Motor Vehicle Sales Amendment Bill

I rise to speak in the second reading of the Motor Vehicles Sales Amendment Bill 2009. Labour is supporting this bill, but it baffles me as to why it is being prioritised in urgency. In fact, reflecting on that this morning while I was considering what I would say, I decided that we should be calling the bill the “Motor Vehicle Sales Very Urgent Amendment Bill”. This raises issues about the priorities the Government is applying to this legislation. Government members seem to think that one of the most important things the House should be giving its attention to today is a bill to reduce the compliance costs for used car salespeople, but as my colleague Chris Hipkins said in his speech on the first reading, that sums up the National Government. This bill is so urgent that the last time I spoke on it, during the first reading, was 30 June 2009, so it is a very urgent bill that we must pass today—in urgency!

Although this bill is important and very urgent, and we do support it, I ask whether it will address the primary concerns that are facing many New Zealanders right now, and I ask why National is prioritising it when the House should be using its valuable time to consider measures to protect New Zealand jobs. Just this week about 175 meatworkers at Bernard Matthews Waipukurau plant are being laid off. That was reported in Hawke’s Bay Today on 17 June. That follows Silver Fern Farms’ announcement last week that it plans to cut 174 jobs at two of its Christchurch meat plants. These job cuts reflect a worrying trend, and have prompted—

💬 Peseta Sam Lotu-Iiga: I raise a point of order, Mr Speaker. The bill we are actually talking to is the Motor Vehicle Sales Amendment Bill. I do not need to explain any more. I think we are getting away from that.

The ASSISTANT SPEAKER (Eric Roy): The member has raised a point of order of relevancy, and a second reading is the tightest debate that we have. I ask the member to refer specifically to the bill.

In addressing the Motor Vehicle Sales Amendment Bill, I was referring to a worrying editorial in the Otago Daily Times. It described New Zealand’s meat industry as heading for a train crash, and that was reported on 15 June. Our meat industry is very important, along with our rail engineering industry and many other industries. Yet although we are dealing with the Motor Vehicle Sales Amendment Bill, this Government prefers to sit on its hands and do nothing about that industry or many of the other industries where major job losses are occurring. Instead, the Government seems to believe that the House’s time is better devoted to legislation on the sale of used cars, rather than on the livelihoods and well-being of New Zealand workers and their families. Many of those people are not able, or are struggling to afford, to run a car, let alone consider selling one and buying another one, because of the rising costs they are facing and the cost of living, particularly in relation to electricity and petrol costs as a result of the emissions trading scheme—costs that are being put on to ordinary consumers. Ordinary people are also facing rises in GST, which will affect them, and many of them are losing their jobs and struggling to find new jobs.

While I was reflecting on the bill and its importance in this context, I started to think about the used cars that I myself have owned over the years, and about the number of cars that other members of the House have owned. I certainly know that our very well-respected Speaker, Dr Lockwood Smith, takes a great interest in cars. I reflected on my first car, and thought I would share with the House a little story about it. It was a motor vehicle that was bought and sold on a number of occasions, being constructed in 1948 and being a Morris 10.

💬 Grant Robertson: Very nice.

It was a very nice car, and it cost $125. It was bought, I think, in about 1978 or 1979. His name was Maurice. When I bought him he was in a paddock. Being a 1948 Morris 10 he had running boards and the old side indicators.

💬 Chris Tremain: Did it have an iPad?

No, but there was a crank that I had to turn sometimes when the engine would not work. With reference to the Motor Vehicle Sales Amendment Bill, Maurice served me well for a number of years and was eventually replaced by a 1959 Volkswagen. When I reflect on that I think that a number of members of the House will have owned a number of vehicles during their lifetime and many of them would have been used cars, and that would be very relevant to this bill.

On a more serious note I point out that the Motor Vehicle Sales Act 2003 came into force in December 2003, and it replaced the Motor Vehicle Dealers Act 1975. The Motor Vehicle Sales Act made fundamental changes to the way in which sales of motor vehicles were regulated. This bill amends the Motor Vehicle Sales Act, which was passed by the Labour Government in December 2003. The objective of the Motor Vehicle Sales Act 2003 was to promote and protect the interests of consumers in relation to their motor vehicles sales, but, sadly, by that time Maurice had been sold and passed on, and I think he ended up in a paddock with, again, plants growing through him.

The aim of this bill is to reduce compliance costs, close loopholes, and improve the effective operation of the Motor Vehicle Sales Act. That Act sought to introduce a new registration regime for motor vehicle traders and make them more accountable to consumers but also to offer some degree of flexibility for participants in the motor vehicle industry. The policy underpinning the Act had several core elements to ensure accountability, and accountability is a very, very important word. It is something that as members of the House we all take very seriously. These elements included the requirement for those trading vehicles to be registered, for more disclosure concerning used motor vehicles, and for the provision for consumer remedy through the Motor Vehicle Disputes Tribunal. This bill increases the financial limit on the jurisdiction of the Motor Vehicle Disputes Tribunal from $50,000 to $100,000, and it is vitally important that consumers have avenues for recourse when it comes to trading. The bill also intends to reduce for traders the compliance costs that are currently associated with requiring an annual statutory declaration to be made as part of the registration renewal process.

The Motor Vehicle Sales Amendment Bill was referred to the Commerce Committee on 30 Jun 2009, which happened to be the date almost a year ago on which I last spoke on the bill. Now it is very urgent and back in the House today during urgency for its second reading. The closing date for submissions was 20 August 2009, and the Commerce Committee reported back to the House on 14 December 2009. So that is about 6 months—it is 6 months and 10 days ago. We received and considered eight submissions from interested groups and individuals, and we heard two submissions.

I would like to thank my fellow select committee members for their work on this bill, as well as the Ministry of Consumer Affairs for its advice. As a member of the Commerce Committee I have helped examine the Motor Vehicle Sales Amendment Bill and recommend that it pass with a number of amendments. It would also be interesting to hear today from other members about their own experiences with used cars. It would be good to hear any interesting stories they could share with the House. I have owned only one car that had a name, and it would be interesting to know whether other members have named their cars. I commend the bill to the House.

Before I call the next member, it might be helpful if members of the House acquainted themselves with the rules for debate on a second reading. They can be found in Speakers’ rulings 105/5 to 106/6. The rules may exclude members talking about the names of their cars.

I will take just a short call on the Motor Vehicle Sales Amendment Bill. Before I refer to the bill, I would like to diverge slightly. I understand that Australia has a new Prime Minister, and I think it is a good time to acknowledge Julia Gillard and to wish her well. I thank Prime Minister Rudd for his efforts over the last 2½ years in governing our closest ally, Australia.

The Motor Vehicle Sales Amendment Bill promotes and protects consumers’ interests. It also creates an environment of confidence where consumers can choose and purchase vehicles. The previous speaker, Clare Curran, said this bill would be passed today under urgency, but it will not. It will have its second reading today but it will not be passed—that is, through all stages—under urgency. This bill is in line with the National Government’s efforts to reform regulations, to cut red tape, and to reduce compliance costs. Compliance costs are not just about form-filling for the sake of form-filling, and they are not about recording for the sake of recording. They are not about paying administration fees and costs for the sake of paying fees and costs and creating more bureaucracy. One of this Government’s six policy drivers is to boost long-term economic growth. That is about creating jobs, lifting incomes, raising living standards, and cutting regulation and red tape. This bill fits within our long-term strategic plan for this country.

I will talk about a few parts of the bill that the previous speaker did not refer to. In fact, I will address the bill, because the previous speaker did not. It amends the process for traders renewing their annual registration and reducing compliance costs, as we have already stated. It will make annual statutory declarations part of a registration renewal, which I think is critical. It is about closing the loopholes around preventing the automatic banning of traders whose registration has lapsed. The bill is also about removing requirements for private sellers at car markets—that is, not sellers in the market place, but private sellers—who want to display consumer information notices. The bill also increases the financial limit at which cases may be heard by the Motor Vehicle Disputes Tribunal from $50,000 to $100,000. I think that that is in line with not just inflation but also the pricing of motor vehicles as time goes on. Finally, it also allows the tribunal to award costs for non-attendance of either party to the dispute and it allows the decisions to be published. I think that that is a critical part of the bill. It provides incentives for justice to prevail, and it also provides for the accountability and the transparency of those decisions so that the public may see how such decisions are made and how they are disclosed.

We heard this bill in the Commerce Committee. Admittedly, the prior speaker did refer to it being over a year since the first reading, but we heard submissions and we worked through the bill in what I thought was a collaborative way—as we do in that select committee.

💬 Clare Curran: We certainly do.

We certainly do. It is a bill that is to be commended for its overall purpose. Thank you.

I am very pleased to stand in this moment of urgency to also make a contribution on the Motor Vehicle Sales Amendment Bill. I was not a member of the Commerce Committee, but I was pleased that I was able to stand here with my colleagues who worked so cooperatively to get this bill through the committee. We are supporting the second reading of this bill. The bill really builds on, and amends slightly, the Motor Vehicle Sales Act 2003, which was enacted by the previous Labour Government. This bill was worked on under Labour. It has been heard in this House. It was brought to this House over a year ago, and now in urgency we are, hopefully, going to progress it quickly.

I will refer to a couple of points about the purpose of this bill, which is obviously to promote the interests of consumers in relation to motor vehicle sales. We hear a lot about the trustworthiness or not of used-car salespeople. They are often likened to politicians—all that we can do, I think, is to raise their profile in the hope that perhaps our profile might be raised as well! The bill makes a number of changes. It helps to reduce compliance costs. It helps the people in the industry with those compliance costs, but, at the same time, it ensures that consumers are guaranteed protection in the buying and selling of used cars.

As I said before, the bill amends, not dramatically but slightly, the principal Act of 2003, which was brought in under the previous Government. The policy of that Act had several core elements. There was a requirement for those who trade in motor vehicles to be registered; it required the disclosure of information concerning motor vehicles; and it provided for consumer redress through the Motor Vehicle Disputes Tribunal. In many ways it was very good legislation, designed to try to tidy up matters, and to give clarity and certainty to people who are involved in buying and selling motor vehicles, particularly to consumers. However, the fact that this bill has come back to the House now, under urgency, is somewhat perplexing. I would not have thought that we needed to work until midnight to try to progress this bill, but nevertheless, now that it is here and all sides of the House agree on it, I guess the point is to get it through.

A requirement of the 2003 Act was that it be reviewed after 2 years. The Ministry of Consumer Affairs completed that review, and it was tabled in the House in 2006. The review considered how the registration process, the banning provisions, the information disclosure process, and the Motor Vehicle Disputes Tribunal were operating. This amendment bill flows out of that review of the Act’s operation. The review made a number of recommendations. I will not go through them all, but I think that the first recommendation is important. Clause 9 sets out an amendment to section 39(2) of the Act, to remove the requirement for motor vehicle traders to make an annual statutory declaration of their trading details where those have not changed. That is replaced by a requirement to confirm with each annual renewal that details have not changed. In many ways it is a very simple change, but it lessens the requirements on motor vehicle traders to jump through hoops when that is largely unnecessary. The Labour Party, just like any other party, certainly supports any moves that will enable business in New Zealand to progress more speedily and with the minimum amount of obstacles in its way, so it supports those moves.

One of the technical recommendations in the review was to amend the cc rating of motorcycles. It recommended that paragraph (b)(iii) of the definition of “motor vehicle” in section 6 of the Act be amended to exclude motorcycles up to 50cc, not 60cc as it is currently worded, in order to reflect the ratings used in other relevant legislation. That brings the Act more or less into line with other legislation. It is more or less a technical change, and again it perplexes me that we are here under urgency to ensure that those sorts of changes are made. Why is moving from 60cc to 50cc in a definition considered to be so urgent that we have to put this bill through under urgency?

The review recommended extending the inspection powers to the Commerce Commission. It recommended that consideration be given to amending the inspection powers set out in sections 124 to 129 of the principal Act to also include the Commerce Commission, to allow appropriate enforcement of the information provisions of the Act, and it also explored including such inspection powers within the Fair Trading Act 1986, as well. I think this provision in a sense extends the comfort zone and the security that consumers have in the buying and selling of used cars and motor vehicles.

In that line, I say my first car, by the way, was called Molly. It was a 1958 Morris Minor van. I currently own a 1957 MGA, which actually does not have a name.

💬 Clare Curran: So you’ve gone backwards!

I have gone backwards, rather than moving forwards. I have been unsuccessfully trying to restore my MGA for the last 12 or 15 years. It is a hole that I pour money into, according to my wife. But I am diverging from this debate.

I will get back to recommendation No. 8 of the review, which was about the ability to award costs to any party for non-attendance at a Motor Vehicle Disputes Tribunal hearing. Clause 23 of the bill amends clause 14 of schedule 1 of the Act to allow costs to be awarded against any party to a claim for non-attendance at a hearing for no good cause.

Once again, I say the bill tidies up a lot of the provisions of the legislation enacted in 2003. The review of that Act was done in 2006, so it has been sitting there now for 4 years, and we have wanted to address its recommendations. It is good that that is being done now, but I repeat the point that I have made before about this bill being debated in urgency. My belief is that urgency should be used for critical legislation that needs to go through in a particular time and that will have an important bearing on New Zealand. I do not really think that this bill meets those particular criteria.

Kia ora koutou. It is interesting that New Zealanders seem to have an extraordinarily close and intense relationship with their motor cars. We have already heard evidence of that. I am tempted myself to start telling stories of cars owned, and of those I would have liked to own or wish I had not owned, at different times.

💬 Clare Curran: Did you have one with a name?

Oh, yes! It is true that we do have a particularly emotional attachment to those things, albeit they are only steel, rubber, and glass. Nevertheless, we still engage with them at a level different from the level at which we engage with other commodities and home appliances, which is essentially what they can be reduced to. For that reason alone, it is important that we have adequate consumer protection in relation to the buying and selling of motor cars, and this Motor Vehicle Sales Amendment Bill takes us some steps closer towards that. Cars are named typically as being the second most expensive item that people will purchase after a home. In the age of $10,000 television sets, perhaps that is not quite as true as it once was, nevertheless they are a significant investment. For that reason, we need to endeavour to make sure that people are reasonably well protected when they go out to purchase those quite expensive items.

The car business has historically attracted its share of rogues, and perhaps even more than its share of rogues. It just seems to be one of those industries—again, perhaps, because of the emotional connection that people feel with cars. People get involved in the buying and selling of cars for all sorts of reasons, not all of them beneficial. I think the amendment that proposes—that insists, in fact—that new management coming into a company must be named, in order that people have a clear sense of whom they are actually dealing with, is good. It is very difficult to mount an argument that cars are actually an asset; in fact, they are a serious liability for most people. Business people are increasingly recognising that, through choosing to lease rather than purchase their vehicles. Nevertheless, for most people a car is still a major asset.

I think it is valuable and important that an amendment in this bill proposes some attention to the Internet purchases of vehicles. If it is possible to enter into a contract to purchase a car online, then there should be sufficient provision for accurate and complete identification, and so on. I did a quick check a couple of weeks ago, when it seemed that this bill might be debated in the House, and I discovered that on TradeMe something like 32,000 vehicles were for sale, of which 25,000 were identified as being in private sales. About 7,000 vehicles, then, on a given day are available for sale from dealers. Clearly, the Internet is a significant medium these days for the purchase of vehicles, so it is important that this legislation on motor vehicle purchasing keeps up with the reality that more and more people are going to a screen and a mouse in order to purchase vehicles, which is a mixed blessing in itself.

I have said that many of us have an emotional connection with cars, and I am certainly one of those. My first car was also of 1948 vintage. I recently owned a car for 9 years, but that ownership ended when a runaway truck destroyed it. I have gone back and bought a 1985 vehicle, which was made in New Zealand, I am pleased to say. I suspect that it will give many years of service. I look forward to the day when the emotional connection with cars will be reduced because we will have options in the form of a fast, efficient, reliable, modern public transport system. I think our attachment to cars is very much because historically they have given us a mobility that we have not been able to achieve by other means, given the absence of investment over 50 or more years in modern, efficient public transport. At that point, I will end my remarks. Kia ora koutou.

Debate interrupted.

Sitting suspended from 1 p.m. to 2 p.m.