Bill reported without amendment., Fair Trading Amendment Bill (No 3)

I move, That the Fair Trading Amendment Bill (No 3) be now read a third time. I thank the House for the support that it has given to this legislation. The main purpose of this bill is to strengthen the level of consumer protection provided by the Fair Trading Act, by reducing the incentives for traders to offend and reoffend. It achieves that purpose by increasing the general penalties and creating a new penalty system for pyramid selling schemes that is designed to render those schemes profitless. The bill also extends the Commerce Commission’s search power so that it can enforce the new pyramid selling penalty, and it removes procedural barriers to effective enforcement. Finally, the bill updates the Act to reflect modern business practices, but it will not materially alter business compliance costs.

I thank the members of the Commerce Committee for all their work on this legislation. I particularly thank the officials who have done so much work to address the great need to protect innocent New Zealanders from unscrupulous traders in this context.

A number of issues were raised during the Committee stage. There was concern, for example, that the definition of pyramid schemes should not include franchise schemes. But members had read the new provisions in isolation, because there are wider definitions of pyramid schemes in the main Act. There was a question about the fines. We are bringing the fines up to date, as they have not been changed since 1986. I just want to tell the House that the equivalent Australian penalties are $200,000 for individuals, and $1.1 million for companies. Of course, the Ministry of Justice was consulted on the levels of penalties, and is very happy with this progression. Given the nature of the offending that we are trying to address, I do not think that the penalties are at all unreasonable. They are a sign to the courts that we expect the new range of penalties to be taken very seriously and applied in all possible cases. Some concern was expressed about the notice power for the production of information. The Commerce Commission already has a powerful search warrant power, and this is actually a less intrusive power because it can be used where voluntary compliance is likely, rather than going to the full extent of going to court to obtain a search warrant. So we are actually seeking a more moderate power in this legislation than the power that exists already.

Good contributions were made on this legislation. As I said, I thank the select committee for its work. I particularly thank the officials and the House for its speedy passing of this legislation through its last stages tonight. I thank the Opposition for its cooperation.

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 $100,000 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 $200,000. 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?

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.

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!

—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!

—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.

I rise to support this third reading of the Fair Trading Amendment Bill (No 3), which aims to strengthen the Fair Trading Act by making amendments to enforcement and procedural provisions, and, in particular, creating a new, additional penalty regime for pyramid-selling schemes based on the commercial gain from the scheme. United Future sees this legislation as technical in nature, and believes that it has been largely non-controversial.

The bill amends the Fair Trading Act to provide that the criminal limitation period runs for 3 years from the date that a breach is discovered, or ought reasonably to have been discovered. This has been done because in some markets, such as building, investment products, insurance, and long-term guarantees, consumers or the Commerce Commission are unlikely to discover a breach until well after 3 years from the date that the breach occurs. Specifically, the bill has doubled the existing maximum fines under the Act, which are currently $30,000 for an individual and $100,000 for a company, to $60,000 for an individual and $200,000 for a company.

The bill amends the definition of pyramid-selling schemes in the Act to take into account newer types of schemes. These may involve participants buying or selling an investment opportunity, and using an agent, who is provided by the scheme operators, to recruit other participants on their behalf, instead of trying to recruit new participants themselves. It also extends the Commerce Commission’s search powers so that the commission may obtain a warrant to search for evidence to demonstrate the nature and extent of a breach of the Act, revenue obtained through offending, or other matters material to the seriousness of the breach. This will assist the commission in gathering evidence for courts to consider in sentencing. In particular, it will help implement the commercial gain penalty for pyramid-selling schemes.

Also introduced is a new power that will allow the Commerce Commission to issue notices requiring people to supply information or documents. This power would give the commission more flexibility, and is most likely to be used when the commission seeks information from witnesses who are not hostile. United Future is happy to support this legislation.

I would just like to take a short call on this bill on behalf of New Zealand First to support the expanded provisions dealing with pyramid selling. The provisions under the original Act were reasonable for the pyramid-selling schemes that existed at the time, but as new and innovative ideas have come into being, those provisions have become inadequate. Therefore, this bill tightens them up and captures a lot more of them. We are confident that the bill does not affect existing legitimate franchise operators. With that, we hope this bill is not used to try to close down any of the legitimate franchise operators, and we are confident that it will not.

New Zealand First does have some reservations about the wording in clause 14 of paragraphs (a) and (b) of section 47(2) of the principal Act, particularly the use of the words “may constitute”. I would like to give an example of where those words are used. Subsection (2)(a)(ii) states: “the nature or extent of any conduct that constitutes, or may constitute, a contravention of this Act;’’. We feel that those words are too loose and they should be tightened up along the lines of the Crimes Act—particularly the sections of that Act beginning with section 312A, which are very specific about the reasons for interception warrants and the way that they can be applied for. This particular area of the bill should be tightened up so that it does not capture people who are undertaking legitimate activities that may well be assumed to be outside the law, or to constitute an act outside the law. In that case, we feel that the way the bill has been worded is too loose. It could capture some of those people and inconvenience them to some considerable extent. When the Commerce Commission does inconvenience people, often the result for those people ends up being a major financial loss, without any compensation for their loss. We feel that particular part of the bill should have been tightened up, and we are disappointed that we were unable to do that with our Supplementary Order Paper.

But, in essence, we support the bill because we feel it is far better to have the law tightened in respect of pyramid selling—particularly the new forms of pyramid selling. Therefore, we support the bill.

It is with great pleasure that I rise to speak in support of the third reading of the Fair Trading Amendment Bill (No 3). I recommend it to the House.

The Fair Trading Amendment Bill (No 3) was introduced to the House more than a year ago as a bill to deal with pyramid selling. The New Zealand First member who has just resumed his seat—I do not think that the brief interruption since then counts as a speech—was obviously taken in by the spin that accompanied the introduction of this bill. There is nothing in this bill that deals with pyramid selling in any way that the existing law does not.

This bill, as a bill dealing with pyramid selling, is simply misleading and deceptive conduct. Indeed, if the politicians in charge of introducing this bill were judged by the same standards that were applied to the commercial people it purports to regulate, they should be in prison, although I do not think that imprisonment is used in these matters. The misleading part of the bill is that the only change to pyramid selling is to insert the words “whether personally or through an agent” into paragraph (ii) of section 24(2)(a) of the principal Act, which is amended by clause 5. That, I suggest to members and to New Zealanders, will catch almost no pyramid selling, if any is still occurring. What it may do is end up catching the people who run Lotto, or perhaps the people running bingo or housie, or the people who are running the pokies. The definition states: “that, to many participants in the scheme, constitutes primarily an opportunity to buy or sell an investment opportunity,”.

Even the TAB describes what it does as “investment”. The TAB has a guaranteed loss ratio over long-term “investment”, which would probably be worse than a number of these pyramid schemes that we are supposed to get to. But of course Mr Mallard, who is trying to intervene, is part of a Government and sits alongside Ministers who told us what this bill was going to do. Does Mr Mallard know what they told us? They told us that they were going to get to the bottom of scams. Let me tell Mr Mallard what his colleagues said. Mr John Tamihere, of course, was chosen as the appropriate representative to deal with this. He came in here with some ringing words about misleading and deceptive conduct. He gave us a good definition of it, and told us that any person of standing in our community involved in a scam, unwittingly or otherwise, should have the integrity, credibility, and ethics to stand up, come back to the country, and publicise the scam so that others would not be unwittingly misled into that type of investment. Of course, it was a little different when Mr Tamihere had to try to hide behind a personal explanation so that members of this House could not go any further. There is no comment from Mr Mallard. Does he give up on interjections when Mr Tamihere’s name comes up? I ask him whether interjections are quite unacceptable now.

But there is more. It got a lot better. Here is another Minister of the Labour Cabinet on what this bill was going to do. He said: “I want to see a very rigorous investigation of those issues.”, that is, the pyramid trading issues. “I am absolutely confident that the Labour members on the committee will dig deep on that investigation. They will drill all over the place, and many things will be flushed out for the benefit of the whole community. I look forward to the rigorous debate and investigation by the select committee. I expect it will be better than a Senate committee investigation in the US. It will be deep investigation, and the public will be better off for it and for this bill.”

Now let us look at what the committee did. Let us look at what this House got from this tawdry little piece of deception introduced by this Government. What we got was a hearing of evidence that took 30 minutes, and consideration, which presumably included getting rid of Mr Peck’s typos, of 55 minutes. So there is the Fair Trading Amendment Bill (No 3)—the pinnacle of the Minister’s career; the pinnacle of the honourable Judith Tizard’s time in this House to date, no doubt. She satisfied Mr Rick Barker and Mr John Tamihere, and no doubt that is exactly what Mr Mallard was expecting.

What do we have instead? It is not simply that this bill does not do anything. It is not that it is just empty deception. It actually, on the way, returns to “soak the rich”. It takes a swing at business. Give a good thump on the way, because they will not complain. Sadly, it managed to drag in National Party members. I believe they have been improving, I believe that they are getting better, but sadly they, too, went along with “have a thump at business” because no doubt they thought it would not look good if they voted against increasing the sentences.

What we got, of course, is the new power for the Commerce Commission to decide that it does not matter what the courts do about justice, “we will do justice ourselves”. All it needs now for the Commerce Commission to stuff someone’s business completely, to send out a signal that “you don’t monkey with us”, irrespective of the bona fides, that “you do not challenge the commissars from the Commerce Commission” is to apply for an injunction. We are told by Labour’s little gift here that the court must not, as a condition of granting an interim injunction, require the commission to give an undertaking as to damages. A protection, carefully developed by the courts over generations, is swept away in five short lines. Until now, if we get a court order, without a proper opportunity to investigate, without full argument, without giving an opportunity to mount the defence, if we get an interim injunction, which means immediately, then we have to undertake that if we are wrong we will meet the costs of the person who has been wronged.

So what did the Government do? It abolished it. That is not enough, when we want to thump business. So we got new subsection (6) in section 41, inserted by clause 10, which states that the court, faced with this injunction application, knowing that it is not going to have the full story, knowing that there is not time, must not take into account that the commission is not required to give an undertaking as to damages. So we see the true measure of the malice in this bill. It is that the court, when deciding whether to grant the injunction, cannot even consider that it may be an engine of gross injustice—completely uncompensated injustice—with no remedy for the wronged person.

There was another provision in the bill that excited a bit of attention. In fact, it had the Greens, United Future, ACT, and National voting for it. It was an amendment by Mr Brent Catchpole that tried to bring the power of search within normal parameters. It tried to say that at least when a warrant is issued there must be a suspicion that an offence is being committed. Instead, this Government—the “Minister for Auckland Transport”—has brought in a search provision saying that warrants should be issued if an offence may be being committed. In other words, officers can say that the evidence, even if they find it, does not need to amount to an offence. All it needs to amount to is an argument that it could constitute an offence. That is way beyond the powers of search that have been the product of careful protection of the liberties of the subject against the overweening power of the State for generations. This is not just an embarrassing bill; this is not just a tawdry piece of political malice; this is actually viciousness against the business sector.

It is little wonder that the ACT party would oppose a bill called the Fair Trading Amendment Bill (No 3). It is no wonder, when we consider the actions of that party. When this bill was first introduced into the House we know that ACT members went on a big retreat. They went on an out-of-Parliament retreat, all the way around to Pipitea Street, to talk about how this bill could be defeated. But, tonight, it will be read for a third time, and ACT party members are shaking in their boots about it around in their electorate office in Pipitea Street because they are so concerned.

Mr Franks quoted from Hansard and said that Labour members in the first reading had said that we would be coming after pyramid schemes and dodgy schemes, and he accused us of not doing that. But Mr Franks has not noticed that we have come after those schemes, and that is why that party sits at 2 percent in the polls.

The Greens support this bill. I refer members to the excellent comments made earlier in debates on the bill by my colleague Sue Kedgley in earlier debates on the bill.

I support this bill.

Obviously, members in the Labour Party are paid by the word. I do not think that even my cat could give a speech more quickly than that, and I still have not managed to teach it to speak English! National will support this legislation, because, on balance, there are more good parts in it than there are bad parts. But I have to say that it is not great legislation. Let me start by waving some red flags for the House, so that members can see where there are some risks.

💬 Richard Worth: Blue flags.

Blue flags! Here we are at a quarter to twelve at night, in urgency, whipping through legislation that was introduced 2 years ago. It was introduced 2 years ago, yet here we are in urgency whipping through mediocre legislation that has some good bits and some bad bits in it. I will discuss the bad bits at length, but I will start with the good bits.

We have spent hours discussing the bill in the House and giving it some rigorous debate. That is not what the Commerce Committee did. It did not take hours to hear evidence; it took 30 minutes. An episode of Coronation Street runs for 30 minutes, and that is a programme that has been going for about 30 years. The select committee listened to evidence for 30 minutes. There were six submissions, and the committee bothered to listen to only one of them. I hope the reason was that the other five submitters did not want a hearing. That is all I want to know, because the committee heard only one submission and it took 30 minutes to do it.

💬 John Carter: Who from?

I do not know. It was Business New Zealand, I think. It took the committee 55 minutes to deliberate on the bill. So this legislation, which was introduced 2 years ago, is now being discussed under urgency after having had the wonderful time of 1 hour and 25 minutes in the select committee process. The Labour member who spoke before me with such passion uttered four words. He is on the select committee, I think.

💬 John Carter: He’s the chairman.

He is the chairman of the select committee! It is no wonder that the legislation that goes through this House is hopeless.

💬 Hon Member: This bill is hopeless.

Absolutely hopeless! He had four words to say about legislation that has been around Parliament for 2 years. Well, members should not worry; the cavalry is here in the form of the National Party, and it will give it some rigorous debate. We will tell members why we are supporting it, because there are some good bits—

💬 John Carter: Are we sure?

We are, but we should not get too excited about it, because it is mediocre—

💬 Richard Worth: This is a good speech. It should be heard in silence.

Yes, I would prefer fewer interjections, but generally they come from the opposite side of the House and not from my own team. We are supporting the legislation because of what it is attempting to do in the area of pyramid selling. Pyramid schemes, as anyone will know, are very unfair and very unethical. They are schemes that are designed with the intention not of doing a real transaction but of defrauding the people who invest in them. One of the reasons that they are so dangerous and that so many New Zealanders have been caught by them is illustrated by doing the numbers very quickly in our heads—for example: a person sells the scheme to five people, who sell it to another five people, who then sell it to five more people, and so on. The Labour Party might need a calculator to do that, but on this side of the House we can do the numbers in our head. In a country of 4 million people, we do not have to go down many layers to realise that all of New Zealand could be sucked into a pyramid-selling scheme. Only last night on television we saw evidence of a disastrous pyramid scheme that young New Zealanders were being sent via the Internet. It used very graphic pieces of information and very graphic photographs—

💬 John Carter: That’s very serious.

It is very serious, and the very graphic information was quite alarming and quite concerning. We are supporting this legislation because we do not want to see that sort of muck being sent on the Internet. We do not want to see New Zealanders being sucked into those schemes. The Internet is a very powerful medium by which to send pyramid schemes.

I also want to point out to members that the good news of this legislation is that it aligns our position with that of Australia. It aligns us with the position outlined by the Australian Competition and Consumer Commission in Australia. If this legislation had been in place some years earlier—for instance, if it had been put in place much faster than the 2 years it took from when it was introduced into the House—then a number of schemes that have operated since its introduction into this House would have been closed down. That is one of the reasons we are supporting the bill.

The second point I want to move on to is the issue of the criminal limitation period. It is late into the night and we do not need notes—

💬 Hon Trevor Mallard: This is not one of the member’s better speeches.

It could be. It is not over yet. Like a whole lot of things, it is not over. I tell that member that it is a helluva lot better than the contribution from the member on his side of the House, which comprised four words—that stunning performance from the chairman of the Commerce Committee that heard 30 minutes of submissions and took 55 minutes to write up its deliberations. I ask the Minister to answer this question for me: why does it take 55 minutes to write up the committee’s deliberations on something it took only 30 minutes to hear?

💬 Hon Trevor Mallard: Because you’ve got slow Tories on the Commerce Committee.

No, no. There are no slow Tories on that committee. There is no such thing as a slow Tory.

Let us move back to the 3-year criminal limitation period. The legislation will change the period from 3 years of the discovery of the breach, or when a party should have discovered the breach, as opposed to 3 years since the product was developed—and there is very good reason for that. If we move to something like the investment products that are covered by this legislation, members will know about long-term guaranteed products.

For instance, one of the major financial institutions in New Zealand is currently marketing a product that has a capital guarantee out for 12 years, with a minimum return of 40 percent on an investor’s money, if it is invested for those 12 years. It is impossible under the Fair Trading Act to understand whether that guarantee will be lived up to within 3 years. So it is very logical that this legislation will cover that. It is doing it, and that is one of the reasons that National is supporting the bill. The situation is similar in respect of insurance and long-term warranties and guaranteed offers. Those are the reasons we are supporting the bill. They are very important, sensible reasons for supporting it.

I do want to talk about the bad bits of the bill. Had the chairman of the Commerce Committee allowed the committee to take more time on the bill rather than despatch it in such a despicable way, within 55 minutes—and with four words—he would have addressed this issue. It is the issue of exempting the Commerce Commission from an undertaking for damages. That means that the commission can go out there like a big bully and take an injunction against a company, and if it is wrong and puts that company through living hell, it is not liable for damages. I say that is wrong. That is big bully stuff. It is just plain wrong. The second thing it can do is to require the production of information and documents that do not even exist. It can ask to see a computer report for something that does not even exist. That is heavy-handedness and it is—

💬 Rt Hon Winston Peters: Is that true?

I say to Mr Peters that that is absolutely true. That is sloppy. It is one of the reasons we had to wrestle with in terms of whether we would support this legislation—that, and the way it was so poorly treated by the chair of the select committee with those 30 minutes of deliberations. It just was not good enough. But in the end we have decided to support the legislation because of what it is doing in the areas of pyramid selling and the criminal limitation period. I am sure the bill will pass into law, and in due course, when National is back in Government in 2005, we will address those issues that I have outlined.

This is yet another example of a great bill before the House this evening. I support it fully.

The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member, Pansy Wong—

💬 Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (H V Ross Robertson): I have already called the member.

💬 Rt Hon Winston Peters: Like who cares what she thinks?

The ASSISTANT SPEAKER (H V Ross Robertson): That is not a point of order. I have already called the member.

💬 Rt Hon Winston Peters: I have not had a speech here yet. She has.

The ASSISTANT SPEAKER (H V Ross Robertson): No, the member will be seated. I am on my feet. Under Speaker’s ruling 23/3, I have already called the member, and I call her again now.

💬 Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The fact that you have called her improperly is no explanation. We have a thing called precedent here.

The ASSISTANT SPEAKER (H V Ross Robertson): Can I just say that the member has not spoken—

💬 Rt Hon Winston Peters: I am sorry, Mr Speaker, but we have a thing called precedent here, based on parliamentary rules. I am calling my first call in this debate. I ask you to ask the Clerk what the rule is.

💬 Hon Trevor Mallard: I think the member might not have picked that in the last few minutes we have moved from the Committee of the whole House and are now on the third reading of—

💬 Rt Hon Winston Peters: It’s on the bill.

💬 Hon Trevor Mallard: No, it is not on the bill. It is a question of debate on a particular question. I think those rules have not changed, even in the last quarter of an hour or so.

The ASSISTANT SPEAKER (H V Ross Robertson): I thank the honourable member for that. As I said previously, the honourable member Pansy Wong has not spoken in this debate. I have called her under Speaker’s ruling 23/3. I cannot take the call away from her. I call the honourable member.

It is a pleasure to take a call in the third reading of the Fair Trading Amendment Bill (No 3). I am grateful that today this bill has received about 4 hours of debate. We spent about 2½ hours on the Committee stage, and about 1¼ hours on the second reading, and, with the diligent contributions, particularly from the National Party, at least we all now understand why we support this bill. We did not have a contribution from the Minister. We have had not one single syllable from all those back-bench Labour Party members, and if nobody from the National Party had contributed, they probably would not know what bill we were debating, or why the Labour Government supports the bill.

However, there still remains a question to be answered. As my colleague John Key has pointed out, this bill was introduced into the House in December 2001 and referred to the Commerce Committee on 2 May 2002. We supported the bill at the first reading and we supported its referral to the select committee, mainly because of the amendment to toughen up the penalty against pyramid selling—an issue we believe is an issue worth the House’s consideration. But I guess members like myself did not expect that the select committee would only bother to spend half an hour listening to submissions and take 55 minutes to deliberate. It might be something to do with the chairman, Mr Mark Peck. He might believe that the time taken in a select committee has to be in proportion to his size. I notice that the Assistant Speaker in the chair is a member of the select committee. He might appreciate why the National Party believes that in such a rushed process some provisions will require amendments. My colleagues have been working very hard. We support the legislation, mainly because it addresses pyramid-selling schemes. However, we also believe that it needs some amendments in order to make it an even better bill—a bill that will not lead to additional compliance costs with no corresponding benefits.

Let me just touch on the four areas that National has promised to fix when we become the Government in 2005. The first one is that whenever legislation is introduced, there should be a transitional period. It is not fair to the business community or to organisations that have to implement the legislation when there is no transitional period. I commented briefly on this at the select committee, because even some technical changes or amendments would lead to the business community not being sure how the implementation would work and how the courts might interpret those changes. It is important that a transitional period exists so that educational sessions can be conducted. So the first amendment we would make would be to ensure that no bills are enacted without having a very fair transitional period.

The second area that we believe needs to be looked at again is the power given to the Commerce Commission. For example, the Commerce Commission has the power to demand any documentation to be produced by any entity if the commission is investigating that entity. It is fair that the Commerce Commission should receive cooperation, but if it happened that it was wanting documentation that is not produced as part of that entity’s financial statement, etc., the Commerce Commission’s power should be restricted. A lot of people might think that with computers it is easy to produce documentation. But if the documentation is not part of the company’s system, it will lead to substantial compliance costs. That leads me to another point. This bill contains no compliance cost statement.

Sitting suspended from midnight to 9 a.m. (Thursday)