Electronic Transactions (Contract Formation) Amendment Bill

I move, That the Electronic Transactions (Contract Formation) Amendment Bill be now read a third time. It gives me great pleasure to speak at this third reading of my member’s bill here, a bill over which many words have been spoken—

💬 Carol Beaumont: Far too many.

—most of them of them by me, I am bound to admit. But nevertheless, clear and predictable laws governing commerce are some of the foundations of the success of the modern economy upon which our prosperity depends.

The fundamentals of business have not changed over the years. Trading is the most natural of all the activities of men and women. It is a civilising activity because, ultimately, you only succeed in business and in trade if you give other people what they want at the price they want it; otherwise, you go out of business. Most of all, trade flourishes in an environment where there is a shared understanding of the rules, so contract law and contract formation has been fundamental to the progress that we have seen in global terms over the past few centuries, and, in particular, in this country since its formation. I trust this bill will go some way to add to that shared understanding, and on that basis I commend it to the House.

Clarity and certainty lead to confidence, and confidence leads to greater investment. That is why it is so important that this Government over the past 6 years has demonstrated the stable, predictable Government policies that have led to business confidence levels being so high. We see right now very high levels of business confidence and commercial confidence, which are buttressing the economy and are so important in getting us back into growth. Once businesses have confidence, they have the confidence to invest, to employ and create jobs, and to grow their businesses. So our laws need to be constantly maintained and adapted to respond to changing technology. This law comes into that category.

Although I said at the start of the first reading that on its own this bill is not going to bring about the brighter future to which we all aspire and to which this Government is so committed, it is a small and useful addition to the lattice-work of our contract law formation. This bill tidies up one small area of uncertainty and will go some way to increase the flow of business. Given the prevalence of electronic communications in society today—including emails, smartphones, and the use of social media—it is useful that the current Act be amended to cover such areas.

If we can just drill down, the primary purpose of this legislation is to clarify the legal position on the time at which a contract is formed if the acceptance of the offer is sent by some form of electronic communication. The bill recognises the need for contractual transactions to join the electronic age. The general rule of contract formation is that a contract is formed at the time that acceptance of the offer is communicated to the offeror. So when somebody says “Yes, I accept the offer.” or the offeror and the accepter shake hands then the deal is done.

However, as we know, and as has been recorded in some of the earlier speeches, but does bear repetition here at this important third reading, an exception to the rule was created for acceptances created by post. This goes back to the famous case of Adams v Lindsell of 1818. It is worth just quickly going over the details of that case to remind the House. That case involved two parties in the sale of wool. On 2 September the defendants wrote to the plaintiffs offering to sell certain fleeces of wool—I will not be pulling the wool over—and required an answer in the course of the post. The defendants misdirected the letter so that the plaintiffs did not receive it until 5 September. In the meantime, the plaintiffs had posted the acceptance on the same day but it was not received until 9 September. Meanwhile, on 8 September the defendants, having not received an answer by 7 September as they expected, sold the wool to somebody else.

The defendants argued that there could not have been a binding contract until the answer was actually received and that until then they were free to sell the wool to whomever they wanted. The judge said that if that was true, it would be impossible to complete any transactions through the post. If the defendants were not bound by their offer until the answer was received, then the plaintiffs would not be bound until they had received word that the defendants had received their acceptance, and this would go on indefinitely. So it was considered that the offerors were making the offer to the plaintiffs during every moment that the letter was in the post. Then, when the offeree has placed his acceptance in the post, there is a fictional meeting of minds—and that is the phrase that the judge used, “a fictional meeting of minds”—that concludes the offer and gives effect to the acceptance.

The problem is that that longstanding rule relating to postal acceptances started by Adams v Lindsell and enumerated in many other cases and laws consequently is not appropriate to electronic transactions. This has already been recognised. There is no clear authority yet on transactions by way of email. The point of this bill is to serve to clarify the law.

When we go through the details, how I intended to remedy this in the draft law was by inserting a new section 32A into the Electronic Transactions Act—

💬 Carol Beaumont: This has to be the most boring speech ever. This is a personal best in boring.

Look, it may not be the most exciting topic but it is an important topic. So I was introducing new section 32A, which said that an offer accepted by electronic communication is deemed to be accepted at the time of receipt of the acceptance by the offeror. I thought that was a rather neat way of getting the idea across, but the Commerce Committee heard a lot of submissions on this topic, led by Jonathan Young, the MP for New Plymouth. The committee members thought, in their wisdom, that it could have been more elegantly handled. In truth, this reflected some of the submissions.

The concern outlined during the course of the select committee process was that there could be a misapprehension that a hard-wired rule applied and that the offer could be deemed to be accepted electronically only at the time of the receipt. So the suggestion during the select committee process was to abandon the new section 32A approach and instead insert a new section 13A into the Act, which was indeed what was done, to make it clear that this was a default rule instead of a rigid approach from which the parties would be able to contract out, if they wanted to.

So we have here section 11 of the principal Act, the Electronic Transactions Act, which already establishes a time at which an electronic communication is taken to be received. So what we have is a new section 13A, which says: “(1) For the purpose of the formation of a contract, an acceptance by electronic communication of an offer is taken to be communicated to the offeror at the time determined by section 11 …”. So I think this is a more elegant way of solving the problem that I set out to solve, to bring clarity to the situation. As a result, I think we have an effective law that will make a small but important difference.

Interestingly, this bill nicely dovetails with my next member’s bill in the ballot, which is all about freedom of contract over employment contracts. That fits very much with my principles that people should be able to arrange whatever contracts they want and have them enforced by the courts, which is the very foundation of all our commercial activities.

What we have as a result of the good work of the select committee—for which I am grateful to the efforts of Jonathan Young and my colleagues—is a facilitative piece of legislation that ensures that negotiating parties are free to specify their own mutually agreed conventions but in the absence of that, everybody knows the rules.

Stepping back from that, I know that this piece of legislation is a modest one. It deals with only a very small piece of the law that had been somewhat vague. But it is important more in the sense that it is an example of this Government’s determination to work to ensure that every little piece of contract law is well tended and kept up to date with changes in technology. On that basis, I am thrilled at the broad measure of support that we have had from across the House and many parties. I commend this bill to the House and I look forward to the support of other parties. Thank you.

There is a four-letter word that could be used to describe the Electronic Transactions (Contract Formation) Amendment Bill, and it begins with “s”. That word is “spam”. This bill is a nothing bill. It is a time-wasting bill. It has wasted the time of Parliament in the long-winded debate. It has wasted the time of the Commerce Committee. It has wasted the time of officials.

Our opposition to this bill, because we clearly oppose this bill, is on a point of principle. That principle is that such a bill should never have been brought before the House. It has ended up coming back to this House with no purpose.

At best this bill could be described as a clarification of the law; it adds nothing to the law. It is a massive waste of time for this Parliament, particularly for the Government on the other side of the House, which is clearly displaying that it has run out of energy, it has run out of ideas, and—

Sorry to interrupt the honourable member. The time has come for me to leave the Chair.

Sitting suspended from 6 p.m. to 7.30 p.m.

It is my pleasure to stand and speak on the Electronic Transactions (Contract Formation) Amendment Bill in its third reading. This might be a small bill—in fact, measured by words, it is very small, and is crafted by such a wordsmith as Paul Goldsmith. Its size could leave us perplexed, except it takes far greater acumen to say something in fewer words than it does in many. Mr Goldsmith, a legislator, can be proud of his accomplishment in this law. Let me give some context to that. Creating law in such an important field of human endeavour and activity as contract law is important. Contracts are so important to the healthy development and growth of not only economies but society. They are like the sinews that hold so much together. “What is a hand without an arm?”, somebody might ask. Each, separately, has little use or function, but together they have mobility, leverage, and usefulness. What is a foot without a leg? What is a mouth without a mind? Perhaps some members on the other side could answer that question.

But contracts are those that connect disparate parts of our economy and our society together. They socialise people. You have what I want, and I have what you want—that is the nub and centre of a transaction. So let us talk and let us see if we can come to an agreement. Let us do an exchange of value.

Contracts also connect countries, as we know with the free-trade agreements that are benefiting our nation in these times. They are agreements that have sheltered us from the global financial crisis perhaps more than most countries. Such is the power of contracts. They are built upon international understanding and agreements that connect us for mutual benefit, and that is good. They create degrees of dependency, and that is OK because you look after those whom you depend upon. They create bridges of trust and respect, value and inclusion.

A few years ago I visited an integrated circuit manufacturer that has its factory between New Plymouth and Mount Taranaki. It makes dozens, if not hundreds, of components. One of the components it makes is a small integrated circuit of an onboard computer system of an F-16 Fighting Falcon, made by General Dynamics for the United States Air Force. How a small North Taranaki business can supply a single part to the United States Department of Defense baffles me, but it was a contract that makes it possible.

I am a space buff. I love science fiction. I always watch every Star Trek movie that comes out, and I followed the progress and development of the space shuttle. The statistics are simply mind-blowing. It is the most complex machine ever constructed, with 2.5 million separate parts and 370 kilometres of wiring. Its three main engines are together more powerful than 60 Clyde Dams, and the pressure of their turbo pumps can send a column of liquid hydrogen nearly 60,000 feet into the sky. The space shuttle programme was supported by over 1,500 active suppliers, some of whom are the only known or certified source of a particular material, part, or service. What brings all these suppliers together, all these parts together, is contracts. What we are looking at tonight is a component, a small component, of a wider body of contract law. As every single one of those parts is important, so every component part of contract law is important. Contracts are the sinews and the ligaments that bind all their collective creativity and intelligence into detailed design manufacturing and quality assurance that, back with the space shuttle programme, enabled them to make one of the most complex and daring machines known to man.

Contracts are what grow countries. They are vitally important. They connect people and their ideas with outcomes and advancement. Any law that strengthens our contract law is not only good for business but it is good for our society. This bill is a single component of a bigger body of law, known as contract law. It has a part to play in our social and economic well-being.

A very important part of why this bill has come to the House is all about when a contract, an electronic transaction, takes place. What is the timing that is critical for that to stand its stead? That is a very important thing, because we know that when it comes to disputes, often timing is the issue. To have some clarity in the law about the timing of when an electronic transaction or contract takes place is clarity that is going to benefit the wider body of contract law. The example that Mr Goldsmith used was a case that goes back a couple of hundred years, back to 1818—the case of Adams v Lindsell. It was an English contract law case, regarded as the first case towards the establishment of the postal rule for acceptance of an offer. Ordinarily, any form of acceptance must be communicated expressly to an offeror. However, it was found that where a letter of acceptance is posted, an offer is accepted “in the course of post”. When it came to an offer and an acceptance of an agreement that transacts through the post, you have this period of time where it is an unknown entity of whether the offer has been accepted. Of course, these days we do not do postal contracts that often. We do electronic contracts. They are the norm, and increasingly will be so in our modern society.

The case involved two parties in the sale of wool. On 2 September the defendants wrote to the plaintiffs offering to sell them certain fleeces of wool and requiring an answer in the course of post. The defendants misdirected the letter, so that the plaintiffs did not receive it until 5 September. The plaintiffs posted their acceptance on the same day, in good faith, but it was not received until 9 September. Meanwhile, on 8 September the defendants, not having received an answer by 7 September, as they had expected, sold the wool to someone else. Here we have this beautiful conundrum happening. The defendants argued that there could not be a binding contract until the answer was actually received. Until then they were free to sell the wool to another buyer.

The court said that if that was true, it would be impossible to complete any contract through the post. If the defendants were not bound by their offer until the answer was received, then the plaintiffs would not be bound until they had received word that the defendants had received the acceptance, and this could go on indefinitely. Instead, it must be considered that the offerors were making the offer to the plaintiffs during every moment that the letter was in the post. In essence, it is like sending an email offer that, when you send it, is open and alive for all of that period of time. In this case it was a matter of days, because the letter was misdirected and received late.

Then when the offeree has placed his acceptance in the post, there is what is called a fictional meeting of the minds, which concludes the offer and gives effect to the acceptance. All of this had to be worked through in law 200 years ago, because what was happening was that trading was starting to happen in distant places—similar, of course, to what we do all the time. The acceptance did not arrive in the course of post, strictly speaking. All parties understood the course of post to refer to 7 September, but because the delay was the fault of the defendant, it was taken that the acceptance did arrive in the course of post. In conclusion, this bill is about determining the time.

As members opposite will know, Labour opposes the Electronic Transactions (Contract Formation) Amendment Bill. It is a spam bill, designed to clog up the members’ bills ballot process. It should have been a Government bill or part of a Statutes Amendment Bill.

We are also extremely concerned about the amount of time that has been wasted on this bill. It is clearly an attempt to block the passage of Sue Moroney’s Parental Leave and Employment Protection (Six Months’ Paid Leave) Amendment Bill, or to have that bill put before the House. I will leave my comments there.

Like the previous speaker, Carol Beaumont, I have to say that this bill is clearly a waste of the time of the House. We have members’ days so that all members of Parliament, even if they are not in Government, can submit bills. I would like to just note that the Green Party has 14 excellent bills in the ballot at the moment that would make a positive contribution to New Zealand. That is what we are here for—to come up with constructive solutions that are going to lead to a fairer New Zealand, one that is greener and smarter, and has an economy that works for everyone.

So, instead of debating bills that might actually make a substantial difference to the lives of New Zealanders, we are stuck here taking up the time of the House with a completely trite bill like the Electronic Transactions (Contract Formation) Amendment Bill, which clearly should have been in a Government bill or part of the statutes amendment process. That is all I have to say. Thank you.

At 7.18 this evening, just before we resumed this debate in the House, the Hon Tim Groser released a press release. The heading of that press release said: “OECD ranks New Zealand’s service sector amongst most open”. The previous speaker, Julie Anne Genter, talked about the importance of having a green and smart economy. Well, the service sector is very much a part of that economy, and at the heart of the service sector are the financial transactions that drive that economy. This bill takes a step forward to improve financial transactions through contract law, and I think that it does make a not insignificant step forward in that regard.

The Hon Tim Groser’s press release said: “New Zealand’s service sector ranked amongst the most open in a recent survey of 40 countries conducted by the [OECD]. … The OECD’s new Services Trade Restrictive Index aims to quantify the restrictiveness of policy measures …”. What we are talking about here is a change in policy that actually improves the ability to conduct business online and in the service sector. This survey adds to a number of international comparators that have recently been received by this country ranking us globally as one of the best countries in the world. That makes for an exciting future for New Zealanders, particularly for young New Zealanders in this country.

So I rise to speak on this third reading of the Electronic Transactions (Contract Formation) Amendment Bill. Can I congratulate Paul Goldsmith on having had his bill drawn from the ballot and being able to progress it through the House before Parliament rises at the end of this term.

You will be aware that the Government has set four priorities—four objectives—for this term of Government. They were to return the country’s books to surplus, to rebuild that beautiful city of Christchurch, to build a stronger and more competitive economy, and to build better public services. The Government has undertaken hundreds, if not thousands, of initiatives to take positive steps towards achieving these objectives. The reality is that there is not one silver bullet that will achieve these goals. However, the combination of many individual initiatives such as Mr Goldsmith’s together make significant progress towards lifting the bar in New Zealand and building a brighter future for our country.

The Government has made huge progress over this term, and this bill adds in a not insignificant way to that progress. To reflect on that progress, the Government will release a Budget that charts the surplus in the 2014-15 year. This is a huge achievement in itself and is the result of many different initiatives, such as Mr Goldsmith’s. At the same time, the Australian Government will release a Budget that will paint a very different picture of its Government accounts. Through the tough decisions we have made over the last 5 years, we now have choices to extend funding, not to contract it. The announcements made just this week in regard to a $22 million increase for budgeting services, a $10.4 million increase in funding for providers who support victims of sexual violence, and a $20 million increase in funding for apprenticeships are no accident. They are the result of a very considered approach to bringing our Budget back to surplus, and thereby providing us with choices going forward.

The Government has made huge progress with the rebuild of Christchurch. Literally thousands of large and small initiatives have been delivered to progress the rebuild. Just yesterday the Government announced a $3,000 incentive for 1,000 beneficiaries to aid them in securing jobs in Christchurch to help with the rebuild. We are committed to that rebuild and to seeing it through.

We have made huge progress with our third goal, which is to build a stronger and more competitive economy. The Business Growth Agenda has provided the foundation for hundreds of big and small initiatives to advance that objective. Outside the Business Growth Agenda there have been thousands of initiatives made by businesses, local government, and many individual New Zealanders to help make the New Zealand economy grow. Thank you to all those people.

Paul Goldsmith’s bill makes, as I have said, a small but significant contribution to making the boat go faster. The Electronic Transactions (Contract Formation) Amendment Bill clarifies the legal position on the time at which a contract is formed if the acceptance of the offer is sent by electronic communication. The reality is that we now live in a digital age, with more and more contracts being offered and accepted through digital mediums. This bill advances the law in this area, once again modernising our economy by improving the productivity and competitiveness of our nation.

The results of the wider suite of initiatives, including Mr Goldsmith’s, have been stunning, with New Zealand now showing huge signs of recovery. Our growth rate now puts us amongst the best-performing economies in the Western World. Interest rates remain at all-time lows, inflation remains within the target band, business and consumer confidence are at record highs, and employment continues to grow. As we heard from Minister Joyce today, manufacturing has been in expansion for the last 18 months, and in just the last few days we have seen very positive news about record highs in exports and employment growth, with 68,000 new jobs in just the last year alone.

Most particularly—and it a huge sign of the strength of our economy—has been the turn-round in migration numbers. New Zealand has had net positive migration to New Zealand of in excess of 30,000, and there is a huge turn-round in the numbers migrating across to Australia. Young New Zealanders will always want to explore the world—I have no doubt about that. My own children, I am sure, will want to explore the world, and I welcome that. But with this Government, Kiwis are starting to return in their droves. This, if not anything else, is the proof of a strong and a competitive economy in action: Kiwis returning in their droves and foreigners lining up to get work visas. If it were not for all the hard work that has gone in to achieving this, some would start calling us the lucky country, not Australia. But luck has nothing to do with it. Millions of Kiwis are contributing to this effort, and today Paul Goldsmith takes another small step.

The Electronic Transactions (Contract Formation) Amendment Bill also links strongly with our fourth objective in Government, which is to build better public services. For the first time ever, we have seen a Prime Minister not just talk about improved public services but hold the Government to account on key targets. From health to law and order, to education, the Public Service is being held to account to deliver better services. As a result of this, we now have more children than ever in early childhood education and more teenagers passing National Certificate of Educational Achievement, with significant improvements in Māori and Pacific Island communities. We have more elective surgeries than ever before, significantly better access to cancer treatment, and hugely improved immunisation levels—once again, particularly in Māori and Pacific Island communities. In law and order, our police have delivered the lowest crime rate in 25 years. Once again my thanks go out to the entire Public Service for its commitment to delivering better services in very tight fiscal times.

One of the Public Service targets that has a lower profile but is extremely important to a modern economy is result area 10. This Public Service target requires that for 70 percent of New Zealanders, their most common transactions with Government will be completed in a digital environment by 2017. Kiwis are increasingly turning to their digital devices for information and services. They want their Government to be available online. They do not want to wait in queues. They do not want to have to replicate their details time and time again. Paul Goldsmith’s bill will assist with the achievement of this target because it clarifies the legal position around when a contract is formed online. It modernises the law for our burgeoning digital economy.

At the heart of the result area 10 target is the Department of Internal Affairs, led by Colin MacDonald and Tim Occleshaw. Central to the Department of Internal Affairs’ delivery is the Government’s information and communications technology strategy and action plan and its digital-by-default strategy. It is an exciting strategy that leads agencies across Government to continuous improvement in their engagement with citizens over the internet.

One of the best examples of this has been the roll-out of passports online, with over 100,000 Kiwis having renewed their passports online within a 3-day turn-round period. This is an incredible result and it sets the benchmark for many other Government services across New Zealand. These initiatives will be leveraged by yet another digital initiative, RealMe, which is a national solution to establishing identity online.

Across New Zealand Kiwis are stepping up to drive a better country for all of us. Today Mr Goldsmith takes a small step towards achieving that and to taking the country forward as well. I congratulate him on his bill. Thank you for the opportunity to speak this evening. Thank you.

I take a brief call on behalf of New Zealand First on this member’s bill, the Electronic Transactions (Contract Formation) Amendment Bill, simply to say that it is again somewhat disappointing. This is the second time in 2 weeks that we have experienced National members filibustering to ensure that they drag out this process so as to avoid other more worthy bills that have real significance to New Zealand, particularly to working families in this country, and that will have a benefit for them.

It is interesting, in my experience over many years in local government and central government, to watch many of the Government politicians in the last number of months stand up and give 30-second, 60-second, or 2-minute speeches when it suits them, when they want to get on with Government business and when they want to ram and push the legislation through the House at lightning pace, and where they give absolute lip-service to democracy and the democratic process. But here, where there are members’ bills waiting on the Order Paper, waiting for New Zealanders to respond to, and for us to get on with, they completely filibuster and have 10-minute speeches, obviously prepared by their research units. Most of them would not have prepared those speeches themselves.

I am just going to say this to the Government, on behalf of New Zealand First: start being a bit more responsible, start putting aside some of your own political agendas, and start thinking about the benefit and the good of New Zealanders rather than your own political outcomes.

I would like to start by congratulating my colleague Paul Goldsmith on this excellent bill, the Electronic Transactions (Contract Formation) Amendment Bill, which was drawn from the ballot.

I want to talk about the last speaker, Andrew Williams, who said that this Government is not looking after the public. I would like to say that this Government has delivered so much in the last 5½ years that the country can be proud of. The bill that we are discussing here today may seem small and compact, like the technology that most of us in New Zealand use today. However, its impact on all of us is likely to be very important. I would like to clarify here that with changing technology, things are getting smaller and smaller, and this bill is small but will have a huge impact on the business community.

If we look at the number of postal deliveries in the last decade or so, they are decreasing because of technology. Nowadays, everyone is communicating through emails, through SMS, and through other resources available today that were not available a few years ago. There is little doubt that our reliance on the internet is increasing day by day. We use the internet for almost everything—from checking our emails, to paying our bills, to completing our banking, and for other business transactions. It is essential to ensure that the new technology being used to do business is rooted in the time-tested way of transacting and running businesses.

What I mean to say is that the technology is here to help us do business at a faster pace. However, it is our duty to ensure that all due diligence is employed before using this technology. This bill specifically does that for consumers. It removes the uncertainty around the legal position on the time at which a contract is offered and accepted via electronic communication.

As my colleague the Hon Chris Tremain mentioned, a lot of things nowadays are being done electronically. One of those is the renewal of passports. About 125,000 people have renewed their passports online, and the turn-round is 3 days.

💬 Hon Member: How many days?

Three days’ turn-round. It is renewed in 3 days, and 125,000 people have used this facility since it was introduced in 2012.

Contracts are an essential part of doing business. Contracts form the legal framework that facilitates trade and commerce. Contracts are evidence for all the parties that a transaction has taken place. All parties who are part of this transaction have certain obligations to fulfil as part of their contractual agreement.

A contract, as we all know from our experiences, also acts as a hedge against any surprises or misunderstandings that may occur after the product or services that that contract pertains to have been delivered. Therefore, this piece of paper protects all the parties in all transactions.

💬 Hon Ruth Dyson: You should be able to do it spontaneously on this bill.

What is that?

💬 Hon Ruth Dyson: You’re not allowed to read your speech.

No, it is allowed. There is nothing stopping me from reading a speech.

💬 Hon Ruth Dyson: I know—I wish there was. Complying with the rules would be good.

Yes, you need to do that. You need to object to the Deputy Speaker about that. Every member speaks in this House by reading.

As I said during the first reading of the bill, times have changed, and we are living in a digital world. So our laws are to be updated. We have to update the laws that are obsolete.

💬 Hon Hekia Parata: Speak Hindi.

Sorry?

💬 Hon Hekia Parata: Carry on in Hindi.

I can speak for 10 minutes or half an hour in Hindi. Can that member understand Hindi? I do not think so. So for her convenience I am reading. I am making sure that she can understand what I am saying. This bill from my colleague Mr Paul Goldsmith does that. A clause of the bill amended the Electronic Transactions Act by inserting new section 32A. The amendment clarifies the formation of the contract when the acceptance of the offer is made through electronic communication.

For example, currently, as soon as a contract is posted, the law states that a contract has been established. At present, this rule does not cover a contract accepted electronically. For example, if a person accepts a job offer by email, then there is no legal certainty over when the contract was created. In bygone eras before emails, there was a term postal acceptance rule. This rule created a directive whereby an offer was deemed to be accepted when the acceptance was posted. Over the years the rule has been extended to include telegraph, but has been held not to apply to acceptance by telephonic means, telex, or fax.

In this modern time, when emails and smartphones are in regular use, it is important that the current legislation is amended to cover such areas. Currently, there is no mandate on acceptance by email, which is practically immediate, and the person who sends the email is usually in the best position to know whether it has been delivered or not. With the Government focus on building a more competitive and productive economy in the 21st century, in the global world we live in, there is little doubt that all of us will use the internet to do business and to transact online even more than we do currently.

With this in mind, this National-led Government is working to ensure that our Public Service makes the most of online services, and we are rolling out ultra-fast broadband. However, our law needs to ensure that all parties who are involved in an electronic transaction, be it a business or a consumer, know their obligations after they have electronically offered and accepted contracts for the product or the service.

The Electronic Transactions (Contract Formation) Amendment Bill recognises that we live in an internet age. It amends the Electronic Transactions Act to allow certainty to those who choose to accept a contract electronically. I support this bill and I congratulate Paul Goldsmith on his initiative in bringing this bill to the House. With this, I conclude my speech today.

I think that the importance and complexity of the Electronic Transactions (Contract Formation) Amendment Bill is best understood in light of the team of officials sitting to your right, Mr Deputy Speaker—the usual Government squad here to unpick the complexities that come out in the debate in case the member needs to cover them off in a press release afterwards!

Look, we went to the Commerce Committee. We heard the nonsense of it all. I was there. I do not think the officials could believe they were there. Mr Goldsmith would be better off spending his time in his electorate—

💬 Hon Ruth Dyson: He hasn’t got an electorate.

—or the electorate he would like to have—campaigning for an local exemption to the Resource Management Act, as the ACT Party, which he supports, would like to see happen.

One serious issue before I sit down—I do not want to hold this bill up—is that right now in Karitane, in my electorate of Dunedin North, there are real digital issues. The one shop in town has its eftpos machine crashing over and over again because of terrible coverage. This is another example of where the National Government has been too hung up handing out corporate welfare to its mates in Chorus due to the stuff-up of the ultra-fast broadband roll-out and has not concentrated on the basics. Karitane cannot run a web-based business. This is the kind of real issue that should be being addressed, rather than the nonsense that is in this bill. Labour will oppose this bill, and I stand to speak to that effect.

It is a great privilege to speak in the third reading in support of the Electronic Transactions (Contract Formation) Amendment Bill. I want to thank my good colleagues the chair of the Commerce Committee, Mr Young, and also, of course, the National MP Paul Goldsmith for bringing this member’s bill to the House. I also thank the other committee members for their hard work.

Before I talk about the bill, I would like to talk about trade relations between China and New Zealand. I understand that when I became an MP in 2011, China was our second-largest trading partner. Now China is the largest trading partner of New Zealand, and we should not take that for granted. We still need to expand our trade with China. There are many ways of doing that, but online trading is a key part of expanding trade relationships with China. For that reason I understand that the Minister of Trade, Tim Groser, has been working very hard to expand online trading with China. I actually worked with Minister Groser to try to set up a virtual New Zealand house in China, and we did that. In March this year, when Minister Groser was visiting China, he launched a website that is called “Fresh New Zealand”.

Alibaba is the largest online company in China, basically. Alibaba is so important that on 11 November each year, for a single day, online trading through Alibaba is about 20 billion in Chinese currency—in 1 single day. That is how much—$20 billion in just 1 single day—is going through Alibaba. That is how important online trading is in China.

💬 Hon Kate Wilkinson: How much is that in New Zealand?

That is about—if you divide it by five—

💬 Hon Kate Wilkinson: Huge.

Yes, of course. It is very, very big trading in 1 single day. Look at this. This is the picture in China. The online trading market is basically—we believe we cannot miss this particularly important market. That is why we say that we need to provide facilities and infrastructure for the future, and this bill will simply improve our infrastructure for the future, for trading.

As we have heard from the previous speakers, the purpose of the bill is to clarify the legal position on the time at which a contract is formed. This is important because for business we need clarity, right? If the acceptance of an offer is sent by electronic communication, when is the contract formed? That is very important, and this bill will clarify that. This bill will amend the Electronic Transactions Act 2002. The Commerce Committee, of which I am a member, recommended that the bill be passed with amendments. This is a good bill. It clarifies uncertainty around when contracts are formed if the acceptance of an offer is made through electronic communications like email. Clear and predictable laws governing commerce are some of the foundations of a successful, modern economy. This bill will deliver clarity and certainty, which will lead to confidence, and confidence leads to greater investment. Very clearly, overseas investors are very interested in New Zealand, not only because we have good opportunities but also because we have very clear rules. We have a very clear environment—very transparent. So this is very important.

Under current legislation, when a contract is accepted by post, a rule applies that means that the contract is formed as soon as the acceptance is placed in the post. However, this rule does not cover contracts accepted electronically—for example, emails. So if someone accepts a job by email, then there is no legal certainty over when that contract was formed. This bill tidies up a small area of uncertainty. It will amend the Electronic Transactions Act 2002 to follow the postal acceptance rule relating to electronic communications. Given the prevalence of electronic communications in society today, including email, smartphones, and social media, it is good that the current Act is amended to cover such areas. Basically, in today’s world it is hard to imagine not having electronic devices. For example, iPhones are very important in our lives, and we work and also do transactions using them.

The National-led Government is committed to operating online in the 21st century. It is about making the Public Service work better for taxpayers, businesses, and consumers. This will result in a more competitive and productive economy, which will support jobs, higher wages, and first-class education and health systems, and help New Zealanders and families to get ahead in New Zealand. Here, education in particular is also important. Why? I have a kid who is 13 years old. Every day when she does homework, she goes online to research all these things. Basically, the younger generation is more literate in terms of using electronic devices. It is important that we do have this clarity for future generations. These are the things that matter to New Zealanders and that the National-led Government supports and is working hard to deliver for New Zealanders.

We have set a target that an average of 70 percent of New Zealanders’ most common transactions with the Government will be completed in a digital environment by 2017—that is 70 percent. This includes, among other things, renewing adult passports, applying for visas, financial assistance, Inland Revenue Department numbers, and paying for vehicle licensing. But there are many more options, of course. We have many things that can be done via electronic communications. The National-led Government is also investing $1.65 billion to deliver faster broadband to 97.8 percent of all New Zealanders where they live, work, and study by 2025. We believe that ultra-fast broadband is vital. It will promote innovation, create jobs, and grow the New Zealand economy. Actually, I was talking to someone the other day. He was working online, basically, doing overseas transactions from New Zealand. He found that currently it is quite difficult because we do not have ultra-fast broadband.

National is focused on building a more competitive and productive economy. New Zealand’s unemployment rate continues to be lower than that of most OECD countries. Through our comprehensive Business Growth Agenda, the Government has a strong focus on creating the opportunities for competitive businesses to invest and employ more people. Our results so far are reflected in strong growth, increasing employment, improved trade balance, stronger productivity growth, and real wages rising faster than the cost of living. We are working to ensure that our public services make the most of online services. The Electronic Transactions (Contract Formation) Amendment Bill recognises that we live in an internet age, and that is a good thing. Thank you.

I call the Hon Trevor Mallard. I am advised this is not a split call.

No, it is not a split call, Mr Deputy Speaker. I want to use the time that is available to both the Greens and the Labour Party. The first point I would want to make—sorry, I am just trying to look through the non-transparent member standing there—is to acknowledge the mover of the Electronic Transactions (Contract Formation) Amendment Bill, Paul Goldsmith. He did pick up something that should have been in a Statutes Amendment Bill. He used a Gestetner or a photocopier or something to copy it out and he put it into Parliament, and it is a bit of action.

But I would say it is a waste of that member. That member is much more intelligent than Nicky Wagner, who has gone into Cabinet. He should have got in. I just want to say to him, after the news that we have got over the last few minutes, that I am sure that he is headed to a ministerial post, because Judith Collins is “gone-burger”. Never before has the National Party dropped 6 percent in the polling in less than 2 weeks. The National Party is in free fall and Judith Collins is going to be blamed for that.

We already know that she has been practising because she is going to be singing the theme song for the National Party at the next election. Do you know what it is called? It is called “Don’t Cry for me, Oravida”. Judith Collins is going to be leading the song. She is going to be leading the song. National is down 6 percent in under 2 weeks as a result of her chicanery and the lies that have been told around the country on this issue. As a result, no little diversion like this silly little bill, which should not have been in this Parliament, will make any difference whatsoever.

It is a pleasure to take a call on the third reading of the Electronic Transactions (Contract Formation) Amendment Bill. I want to open with an observation. We were lucky enough to listen to the Hon Chris Tremain speaking for 10 minutes, and he was uninterrupted. The Opposition benches were quiet. They had nothing to say. Then I listened to my colleague Kanwal Singh Bakshi and my colleague Jian Yang get up and make two very good contributions of 10 minutes each. The whole time they were making their contributions they were being laughed at, they were being abused, they were being interjected on by Ruth Dyson, and they were being abused by Trevor Mallard. So what I would ask people and viewers at home to do is to take their own observations from that. The Hon Chris Tremain got up for 10 minutes and made a speech uninterrupted. My colleagues Kanwal and Jian then got up to make their speeches, two thoughtful contributions, and they were abused the entire time and heckled by the Opposition benches. People at home can make up their own minds about that one, but I felt that it was a disgrace, and you should all be ashamed of yourselves.

💬 Jami-Lee Ross: Because they’re ethnic.

I do not know whether it is because they are ethnic. People can make up their own minds about that. I am not going to accuse anyone of anything, but to me it was a disgrace and it was a smear on this House.

If you want to talk about how important the digital age is, we have to ask ourselves what Clare Curran was doing up at the Kim Dotcom mansion. What was Clare Curran doing up at the Kim Dotcom mansion, having the—what was it—digital bill of rights legislation delivered to her by Kim Dotcom? Who was sitting in the getaway car out the back? Probably Mr Mallard. Mr Mallard was probably sitting out there in the getaway car, ready for Clare to sneak away in the dead of the night with the new digital bill of rights legislation that Kim Dotcom had given her. Got anything to say now, Mr Mallard? Got any comments to make on that? Yes, it had to be a getaway car because you would fall off a bike. There is no doubt about that. There would be no doubt about that.

This is a very good bill and I want to commend my colleague Paul Goldsmith for bringing this bill to the House. It is an excellent bill. We do live in an age of the internet and technology and—

💬 Hon Trevor Mallard: Minus 6 percent and falling.

Oh, well, you want to talk about polls; let us talk about your prospective coalition partner, the Greens. Let us talk about what Mr Norman has been doing, Mr Mallard.

💬 Mr DEPUTY SPEAKER: Order! [Interruption] Order! The member should be careful not to include the Speaker by the use of the inappropriate pronoun.

You are right. I am sorry. I apologise, Mr Deputy Speaker. So, Mr Mallard, let us speak about your future—

💬 Hon Trevor Mallard: I refused to do that yesterday. You’re a wimp.

—and who you proposed to be your Deputy Prime Minister. Yes, we are used to your abuse, Mr Mallard. We have just seen Mr Jian Yang and Kanwal Bakshi be subjected to your abuse over the last half an hour. But let us talk about your prospective coalition partner and what he has been up to. He has been up at the Kim Dotcom mansion too. He was probably high-fiving Clare Curran on the way through and being tasked by Mr Dotcom to stop his extradition. And this is a Government in waiting? This is meant to be a Government in waiting, up there talking to someone who is currently under a Department of Justice indictment for theft of intellectual property? To me, it is an absolute travesty.

Let us talk about Shane Jones. You know, I have been very fortunate and lucky to get to know Shane Jones in my time here in Parliament. I am involved in the Parliamentary Rugby Team. It is an honour to be the co-captain along with Damien O’Connor. I have got to know Shane Jones very well. I will tell you right now that he is a man of integrity and he is a man who is focused on economic growth for New Zealand. I will tell you now that the reason he is not sitting over there with you guys and why he is not going to stay with you is that he sees no future in terms of economic growth, and that is what he is about. He has got aspirations for the people of Northland—yes, he has—but he understands clearly that, especially with your coalition partner the Green Party, there is no aspiration for economic growth. It is as simple as that.

I will get back to the Electronic Transactions (Contract Formation) Amendment Bill because it is a good bill and it does actually fold neatly into what the Government is trying to achieve, and that is economic growth and a future for our generations. We are a small country. We are a country of 4½ million people. We will not get ahead by trading amongst ourselves. We have to make sure that we position ourselves globally to continue to be a real global player and to continue to grow our exports. To do that there has to be attention to detail and we have to be seen to have the best global regulations and systems in the world. To do that we actually have to have bills like this to make the changes and to make the tweaks that are necessary in order to allow us to keep growing and moving in that direction. So it is with great pride that I stand and take a call to support this very good bill from Mr Goldsmith, this Electronic Transactions (Contract Formation) Amendment Bill. Thank you.

Bill read a third time.