Consumer Law Reform Bill

I move, That the Consumer Law Reform Bill be now read a second time. I would like to thank the Commerce Committee for its consideration of this complex and significant reform. The committee has considered changes to 10 Acts and reflected on more than 90 submissions covering a wide range of views. Its changes reflect a fair and robust process, and I am very pleased that the committee was unanimous in its support of this significant update of consumer law in New Zealand. Ideally, law reform such as this should receive cross-party support.

The Government is committed to building a more productive and competitive economy. Strong consumer laws are the cornerstone of a buoyant market. When consumers transact with confidence and honest business practices are supported, we all reap the rewards. Our laws are basically sound, but they are over 25 years old and need updating to deal with modern transactions such as internet trading, as well as other technological advances. The main aims of this bill are to offer better protection to both consumers and businesses; to bring consumer laws in line with the business practices of our times; to make complying with the laws much more straightforward; and, not least, to make enforcing the laws more efficient and more effective. On this Government’s agenda is progressing a single economic market with Australia; changes in the bill make our law consistent with the Australian consumer law, where it is the right thing to do so.

Three main consumer laws are being updated: the Consumer Guarantees Act, the Fair Trading Act, and the Weights and Measures Act. The Door to Door Sales Act, the Layby Sales Act, and the Unsolicited Goods and Services Act will be repealed and incorporated into the Fair Trading Act. A new Auctioneers Act, with a modern approach to registration, is being put in place. I believe that this bill will be welcomed by consumers, businesses, and regulators alike. My thanks go to the Hon Heather Roy, the Hon John Boscawen, the Hon Simon Power, and the Hon Chris Tremain, the former Ministers of Consumer Affairs, who have previously guided this work. I believe I have also added to the final flavour of this legislation.

I would like to comment on some of the most significant changes in the Commerce Committee’s report. The Consumer Law Reform Bill provides for a principle-based approach. Binding the legislation is a purpose clause that will precede the Fair Trading Act, the Consumer Guarantees Act, and the Weights and Measures Act. This clause has been amended to better reflect the Act’s driving principles: consumer protection and a trading environment that encourages healthy competition amongst traders. The revised purpose is crystal clear. It is to ensure that the interests of consumers are protected, businesses compete effectively, and consumers and businesses participate confidently in the market place.

It is through delivering positive outcomes to both consumers and businesses that we will see markets flourish and the economy thrive. The bill will significantly amend the Consumer Guarantees Act so that it covers all transactions between traders and consumers. This includes goods sold at auction or by competitive tender—online or off-line—that are currently excluded from coverage by the Act. All goods sold by traders to consumers will now be covered by the basic guarantees that the goods have clear title, comply with description, and are of acceptable quality. This makes modern transactions between consumers and traders mode-of-sale neutral.

I acknowledge that some traders, particularly traders of motor vehicles, have raised concerns about the guarantee of acceptable quality. The bill will now amend the acceptable quality guarantee to make it clear that the context of a sale must be considered when the definition of “acceptable quality” is judged. If, for example, a consumer buys a used car from a trader for, say, $1,000 with 300,000 kilometres on the clock, it probably will not be reasonable to expect the trader to repair it if it breaks down several weeks later. A complementary change has been made to the Fair Trading Act, so that traders will be required to identify themselves as such when selling goods on internet sales sites. This is to prevent traders avoiding obligations by posing as consumers. The Commerce Committee has recommended that a new delivery guarantee be added to the Consumer Guarantees Act as a more precise way of increasing protection to consumers. Traders will now be held responsible for goods up to the point of delivery. When goods are damaged and do not turn up, consumers can expect traders to address issues. Traders will have to contact carriers for compensation.

The Fair Trading Act is also an important part of our consumer law framework. A major new provision in the bill is to ban unsubstantiated representations. These are representations made without the manufacturer or trader having any reasonable basis for making them. This type of claim disadvantages responsible businesses that do their research and evidence their representations. People may pay a premium for goods that “prevent asthma” or are “environmentally friendly”, and it is only fair that we can trust that these claims are made on reasonable grounds. At the select committee, many submitters raised concerns about the application of the new provision to creative advertising. Regulation at the cost of creativity is not the intention. As a result, a new subsection has been added. The rules will not apply to claims that a reasonable person would not expect to see backed up by research and evidence.

The Fair Trading Act will now include the rules for consumer transactions—lay-by sales, uninvited direct sales, extended warranties, and auctions conduct. We all either have experienced or have heard of cases of the extra buying pressure exerted by people who come to the doorstep, or of the experience of being sold an extended warranty when it is not quite clear why a person may need it. These areas of the law are vital to get right. Several enhancements have been proposed by the select committee. The main areas of change are in uninvited direct selling and extended warranties. With regard to uninvited direct selling, a concern was that the new provisions were too broad. The select committee has made changes to ensure trade events like Fieldays are not captured by the provisions, while still ensuring protection from unexpected selling in the home. The disclosure requirements in extended warranties have been changed. Traders must now list what extra provisions the extended warranty gives over and above the Consumer Guarantees Act so that any extra benefits of an extended warranty are completely transparent.

The Commerce Committee was asked to specifically examine whether to add to the bill unfair contract terms and unconscionable conduct provisions along the lines of such provisions in the Australian consumer law. Weighing up the views from both businesses and consumer representatives, the committee has recommended adding provisions dealing with unfair terms in standard form contracts into the Fair Trading Act. In respect of unconscionable conduct, the committee has advised it is desirable in principle to address this issue, but believes it is prudent to wait until Australia has developed a body of authoritative case law on the matter before considering following suit. Only the Commerce Commission will be allowed to take action to have a term in a contract declared unfair. The bill also includes a list of examples, as are also listed in the Australian consumer law, which will give the courts additional guidance.

Finally, the committee has taken steps to strengthen enforcement powers and penalties. These include giving the Commerce Commission compulsory interview powers when investigating the most serious breaches of the fair trading law. Penalties for more significant breaches of the Fair Trading Act, like giving false or misleading representation, have been raised to $200,000 for individuals and $600,000 for corporate bodies, and these bring us closer to comparable Australian consumer laws. Penalties in the Weights and Measures Act have been brought into line with those in the Fair Trading Act. Fines for offences in consumer transactions, like lay-by sales, remove the need to take matters to court. Product safety officials have been given more authority to enforce consumer information and product safety standards, including the right to inspect business premises. Strong and relevant consumer laws are essential for both consumers and businesses. I am confident this reform will help promote confident, well-informed consumers. In turn, we can drive competition, innovation, and sustained growth. I commend this bill to the House.

As the Minister of Consumer Affairs has said, Labour supports this bill, the Consumer Law Reform Bill, and has supported it since its introduction on 20 April 2011. I do want to comment just briefly on the length of time it has taken to get this law to this point in the House, just concluding its second reading on the last sitting day of this year, 2012. It was referred to the Commerce Committee on 9 February this year, which does show that it sat on the Order Paper prior to the general election and was not dealt with until then. The closing date for submissions was 29 March 2012, and, as the Minister has said, they have received 90 submissions, hearing 60 of them.

Unfortunately, I am not on the Commerce Committee so I am not able to traverse all of the detail of the legislation in terms of the response of the select committee, but I do have one of the departmental reports, which I do want to refer to in relation to the last matter that the Minister concluded on, which is the question of unconscionability. I have been on the record as the spokesperson in support of unconscionability going into our law. I understand why the Government has adopted this particular point of view, but I think that it is probably a little bit unfair just simply to mention that some submitters commented on it. I want to put on the record who supported the introduction of unconscionability provisions and who was opposed.

Let us start with the list of those who were opposed to the unconscionability provisions, and I am reading from the departmental report: “Various submitters opposed including the concept of unconscionability in the FTA,”—not the free-trade agreement but the Fair Trading Act—“including Fonterra, Business New Zealand, Telecom, New Zealand Retailers Association, and the New Zealand Chamber of Commerce.” So those were the ones who were opposed to writing unconscionability into our Fair Trading Act, as the Australians have done. “Submitters in favour of introducing unconscionability provisions include the Salvation Army, Consumer New Zealand, the Citizens Advice Bureau, the Whitireia Community Law Centre, the Commerce Commission and the Motor Trade Association.” What is the difference between those who support the introduction of the unconscionability provisions and those who oppose them? I would suspect that the ones who are in support of the unconscionability provisions being written into the Act are actually those who are dealing with people day in, day out who are the subject of unconscionable behaviour.

I want to talk about unconscionable behaviour, because unconscionable behaviour is occurring daily in Christchurch. Every single day my colleagues and I are approached by people who are dealing with insurance companies that are trying to evade the obligations that they signed up to when they were perfectly happy to take the premia off our constituents—off the people of Christchurch—year in, year out. What is happening now? We have elderly people being told by their insurance companies that they have no option other than to accept an unconscionable offer, because they do not think that they are going to be around long enough to see their property rebuilt. So if the Government really wanted to address one of the major problems that is being confronted in Christchurch at the moment, it would be looking seriously at this unconscionability provision and it would be looking at who supports it and who does not. On a daily basis, as I say, there are all sorts of concerns being raised.

Let me just read into the record the purpose clause from the new fair trading legislation, as it was introduced, and then how the Commerce Committee has addressed it. It was: “The purpose of this Act is to contribute to a trading environment in which—(a) trading is fair; and (b) there is effective competition; and (c) consumers and businesses participate confidently.” This was changed in the select committee to read: “The purpose of this Act is to contribute to a trading environment in which—(a) the interests of consumers are protected; and (b) businesses compete effectively; and (c) consumers and businesses participate confidently.” I think that the select committee has actually got that right. I think it shifted the balance when it reasserted the purpose clause in the way that it has, because I think there is an assumption—there certainly is in the case of Christchurch—that people feel that the market place is actually what they have been abandoned to, on their own.

There are instances where the Government actually does have to put its hands on and there are instances where the market does not actually supply the answer, particularly when there is an inequality of knowledge so that there is a discrepancy between what the company knows and what the consumer knows, and also when people do not think that they have got any real choices in the matter. That is where this question of the interests of consumers being protected comes in, because it is not equal in the market place in all instances. If somebody walks into a shop and they see an item that they want to buy, if the price is right, then they will buy it. Their interests are protected in the market in that regard. But their interests may not be protected if the owner of the particular product or the service that they are buying knows more than that person about what they are buying and the owner knows that there is not fair value, or that they are buying something that is not safe or up to a particular standard.

That is an issue that is dealt with a little bit in this legislation, but there is actually a little bit more work that needs to be done. What we have not managed to get to in this country—and I notice that the standards legislation has fallen off the Order Paper—and what we need to get to in this country is an ability to have the public-good standards written on behalf of the public good, with public-good funding that is not dependent on the private sector or an individual Government department referring a matter to Standards New Zealand in order for a standard to be written. We actually do have to do better than that, because there are instances where people could not possibly have the same amount of information as the owner of the product or the supplier of the service—could not possibly be in the same position as them—and we do need a law that protects them better than even this law will do. We agree with the original concept—and I think the Minister left it out of his list—of the Hon Heather Roy, because in fact she was the one who was the enthusiastic individual who promoted the One Law—One Door mantra, and we have not got there yet. That is something that we do need to think about—whether we can, in fact, get to that point.

But I want to place on record that the Prime Minister of New Zealand told Christchurch that he would be there for them, that he would walk alongside them. There are instances—

💬 Hon Clayton Cosgrove: Nobody would be worse off.

Nobody would be worse off—that has long gone, that one. I think the word that I hear more often in Christchurch in relation to that matter, Mr Cosgrove, is the word “disappointed”. Every single day I hear people saying that they are disappointed. There are others who are angry and feel betrayed. But in terms of the consumer rights, the protection that he promised would be there has not been there. People have been abandoned to deal with their insurance companies alone, and nobody is standing alongside them. We have people coming to us on a daily basis who are not coping, and I am deeply concerned at the psychological damage that is being done. There are people in our areas who are suicidal because of the pressure that they are being placed under by the rapacious insurance companies.

If we are seriously going to address consumer law reform, then this bill does not quite go far enough. We will be supporting this bill. Of course it is an improvement on what the current law is, but it does not, by any means, let anyone off the hook for the real reform that is yet to come.

I am very pleased to stand and speak at this second reading of the Consumer Law Reform Bill. A review of consumer laws commenced in November 2009 with the then Minister of Consumer Affairs presenting to consumer and industry representatives proposals for a modernisation of and a reduction in a number of consumer laws. All except one of the laws covered by the Consumer Law Reform Bill are more than 20 years old and have not been reviewed in that time, so this is a timely and very important review and update of our consumer laws. Consumer laws are such that they should be seen as fundamental laws that should stand the test of time and not need regular amendment.

One of the areas in the bill that the Commerce Committee has worked on is this area of unfair contract terms. Major work was undertaken by the Australian Productivity Commission in its jurisdiction to determine the extent to which unfair contract terms were problematic in Australia. This was outlined in the commission’s report in 2008 on the Australian consumer policy framework. Its investigation uncovered largely anecdotal evidence of an existing problem. The Productivity Commission’s report cited studies that indicated between 5 to 15 percent of all consumers may be detrimentally affected by unfair contract terms each year. We note also that, internationally, modern consumer law provides protections against unfair terms in standard form contracts. In Australia provisions for unfair contract terms are included in the Australian consumer law, alongside protections against misleading and deceptive conduct.

A term is an unfair contract term only if it is declared as such by the High Court or a District Court on application of the Commerce Commission. This process would ensure that the Commerce Commission was given control of the enforcement of unfair contract terms, and it is most likely that the Commerce Commission would be talking to firms that are using unfair contract terms and would see them comply prior to declaration by a court.

The Commerce Commission’s submission noted that in its fair trading enforcement work it had identified some issues that may have been more effectively dealt with, if there were or had been unfair contract terms provisions. Here are some examples.

A telecommunications company increased the customer’s monthly plan price for their broadband service from $35 to $40 a month, 6 months into a 2-year contract. In doing so, the company relied on a term permitting unilateral price increases in its standard form contract of service. The company told the customer that the price increase was due to an increase in the wholesale that it was paying to a third party for the service. The company insisted that a significant termination fee would be charged if the customer cancelled their contract due to the increased price of the plan.

Another example is a rent-to-own scheme that included terms and conditions in its contracts to the effect that the consumer did not purchase the property, but was granted a right to occupy the property under a 30-year instalment agreement. There were a number of contractual terms that were likely to have been regarded as unfair. For example, the occupiers had to pay for any repairs that the investor companies said needed doing. Also, if the occupiers failed to meet a payment at any time in the 30-year period, the agreement could be terminated. So here are some examples where we would say that consumers were definitely getting the rough end of the stick.

In another example, a company leased water filters to the lessee for a period of 2 years for a minimum price of $15 a week. The contract included a clause requiring the lessee to exercise a right of purchase or cancel within 7 days of the end of the lease. If the lessee failed to purchase or cancel, then the contract automatically rolled over for a further period of 2 years on the same terms. These requirements were not clearly disclosed to the lessee when the contract was entered into.

We can see that there are some obvious changes in this Consumer Law Reform Bill. Unfair contract terms is just one significant area. Other areas were acceptable quality guarantee. That is to do with the expectation that a consumer might have that their product has an acceptable quality and also the implications and obligations of the trader in that regard. We looked at online auctions. Of course, that was a very important area. One of the areas, I think, that we have come through to an agreement on is that there should be no mode of sale that is exempt from the Consumer Guarantees Act.

I am very happy to commend the good work of our committee, the Commerce Committee, and this bill to the House. Thank you.

I want to pick up where my colleague Lianne Dalziel left off, saying that of course we will support this bill, the Consumer Law Reform Bill. We agree with its objectives. Who would not? However, it does not abrogate a Government’s responsibility to be an active player in supporting, maintaining, and enhancing consumer rights. My colleague talked about the earthquake, and I saw there was one member over there who was spitting bile over at this side as she was speaking about the difficult situation that many of our consumers are dealing with in Canterbury, in my area and others. The situation they find themselves in is they are dealing with the monster insurance company—legalled up, with all the experts—and the granny or grandad at 83 years old with a munted house is on their own, not knowing what to do, and receiving very, very little support, if any, from the Crown, apart from the good offices of, say, the community law centres, the citizens advice bureaux and their legal expertise, and others. The odds of them getting a good deal are stacked against them.

Most of us in this House are not lawyers, so we do not have that precision of legal expertise to interpret contracts and documents that are put in front of us. But I suspect most of us in this House have the wherewithal to go and hire the experts we need to assure ourselves of the fact that the deal that might be put in front of us by an insurance company in that situation in Canterbury or others either is a good deal or is not a good deal. I know from dealing with local folks in Canterbury—for instance, a very straight example is even when it comes to pathways and driveways, where individual folks have been asked by project managers to sign a contract, and in one case I think it was 14 pages, before the job was done that had blank dollar figures in it. Blank dollar figures—that is not on. The point my colleague was making is that there is a role, even despite this law, for a Government that felt that it was appropriate to surgically intervene on these matters.

In respect of, say, insurance companies and some of the examples I have cited, there is a role for the Government to surgically intervene, despite the passage of this legislation and its overarching objectives and remedies in respect of consumer rights. We know, of course, that this—what is the term? The behavioural term?

💬 Hon Lianne Dalziel: Unconscionable.

This unconscionable behaviour is catered for to be dealt with in this legislation. You would have to argue—

💬 Hon Simon Bridges: Oh, leave David Cunliffe out of it.

Oh, we will get to you in a minute. We will get to you in a minute.

💬 Hon Simon Bridges: Don’t be so mean.

We will get to you in a minute—

💬 Hon Amy Adams: Mr Nasty’s back.

Oh, well, I was not the one who interjected on the colleague, as the old acid drop in the corner there has a crack. Unconscionable behaviour is dealt with in this bill. When we talk about—if we are going to talk about individuals—unconscionable behaviour, I am mindful of some examples a bit close to home. One could look at, and one would hope that this legislation would deal with, what I call the “Brown Bag” factor—the “Brown Bag” factor—where “Brown Bag Banks”, of course, got himself into some difficulty—

💬 Mr DEPUTY SPEAKER: Order! Look, the member can use the illustration, but we are not going to put tags on people’s names.

OK. Far be it from me to refer to the Hon John Archibald Banks in that way, but we could look at Mr Banks’ situation and ask whether his situation would be dealt with in some way, shape, or form under this legislation. I am mindful of the fact that it deals with false and misleading representations. I would have thought that would be very germane to the Hon John Archibald Banks in his situation in respect of Mr Dotcom. I am mindful here of a passage in the bill commentary that is very interesting, which talks about “Unsolicited goods and services”. We know that the Hon John Archibald Banks alleges that he received some unsolicited—or were they solicited? We are not quite sure of the nature of the bodyguard or what was in the brown bag—and I am not referring to the Hon John Archibald Banks—or whether those services, or goods, or dollars, or rocks and stones, or gold bars, or whatever they could have been, were unsolicited or not. Mr Banks maintains they were not solicited. Mr Banks maintains that when he received the bag, the sack, the envelope, the whatever, he did not know what was in it.

I am mindful of the passage in the bill commentary, under that heading of “Unsolicited goods and services”, that says: “To ensure that museums could”—I do not know whether they are referring to that old political relic John Archibald Banks—“still treat anonymous goods left with them as gifts, rather than as goods left under their care which they are obliged to try to return.” I do not know whether—that old political relic Mr Banks—when the officials drafted this, they were mindful of Mr Bank’s situation. I do not know. I do note with interest, and I would ask whether this was an unsolicited good or service, in the media that Mr Banks has purchased an elephant. I do not know whether that was an unsolicited purchase or—

💬 Hon David Cunliffe: The elephant in the room.

The elephant in the room. I do not know the name of that elephant, or whether that elephant has been given a name—maybe “Brain Fade” or something like that. But I do note from fifth form science that, I am told, elephants have a damn good memory, and I am wondering whether Mr Banks has looked at this legislation and thought that maybe a remedy for his lack of memory was to purchase an elephant. That elephant may be able to provide some instruction. He may remember what his name is. He may remember where he comes from, what he did yesterday, whether he took a helicopter ride, whether he met Kim Dotcom, what was in the brown bag, and what was in the envelope. This could be very, very instructive. It could be a remedy in medical science that we have simply not seen to date, and Mr Banks may have made—

💬 Denis O’Rourke: High technology.

This could be, as my colleague said, a high-tech breakthrough, given that elephants never forget—elephants never forget. So I look forward to the scientific or DNA evidence or research that will probably be published in Harvard medical journals and other learned institutions around the world, as they compare the size of Mr Banks’ fading memory and cranium with that of his elephant “Brain Fade”, and it will be interesting to see where we go with that. I know that the learned judiciary in coming days next year may call the elephant, actually, as a witness on medical advice—

💬 Hon Lianne Dalziel: The only credible witness.

—the only credible witness—to provide some sort of benchmark for amnesia or other medical conditions.

On a more serious note, this is important legislation. None of us in this House would disagree with protecting and enhancing consumer rights. We have seen cases over recent years where consumers have been led down the garden path, have not had their rights preserved, and have been abused commercially and otherwise. I suppose I should come back to my original point, which was that there is still a role for the Government, because even this legislation, once put through—and I do not mean any disrespect to our communities—is reliant on those in the communities who have the experience, the skill, or, in many cases, the financial resources to act in a way that, despite the legislation, can protect their own interests. What I get concerned about are those vulnerable souls out there who do not have the experience, perhaps, of us in the House and other places and who do not have the—I will not say “guts”; that would be inappropriate. But those who would not be brave enough, if you like, in the face of, say, insurance companies to say no, to resist, or have the confidence—that is the word I was looking for, “confidence”—to resist some of the pressure that is put on consumers, they are out there on their own. They do not have the facility to seek advice, and they do not have the resources to seek advice.

All they are seeking, actually—they are very smart—is to know whether this is a good deal or not, but they do not have the resources that we do in our areas of interest to gain that backup, to have that confidence, or to gain that support. Despite this legislation, there will always be a role to protect those people—and in some cases, not to be unfair, often from themselves—from a position of a lack of knowledge where they get themselves into difficulty, where they put themselves under pressure, or where they are subject to the pressure of commercial interests. Acting in good faith, as those individuals are—and we have all dealt with them in our various communities—they get themselves tied up in legal and consumer knots. So there is a place here, I think, for consumer education to be enhanced, and there is always a place, despite any legislation put through, where Governments must be prepared, as I said at the start of my speech, to surgically intervene where there are gaps and where commercial entities try to pull the wool.

The Green Party is pleased to be supporting the Consumer Law Reform Bill. We are supporting this bill because it proposes the most significant changes to consumer law in the last 20 years, because it includes protection for consumers, and because it provides for more effective enforcement of these laws. We all know someone who has been ripped off or exploited in some way to buy a product they did not need, or a service under pressure, who was quoted a misleading price, or who was sold a product that did not perform as expected. This bill will help address and close some of the more significant gaps and loopholes.

I would like to mention here—the previous speaker, the Hon Clayton Cosgrove, notwithstanding—that I was impressed with the level of engagement by the Commerce Committee members, who seemed to put political differences aside and work for the best possible outcome. I also want to acknowledge the very high-quality advice that we received from the Ministry of Business, Innovation and Employment, which seemed to be able to produce a swathe of experts on a whole range of issues from consumer goods to auctions and from unfair contracts to third-party payment. The submission process was very interesting, as there were very few submissions from individuals. The bulk of submissions were from businesses, energy companies, retailers, and the like, as well as from community and consumer groups, and I feel that this reflects in part the very complex and detailed nature of this bill.

We are very pleased that the bill makes it explicit that the Consumer Guarantees Act applies to internet sale sites and requires all traders selling goods and services to consumers on internet sites to identify themselves as such. The Green Party is also particularly pleased that the bill significantly expands the powers of the Commerce Commission, which will enable it to be more effective in carrying out its work.

The committee has recommended compulsory interview powers for the Commerce Commission. We strongly support this move as these powers are needed to assist the commission in obtaining documents and information that will allow it to properly investigate a company in a timely and cost-effective way. Some people had raised concerns that these powers may be too heavy-handed. We are satisfied that the safeguards proposed in the bill are adequate in that the powers will apply to investigations of serious offences only, and the person being interviewed is protected from having their statement be admissible, except for serious charges if the case were to proceed to court.

In addition to the increased powers for the Commerce Commission, there are a number of other areas in the bill that the Green Party is particularly pleased to see, including provisions preventing unfair contract terms in standard form contracts. One of the things I particularly questioned about this was whether that would mean it could rule out some very standard contract terms in banking contracts and insurance contracts and rule them to be unfair. The reply was that, yes, it could do that, and that is a move that we hope will eventuate.

However, the change that the Green Party is most pleased to see in this bill is the proposed prohibition on making unsubstantiated representations. This provision will address an area that the Green Party has been concerned about for a long time. Many consumers base their purchasing decisions around claims such as having a reduced impact on the environment, using 100 percent renewable energy, being biodegradable, using resources sourced from sustainably managed forests, and so on, and such conscious consumers will often be prepared to pay a premium on the price that they pay for the assurance of such claims. One of the really frustrating things for us is that so many claims are actually not true, are misleading, or are based on “greenwash” that we effectively have to become detectives or rely on pressure groups to do that detective work for us in order to be assured that the claim is in fact true, or we have to cross our fingers and hope. We consider it to be a fundamental right of consumers to be confident that claims made for a product are based on truth.

An unsubstantiated claim also disadvantages businesses that make the effort and do the research to ensure that their claims are based on fact. Currently, the difficulty with the law as it stands now is that it can be very hard or costly to prove a claim is false, and this has proved very onerous on the Commerce Commission. The crucial aspect about the proposed change is that the onus of proof about a claim will shift from the Commerce Commission to the business making that claim. Just imagine, businesses will have to prove that the claims that they make about their products are true. It is disappointing that a significant number of businesses, such as Meridian Energy, argued that it would impose significant compliance costs and be too expensive for them to provide the evidence required. The solution to this is simple. If you do not have good evidence that your claim is true, do not make that claim.

However, the committee did take on board concerns about the possible impact on advertising creativity by recommending new clauses that make it clear that the provision does not cover representations that a reasonable person would not expect to be substantiated. I am sure that the makers of a very high-profile product will be relieved that they do not have to provide evidence of wing growth.

The Green Party did have a concern that the Commerce Commission would not have sufficient powers to effectively enforce the prohibition on unsubstantiated representations—a point that was made by Consumer New Zealand. We considered moving an amendment to the bill to give the Commerce Commission the ability to issue power of substantiation notices, as is the case in Australia. We sought advice from the Commerce Commission on this issue and have been reassured by the Commerce Commission’s view that the substantiation provision in this bill is superior to the substantiation in the Australian consumer law because it is simpler, more easily enforceable, and a better education tool. It has also informed us that it does not feel it needs specific substantiation notice powers because it expects to be able to use the existing information-gathering powers under section 47G of the Fair Trading Act, along with, if necessary, the new compulsory interview powers to support the new prohibition on unsubstantiated claims.

For this reason we are happy with this reassurance from the Commerce Commission. I am confident that it will be able to enforce the prohibition and, therefore, we are pleased to be supporting this bill. Thank you.

I suppose as a hard-out user of TradeMe—I have had, I think, from memory, 266 wins on TradeMe—you are always wondering whether the goods you receive, which can range from a sliding door that we purchased from an unfortunate leaky building, and it was only $150 so we thought that was quite a good deal—

💬 Chris Hipkins: You can return the Speakers’ gown.

We will get to the comedy later. You always wonder whether you have any comeback on the goods you have purchased, whether they were from a shop or whether you were lucky enough to win an auction on TradeMe. My hat goes off to TradeMe, by the way.

This bill, the Consumer Law Reform Bill, allows those who buy off TradeMe, who win auctions on TradeMe and other auctions like TradeMe, the guarantee or the protection, I suppose, of legislation. What that does is it makes the consumer feel a little bit more protected. It makes the consumer a little bit more pleased with himself or herself when they are out buying. But I suppose probably the most important aspect of this legislation is the unsubstantiated representations. We see them on a day-to-day basis, if you look at the TV—you know, on the TV shop, and the shopping channel. The consumer today is inundated with products. That is due to new technology. You are watching it on TV or you turn on your screen on your laptop, and advertising is over the top. So there must be some protection for the consumer. I think that the Commerce Committee in doing its job has actually done an absolutely wonderful job.

There are suburbs—Ōtara, Porirua, and Manurewa—that are actually going through this, I suppose, blitzkrieg of people in little vans and trucks who stop outside people’s homes and berate people to sign—

💬 Hon David Cunliffe: National Party candidates.

No, it is actually not the National Party. In fact, I know a lot of people out in New Lynn who are Cunliffe supporters—

💬 Jacqui Dean: What?

Yeah, well, there are only one or two. I digress. These people prey on the less fortunate, they prey on people who do not know the law, and they prey on people who cannot read or write, and somehow they sign people up to a contract with huge interest rates. It is predatory. It is the most horrible thing to observe, and I think that what we have achieved here, and what the select committee has achieved here, is some true protection for those who are on the end of those predatory traders. So I want to say thank you to the select committee.

It is time that the consumer laws in New Zealand were modernised. I think it is a thorough reform. They are clear laws.

💬 Hon Lianne Dalziel: It’s not thorough—that’s the point.

Well, I think it is, and it will be shown to be thorough, because everybody in this House will vote for this legislation. OK? That is the point.

Then we hear from the other side of the House. Half of Clayton Cosgrove’s speech was about the Hon John Banks. Well, my words to Mr Clayton Cosgrove are these: you know, you can talk about the allegations about John Banks, but what about some of the allegations of large donations from the fishing companies to certain MPs?

💬 Michael Woodhouse: Ooh, that’s a good question.

And that is not an allegation. That, actually, is on an MP’s return.

💬 Hon Lianne Dalziel: Yeah, declared.

Oh yeah, he declared it—that is right—but he also tried to bring in a member’s bill to actually support that fishing company. For goodness’ sake! That is the sort of area that members opposite do not like. It is easy to make unsubstantiated allegations, it is easy to stand up in this House and say what you want to, but they do not like it when you start to push back on some of those allegations, because they are as guilty as those whom they allege are up to no good. If you can throw it, then please accept that it is going to come back on you—most probably tenfold.

💬 Hon Lianne Dalziel: Say it outside the House. Don’t be a scumbag.

The screeching from that member from down in the South Island—that is all they can say: “Say it outside the House.”

This is a good bill. It is the Hon Simon Bridges’ first attempt at legislation, and I think it is a damned good piece of legislation that protects our consumers and makes it easier for the consumer to trade with a bit of protection from a bill that is, I think, a long time coming. I do commend this bill and the work of the Hon Simon Bridges.

I take a call on behalf of New Zealand First on the Consumer Law Reform Bill.

💬 Hon Simon Bridges: I thought Brendan was the spokesman in this area.

No, I am the spokesman on consumer affairs, Mr Bridges. As the spokesman for consumer affairs, I can advise the Hon Simon Bridges that we will be supporting this bill, because, after 25 years, it is overdue that there is a review of consumer legislation. This is long overdue, and we feel that it is good legislation to be bringing to this House.

It was very interesting hearing the dissertation from Tau Henare all about his antics with TradeMe and the selling from vehicles outside his house, and all that sort of thing. It certainly would have qualified him greatly to become the next Speaker of this House, with such significant consumer knowledge of TradeMe and all the wins that he has made on TradeMe. What a shame he did not continue through with his position as Speaker, because I am sure that with that sort of background and that sort of ability he would have won support, hands down, from everybody in this House. But, as he did not, we will have to look forward to another day when Tau Henare will put his name forward as Speaker, and we all look forward to that occurring.

But in terms of the Consumer Law Reform Bill and the purpose of this bill, certainly it covers all transactions between traders and consumers. That is a very important part of this bill. It will tidy up this whole business of the grey areas—what happens between traders and consumers, particularly online, particularly on the internet, and all that sort of thing, where there is a certain element of risk and where people are a little bit dubious about how to conduct business online. This does tidy a lot of that up in terms of competitive tenders, in terms of ensuring that the goods are received properly and in good order, and that the person sending the goods is responsible for those goods until they are signed for and received by the recipient. Again, that is a good thing because there have been a lot of areas of doubt, particularly with retailers sending things out these days more and more by courier, and by various means, and we need to ensure that the goods are received by the person in proper order as they expect them to be.

Also, in terms of the Fair Trading Act, part of this bill is reviewing the Act to prevent unfair contract terms in standard form contracts. It is tidying up a lot of those standard form contracts—and, again, that is a good thing—and modelling a lot of that on the basis of Australian consumer law. Likewise it is good that we are bringing our standards into line with many Australian consumer law standards. Again, that is very useful because so much does move trans-Tasman, between Australia and New Zealand—so much so these days in fact that often the goods are not housed in New Zealand; they are often housed in Sydney or Melbourne or somewhere else, and they come directly from other places. So it is good that we are lining up with Australian consumer law so that, again, we are better protected.

In terms of breaches of the Fair Trading Act the penalties are also increased, which is a good thing, going from $60,000 for breaches of the Fair Trading Act to $200,000 for individuals who breach the Fair Trading Act—that is a maximum; to a maximum of $200,000—and for bodies corporate, penalties are going from $200,000 to $600,000. An amount of $600,000 is starting to get into some serious, serious money in terms of possible breaches of the Fair Trading Act, so, again, that is a good thing.

New Zealand First has said in this House that we will support good policy and we will oppose bad policy. In this case we believe that this is good policy. This is a good move. This does greatly improve the rights of consumers in this country, but it also probably sets a better standard for providers, for suppliers, for merchants, and for all those sorts of people, so that they very much will know where they stand and what their requirements are in terms of service. Also, the consumer will have a far safer position in terms of doing business, particularly on the internet. Nowadays, with so much being sold via the internet, or via email, or via texts and Twitter, and all sorts of things, it is vitally important, if you cannot physically touch the product but you see it online or whatever, that you have more guarantees and more safeguards to protect you. So we support this, and New Zealand First will be voting for the bill.

I also support the Consumer Law Reform Bill, and I commend the Commerce Committee for the work it has done on it. It is good to note that there is widespread support for updating this area of law to reflect technological advances and modern consumer conditions.

My Christmas wish is that I will be able to contribute further to improvements in our consumer law next year by winning the parliamentary lotto competition, better known as having a bill drawn out of the members’ ballot. I have been working with representatives of the Scrap Metal Recycling Association of New Zealand for nearly a year now, and they and I hope that my bill, the Secondhand Dealers and Pawnbrokers (Scrap Metal Dealers) Amendment Bill, will be drawn early in 2013.

We have got a serious problem in this country arising from the increasing incidence of scrap metal thefts, and that does come under the umbrella of consumer law. We need to drive the cowboys, who harm the honest operators—and that is the vast majority—out of that industry and make it harder for thieves to dispose of stolen scrap metal, which has become an attractive currency for those who choose a life of crime.

But that is yet to come. For now this bill, the Consumer Law Reform Bill, serves a worthy purpose and deserves our support. It has mine. I close, Mr Assistant Speaker Tisch, by wishing you, all honourable members, and all who are listening at this moment a very merry Christmas and a happy summer holiday.

I reciprocate the good wishes of the member opposite, Tim Macindoe, and wish him and his colleagues a merry Christmas too, because we are in fact here in the dead of morning. It is the dead of morning, which may not be as dead as tomorrow morning, because, of course, we have got the press gallery party tonight, but we are in the dead of morning. That is spelt m-o-r-n-i-n-g, but of course in the National Party they put a “u” in the word, because I have been looking at the latest opinion polls that show the National Party heading downhill, with an inexorable slide to the Opposition benches.

But, you know, we are a fair-minded Labour Party. We are here to help the Government tidy up what it has obviously put in the bottom drawer to just scrape through at the end of the year. This Consumer Law Reform Bill is important to consumers. This is one of those bills that stand up for the little guy, for the ordinary Kiwis who are often vulnerable in the face of unfair trade practices, commercial bullying, monopolies, etc. You would think it would be a priority for these guys.

Let us ask ourselves when the bill was introduced—20 April 2011. It was one of those feel-good things National members talked about before the last election, to tell New Zealanders that they were on their side, and then suddenly it was just not a priority any more. How long did it take for the bill to get its first reading? It was not until 9 February 2012 that it went to the Commerce Committee and it has languished all the way through the process, until the very last day of the parliamentary school term. The Opposition is playing pooper scooper here, helping it get all the loose ends, the rats and mice, tidied up, and we were not going to let this one by.

We were not going to let this one by because this one is really important to ordinary New Zealanders. Why is that? Well, you know, the goals of the bill could not be better really, could they? They want consumer protection law and consumer practices, which are, No. 1, fair. Who can argue with fairness? In fact, I think it is part of Labour’s constitution. No. 2 is that it brings in effective competition—effective competition. “Effective” means that it may not be perfect, but it will get the job done. And that does not mean monopolies rule the roost, as they have so often under the National Party.

💬 Hon Lianne Dalziel: And they’ve changed the wording.

And we have changed the wording. We have improved it to ensure—and this was the work of the Commerce Committee; we are quite proud of this—it is the interests of consumers that are protected.

💬 Hon Lianne Dalziel: They forgot that in the original bill.

You would think that that would be implicit in the title of the bill, but in the Government and the Minister’s first draft they forget to put “consumers” in the purpose clause. Well, it could have been that they were there to protect the monopolies. But we were not going to have it. We ensured that the Consumer Law Reform Bill was here to protect consumers—what a good idea—

💬 Moana Mackey: That’s novel.

—exactly right—and to ensure that businesses compete effectively. Well, in the history of National Governments, that has not always been the case, has it? We remember the way that for 10 years at least Maurice Williamson was—remember—the “Minister for Telecom”. What Telecom wanted, Maurice Williamson would agree to. There was no effective competition there until the last Labour Government came in and sorted it out.

The electricity industry, under Max Bradford, was a kind of pseudo competition. New Zealand had an electricity system that worked, he split it up into a group of local monopolies that added cost and complexity, and the consumers’ costs went up and up and up.

💬 Hon Lianne Dalziel: That’s because they privatised a lot of them.

That was a typical National Party combination of deregulation and privatisation. New Zealand consumers know it has been toxic. It has hit them right in the wallet, and this bill is a small way of making it up to Kiwi mums and dads and saying: “Actually, have a merry Christmas, because we caught this egg before it hit the floor. We’re here to support it through the House on the last day of school.”

💬 Hon Lianne Dalziel: It’s not even going through the House on the last day.

Well, this is at least getting a second reading. We are trying to help here—my colleague is quite right. It is not going all the way through; this is the second reading. God knows, at the current rate of knots, when the third reading is going to be. On this Government’s timetable, it might just go into the next election promising to pass this bill. Well, that would be a help.

So what does the bill deal with? Well, the first thing is that consumers are very seldom on a level playing field. It is really important that we as politicians just recall to the public that we understand why that is. If you go to the doctor, the doctor knows more about your illness than you do. The doctor has got more information. When you go to a specialist provider of goods and services, whether it is for a vacuum cleaner or a TV, they will know more about what they are selling than you probably do about what you are buying, although the internet helps even that up a bit.

Monopolies, oligopolies, and cartels are another sort of problem. I want to acknowledge the Government, actually, for one thing. I am being nice to it this morning. I want to acknowledge it for the efforts to have a look at the shipping industry in the Commerce (Cartels and Other Matters) Amendment Bill that is currently before the Commerce Committee. That may help limit some of those cartels, but often it is consumers who are the ones who suffer.

How do they suffer? Well, here is the content of the bill. We deal with things like “unsubstantiated representations”. What a wonderful phrase that is—“unsubstantiated representations”. That means telling porkies. That means when someone is trying to sell something to someone, they say things that are just not true, like, oh, I do not know: “We will not raise GST.” That would be an unsubstantiated representation, would it not? Especially if you then turned round and said: “Hey, I think we’re going to raise it after all.” And then you said: “Well, we never promised we wouldn’t.” That would be an unsubstantiated representation.

What about: “Climate change is a hoax.”—climate change is a hoax—followed by: “Oh, we’re going to have a world’s best practice emissions trading scheme.”, followed by: “Well, we’re going to withdraw from the follow-on negotiations of the Kyoto Protocol.” What a national shame that is, and another unsubstantiated representation.

Unsolicited goods—well, we certainly could not top our good colleague Mr Cosgrove’s contribution earlier, who talked about the brown bag that turned up on Jonathan Archibald Banks’ desk. You know, helicopter rides, free iPads, the whole palaver, but he could not remember a thing about it. It certainly is a mystery to us why those unsolicited goods and services were not recalled. Unsafe products, product recalls, and safety officers are also all in here. One of the advantages of this worthy little bill is that it draws together regulatory standards from a bunch of different Acts and puts them in one place.

Thirdly, it harmonises our law with that of our Aussie mates. We on this side of the House are not one-eyed about that proposition. We do not believe in a knee-jerk response to harmonise with Australia, just because it is Australia. But where Australia has sensible law that provides better protections for consumers, as it does in this case, and a better labour law would be another example, we are happy to see the benefits of harmonisation.

There are a number of specific and substantial changes that were made by the select committee to this bill on the way through. If I just perhaps mention a few in passing: firstly, the introduction of a new prohibition on the use of unfair terms in standard form consumer contracts. That is when you go to a shop and you are given a form, or you might get it on the internet when you buy something online, a bit like getting a standard rental agreement on premises. The terms that are in there, because they are standard form agreements, ought to be terms that ordinary New Zealanders can rely on without having to sweat and worry. This bill, thanks to the work of the select committee, provides that.

In relation to those unsubstantiated representations, there is a new test that it should be representations that a reasonable person would expect to be substantiated. We might call that the “no crap” clause. There is a new provision in the Consumer Guarantees Act that business transactions must be fair and reasonable. We have increased the maximum penalties from $60,000 to $200,000 for individuals, and from $200,000 to $600,000 for bodies corporate. We have enhanced the enforcement powers of the Commerce Commission, and we have removed changes related to the Carriage of Goods Act, which were too complicated to bring into force in relation to when a limited carrier’s risks end and the purchaser’s take place. There is a new guarantee as to delivery, on the other hand, in the Carriage of Goods Act. So that is the kind of perhaps unspectacular, perhaps worthy, but none the less really important stuff that is in this bill.

May I, in closing, offer Christmas good wishes to you, Mr Speaker, and all your colleagues in the Chair, to members opposite and all around the House, and to our wonderful staff who keep us safe, fed, clothed, and watered around this building. I wish you all and the public well for a very merry Christmas and a happy and peaceful New Year.

Before I talk about the bill, the Consumer Law Reform Bill, I echo the greetings to the House from the member opposite, David Cunliffe, who has just sat down. I echo that: merry Christmas to everybody. What irony from David Cunliffe. How the mighty have fallen! He talks about unsubstantiated claims and he talks about fair trading. The irony is in the unsubstantiated claim he made to the Labour caucus, saying he had the numbers. The Labour caucus saw through that. The fair trading that happened in that caucus was that he got demoted, he is on the back benches, and he is speaking not from the front row but from the back row. He calls that fair. That is fair trading indeed. He is lucky that this bill is actually coming to fruition now, and, perhaps, if it had happened at that time, there might have been a claim.

This bill is a good bill and everybody agrees with that. The purpose of this bill is to make sure that consumers are protected. I want to give two very quick examples of some of the unsubstantiated claims that have bothered a lot of people in the ethnic communities. As a mother I look at some of the ads and I really have to think whether the claims are in fact true or not. I do worry that there are people out there buying them. There have been advertisements for health products that promise to give your child an extra foot in height. Often Asian parents worry that their children are not going to grow as high, as tall, as they should because of differences in diets and whatever. These health products claim that they will guarantee an extra foot. This bill will make sure that those people cannot make those kinds of claims. I think that is a good thing to happen.

The second example is the thing about the Consumer Guarantees Act, which will be amended to better protect consumers who receive goods via a courier. I know of an incident where a local service centre had sent a repaired good, a telephone, back to the owner. The owner could not get to the service centre and had organised her own courier to get it delivered. But when the phone actually got delivered to that person the phone was broken. It was shattered. By the time it went through that whole insurance process, it was a nightmare. It took for ever, and it took months to repair, but a good service centre actually took responsibility and paid for the product using its own insurance company. But there are other companies that are not as responsible, and this bill will make sure that when goods are sent by courier it is actually the sender who is responsible for the good. This bill is a good bill. I commend it to the House.

The next call is a split call. Clare Curran.

I would like to take a short call on this bill, the Consumer Law Reform Bill. This piece of legislation, this piece of law, is a good piece of law. I want to make a couple of comments about the good work the Commerce Committee has done on it. I want to particularly mention the officials, because they have worked very hard to make this bill work for consumers, and they have put an awful lot of effort into it. They do deserve a special mention for that. The Commerce Committee works very hard on the legislation that comes before it, and it works cooperatively and collaboratively around most bills that sit before it. I do want to make that point.

The point about this piece of legislation is that it is about looking at how in tough economic times you can make sure that consumers are protected. That is very important. It is unfortunate, though, that at this very moment consumers are not being protected in another environment. Pointing to the importance of this bill, this bill is a good, strong piece of legislation in the making. It may be that we can have a good debate around it and the arguments that went backwards and forwards on it. But what we are seeing at the moment is a massive piece of hypocrisy, with that Government intervening in a regulatory process that is going to force up phone and internet bills for New Zealanders, and the Prime Minister intervening and saying that he will not rule out legislation. Ultimately, that will end up being a situation where the consumers of New Zealand lose out—lose out—at a time when they should not.

The laws that were made by this Government 2 years ago through the Telecommunications Act were hotly debated in this House. Warnings were given around what might or might not occur. Well, sure enough, it has come to bear that the Government has now got itself in a pickle, and there is article after article appearing on this particular issue, including by the former Telecommunications Commissioner, who came out yesterday and said that it was an unprecedented move for the Government to intervene in this process in a way that is going to affect consumers. It is going to affect consumers adversely if the Government intervenes in the way it says it is likely to do. I want to make that point because it is an extremely important point.

Although on the one hand here we are debating a piece of legislation that is about putting in place a more fair regime for consumers, particularly in terms of bringing legislation up to date in the online environment—and an extraordinary amount of good work has been done on a piece of consumer legislation—on the other hand we have a situation where consumers are going to be sold down the river. That will all be in favour of propping up the profits of a privately owned company, Chorus, in order to suit the will of the Government and its intentions around ultra-fast broadband. Twelve dollars a month is quite a lot of money for the poorest families and people on low incomes. Twelve dollars a month is at least what consumers are going to be stuck with in their phone and internet prices, at a time when those prices should be going down.

This issue has created widespread horror and uncertainty for the whole of the telecommunications industry, which is seeking stability. This bill, the Consumer Law Reform Bill, is meant to be providing a more secure environment where everybody knows where they stand, but, instead, in an unprecedented move, the Prime Minister has intervened and said he will not rule out legislation. The industry has been sent into turmoil.

There is the prospect of judicial review of any final decisions that the Commerce Commission does make. This is at a time when there should be certainty and stability in the industry, so that the telecommunications companies can get on with investing, innovation can occur, and more services get developed, which will create more competition, and, ultimately, consumers will be better off.

I am pleased to make a few brief comments on this bill, the Consumer Law Reform Bill. I was on the Commerce Committee, in fact, when it was first introduced, and so it is good to see it make one more step. It was interesting at the time to recognise that a lot of the Acts that this bill amends are actually quite dated—dating back to the 1970s and 1980s—and one Act, the Sale of Goods Act, actually first saw the light of day in 1908. It has been amended since, of course, but it is something like a quarter of a century since we had a serious look at consumer law, and on this bill I think the select committee has done a good job.

Clearly, a great deal of work has been done, and there are some quite major revisions, but I do think it is a good piece of legislation, which we are pleased to support. It seems to me that one of the guiding themes, perhaps, of the committee’s work has been, in a sense, to follow the money. By that I mean that I think it has sort of hunted out situations where a seller, a less than scrupulous trader, might be looking for opportunities to extract more money from a consumer without offering value in exchange. I think that is a pretty good theme to pursue in this sort of context.

I am particularly pleased about what have been referred to as “unsubstantiated representations”, which is a wonderfully florid phrase, basically describing people who are seeking to rip off or mislead. The particular concern, obviously, or one of them, form our point of view is the whole issue around “greenwash”—people making unsubstantiated claims about some environmental or social quality or characteristic of a product or service that simply is not there and simply is not able to be backed up or supported. Not only is it unreasonable and unfair on consumers but also it undermines the very good work done by companies that work very hard to offer genuine brand value. They actually work very hard to invest in the sustainability or the ethical in terms of a product or a service.

Of course, there is an ongoing battle in the banana market in New Zealand, which is not a trivial market. Collectively, it seems, we spend about $150 million a year on our favourite fruit. Of course, when you get a company like All Good, which invested a considerable amount of money to get third-party fair trade certification for its bananas, being undermined by a company, Dole, coming in and putting on its product a sticker that says “Ethical choice”—a claim that has absolutely no substance and no third-party verification—it is essentially “greenwash”. We ought to be driving that out of the market to the extent that we possibly can, and I think this bill makes a useful contribution towards that.

I recall when this bill first came up that I was quite surprised to learn the extent to which a recipient of unsolicited goods actually has some degree of responsibility for those goods, despite not having asked for them. I am pleased that there are some provisions in this bill that just push that responsibility back to whomever might be giving or distributing unsolicited goods. It is reasonable that, yes, if something comes to you, you ought not to seek to destroy it, but, equally, I think that if I do not ask for a product to be sent to me, if I have not indicated a wish to receive it, I ought not to have too much in the way of responsibility for those goods. That should remain with the individual who saw fit to send them to me.

This bill certainly brings up to date the relatively new phenomenon of internet trading, which is quite commonplace. We all do it. Most people now resort at some point to purchasing on the internet. The provision for people who are in trade is good—professional sellers of goods, as opposed to somebody just clearing out the garage and getting rid of something they do not want. It is important that we understand who we are dealing with, whether it is another private individual or a company, as our expectations are reasonably different in terms of support. So I think that is a good improvement.

The final comment I would make is to say I really applaud the effort that has been put into the whole issue of extended warranties. Consumers are not just being offered so-called extended warranties; often they are pressured. Often consumers purchasing electronic goods, for example, are put under considerable pressure to purchase these extended warranties that, in fact, offer very little protection, and often less protection than is already available in the consumer protection law. So it is good to see—I think it is an excellent idea—that a summary must be offered, highlighting what, if any, value is included. So this is good legislation. Compliments to the Minister of Consumer Affairs and the select committee. We are happy to support it. Kia ora.

I am happy to welcome the further advancement through the parliamentary process that this bill, the Consumer Law Reform Bill, is taking. Consumer laws are important for New Zealand citizens, and it is good to see that after roughly 25 years they are getting an update, they are getting an overhaul, and that some new provisions will be enacted for New Zealanders. Like my colleague Melissa Lee, I too was listening very carefully to the speech by the Hon David Cunliffe. I just simply say to him “Welcome to the backbench, Mr Cunliffe.” Welcome to the backbench. I could never be quite as cutting as my colleague Melissa Lee, but she did make an observation of, oh, how the mighty have fallen. Welcome to the backbench.

I would just briefly like to comment on one aspect of this legislation that I thought was particularly worth commenting on, and that is the extension of the disputes tribunal’s jurisdiction to cover section 9 of the Fair Trading Act. Having an appropriate level of access to justice for consumers through the disputes tribunal and extending that power to section 9 of the Fair Trading Act, I think, is particularly welcome. It is something that has been raised with me before by a constituent in my electorate, and I am pleased to see that it is being changed through this legislation. It is a good bill. It enjoys wide support amongst the House and I look forward to it passing its second reading.

Bill read a second time.