Fair Trading Amendment Bill

on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Fair Trading Amendment Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill.

The Fair Trading Amendment Bill amends the Fair Trading Act 1986 to introduce new protections for businesses and consumers against unfair commercial practices. Firstly, it introduces a prohibition against unconscionable conduct in trade. Secondly, it extends existing protections against unfair contract terms in non-negotiable consumer contracts, or “take it or leave it” consumer contracts, to also apply to business contracts with a value below $250,000 in a given year. Thirdly, it strengthens the ability of consumers to require uninvited sellers to leave or not enter their premises, including through the use of “do not knock” stickers. The bill also makes a number of technical changes to the Act to improve its functioning and to support consistency with other legislation enforced by the Commerce Commission.

This bill supports this Government’s goal of building a more productive, sustainable, and inclusive economy. An important part of achieving this goal is ensuring that New Zealand has a trading environment where both businesses and consumers are treated fairly. At its core, a fair economy is one where businesses and consumers trust each other, where businesses compete on their merits, where businesses have a reasonable opportunity to grow and thrive, and where consumers are protected from high levels of detriment.

New Zealand already has a number of protections against unfair practices, including those contained in the Fair Trading Act. However, when consulted in 2018 on whether these protections went far enough, many submitters told us that they did not. We’ve heard about firms who are bullied by their larger suppliers or business customers. We’ve heard about cases where the larger business unilaterally buries the terms of the contract, including price, and we’ve heard about countless examples of businesses who have had to wait very long times to be paid, sometimes up to 90 days and beyond after the work has been done or products supplied.

This stuff matters because it makes it hard for New Zealand businesses to focus on what really matters: developing their products and services, innovating, and growing their businesses. Instead, businesses have to spend hours reviewing contracts to ensure there are no unfair terms. They have to work with their accountants to deal with cash-flow issues arising from late payments—which is no reflection on their accountants—and they have to deal with the stress that comes from being bullied or harassed by their suppliers or business customers. This has flow-on effects also for other parts of the economy, especially for the families and communities that these businesses support. We’ve also heard about real consumer harm as well. We’ve been told about businesses preying on vulnerable consumers in shopping malls, in their homes, and even in mental health units. We won’t get to a more productive, sustainable, and inclusive economy with these sorts of practices in the market place.

I’d like to talk about some aspects of the bill in more detail: firstly, the bill’s prohibition against unconscionable conduct. Unconscionable conduct is serious misconduct that goes beyond what is commercially necessary or appropriate. The bill does not define exactly what is unconscionable; however, the prohibition is based on provisions in the Australian Competition and Consumer Act 2010. The bill is designed to make clear that the prohibition goes beyond the narrow concept of unconscionability that currently exists in the New Zealand courts. In Australia, the courts have said that conduct is unconscionable if it goes against conscience by reference to the norms of society. The courts have stated that such norms include honesty and fairness. The bill provides a list of factors for determining whether the conduct is unconscionable, such as whether parties acted in good faith, whether a trader used any unfair pressure or tactics, and whether the person affected was in a position to protect their own interests.

Unconscionable conduct will be an offence subject to penalties of up to $200,000 for individuals and $600,000 for bodies corporate. This prohibition is necessary to deal with a very small minority of businesses that take advantage of the vulnerabilities and lack of bargaining power of consumers or other businesses. However, any business that acts fairly and reasonably should have no reason to be concerned that they are in danger of breaching this new prohibition.

Secondly, the bill extends the current protections against unfair contract terms in consumer contracts to also protect small trade contracts. Unfair contract terms are defined as terms that are imbalanced, unnecessary, and that would cause detriment. Small trade contracts are, broadly, non-negotiable contracts between businesses that form part of trading relationships that have an actual or expected total value of less than $250,000 in any 12-month period.

A standard form contract is a non-negotiable contract presented on a “take it or leave it” basis. For example, a standard franchise agreement used by a restaurant franchiser or a standard lease agreement offered by a large commercial property owner for office space. The bill provides that if the Commerce Commission seeks and receives a High Court declaration that a contract term is unfair then parties may not include or enforce such terms in their non-negotiable contracts. The extension of the unfair contract terms protection to businesses recognises that, like consumers, some businesses can face a complete lack of bargaining power when dealing with other businesses. This leaves them with no real choice but to accept unfair terms in contracts because the alternative might be for their main customer or supplier to walk away from them and leave their business and livelihood in jeopardy.

The unfair terms that we are seeking to address aren’t ones that are necessary to conduct business. In some cases they are put into contracts simply because the dominant party knows it can get away with it. It is not reasonable to expect small businesses to be able to pick through routine contracts with a fine-tooth comb to try and detect any unfair contract terms, particularly when they may not have the bargaining power to have them removed in any case.

At the same time, the $250,000 limit on the protections recognises that when businesses enter into large strategic contracts, they do have an obligation to do their own due diligence, seek legal advice, and make their own decisions about whether the risks being placed on their businesses are acceptable or not. I’m already aware of feedback about this threshold, and I would encourage those submitters who wish to place their feedback to the select committee. These new protections will require businesses to review and potentially amend their contracts, but I am confident that the protections should not significantly inhibit businesses’ ability to enter into fair and reasonable contracts with each other.

Thirdly, the bill provides that if an uninvited seller is on or approaching residential premises for the purpose of selling something, the seller must leave or not enter if directed by a consumer. A direction can be written or verbal and can be specific or general, such as a “do not knock” sticker on a letterbox, so if a mobile truck shop shows up and tries to knock on a consumer’s door, despite seeing a “do not knock” sticker, the trader would be legally obliged to leave the premises or face penalties. The provision originates from a concern identified in our review of consumer credit law in 2018. It found that consumers are often preyed upon by mobile traders and that measures that they take to deter such traders at present—such as putting up “do not knock” stickers—do not have a legal effect currently. This is a result of the way the courts have interpreted the Trespass Act 1980. The courts have stated that broadly worded notices such as “do not knock” stickers are not legally enforceable under the Trespass Act.

Under this proposal, ignoring a direction to leave or not enter will be subject to penalties of up to $10,000 for individuals and $30,000 for businesses. This will be enforced by the Commerce Commission. I expect that the Commerce Commission will, generally, only take action in respect of systemic commercial offending by mobile traders. Any concerns relating to safety would be dealt with by police, as at present.

To conclude, this bill draws a line in the sand in respect of commercial conduct. It makes clear this Government’s expectation that business in New Zealand will be conducted honestly and fairly. At the same time, the protections are designed to ensure that businesses can continue to compete effectively, negotiate firmly, and freely enter into contracts that reflect their wishes. I commend this bill to the House.

Thank you, Madam Speaker. Well, the Government is at least showing some consistency at last. The consistency is that for every problem that exists or they perceive, the only answer is more Government, and, within that, the only answer for more Government is more regulation-making power so the Minister can sidestep Parliament and do what he or she wants to their heart’s content.

Certainly we don’t have an issue with protecting consumers, in particular, and we acknowledge there are some issues of power imbalances that are extraordinarily serious for some small business owners, but we have a very big issue with the failure to seek to define what unconscionable terms will mean and what those terms will be. I mean the Minister, in introducing this bill, actually gave a potential definition, saying that “the courts in Australia have found that unconscionable is” and he read that piece. Why did they not put that into the bill then? Why not define this? Instead, they give some areas where the court may give consideration—it’s not saying that they define unconscionable conduct at all—it’s saying they can give consideration to certain matters.

We would say that it would be equally important, if this bill does pass, that the Ministry of Business, Innovation and Employment should publish some guidelines for traders, for businesses, to ensure that they can steer clear of it. No one wants to be at the wrong end of a court proceeding. You certainly don’t want to be the first cab off the rank, which actually leads to some of the background behind this Fair Trading Act piece. In select committee work back in 2015 this very matter was looked at—unconscionable elements in contracts. It was determined at that time—and I believe it was a unanimous decision, and I could be corrected on that, but the committee found that, actually, the better option to undertake was to allow some case law to be determined in New Zealand so that it could be clearly understood what would be in, what would be out, just where the boundaries might lie. This Government has chosen not to allow that to go through its process but, instead, to put a provision in without defining what “unconscionable” would be. We think that is a glaring error.

On the particular business to business, small business unfair contract terms, a couple of issues there. The first one is—and we do acknowledge that there are some small businesses in incredibly invidious positions where their large business customer simply has so much power that they may feel they have no alternative but to agree to terms that they really, really wouldn’t normally want to sign up to. But there are a couple of elements to that, not least that it’s not the Government’s role to intervene in commercial agreements between willing parties to ensure an outcome, which is what this will do. It’ll do it in a couple of ways, not only because the unfair terms are understood, but because it gives the Minister power to change that at will. It’s the greatest regulation-making power in this bill. They’re giving the Minister of commerce the ability to determine what will be unfair for a small business contracting with what is likely to be a much larger company. It’s not the Minister of commerce’s role to determine the contracts between willing suppliers and customers in New Zealand. So we think there’s a lot of work that would need to be done on that.

I’ll get to the door-to-door stuff last. We’re also a bit concerned about the proposed penalties, particularly if I return to the area around unconscionable conduct. Particularly for individuals, it’s really quite high, at $200,000. I think you could probably argue the proposed penalty for a business at $600,000 may be far more reasonable, but the one for individuals—I mean, we really have to understand the problem and determine that the penalty proposed or the penalty regime proposed is proportionate, and I’m not sure that the Government, in putting this together, has made that case.

The very last part I’ll talk just briefly on, because, actually, I think, you know—the point about helping consumers to be able to ward off predatory sellers is not a bad thing, but, again, it’s about appropriateness to the situation. So the Minister said that in his view, the Commerce Commission would only act against mobile traders. Well, why not define that? Why not say that it applies to them? There may even be a couple of other types of door-to-door salespeople that these particular provisions could apply to, but the way it’s written is they’ll simply apply to anyone seeking to undertake some sort of trade at the doorstep. So I’m sure the Girl Guides are probably figuring they’re quite happy that they’ve stopped selling biscuits, because, quite frankly, the way the legislation’s written at the moment, they would be captured.

💬 Hon Stuart Nash: That’s not true.

Yes, they would, because they’d be knocking on doors seeking to sell something, and so by the law, they’re captured. It’s important, when we deal with this—it’s what the law says, not how people want to administer it. It is how it is written that is important.

But, you know, we’re not going to support this legislation. We think it’s a bit rushed and not well defined as it should be, but we will work constructively in the Economic Development, Science and Innovation Committee. We will seek to actually improve it as best we can, and if it transpires that what comes out of select committee is appropriate and acceptable, we may well change that position, but what we’re saying is it’s not right now.

Actually, it’s the Government’s job around this policy to get it right before it introduces the bill into the House, not simply going, “Well, here’s the thing we think’s worth doing; you panel beat it out at select committee.”, which, unfortunately, I have to say, we’re seeing more and more of, and particularly more of regulation-making powers constantly put into Government bills to give them all the authority to do what they want after Parliament’s given the first sanction, with no direct and immediate scrutiny from Parliament. Well, actually, it’s Parliament’s role to pass laws and make laws in this country, not the Government’s. They propose, and Parliament decides whether or not it agrees. It is already quite egregious, quite frankly, just the extent to which this Government is inserting regulation-making powers in all sorts of legislation it brings to this House. Quite frankly, that alone would be enough to oppose this bill. As I said, we’ll work constructively, we’ll see if we can turn it into something worthy of our support, but right at the moment, it is not that.

Must be a cold night in hell, because tonight is the night that the National Party has opposed a bill that supports small business. That is an astonishing position for that party to take. This is a bill that small business asked for. This is the bill that was extensively canvassed in discussion and consultation with business. It is a bill that was asked for. Why? Because 45 percent of small businesses say they have been bullied, they have been pressured, they have been subject to conduct that could amount to being unconscionable conduct. This bill seeks to protect small business from the imbalance of power that can come when they are dealing with large business. This is a bill that should be supported by the National Party, and I do not understand why they will not support it.

On this side of the House, because we understand the stresses and strains of small business, because we understand what can happen from a power imbalance, because we understand why it matters when one party is so much bigger and stronger than the other party, we support this bill. Why? Because it seeks to give grounds for redress where a large business pressures a small business, where a small person is subject to extraordinary pressure. That is why we support it.

The previous speaker, Brett Hudson, was concerned that we had not defined what unconscionable conduct is in this bill, that we had not given an explicit definition, but he also complained that we hadn’t allowed case law to provide a definition over time. Now, I cannot reconcile those two statements. In fact, this bill does find a way of drawing on the strengths of case law and drawing on the strengths of providing guidance in legislation. If the previous speaker would care to look at clause 6 of the bill, he would see that clause 6 inserts two new sections into the Act, sections 7 and 8. Those clauses give an understanding—it says that a person must not trade in or engage in unconscionable conduct, and then it sets out a series of criteria that the court may take into account when determining whether something amounts to unconscionable conduct. It doesn’t define it exactly, but it sets out a series of criteria.

This is, I guess, because in some cases, what might amount to unconscionable conduct might change over time. Phishing, indeed, did not exist 20 years ago, but it might amount to unconscionable conduct. Some of the sales techniques that we see that have come about through the advent of the internet might not have been unconscionable conduct—couldn’t have been defined that way—because they didn’t exist 20 years ago. These series of criteria will enable us to update our understanding of what unconscionable conduct is as business practice changes.

So let’s have a look at some of the criteria that are sitting there in the bill. It is to do with the relative bargaining power of the people engaging in the conduct—that’s paragraph (a) of the proposed new section 8. It is to do with the extent to which a trader and an affected person acted in good faith. It is to do with taking into account the particular characteristics and circumstances of an affected person. It is to do with whether an affected person was able to understand any of the documents provided. It’s to do with whether there was unfair pressure. It is to do with whether the trader unreasonably failed to disclose various intended conducts, and so on. In other words, there’s a series of criteria set there as to what unconscionable conduct might be.

It is exactly those criteria that we might seek to elucidate, to refine, to make better in the select committee process, but not the basic premise of this bill, the basic premise that says that we must act to protect small business from unconscionable conduct. May I suggest that it is utterly absurd not to support this bill, this bill that works to protect the small person. I commend this bill to the House.

💬 Jonathan Young: Madam Speaker. Madam Speaker—Jonathan Young.

Oh, I call Jonathan Young. I got the “Young” bit; I was just struggling with the Audrey or the Jonathan.

That’s right. I’m not Jonathan Hunt or Jonathan Coleman, as I often get introduced as. Well, thank you very much for the opportunity to speak on this bill, and I am so pleased it’s coming to the Economic Development, Science and Innovation Committee. It is about time that Government sent bills to the right place. We have had such a light workload this last 2½ years. It’s going to be good to get into this, and I think that, as my colleague Brett Hudson has said and I have said to Minister Faafoi, even though that committee is led by an Opposition chair, he can have assurance that we will do the job unbiased. We will do it professionally. We will look at legislation that the Government promote, and we will look at it through the lens of what is good for New Zealand. That’s my pledge as chair of that committee.

I’m pleased that this bill is coming to that committee because through the rigours of submissions, then we will get to the nub of what is the definition of unconscionable conduct. In fact, I believe I was chair of the Commerce Committee back in 2015 when we looked at this. We looked at the Australian legislation around this. We did have a good, wide-ranging debate, and we determined, as Brett Hudson said at that point in time, that because there was no clear definition of what it was, that we ought to wait and see the effects of the Fair Trading Act at that point in time to see whether we could get some clarity around this. With all due respect, I think that’s what we will be doing again as the select committee looks at this: we will be looking for examples out there in consumer-land to find genuine examples of where people have felt that there has been contravention of what would be considered to be fair trading.

I do think that a very broad definition of unconscionable conduct is “a serious misconduct that goes far beyond what is commercially necessary or appropriate”. It’s too wide. It’s too broad. It’s very subjective. If somebody walks into a shop and comes under what they would consider to be intense pressure from a salesperson, is that because that salesperson is acting inappropriately or unethically, or is it because the person is feeling under pressure because they can’t afford a product or whatever it might be? Whenever I go into a shop and somebody approaches me, I find that, by and large, they are very appropriately behaved and they understand that they, first of all, want to win the client before they can win the sale. I think that’s important to see.

When it comes to small business, large businesses, and things like that, there’s going to be a lot in this. We have traversed this space, I believe, twice in the last five years around supermarkets. We have looked at it a couple of times. The Commerce Commission has delved into this quite considerably to see whether there is unconscionable conduct taking place. Once again we will no doubt get submitters from that sector and from small businesses that supply to them. It’s going to be quite a process for the select committee to go through and work to find the balance that’s needed—the balance that’s needed—in the robustness of trading that happens.

One thing that I can say to the Government parties: for goodness’ sake, please do not try to homogenise how everything works. There are all sorts of different approaches, techniques, models of business, personalities of salespeople—all of this is part of what makes people succeed in their profession, if they’re a salesperson, or if they’re a small business or large business. We need to acknowledge the balance that’s needed in all of these things.

So, look, thanks very much for sending it to the Economic Development, Science and Innovation Committee. We will look forward to doing good, solid work on this bill. We believe in fair trade. We believe that Kiwis need to have a fair go—obviously, we believe in that—but we want to make sure the balance is correct and that we don’t put a wet blanket over everything but that we also give opportunity for entrepreneurship to flourish in our country as well. Thank you, Madam Speaker.

Thank you, Madam Speaker. Welcome back to everybody after a great festive break. I just want to commend the previous speaker, the honourable Jonathan Young, for his comments in relation to the thorough process that we’ll be running this bill through, through our Economic Development, Science and Innovation Committee, which I sit on. You do a thorough job, and I enjoy it on that select committee with you.

I’d also like to congratulate the Hon Kris Faafoi for bringing this bill forward, because, as much as I’ve heard a couple of comments this evening to say that there’s maybe not as big a problem as people think, I believe there is a big problem there, as Dr Deborah Russell has pointed out. Having been a small and medium sized business owner and operator for a large part of my life, and having a lot of my friends and contacts who still are small and medium sized business owners and operators, I see unconscionable trading regimes and sales techniques going on to this very day, albeit not everywhere, in every sector, in every corner, but it does happen. When you hear these stories, you think: how is that behaviour able to continue in a modern society like ours?

We’ve got laws around consumerism to protect businesses, to protect our consumers, but this is just a further tightening, ratcheting up, to ensure that we protect and bring back a balance to businesses, both small and medium sized, and create an equilibrium between those two sized entities, as well as creating an equilibrium between the businesses themselves and the consumers that sometimes get caught up with bad sales practices.

The word “unconscionable”, as we heard from Brett Hudson, is one that seems to be raising some angst in their caucus. I am also very surprised that the party that stands by small and medium sized business, and businesses in general, is not supporting this bill through the House, because it is set up and designed specifically to protect those people. If the only word that seems to be causing some angst is the word “unconscionable”, then surely the best thing to do is set up a law so that you can actually take that law and you can test it to make case law out of that law.

If we go back to the last Parliament, when we talked about health and safety and we had “persons conducting a business undertaking” (PCBUs) introduced as a terminology and “legal culpability”, they didn’t have a problem with bringing in terms such as those that needed to be tested in law. But I’ll tell you what that did: the moment you put legal culpability out there for PCBUs, everybody lifts their game, and with that word “unconscionable” being introduced into this bill, instantly this bill is introduced people will need to think twice about their practices, the way they operate, the way they behave with other businesses, and the way they treat their consumers and customers. So we absolutely support this bill moving through. I’m excited to see that it is coming into the select committee that I sit on with Jonathan Young. We will pull this bill apart.

There are, I guess, times in our lives when we see things happening that we don’t like the look of. In fact, I can tell you, if you want to put context to “unconscionable”, where I know a farmer who was growing a crop who signed a contract with a large supplier who then invested into their farm to get plant and equipment to ensure that they could keep up with demand. They got more land to produce more product. The moment they were locked in, they changed the terms of the contract and there was nothing that that farmer could do but slowly but surely go backwards. That is unconscionable; it’s not too difficult to work out. Or where you see salespeople preying on the vulnerable, whether it be door-to-door or by peddling wares that people don’t need, signing them up to contracts that they don’t want, that they can’t afford—that behaviour is certainly unconscionable. Any fair-minded New Zealander, which the vast majority of us are, will be saying, “I can give you examples of unconscionable too.” Let’s test it, but first and foremost let’s pass a bill that we can actually use to better off business, to better off consumers, and protect and create a balance between those two people and entities. Thank you very much. We will be supporting this bill through the House.

Thank you very much, Madam Speaker. Before I actually get on to the purpose of the bill and, you know, some of the other explanations, I just want to take on what Clayton Mitchell has just spoken about. His definition—I just want to do this because I might forget. He just explained that his idea of what unconscionable behaviour was was that when a farmer signs a contract with another farmer—and the contract is signed—and the bigger entity decides to change the terms of the contract and the smaller entity is going to have to wear that—I thought that was a ridiculous example, because once a contract is signed, how can you change the terms of the contract? You can’t. I think that is something that you could potentially take to court, and sue the person. I’m afraid that that is just not a very good example.

This bill would amend the Fair Trading Act to prohibit unconscionable conduct in trade—misconduct that goes beyond commercially necessary or appropriate conduct, the bill’s explanatory note says—and extend the Act’s protections against unfair contract terms so that they also apply to small trade contracts of less than $250,000 in a 12-month period.

We all know that when people are in business, there are costs to be met. When regulations are introduced in this House, often the cost goes to the business and they have to wear that. In reality, businesses often can’t wear that because it costs them money. It will be passed on to the consumers, and, ultimately, the decisions that we make in this House end up costing consumers more. And that is one of the reasons why this side of the House oppose legislation that actually build on more regulations for businesses to deal with and which will end up costing consumers more. That is one of the reasons.

We are very proud of the improvements that the former National-led Government made to the Fair Trading Act in 2013. They actually benefit the consumers and we’re very proud of it.

Earlier, Dr Deborah Russell explained that the select committee’s role is to refine the definition of “unconscionable conduct” and that she was going to do this at select committee. The very basis of this bill, she says, must be to protect the small businesses from unconscionable conduct. What this speech that Deborah Russell gave and what that side of the House is actually saying is that this Government is a solution looking for a problem. It is a solution that is looking for a problem, because they’re saying that the unconscionable conduct that they’re trying to fix is not even defined, that they can actually try and define it at select committee. So what is the real problem? I think this is a bad bill. I stand on this side with my colleagues opposing this bill.

Thank you, Madam Speaker. The Green Party is very pleased to support the Fair Trading Amendment Bill. I am puzzled by that last speech and that the party which purports to be the party of business is speaking so strongly against this bill. I am puzzled by the speech that Melissa Lee gave, because in the work that the Ministry of Business, Innovation and Employment has done in terms of its survey of businesses, 45 percent of businesses surveyed indicated that they had been offered one or more contract terms that they considered to be unfair in the past year, when this research was done in 2018. Fifty-nine percent had been offered unfair terms that limited the liability of their supplier or business customer. Forty-seven percent had been offered unfair terms that allowed their supply or business customer to unilaterally vary the terms of the contract. There is a problem. This bill aims to fix that problem, to ensure that the way in which business is conducted, particularly for small businesses, is fair.

The bill, as other speakers have noted, applies to contracts which have a value of less than $250,000. It is aiming to support small and medium businesses, which are the heart of our economy in New Zealand. So it beggars belief that National is opposing the bill. I can already see the misleading Facebook ad that they will put up about this bill, because an earlier speaker claimed that the provisions around uninvited direct sale might apply to people like Girl Guides. They had failed to read the bill. There is an explicit provision in it which specifically exempts any visits by charitable organisations—and also by political parties, for those of us who will be doing doorknocking this year to ensure that we get another term in Government, to continue promoting fairness and equity not just in the business sector but throughout our economy. So National is opposing it, typically, because they are negative. I would encourage them to read the bill.

There’s been a lot of debate on the Opposition side about the absence of a definition of “unconscionable” in the bill. For those who weren’t listening to Deborah Russell, she clearly went through that. If members go to the bill, look at clause 6, and look at the provisions that the bill puts in the new section 8 inserted by clause 6, which are the factors that the court has to consider in determining whether unconscionable conduct has occurred. There is a page of factors that enables the courts to build good case law around this. It ensures that we don’t put in the legislation a limited definition. It allows it to be built through case law, but there has been a lot of thought on the factors that the court will take into account. I am heartened by the comments of the honourable Jonathan Young that the Economic Development, Science and Innovation Committee under his chairmanship is going to do a professional job. Look closely at those terms. I think they have been well drafted. They aim to ensure that “unconscionable” doesn’t have an excessive extent and that it will be determined by the court.

The National Party has also failed to take account of the work that has been done in Australia, where there has been some thought to what constitutes “unconscionable”: it is serious misconduct by reference to the norms of society.

This bill is about fairness. It is about ensuring that smaller businesses—recognising that they often have a limited power to negotiate in relation to larger companies. It is evening the scales. They don’t often have the resources to engage in litigation, they don’t have the bargaining power, and what this bill is doing is ensuring that there is a much better standard of conduct, by this unconscionable conduct test. It is protecting households against people like mobile traders who go and harass households and the vulnerable and persuade them to buy things that they don’t want.

This Government is about fairness. National can claim that it’s the party of business, but it’s not interested in fair business. It’s interested in laissez-faire capitalism and leaving people just to survive as they can.

Thank you, Madam Speaker. Well, I’m on the Economic Development, Science and Innovation Committee, so I’m looking forward to having this bill there, albeit that we’ll be voting against it. But Jonathan Young is a fine chair of that committee and I’m sure we will do our utmost to try and get this knocked into shape, albeit that it is the herculean task it is.

At last, I understand why Kris Faafoi is not standing in the Mana electorate and is going to go on the list. He fears the “do not knock” signs popping up on all the doors around in his electorate, and he doesn’t want to be caught by being fined for not leaving the premises. It is a rather silly provision, really. Ultimately, if somebody is on your property and you don’t want them to be there, that’s called trespass. You ask them to leave. There’s a legislative path there, a legal path, if you want to deal with that. To actually add in more legislation, more rules, which is totally unnecessary—it is really just a waste of Parliament’s time and it really does heap costs back on to the consumers, the very people that it seeks to protect. Everything, as I said on the previous bill, which has lots of similarities to this one—there is a symmetry in negotiations, there is a symmetry in sales and transactions. That is a fact of life.

We would be better to help financial literacy through our education system rather than teaching our students to go out and get on the streets and protest about climate change. They’d be far better off being taught about financial literacy. The changing of the terms of a contract, which was mentioned by the New Zealand First member earlier and how unfair that is—and I agree. If the terms of a signed contract are changed, then that is absolutely unfair. But that’s, effectively, what the Minister is asking Parliament to give him the power to do, to give the Minister the power under regulation-making powers, a job that should be done here in Parliament and in the legislation. That is shoddy, lazy Government and it shouldn’t happen and yet it’s increasingly happening in legislation because they haven’t done the work beforehand. This is a terrible bill and I’m voting against it. Thank you.

This is a split call. I call Jamie Strange.

Madam Speaker, thank you for the opportunity to take just a brief call on the Fair Trading Amendment Bill. I agree with the previous member around financial literacy. I guess it loosely relates to this bill, but I think it is something that we do have to have a good look at in our education system, and starting right from the primary school age. Financial skills are a key life skill and I think that they are underrated at times.

We’ve heard a lot of arguments for and against this bill. What this bill comes down to is around fairness, around removing the potential for bullying. There was something that the Minister said, that those companies who engage in fair and reasonable contracts have nothing to fear from this bill; it actually doesn’t relate to them. That is the majority of companies. The majority of companies do have fair and reasonable contracts, but there are some who don’t and that’s what this bill addresses.

Look, I’d just like to touch specifically around the mobile traders. We’ve heard a little bit about this, around the “do not knock” stickers and that people working for a company who disregard the “do not knock” sticker will potentially be liable for a fine of up to $10,000 and their company up to $30,000. Now, that is a large amount of money. However, that is a very important issue.

Consumer New Zealand have welcomed this proposal. This is something that they’ve been lobbying for for quite a while, because they’ve seen the vulnerabilities that people often feel when they open the door to someone and they’re asked to leave and that person does not leave. There’s often quite a strong power imbalance and often a fear there.

So this is an excellent bill, an excellent piece of legislation. I’d like to congratulate the Minister, Kris Faafoi, and I commend this to the House. Thank you.

Thank you, Madam Speaker. Like my colleagues Jonathan Young and Clayton Mitchell over the other side, I’m looking forward to this bill coming to the Economic Development, Science and Innovation Committee. When it does come to our committee, the thing I’ll be looking at in particular is what I want to talk about tonight, which is this definition, or lack of definition, of “unconscionable conduct”.

As we’ve heard tonight, this bill would amend the Fair Trading Act to prohibit unconscionable conduct in trade. The problem, of course, with the bill is it doesn’t define what unconscionable conduct is; and, in fact, the Minister admitted as much in his contribution earlier tonight. Instead of defining it, he instead suggested that we look to Australia. So we have this extraordinary situation where not only will traders in New Zealand have to comply, of course, with all New Zealand laws, but they’ll now have to, if this bill passes, look to Australia to see how the legislation there, or how unconscionable conduct there, is defined by the courts in Australia, before they can decide how they’ll operate in New Zealand, which I find a pretty extraordinary situation. It’s also a very, very poor way of making legislation.

We will be voting against this bill tonight. I do look forward to it coming to the select committee, though, because there are some, I think, really important points that MPs on both sides of the House have actually raised about the Fair Trading Act, so we would like to get, I guess, a thorough thrashing out of some of those issues. But as the bill as currently drafted, where there is no definition of what unconscionable conduct is, despite prohibiting it, I can’t support the bill and nor can my colleagues.

Thank you much, Madam Speaker. I’m very pleased to be standing here speaking in support of this Fair Trading Amendment Bill. I mean, it seems pretty straightforward to me, really. You know, the other side of the House, they call themselves the party of markets. The question I pose to the House is: how is it right to have a market that is acting where deception and bully-boy tactics and intimidation is OK? It’s wrong. That’s not a fair market. It’s not a fair market. That’s not fair trading. How is it OK where somebody can be intimidated into signing a contract that they didn’t understand the terms of? You know, there are provisions currently in law and what this Government is saying within this particular bill is that we want to strengthen those.

We’ve heard tonight that there is a claim that we don’t know what sort of activity this bill would capture. So let me provide some examples, if I may. Photographers, for example, being threatened, verbally abused, and blacklisted after asking for payments that were due. That sort of behaviour is unconscionable and it should be.

💬 Hon Andrew Little: The Nats like it.

Well, evidently, they do, Mr Little. Evidently they are comfortable with that sort of behaviour, because they’ve got an opportunity to support this bill and they’re not. I’m surprised by that, because really there’s no ideological position to take on this. You’re either for fairness or not. And that side of the House just evidently aren’t. I mean, they’ve got an opportunity to prove otherwise, but they’re voting against this bill. They’re trying to position themselves on the fence and say, “Look, we’ll have a rigorous discussion and we’ve made some points and we’ll look at improving it.” Vote for the bill. They’re not going to.

Here’s another example: supermarkets penalising suppliers for promotion runs with other retailers by demanding compensation for perceived losses caused by other retailers’ promotions, and deducting it from the payments to suppliers. How should that be tolerated? It shouldn’t, and this bill, the Fair Trading Amendment Bill, is going to address that. That’s why I have absolutely no hesitation in supporting it tonight.

Thank you, Madam Speaker. I’ve got to stand up straight after McAnulty’s spoken. Now, I want to address a couple of issues in this—

💬 Kieran McAnulty: I don’t even know what that means, McKelvie.

I didn’t mean that at all, Kieran—ha, ha! There are a couple of issues in this bill. First of all, I’m not on the select committee that’s going to have to deal with it, so the piece I say on it tonight will be the last say I have on it, I guess. But I just want to refer to an issue that Jamie Strange raised, which I think is quite important, but I don’t think this bill, unfortunately, deals with it.

If you think about the door-to-door salesman in my day, when I was young. They sold eggs, bacon, sausages, newspapers, and that was about it. We now have, as society evolves, a very different type of door-to-door salesman. And if you think about unconscionable—if I’ve pronounced that correctly—acts in the course of sales, I don’t think this bill has got a show of capturing those people that we’ve designed it to capture. I assume that a lot of that has got to do with clause 9 also, which talks about entering premises against the will of the property owner or the person or the resident of that house.

I don’t think this bill will deal with those issues. And the reason I think that, and we’ve referred to Australia a lot already tonight, is that in 10 years and in an economy 10 times the size of ours, there have been two successful prosecutions under the Australian piece of law. So if you think that they’ve had two successful prosecutions in 10 years in Australia, it’s highly unlikely we’re going to get one in 10 years, given that we’re going to adopt the same criteria they use.

So I think the intent of this legislation—I think the intent of most legislation that comes to this House is good, but I don’t think this bill is going to do what it sets out to do, and I don’t think it’s going to achieve it. Actually, if you read clause 9 quite carefully, I suspect it does cover politicians knocking on doors and we’ll probably get a few notices shoved in front of us to send us on our way.

I also think that I can’t read it in any way where it doesn’t cover the Girl Guide biscuits scenario, for example. So I think it’s going to capture things we don’t want it to capture and it’s going to let the people that we really want to get through the loophole. That’s my small contribution to the bill and we clearly aren’t supporting it at first reading, and I hope the Economic Development, Science and Innovation Committee can make something of it. Thank you, Madam Speaker.

Thank you. E Te Mana Whakawā, tēnā koe. Look, I just wanted to touch on one point really, and it is this scaremongering around the concept of unconscionability and the suggestion that it’s in some way loose. This concept has a long tradition in the law, in equity, and it’s also found, I must say, in the Credit Contracts and Consumer Finance Act. The provision in that Act says that financiers can’t act in a way that’s unconscionable or in contravention of the standards of reasonable commercial practice. So over that time, both in case law alone but also through kind of legislative interpretation, the concept is very well understood and very clearly applied.

There’s only a few elements to it. One is very obvious: that there’s some advantage taking going on. Another element of it is the vulnerability of the person being taken advantage of and the kind of nexus between that is a knowledge or a wilful blindness of that weakness. And if you put those things together, we can see that we’ve got some real wrongdoing. Added into that, there’s almost always an inequality of exchange that goes hand-in-hand with it, that the bargain simply isn’t a fair one, and when you put all that together and stand back, we get the fact that this transaction overall, as a whole, is simply inequitable; that a person in good conscience could not enter into it and take advantage of it.

So along with clauses 7 and 8 in the amendment bill, it was very clear that this will be a really useful tool. It’s one that should have been there a long time ago. It doesn’t just apply to entering into contracts; it also applies to the performance and enforcement of those contracts. It’s a really useful addition to the tool kit that is found in the Fair Trading Act: protecting consumers from the abuses, the caveat emptor, the imbalance of power that often exists. A fantastic bill—I commend it to the House.