send people out to overseas countries where they have to deal with the products of bazaar cultures with absolutely no training, because we do not allow people to grow up until they are 18. The committee should look at that as an absolutely ridiculous piece of—dare I use the word—ageism. It is curious, also, that only 5 years need elapse after an offence before a person is allowed to be a second-hand dealer again. Five years seems a very small length of time. I would have thought that once someone has reached the seriousness of the offences that are mentioned in the bill, the disqualification should be for 10 years, at least. Soon the Government will permanently suppress the records of most offences for most offenders after 10 years, in legislation that is currently being cranked through my select committee.

I am also interested in the definition of “secondhand dealer”. As I read it, if a school holds five garage sales plus a fair, it has become a second-hand dealer. I am not sure that that is intended. It may be that the Minister drafting the legislation has not had a lot of association with—

💬 Hon Ken Shirley: The Minister probably hasn’t read it.

No, the Minister probably has not read it, but he certainly does not have any familiarity with the normal role of ordinary New Zealanders who work on school committees. They are the people who go along to the bring-and-buys, who raise the funds for voluntary organisations, and who know that when one holds a fair, one sells second-hand articles but also, probably, coca-cola and things that people have bought—not everything is donated at a fair—and the same schools have probably held garage sales and a number of other arrangements whereby they have sold things in the previous 12 months. I suggest that if the Government wants to avoid confronting 500 or 700 or 900 school committees, it had better make sure that this bill does not catch them as second-hand dealers.

💬 Hon Richard Prebble: The Labour Party will probably need one.

The Labour Party probably will need one, as a promoter of fairs. Is there not a big fair somewhere in Auckland?

💬 Hon Ken Shirley: The south Auckland flea market.

The south Auckland flea market will need one. I do not know whether it will have the character to get past the police check, so I think this legislation will need to be looked at very closely. The compliance costs should be something that the Government takes a very serious look at it. We will be pleased to see this bill go to the select committee and we hope that the members on that committee will give it very careful scrutiny.

I wish to support this bill, which is designed to combat property crime.

After that mammoth effort from the member preceding me, I say that the National Party is pleased to support this bill. There are just a few issues that I would like to speak on tonight. The first is the point raised by a previous speaker about the level of crime and burglary that is so prevalent in New Zealand, particularly in the fair city of Auckland from whence I hail these days. In particular I want to speak about a human aspect—and the person involved, I am sure, would be very pleased to know that we are starting the debate on this bill. My taxi driver today—from the electorate of Clevedon that I represent—to the Auckland airport, told me that he and his wife had been burgled on Friday afternoon. Not only did they lose a significant amount of their property—and the Minister, Ruth Dyson, might find that funny—but they reported the burglary to the police, and the forensic people who came to take fingerprints did not arrive until Monday afternoon. So we are talking about a 3-day wait in this instance, and I ask that we get real.

We can put all the requirements in this bill for the police to register all of those pawnbrokers and second-hand dealers, and for the police to trot around second-hand shops checking on things and procedures, but the reality is that the police will not do any of that. They are already not following up on burglaries in which they know there is stolen property and they can presume there is DNA evidence or fingerprints left. They are just not following those cases up, and that is one of the problems. One of the real tragedies of this sort of legislation is that it has a great purpose—I am sure that everyone in the House will support it—but the fact is that if the police are not given the resources, told it is a priority, able to make it a priority and be held accountable for it, and the Minister is not made accountable for it, then it will not do even a scrap of good.

When I read through this bill—as I am wont to do, for my sins—I notice that in schedule 2 there are comments about the forms of authorised identification. Although this is not a Committee stage, something that the Minister, the officials, or the select committee might like to look at are the forms of authorised identification of people for the purposes of the Act. For instance, I think of my dear old departed mother who, at the age of 80, when selling up her property and moving to a smaller one, took some things in to get sold at a second-hand place to get rid of them.

She was of the generation when a lot of women did not drive cars so she had no driver’s licence, and she had no passport because she had never travelled overseas. She had no documentation with a photograph on it, or credit card, because she never had credit. She always had cash in the bank; if she could not afford it she did not buy it. She had no 18-plus card issued by the Hospitality Association of New Zealand, because she was a teetotaller, and no document issued by a New Zealand secondary or composite school to a student—issued for the purpose of identifying the student and containing a photograph of the student—because she was not a student.

My guess is that there will be quite a few ladies out there, particularly ladies in the 80-plus age group, who do not have any of the identification required under this bill to be actually able to sell to a second-hand dealer. That matter needs to be looked at; it is, seriously, a problem. Those of us in the House are all of a time when we have passports, and identification through drivers’ licences, but there will be lots of people in the community who will be made to feel like criminals because they happen to be 80-plus and do not have any of those forms of identification. As I say, I speak of my dear old departed mother who would have been in exactly that situation.

So what would have had to happen for people like that? They would not have been able to sell their goods, and someone else would have had to do that for them. Really, is that not negating the whole purpose of the bill? That issue needs to be looked at. As well, when I looked through the bill I remembered all the kerfuffle that there was a few years ago when the National Government brought in the driver’s licence with a photo. What a kerfuffle! Every civil libertarian up and down the country was saying that it was a de facto ID. Effectively, by this bill, a de facto ID is now required in this country to sell something of one’s own to someone else.

I wonder why that is—it is because we now live in a society in which people are presumed to be dishonest and crooked if they are selling their own property. This legislation will not help people whose property is burgled and then sold in pubs and clubs around the place. It will not help them. It will not help those who are the victims of crime. It might, in fact, stop some dealers operating, but the reality is that the police will not go and investigate, because they have better things to do—which are not necessarily a matter of getting around to all the burglaries. Bless their cotton socks, but there are just not enough police. They asked for 160 new police in Auckland and were given 50. We could do with another 100 just in the Counties-Manukau area but we are not being given them, so I do not know how they are ever supposed to go through all that paperwork and regulation.

I note that the honourable member, Mr Gosche, is in the Chamber, and there are a lot of second-hand shops in his electorate. There are instant-finance places, pawnshops, and everything else. I am sure he knows it when he is there visiting, and I am sure he feels that it is the sort of thing that needs to be looked at. But there are so many people now living on credit in this country—absolutely living on credit.

There is the Cash Converters chain. I do not want to be a free advertiser for them, but there are all of those sorts of things because of all those people living on credit, or buying things they do not need and then getting rid of them because we live in a disposable society. When we look at the record-keeping requirements, we see that the bill regulates second-hand dealers and pawnbrokers—the people who have actually opened up a shop, paid the rent, and often employed people. But they are not allowed to employ people under the age of 18, I note. I ask what the point of that really is, and I have to concur with the previous speaker who spoke about the need for younger people to understand the benefits of trade and that it is OK to trade and make a profit, and that we should be encouraging that.

I also note the contribution from Mr Richard Worth of the National Party, who spoke about the fact that this legislation will not touch by one iota the amount of illegal trading of stolen goods and other things that goes on over the Internet. I notice, as well, that in schedule 1 of the bill there is the very strange exclusion about refrigerators, washing machines, clothes dryers, dishwashers, and stoves. I find that fascinating. I also wonder whether those sorts of articles should be subject to a form of regulation, rather than that there necessarily be law, because, clearly, what is in the exclusion list and what is out of it is something that can change very quickly. In 1908 nobody would have thought of “boats, boat engines, and boat accessories”, “cameras and photography equipment”, or “compact discs (laser read)”. We are probably right now not thinking about what will be the “in” thing for children in particular, or teenagers, to buy in another 2 or 3 years. I wonder whether the Minister and the select committee might look at whether that matter is better dealt with in terms of regulation rather than in the main form of the legislation.

So, I say in summary that I am pleased we are able to support this bill, but I have grave concerns about exactly what effect it will have, given the fact that it will not help the little old lady aged 80-plus who cannot fulfil any of the requirements for identification if she sells the goods she has owned for the last 60 years, and who will therefore need some form of exemption, somehow. Nor will it help the police at all to be able to get around and administer this legislation, which will become a burden to them.

I am delighted to rise in support of the Secondhand Dealers and Pawnbrokers Bill, which I understand from the speeches I have heard given tonight has widespread support from across the House. It introduces a tougher licensing and certification regime for dealers, pawnbrokers, and their staff; it requires that dealers must sight ID, and record contact details and the signature of all people selling to them; and it has stiffer penalties for non-compliance with the legislation. The content of the bill, and the fact that it has the support of all parties in the House, from what I have heard, is a credit to the Minister who introduced the bill this evening, the Hon. Phil Goff.

Can I also just mention, as an aside, that I have heard from very reliable sources that that Minister recently turned 50, and as the Minister for Senior Citizens I am delighted to welcome him to my ranks. I look forward to sharing with him the celebration of the speedy passage of this legislation.

I enjoy wandering through second-hand dealer stores. It is amazing what one finds. One might even find a 50-year-old Minister of Justice if one looks closely. National will be supporting this bill to select committee. We do have some concerns about it that we hope the select committee will be able to look at more closely. We hope the committee will be able to crystallise some of the arguments that have come up, especially about people who may be running a fair, such as parent-teacher associations and groups like that. Often they are doing it more than six times a year.

I notice there is an exception under clause 6 that states that people who buy for the purposes of trade, or who sell, exchange, or otherwise deal in second-hand articles or scrap metal on fewer than six occasions in any 12-month period, are not engaged in business as second-hand dealers. What happens if they are, in fact, dealing more times than that? I have been a member of a service club that, as a project over the years, was continually going and getting scrap metal off farms and selling it. We were doing that more than 6 times a year. Under this provision, are those people going to be caught? Stephen Franks made some good points about school parent-teacher associations and groups of people like that who have come to rely on this form of fund-raising for their activities. We really want to know in the select committee how that works.

I will give a bit of background information for those who do not know the difference between a second-hand dealer and a pawnbroker. I found this interesting as I went through the bill, because I was not quite clear myself. Some notes I have here state that second-hand dealers buy goods, at which point ownership passes to them—providing the seller has legal title—and then resells them. I understand that pretty well. Pawnbrokers, on the other hand, hold items as security or a pledge for loans. The borrower retains ownership of the pledge except on default on the loan, and then the pawnbroker has the opportunity to sell those goods. So that is the difference between the two. If we were to go back and look at the legislation we would see that the Secondhand Dealers Act came into effect in 1963, and there have been no changes to it since then. As society has moved on, as communities have moved on, and as attitudes have changed, it is opportune that this bill comes forward.

As Richard Worth said, the Pawnbrokers Act goes back to 1908, and if we look back, we see that there have been massive changes since 1908. [Interruption] It is good to have a lawyer of Richard Worth’s calibre in the House who actually understands the nuances of these issues, because he makes it very easy to crystallise and articulate what it actually means. It is good to have someone like that on our team to do that for us. [Interruption]

I note the people over there want to interrupt. We are actually supporting this, but one would think we were not. We actually think this is good legislation, and I am just trying to add value to it by mentioning some of the things we think are important. It is designed to reduce crime, and that is fine. As the explanatory note says, the reforms envisaged by this bill are aimed at making it harder for criminals to dispose of stolen goods through second-hand dealers. If it is designed to close down fencing—if closing down fencing and those who are receiving is the issue that is out there—well and good. We certainly would support that.

If we were to look further at some of the other areas, we would see that the legislation does not cover auctioneers. I guess that when items have to be sold they will go to an auctioneer, and I would have thought there might be provisions that included auctioneers. If we go back to the 1963 and 1908 legislation, we note that auctioneers are part of those provisions, and this legislation does not allow for that.

I want to briefly mention business costs. Stephen Franks mentioned compliance costs. I am for reducing compliance costs. In many debates in this House I have talked about the high-cost regulatory regimes and the high compliance costs we are faced with. The explanatory note does go on to say that there will be higher costs. If those costs are going to streamline the process and provide accountability and transparency for the people who are dealing in these products—and if that is in the public good—it is something we will have to accept.

I note that there is a very clear message on page 15 of the bill. There is an analysis of the costs that will be associated with this, and it is certainly a very good move to show the costs of the current regime versus the costs of the proposed regime. I will go over this very quickly. The current cost of a dealership for a new dealer is $190.

💬 Hon David Carter: How much?

It is $190, and for a new dealer that will move up, under this bill, to $480.

💬 Hon David Carter: Another tax.

It could be. It is another $290. It does go on to say that there will be compliance costs. I will just read this. “The total industry-wide increase in compliance costs over the status quo for the first year of operation is estimated to be $1,155,000. This is made up of $975,000 in licensing fees for secondhand dealers and pawnbrokers and $180,000 for other costs associated with the new licensing process.” So there are major costs involved, and at the select committee we will be looking very closely at what that all means, because we do not want unnecessary costs. As I mentioned earlier, if the costs bring accountability and transparency, to safeguard the public’s interest, that is worthwhile.

But one major issue is not covered, and that is the buying of goods over the Internet. There is no provision in this legislation that controls the buying of goods on the Internet. There are a number of organisations and firms out there—eBay is one of the biggest—and people who have been involved in buying goods and services over the Internet need to know that they are protected. There is very little protection; by giving one’s credit card numbers over the Internet, one can be ripped off, and part of the work of the select committee, in my view, must be to look at how New Zealanders can be safeguarded in their use of the Internet, because there is no provision at all for that in this bill. We have moved into this age—and this legislation, which is being trumpeted as being so important, and certainly we agree with it, makes absolutely no provision for, or account of, this very important mechanism of buying on the Internet that we have access to.

It does not actually talk about the garage sale provision. I mentioned earlier the point that a lot of organisations have become dependent on running garage sales, having stalls, and whatever. If it is less than six times a year in a 12-month period they will be exempt. But there are organisations out there dealing in second-hand goods every day of the week. We want to make sure that people buying from there are protected, and we want to make sure that the licensing regimes fit the bill. National supports this through to the select committee. We believe there are issues that need to be addressed, and during the select committee process and at the Committee stage we will be pushing and articulating those, to get what is best for New Zealand consumers.

I am thankful for the opportunity to make a very brief contribution to the debate on this bill, which I primarily support. I was compelled by the contribution from the honourable member Richard Worth, whose speech drew me from my office to the Chamber. I am so pleased to have this brief opportunity to speak. It was compelling stuff from Mr Worth, and let it never be said that he is a second-hand rose.

Bill read a first time, and referred to the Law and Order Committee.